Advances in investment theory have dovetailed nicely with ancient wisdom to present investors with a new and exciting paradigm for investing. These advances, known as Modern Portfolio Theory, were developed by primarily by Nobel prize winning economist Harry M. Markowitz. Modern Portfolio theory emphasizes the importance of disciplined investing that focuses on proper asset allocation rather than on trying to pick winning stocks, or timing the market. Asset allocation is generally defined as the allocation of an investor's portfolio among a number of major asset classes. Markowitz and others in the field of Modern Portfolio Theory have taught us that it is much better to create diversified, efficient, disciplined investment portfolios than to try to beat the market.
The way in which asset allocation dovetails with ancient wisdom is that it turns our focus inward rather than outward. It focuses us on our own investing behavior rather than on an endless chase to try to outsmart the market with hot stock tips, market timing and other such lures. Once we have determined an asset allocation that is appropriate for our risk tolerance, then our work is to stay centered and disciplined, to hang in there with our asset allocation strategy, and not get swept up by the hot tip of the day.
The new paradigm is that our focus is on a sense of centeredness, mindfulness, and discipline with regard to our investing. We don't need to be in a competitive frame of mind to be successful investors. We don't need to outsmart others. Instead, we enter into investing with the positive view that even as markets go up and down as they will, over the long haul, a maintaining a proper asset allocation is a sound strategy. We become less focused on the daily ups and downs of the market, and stay centered and mindful, aware that wise investing is a long-term project.
This centeredness allows us to resist the allure of speculative buying when markets heat up. I remember in the late 1990's talking with an old friend near the dizzying height of the internet stock bubble. He showed me a glossy financial magazine featuring a picture of a deliriously happy couple holding up handfuls of cash. The headline trumpeted "Everybody's Getting Rich"
"It's true" my friend asserted. "There's no limit to how much you can make off the stocks of these internet companies. The old rules don't apply to the new economy." He urged me to invest in a high tech company that was just going public, assuring me that we would both make a killing. He was certain his stock, a provider of online services, could not miss. He was convinced it was "the new AOL". Despite his enthusiasm, I declined to invest. I was committed to maintaining my portfolio's asset allocation. It turns out that my decision was prudent, since the company he was touting is now in bankruptcy, with its stock value at zero. My friend had invested far too much of his portfolio on this gamble. Like so many others, he got caught up in the financial euphoria of the tech bubble only to have the bubble burst in his face.
The new investing paradigm helps us maintain our composure when markets go through their inevitable ups and downs. We avoid the trap of chasing the latest hot tip, and learn that building wealth is a long-term project. We stay committed to a long-term strategy of maintaining an appropriate asset allocation, and do not over-react to market volatility. With a sense of commitment and centeredness, we build true wealth over time.
Friday, May 22, 2009
Deferred Student Loans - There Are Rules, You Know!
Getting to college, saving the money and earning it as you go is only a part of the story. Most students will borrow at least some of the cash they need.
Once the classes have finished and it's time to get out into the real world, it's also time to decide how you are going to handle your deferred student loan into the future.
You don't want a cloud hanging over you forever, nor do you want to miss then fun your new earning power gives you.
So what's the deal then?
Let's just look at what a deferred student loan is all about. Whilst some student loans are deferred, you need to realize that many require payments even while you are still at college, which as you might already realize, is like topping up a water barrel that has the plug already out at the bottom.
Question is, can you put money in at the top fast enough to stop your barrel becoming empty?
So, if you can, it might be a great idea to have a loan, like a Stafford loan that needs no repayment until graduation is over, often with a 6-month grace period as well, to get you started in your job and new home etc.
Whatever the benefits of this are, there are rules upfront. If you leave college, or do too few hours of class, for example, you may well be required to pay back all you have borrowed right away. From this point of view, so long
as you stay enrolled in the college that you have chosen, or a similar qualifying one, you will be OK In this way, the loan is regarded as a deferred student loan.
With a Stafford Loan, there are two ways that it works. Sometimes the deferred student loan is offered by the college itself.
The alternative is where private funding is arranged, by a specialist in student loans and guaranteed by the federal government. Repayment is the same in both situations and the loan remains payable under the terms of the agreement.
An alternative, the Perkins deferred student loan, comes through the college and has government funds to back it and is focused on those who cannot afford a loan from any other sector.
You need to remember that there is a range of schedules for deferred student loans that are not as 'deferred' as you might want. Getting into one of these without the right plan going forward will give you a tough time, so make sure that you realize fully what you are getting into.
You see, as an example, a 'Federal Direct Parent Loan for Undergraduate Students' start their repayment demands within a couple of months of classes starting!
This is not really one of the deferred student loans that you would want to take, if you are in the emptying that water barrel situation. If you do find you have one of these loans, it's vital to get your budgeting and cash flow well organized well before you start to fall behind.
Once the classes have finished and it's time to get out into the real world, it's also time to decide how you are going to handle your deferred student loan into the future.
You don't want a cloud hanging over you forever, nor do you want to miss then fun your new earning power gives you.
So what's the deal then?
Let's just look at what a deferred student loan is all about. Whilst some student loans are deferred, you need to realize that many require payments even while you are still at college, which as you might already realize, is like topping up a water barrel that has the plug already out at the bottom.
Question is, can you put money in at the top fast enough to stop your barrel becoming empty?
So, if you can, it might be a great idea to have a loan, like a Stafford loan that needs no repayment until graduation is over, often with a 6-month grace period as well, to get you started in your job and new home etc.
Whatever the benefits of this are, there are rules upfront. If you leave college, or do too few hours of class, for example, you may well be required to pay back all you have borrowed right away. From this point of view, so long
as you stay enrolled in the college that you have chosen, or a similar qualifying one, you will be OK In this way, the loan is regarded as a deferred student loan.
With a Stafford Loan, there are two ways that it works. Sometimes the deferred student loan is offered by the college itself.
The alternative is where private funding is arranged, by a specialist in student loans and guaranteed by the federal government. Repayment is the same in both situations and the loan remains payable under the terms of the agreement.
An alternative, the Perkins deferred student loan, comes through the college and has government funds to back it and is focused on those who cannot afford a loan from any other sector.
You need to remember that there is a range of schedules for deferred student loans that are not as 'deferred' as you might want. Getting into one of these without the right plan going forward will give you a tough time, so make sure that you realize fully what you are getting into.
You see, as an example, a 'Federal Direct Parent Loan for Undergraduate Students' start their repayment demands within a couple of months of classes starting!
This is not really one of the deferred student loans that you would want to take, if you are in the emptying that water barrel situation. If you do find you have one of these loans, it's vital to get your budgeting and cash flow well organized well before you start to fall behind.
The Canyon of Incumbrance: Young Texas And I Crawl Out of Debt
I'm not going to lie. Sure, I'll admit it. I've been pushed past the point of shame, and have fallen straight into the abyss prominently named, "The Lonely Canyon Of Incumbrance." I'm one of those people.
Yes, in my youth, I made some financial blunders and managed to sink myself into a molehill of debt. I refuse to call it a "mountain" -- I refuse! It would only discourage me. But, between student loans and credit cards that got me through tough times (and a few luxurious ones), my "molehill" has added up to more than I want to mumble out loud. Let's just say that at this point, I skim over the "account summary" section of my bills and go straight to "minimum due."
Looking around my dark and scary abyss, though, I realize I'm in good company. Ninety-seven percent of bankruptcies declared in this country are non-business related, and millions of Americans have had to do it. Unsecured consumer debt has risen to an all-time high of $2 trillion, the highest in the world. Factor in mortgages -- a type of secured debt -- and we're up to $9 trillion. Texas is plagued by debt, too. No wonder so many of us can't afford those high premium health insurance policies. (Texas leads the nation with nearly 25% uninsured across the state - that's 5.4 million.)
I won't say it's not my fault. Of course it is. Credit cards were easy; student loans were even easier. And while I worked all through college, somehow the red column in my non-existent financial ledger still added up to an atrocious figure.
Part of the problem, I truly believe, is that with credit cards so easy to get and use nowadays, our generation is forgetting how to manage money. We want what we want, and we want it now. Damn it. Credit card companies know this. They're marketing to college students like never before, and the millions of students in Austin, Dallas, and Houston can attest to this.
After realizing I couldn't afford health insurance and save my credit at the same time, I decided to start accumulating sound advice on financial planning, instead. After several free consultations with credit counselors, I knew there was hope. All I had to do was budget.
It sounds so terribly easy. "Of course," you say. "I do budget." But you may not be budgeting as well as you think. Three dollars a day on your favorite mocha frappuccino adds up to 90 bucks a month, which accumulates to about $1,000 every year. An extra $100 for that snazzy cell phone, when you could get a free one from the provider, is money you could be using to pay off a high-interest credit card. That doesn't mean you can never have your mocha. It does mean outlining a realistic budget for it.
(1) Decipher what you really need, versus what you really want.
Everyone must have food, shelter, clothing, and, for most working individuals, some kind of transportation allowance.
HousingIn general, shelter should take about one-third of your income. With the recent rise in housing costs, this may not be realistic, but do the best you can. Be willing to take an apartment without a view for a little while. If you save a little extra on rent, you'll be a lot closer to buying your own place in a few years.
FoodReduce costs on food by buying non-perishables in bulk when possible (which can be done by joining a wholesale club, or special ordering products through a grocery store), sign up for membership discounts at those grocery stores (which are almost always free and painless), and use coupons! (Think of those extra three bucks as a cappuccino.) Watch for sales and stock-up on good deals.
Co-op groceries are also a great way to cut food costs. Some offer work exchange opportunities in lieu of paying membership fees, and even if there is a small sign-up charge, the savings and profit-shares you'll get over the years will be worth it.
Plan meals ahead, and be willing to cook. Ready-made meals are generally more expensive, as well as less nutritious. Taking your lunch to work, and while out on day trips, can save thousands of dollars a year. If you have the space, grow your own herbs and produce, too. It's fun, cheap, and quite easy once you know what you're doing.
TransportationPublic transportation is a great invention. It's environmentally friendly, and generally a lot cheaper than owning your own vehicle, particularly in large cities. Many employers even offer incentives, such as discount transportation passes, for taking the bus or subway to work.
If public transportation isn't realistic, research carefully before buying a vehicle. Look not only into in-city fuel efficiency -- which is different from how much gas the vehicle will use on the highway -- but also warranties, maintenance schedules, and loan interest rates.
Look into buying a used car directly from the owner, as well. It'll save you the dealership mark-up, and the seller can set a much better price for him or herself than a trade-in would provide. Just make sure to have a mechanic thoroughly check the vehicle over first.
Pay Down High-Interest DebtHigh-interest debt eats more income than you probably even want to think about it. Credit card companies are happy to accept minimum payments, because it means they're collecting amazing profits on excessive interest rates. Would you buy something if it was, say, 16%, 25%, or 35% higher than the ticket price? Well, that's exactly what you're doing when you charge something you won't be able to pay off within the grace period.
To make it worse, most credit cards pay off lower interest rates first. That means if you transferred a balance onto your card for a great, low interest rate, but still have debt at a higher interest rate on the same card (or continue charging on that card), you won't be able to pay down the higher interest rate until the entire balance of the lower interest rate is cleared.
While you should put something into a savings or money market account for emergencies, you're losing money if you invest in those before paying down high-interest debt. It just doesn't make sense to plunk $1,000 into an account earning 5% interest, when you could use that grand to pay off debt accruing three, four, five, or even six times faster.
Yes, in my youth, I made some financial blunders and managed to sink myself into a molehill of debt. I refuse to call it a "mountain" -- I refuse! It would only discourage me. But, between student loans and credit cards that got me through tough times (and a few luxurious ones), my "molehill" has added up to more than I want to mumble out loud. Let's just say that at this point, I skim over the "account summary" section of my bills and go straight to "minimum due."
Looking around my dark and scary abyss, though, I realize I'm in good company. Ninety-seven percent of bankruptcies declared in this country are non-business related, and millions of Americans have had to do it. Unsecured consumer debt has risen to an all-time high of $2 trillion, the highest in the world. Factor in mortgages -- a type of secured debt -- and we're up to $9 trillion. Texas is plagued by debt, too. No wonder so many of us can't afford those high premium health insurance policies. (Texas leads the nation with nearly 25% uninsured across the state - that's 5.4 million.)
I won't say it's not my fault. Of course it is. Credit cards were easy; student loans were even easier. And while I worked all through college, somehow the red column in my non-existent financial ledger still added up to an atrocious figure.
Part of the problem, I truly believe, is that with credit cards so easy to get and use nowadays, our generation is forgetting how to manage money. We want what we want, and we want it now. Damn it. Credit card companies know this. They're marketing to college students like never before, and the millions of students in Austin, Dallas, and Houston can attest to this.
After realizing I couldn't afford health insurance and save my credit at the same time, I decided to start accumulating sound advice on financial planning, instead. After several free consultations with credit counselors, I knew there was hope. All I had to do was budget.
It sounds so terribly easy. "Of course," you say. "I do budget." But you may not be budgeting as well as you think. Three dollars a day on your favorite mocha frappuccino adds up to 90 bucks a month, which accumulates to about $1,000 every year. An extra $100 for that snazzy cell phone, when you could get a free one from the provider, is money you could be using to pay off a high-interest credit card. That doesn't mean you can never have your mocha. It does mean outlining a realistic budget for it.
(1) Decipher what you really need, versus what you really want.
Everyone must have food, shelter, clothing, and, for most working individuals, some kind of transportation allowance.
HousingIn general, shelter should take about one-third of your income. With the recent rise in housing costs, this may not be realistic, but do the best you can. Be willing to take an apartment without a view for a little while. If you save a little extra on rent, you'll be a lot closer to buying your own place in a few years.
FoodReduce costs on food by buying non-perishables in bulk when possible (which can be done by joining a wholesale club, or special ordering products through a grocery store), sign up for membership discounts at those grocery stores (which are almost always free and painless), and use coupons! (Think of those extra three bucks as a cappuccino.) Watch for sales and stock-up on good deals.
Co-op groceries are also a great way to cut food costs. Some offer work exchange opportunities in lieu of paying membership fees, and even if there is a small sign-up charge, the savings and profit-shares you'll get over the years will be worth it.
Plan meals ahead, and be willing to cook. Ready-made meals are generally more expensive, as well as less nutritious. Taking your lunch to work, and while out on day trips, can save thousands of dollars a year. If you have the space, grow your own herbs and produce, too. It's fun, cheap, and quite easy once you know what you're doing.
TransportationPublic transportation is a great invention. It's environmentally friendly, and generally a lot cheaper than owning your own vehicle, particularly in large cities. Many employers even offer incentives, such as discount transportation passes, for taking the bus or subway to work.
If public transportation isn't realistic, research carefully before buying a vehicle. Look not only into in-city fuel efficiency -- which is different from how much gas the vehicle will use on the highway -- but also warranties, maintenance schedules, and loan interest rates.
Look into buying a used car directly from the owner, as well. It'll save you the dealership mark-up, and the seller can set a much better price for him or herself than a trade-in would provide. Just make sure to have a mechanic thoroughly check the vehicle over first.
Pay Down High-Interest DebtHigh-interest debt eats more income than you probably even want to think about it. Credit card companies are happy to accept minimum payments, because it means they're collecting amazing profits on excessive interest rates. Would you buy something if it was, say, 16%, 25%, or 35% higher than the ticket price? Well, that's exactly what you're doing when you charge something you won't be able to pay off within the grace period.
To make it worse, most credit cards pay off lower interest rates first. That means if you transferred a balance onto your card for a great, low interest rate, but still have debt at a higher interest rate on the same card (or continue charging on that card), you won't be able to pay down the higher interest rate until the entire balance of the lower interest rate is cleared.
While you should put something into a savings or money market account for emergencies, you're losing money if you invest in those before paying down high-interest debt. It just doesn't make sense to plunk $1,000 into an account earning 5% interest, when you could use that grand to pay off debt accruing three, four, five, or even six times faster.
Leverage Land Mines
Financial leverage is like a land mine. You might be unaware of it until it blows up. Buying stocks on margin is an obvious form of leverage (the mortgage on your home is another) and all of us understand how risky it is to buy on margin.
Simply put, leverage magnifies your gain or loss and, since you're borrowing money which must be repaid, you can lose more than your entire investment (the investment and the loan amount). Okay, you say, point made, but I don't leverage my investments. Are you sure?
Did you know that many mutual funds use leverage to enhance their returns? To illustrate, let's take a look at two Nuveen municipal bond funds (Nuveen is one of the top municipal bond mutual fund companies): Nuveen Municipal Market Opportunity and Nuveen Municipal Value. It's kind of hard to tell how they differ from the names, so let's look further. Both funds are mostly invested in triple A municipal bonds, the average maturity is approximately 20 years for the bonds held in each fund and, for you quants (quantitative analyst), the duration is 5.5-6.0 years. The funds are quite similar.
Let's look at the five year returns (as measured by NAV). Municipal Market returned 6.21% annually; Municipal Value 5.90%. 31 basis points annually for five years is a noticeable difference for municipal bond funds. Why did Municipal Market perform better? There could be a number of reasons but an obvious one is its leverage.
Municipal Market is leveraged 36%. In a period of stable or declining interest rates we'd assume it would outperform Municipal Value, as it did. But, what if interest rates rise? Shouldn't its leverage reduce its return. And, if you aren't sure which way interest rates are going, or think they're going up, you want to avoid funds with leverage.
The leverage employed by the Municipal Market fund, and many other funds, is an "auction rate" preferred. Like any preferred stock, the principal does not have to be repaid-that's good. But the "auction rate" means the dividend rate (think interest) is reset regularly, typically every week or month, depending upon the instrument.
If interest rates rise, the cost of the preferred increases. The result of rising interest rates can be a decline in the NAV (due to a decline in price of long term bonds) and an increase in expense (the rising cost of the preferred), which further reduces NAV. A double whammy (not a defined financial term).
Simply put, leverage magnifies your gain or loss and, since you're borrowing money which must be repaid, you can lose more than your entire investment (the investment and the loan amount). Okay, you say, point made, but I don't leverage my investments. Are you sure?
Did you know that many mutual funds use leverage to enhance their returns? To illustrate, let's take a look at two Nuveen municipal bond funds (Nuveen is one of the top municipal bond mutual fund companies): Nuveen Municipal Market Opportunity and Nuveen Municipal Value. It's kind of hard to tell how they differ from the names, so let's look further. Both funds are mostly invested in triple A municipal bonds, the average maturity is approximately 20 years for the bonds held in each fund and, for you quants (quantitative analyst), the duration is 5.5-6.0 years. The funds are quite similar.
Let's look at the five year returns (as measured by NAV). Municipal Market returned 6.21% annually; Municipal Value 5.90%. 31 basis points annually for five years is a noticeable difference for municipal bond funds. Why did Municipal Market perform better? There could be a number of reasons but an obvious one is its leverage.
Municipal Market is leveraged 36%. In a period of stable or declining interest rates we'd assume it would outperform Municipal Value, as it did. But, what if interest rates rise? Shouldn't its leverage reduce its return. And, if you aren't sure which way interest rates are going, or think they're going up, you want to avoid funds with leverage.
The leverage employed by the Municipal Market fund, and many other funds, is an "auction rate" preferred. Like any preferred stock, the principal does not have to be repaid-that's good. But the "auction rate" means the dividend rate (think interest) is reset regularly, typically every week or month, depending upon the instrument.
If interest rates rise, the cost of the preferred increases. The result of rising interest rates can be a decline in the NAV (due to a decline in price of long term bonds) and an increase in expense (the rising cost of the preferred), which further reduces NAV. A double whammy (not a defined financial term).
Texas Invests In Its Future: The Young See Hope For Retirement
No wonder so many of us run from discussions on financial matters, ignore our bills, and spend too much money, as if in rebellion. It's scary out there.
Last year, the Employee Benefits Research Institute released the results of a study concluding that the majority of Americans are unprepared for retirement, are not saving enough for it, and have unrealistic expectations about how much they will need to live comfortably in their golden years. Texas is no exception. With its high poverty rate, and even higher rate of those going without health insurance, it's lucky many can get through day-to-day life.
Being one of the millions in debt myself, I can understand this. The rising cost of housing, food-- even clean drinking water -- can drive anyone with a limited income to distraction. I decided to stop changing the television channel with every new disastrous financial report, and to start researching, when an investment counselor said to me with matter-of-fact conviction, "You know, young adults now just may need a million to retire." After the initial (and expected) incredulous gasp, I decided gulping air wasn't going to do me much good. As usual, knowledge and simple planning gave me hope. Here are a few tips on digging yourself out of the panic.
Checking and Savings Accounts:
The first step in building a sound financial future is practicing money management skills with both checking and savings accounts. Most of us have at least one of them; keeping track of their balances is an entirely different matter.
Free checking accounts are fairly easy to procure. At one point, it was common for financial institutions to charge monthly fees for the privilege of stashing money with them, but the banking industry rakes in so much profit from successfully luring their customers into other investments that it's just not necessary anymore.
The theory is that if one has a free account with a particular financial institution, there's a good chance that person will return to that institution for other investments as his or her income grows -- investments that will make both the customer and the bank happy.
By all means, take advantage of this. Texas abounds with students -- students needing any freebies they can get -- so it shouldn't be difficult to find a bank offering free checking and savings accounts, especially in cities like Dallas, Houston, and Austin. Look for a checking account without a minimum balance requirement, and one that doesn't, of course, charge monthly fees.
Free checking accounts are not usually interest-bearing, so put only enough money in it every month to cover your monthly bills, plus a little padding. Keep track of your balance; the greatest risk with these accounts is the astronomical overdraft fees most of them charge. Once all of your bills are paid at the end of each month, stash extra income in an interest-bearing savings account. The average APY (Annual Percentage Yield) on low-balance savings accounts hovers somewhere just around 0.5%, but at least it's something.
Short to Middle-Term Investments:
Once you feel you've established a healthy pattern of money management -- no overdrafts, a properly balanced ledger, and all bills paid in full -- start looking into other investments. Most of the time, you'll need at least $500.00 to invest in other types of accounts, and, at least initially, look for those with better APYs than your current savings account, but will not inflict penalties for withdrawing funds whenever you need them.
Money Market Accounts:
Money market accounts are great investments at any age, but they're particularly advantageous for beginning investors simply because there are no penalties for withdrawing any amount at any time, no waiting period to continue investing (you can, likewise, deposit money at any time), and the funding is usually only a check away. There are several types of money market accounts, so be sure to investigate the minimum investment required, interest rates, and restrictions on each before making any commitments.
Money markets work by pooling investments from thousands of contributors into an assortment of (usually short-term) funds from municipal bonds, to stocks. The result is a fluctuating interest rate that is almost always at least a few percentage points higher than that of a standard, low-balance savings account. According to USA Today, non-bank money market funds are currently at about 5% APY.
Certificate of Deposit:
Certificates of Deposit, or "CDs" have been around longer than the replacement for the tape cassette. Interest rates are fixed, rather than fluctuating, are usually comparable to money market accounts and can be purchased at a bank or other financial institution, including many sites online, for terms as short as three months. Of course, the longer the term you lock in, the higher the rate you will obtain under most market conditions In other words, whatever interest rate you lock in at the beginning will remain the same throughout the course of the investment. Once you've invested in a CD, however, you cannot continue adding to the same one during the life of that investment, until renewal -- which is one reason you may want to go with a shorter term.
The primary disadvantage of CDs lies in the substantial penalties inflicted if the investor withdraws his or her money before the allotted time. The average APY for a six-month CD is currently 3.59%; for a one-year CD, 3.77%; for a five-year CD, 3.96%, although some banks may offer better deals. CDs are a good idea if their current APYs are higher than contemporary money market accounts, and you don't expect to -- or perhaps don't trust yourself to -- handle the money for a while.
Health Savings Account:
Health Savings Accounts, or HSAs were created by a 2003 Medicare bill, and are, without a doubt, worthy of consideration for many individuals and families. HSAs strive to address the growing problem of underinsured Americans (Texas knows this well, with over 25% of its population going without any insurance) by allowing investors to save for qualified medical expenses and future retirement health expenses, on a tax-free basis.
These accounts are only made available to those with qualifying high-deductible health insurance policies, and are a great choice for many young, middle-class Americans. HSAs provide incentives for saving towards healthcare, and a bit of financial padding in case of disaster. The major disadvantage is that penalties are inflicted if the money is withdrawn for unqualified expenses prior to the age of 65.
Retirement Accounts:
The types of retirement accounts available to Americans are too numerous to mention, and are highly dependent on employers in most cases. Entire sections of libraries and many websites are dedicated to this subject. The first, and most important thing to do, is to check with your employer to see if, or what, retirement plans are offered. Some companies offer employee benefits, including flexible 401(k) plans and matching funds. Look seriously into these options.
However, rather than briefly attempting to delve into the plethora of accounts that may, possibly, be available to you, this article will focus on an account available to all, regardless of employer
-- the Roth IRA account - which has become increasingly popular since becoming law in 1997
Now, IRAs have been around for some time, but traditional IRA accounts require funds going in, and coming out, to be taxed. This means that whatever dividends or proceeds an investor earns over the years will be taxed upon withdrawal. Considering that IRA interest rates are compounded, this could (and is intended to) add up to quite a bit over several decades
Roth IRA accounts, on the other hand, do not tax funds upon withdrawal. Funds invested into the account are considered taxable income going in, but the compounded interest or proceeds can accumulate tax free, until the age of 59 1/2, at which point they can be withdrawn without penalty or taxes. A Traditional IRA, on the other hand, is not taxed going in, but is subject to tax coming out, at whatever rate of income will apply to you at that time -- the assumption being that you will withdraw most of this money during retirement, when you will not have other earned income driving up your tax rate,. This means that whatever your Roth IRA account balance statement is, is the amount you have for retirement, free and clear. No more taxes.
If an investor begins an IRA account in his or her twenties, and contributes a modest amount every month (possibly matched by an employer), principle and compounded interest could conceivably yield a million or more dollars over four decades. The way to think of a Roth IRA, as opposed to a Traditional IRA, is that you are paying taxes on the seeds instead of on the crop.
Now, that's something to think about. Maybe retirement is possible...
See, that wasn't so hard. Respect yourself (and your anxiety levels) enough to seriously investigate financial opportunities. There's a good chance you're missing something you have the funding for -- right now, sitting in a no-, or low-, interest-bearing account. If you have any kind of steady income, financial security should be within your grasp. A comfortable retirement is in your future. Just take a deep breath, open your bills, and start acting like the adult you always dreaded you'd have to be someday.
Taking care of your financial responsibilities can have a positive effect on your anxiety levels, sense of security, and overall health. Being aware of your health, and what you can do to safeguard it, will certainly affect you as you age, and eventually your wallet as well.
Last year, the Employee Benefits Research Institute released the results of a study concluding that the majority of Americans are unprepared for retirement, are not saving enough for it, and have unrealistic expectations about how much they will need to live comfortably in their golden years. Texas is no exception. With its high poverty rate, and even higher rate of those going without health insurance, it's lucky many can get through day-to-day life.
Being one of the millions in debt myself, I can understand this. The rising cost of housing, food-- even clean drinking water -- can drive anyone with a limited income to distraction. I decided to stop changing the television channel with every new disastrous financial report, and to start researching, when an investment counselor said to me with matter-of-fact conviction, "You know, young adults now just may need a million to retire." After the initial (and expected) incredulous gasp, I decided gulping air wasn't going to do me much good. As usual, knowledge and simple planning gave me hope. Here are a few tips on digging yourself out of the panic.
Checking and Savings Accounts:
The first step in building a sound financial future is practicing money management skills with both checking and savings accounts. Most of us have at least one of them; keeping track of their balances is an entirely different matter.
Free checking accounts are fairly easy to procure. At one point, it was common for financial institutions to charge monthly fees for the privilege of stashing money with them, but the banking industry rakes in so much profit from successfully luring their customers into other investments that it's just not necessary anymore.
The theory is that if one has a free account with a particular financial institution, there's a good chance that person will return to that institution for other investments as his or her income grows -- investments that will make both the customer and the bank happy.
By all means, take advantage of this. Texas abounds with students -- students needing any freebies they can get -- so it shouldn't be difficult to find a bank offering free checking and savings accounts, especially in cities like Dallas, Houston, and Austin. Look for a checking account without a minimum balance requirement, and one that doesn't, of course, charge monthly fees.
Free checking accounts are not usually interest-bearing, so put only enough money in it every month to cover your monthly bills, plus a little padding. Keep track of your balance; the greatest risk with these accounts is the astronomical overdraft fees most of them charge. Once all of your bills are paid at the end of each month, stash extra income in an interest-bearing savings account. The average APY (Annual Percentage Yield) on low-balance savings accounts hovers somewhere just around 0.5%, but at least it's something.
Short to Middle-Term Investments:
Once you feel you've established a healthy pattern of money management -- no overdrafts, a properly balanced ledger, and all bills paid in full -- start looking into other investments. Most of the time, you'll need at least $500.00 to invest in other types of accounts, and, at least initially, look for those with better APYs than your current savings account, but will not inflict penalties for withdrawing funds whenever you need them.
Money Market Accounts:
Money market accounts are great investments at any age, but they're particularly advantageous for beginning investors simply because there are no penalties for withdrawing any amount at any time, no waiting period to continue investing (you can, likewise, deposit money at any time), and the funding is usually only a check away. There are several types of money market accounts, so be sure to investigate the minimum investment required, interest rates, and restrictions on each before making any commitments.
Money markets work by pooling investments from thousands of contributors into an assortment of (usually short-term) funds from municipal bonds, to stocks. The result is a fluctuating interest rate that is almost always at least a few percentage points higher than that of a standard, low-balance savings account. According to USA Today, non-bank money market funds are currently at about 5% APY.
Certificate of Deposit:
Certificates of Deposit, or "CDs" have been around longer than the replacement for the tape cassette. Interest rates are fixed, rather than fluctuating, are usually comparable to money market accounts and can be purchased at a bank or other financial institution, including many sites online, for terms as short as three months. Of course, the longer the term you lock in, the higher the rate you will obtain under most market conditions In other words, whatever interest rate you lock in at the beginning will remain the same throughout the course of the investment. Once you've invested in a CD, however, you cannot continue adding to the same one during the life of that investment, until renewal -- which is one reason you may want to go with a shorter term.
The primary disadvantage of CDs lies in the substantial penalties inflicted if the investor withdraws his or her money before the allotted time. The average APY for a six-month CD is currently 3.59%; for a one-year CD, 3.77%; for a five-year CD, 3.96%, although some banks may offer better deals. CDs are a good idea if their current APYs are higher than contemporary money market accounts, and you don't expect to -- or perhaps don't trust yourself to -- handle the money for a while.
Health Savings Account:
Health Savings Accounts, or HSAs were created by a 2003 Medicare bill, and are, without a doubt, worthy of consideration for many individuals and families. HSAs strive to address the growing problem of underinsured Americans (Texas knows this well, with over 25% of its population going without any insurance) by allowing investors to save for qualified medical expenses and future retirement health expenses, on a tax-free basis.
These accounts are only made available to those with qualifying high-deductible health insurance policies, and are a great choice for many young, middle-class Americans. HSAs provide incentives for saving towards healthcare, and a bit of financial padding in case of disaster. The major disadvantage is that penalties are inflicted if the money is withdrawn for unqualified expenses prior to the age of 65.
Retirement Accounts:
The types of retirement accounts available to Americans are too numerous to mention, and are highly dependent on employers in most cases. Entire sections of libraries and many websites are dedicated to this subject. The first, and most important thing to do, is to check with your employer to see if, or what, retirement plans are offered. Some companies offer employee benefits, including flexible 401(k) plans and matching funds. Look seriously into these options.
However, rather than briefly attempting to delve into the plethora of accounts that may, possibly, be available to you, this article will focus on an account available to all, regardless of employer
-- the Roth IRA account - which has become increasingly popular since becoming law in 1997
Now, IRAs have been around for some time, but traditional IRA accounts require funds going in, and coming out, to be taxed. This means that whatever dividends or proceeds an investor earns over the years will be taxed upon withdrawal. Considering that IRA interest rates are compounded, this could (and is intended to) add up to quite a bit over several decades
Roth IRA accounts, on the other hand, do not tax funds upon withdrawal. Funds invested into the account are considered taxable income going in, but the compounded interest or proceeds can accumulate tax free, until the age of 59 1/2, at which point they can be withdrawn without penalty or taxes. A Traditional IRA, on the other hand, is not taxed going in, but is subject to tax coming out, at whatever rate of income will apply to you at that time -- the assumption being that you will withdraw most of this money during retirement, when you will not have other earned income driving up your tax rate,. This means that whatever your Roth IRA account balance statement is, is the amount you have for retirement, free and clear. No more taxes.
If an investor begins an IRA account in his or her twenties, and contributes a modest amount every month (possibly matched by an employer), principle and compounded interest could conceivably yield a million or more dollars over four decades. The way to think of a Roth IRA, as opposed to a Traditional IRA, is that you are paying taxes on the seeds instead of on the crop.
Now, that's something to think about. Maybe retirement is possible...
See, that wasn't so hard. Respect yourself (and your anxiety levels) enough to seriously investigate financial opportunities. There's a good chance you're missing something you have the funding for -- right now, sitting in a no-, or low-, interest-bearing account. If you have any kind of steady income, financial security should be within your grasp. A comfortable retirement is in your future. Just take a deep breath, open your bills, and start acting like the adult you always dreaded you'd have to be someday.
Taking care of your financial responsibilities can have a positive effect on your anxiety levels, sense of security, and overall health. Being aware of your health, and what you can do to safeguard it, will certainly affect you as you age, and eventually your wallet as well.
The Tortoise Has Retired, The Hare Is Still Running
Many people spend their time hoping to get rich quickly, like winning the lottery, or getting an unexpected inheritance from a distant relative. The reality for most is that, like the tortoise in the old story we heard as children, slow and steady wins the race !
The tortoise and the hare both started at the same starting point in life. Both came from middle-class families. They were neither so rich as to be able to afford the many luxuries in life, nor so poor as to not have the basics of a roof over their heads, regular meals and a good education.
Mr Hare was all ready to go from Day One after graduation. He was going to prove that he would get out from his middle-class roots and move into high society. Both he and Mr Tortoise managed to land jobs in the same company. Each began to work his way up.
Mr Tortoise worked steadily. He did what he was told, sometimes he had a little spark of brilliance, but for most part, he was just the reliable steady worker. Mr Hare was determined to get ahead quickly. He put in long hours, made sure the upper management noticed him and very soon, he was moving through the ranks much faster than his old friend, the tortoise.
Mr Hare felt he had to keep up with his rising status, and his high income. He bought a bigger house, and a bigger car. He married a beautiful hare who knew how to dress well and make him look good during the company gatherings. Mr Tortoise plodded along. He bought a modest little home, had a second-hand car, and married sensible , if slightly dowdy Mrs Tortoise.
Both were promoted as the years went by. The tortoises stayed in their modest home and had 4 little tortoises. The hares upgraded their home and car every few years to keep up the image. While they bought country club memberships and overseas holidays, Mrs Tortoise bought little houses with the aim of generating rental income from them.
The junior tortoises went to college on scholarships. The junior hares went to the very best private schools, paid for by Mr Hare. Mrs Hare did not want to be associated with Mrs Tortoise. She could not believe their husbands were collegues. She was glad they did not live in the same neighbourhood.
Soon the junior tortoises and junior hares graduated and started work. Junior tortoises had grown up in a frugal environment and lived within their salaries. Junior hares found they could not get the lifestyle they were accustomed to on their meagre salaries. So Dad and Mom helped out.
One day, on his fifty-fifth birthday, Mr Tortoise sat down and did his sums. He realised that his rental income from his four little houses was more than his salary and perfectly adequate for them to live on comfortably for the rest of their lives. The young tortoises had grown up and started their own races. The senior tortoises did a bit of travelling, spent time with their grandchildren, but otherwise, their lifestyles did not change much. They still lived in the same modest home they had bought when they got married.
On his fifty-fifth birthday, a tired Mr Hare sat down and looked at his finances. He realised they only had enough savings to last them about three months, if he stopped working today. His salary was their only means of income to support their lifestyle. The young hares had started work and now needed their parents' help in putting a downpayment on their new homes. They said things were different now. Life was harder and they just could not afford to have the same lifestyle they used to have on such low salaries. But they did not know how to live any other way. Mr hare realised there was no hope of retiring anytime soon.
When the older tortoises died, they left behind a large sum of money in a trust fund for their grandchildren, and have a substantial amount leftover to give to charity. The junoir hares wondered where all their money had come from.
When the hares died, they left nothing for their children. There was even a small mortgage left on their beautiful large family home, which the younger hares were unable to pay off. The home had to be sold. The junior tortoises could only watch sadly as their friends were forced to downgrade, wondering why their apparently rich friends were really so poor.
Not everyone will follow this route. But for most of us, slow and steady still wins the race in the end.
The tortoise and the hare both started at the same starting point in life. Both came from middle-class families. They were neither so rich as to be able to afford the many luxuries in life, nor so poor as to not have the basics of a roof over their heads, regular meals and a good education.
Mr Hare was all ready to go from Day One after graduation. He was going to prove that he would get out from his middle-class roots and move into high society. Both he and Mr Tortoise managed to land jobs in the same company. Each began to work his way up.
Mr Tortoise worked steadily. He did what he was told, sometimes he had a little spark of brilliance, but for most part, he was just the reliable steady worker. Mr Hare was determined to get ahead quickly. He put in long hours, made sure the upper management noticed him and very soon, he was moving through the ranks much faster than his old friend, the tortoise.
Mr Hare felt he had to keep up with his rising status, and his high income. He bought a bigger house, and a bigger car. He married a beautiful hare who knew how to dress well and make him look good during the company gatherings. Mr Tortoise plodded along. He bought a modest little home, had a second-hand car, and married sensible , if slightly dowdy Mrs Tortoise.
Both were promoted as the years went by. The tortoises stayed in their modest home and had 4 little tortoises. The hares upgraded their home and car every few years to keep up the image. While they bought country club memberships and overseas holidays, Mrs Tortoise bought little houses with the aim of generating rental income from them.
The junior tortoises went to college on scholarships. The junior hares went to the very best private schools, paid for by Mr Hare. Mrs Hare did not want to be associated with Mrs Tortoise. She could not believe their husbands were collegues. She was glad they did not live in the same neighbourhood.
Soon the junior tortoises and junior hares graduated and started work. Junior tortoises had grown up in a frugal environment and lived within their salaries. Junior hares found they could not get the lifestyle they were accustomed to on their meagre salaries. So Dad and Mom helped out.
One day, on his fifty-fifth birthday, Mr Tortoise sat down and did his sums. He realised that his rental income from his four little houses was more than his salary and perfectly adequate for them to live on comfortably for the rest of their lives. The young tortoises had grown up and started their own races. The senior tortoises did a bit of travelling, spent time with their grandchildren, but otherwise, their lifestyles did not change much. They still lived in the same modest home they had bought when they got married.
On his fifty-fifth birthday, a tired Mr Hare sat down and looked at his finances. He realised they only had enough savings to last them about three months, if he stopped working today. His salary was their only means of income to support their lifestyle. The young hares had started work and now needed their parents' help in putting a downpayment on their new homes. They said things were different now. Life was harder and they just could not afford to have the same lifestyle they used to have on such low salaries. But they did not know how to live any other way. Mr hare realised there was no hope of retiring anytime soon.
When the older tortoises died, they left behind a large sum of money in a trust fund for their grandchildren, and have a substantial amount leftover to give to charity. The junoir hares wondered where all their money had come from.
When the hares died, they left nothing for their children. There was even a small mortgage left on their beautiful large family home, which the younger hares were unable to pay off. The home had to be sold. The junior tortoises could only watch sadly as their friends were forced to downgrade, wondering why their apparently rich friends were really so poor.
Not everyone will follow this route. But for most of us, slow and steady still wins the race in the end.
Yielding to Real Estate Investment Trusts (REITs)
Income is hard to come by these days. Treasuries are yielding less than 5%. The bond market is in disarray, credit spreads are widening (meaning the price of existing bonds is declining) and there are serious liquidity issues (which also impact value).
Have you considered Real Estate mutual funds? Many have current yields in the 5-8% range (primarily REIT-Real Estate Investment Trust-funds). Now, let's be clear on this. These are equity funds and equity funds carry greater risk, and have greater volatility, than bond funds. (Of course, investors in subprime mortgage funds have found out that debt funds are not without risk!) However, equity funds also offer the potential for increasing income and capital appreciation.
Real Estate mutual funds cover a lot of territory and you want to make sure you know how your fund invests. I selected two top performing funds: CGM Realty and Cohen & Steers Realty Focus I (Cohen & Steers are the godfathers of real estate funds).
Take a look at their holdings. CGM's biggest holdings include two international mining companies, two real estate brokerage companies and one Real Estate Investment Trust. The Cohen & Steers fund's largest holdings are all US REITs. Both are excellent funds but they have very different investment strategies. CGM is more capital appreciation oriented where as Cohen & Steers is more income oriented.
The moral to this story is that you have to drill down into a funds' portfolio to make sure it's right for you. (In addition to looking at the stocks it owns, be sure to check to see if the fund uses leverage to enhance its return.)
Income oriented investors should focus on REIT funds(although I've avoided REITs that invest in mortgages for the time being). REIT stocks, in general, have declined more in price during the current market correction than has the Dow or S&P 500. Some argue that Real Estate Investment Trust stocks were overvalued. Whether or not that was true, many high quality REITs are now yielding in excess of Treasuries. Historically, this has been a good entry point.
Of course, many high quality Real Estate Investment Trusts are still yielding in the 2-4% range, so the correction in the REIT market may not be over. And, one of the drivers of REIT stock prices-buyouts by private equity firms-may be ending.
On balance, though, this appears to be a good time for income oriented investors to own REIT funds. Pick a good fund and you'll get high current income and an investment whose value and income stream will increase over time.
Have you considered Real Estate mutual funds? Many have current yields in the 5-8% range (primarily REIT-Real Estate Investment Trust-funds). Now, let's be clear on this. These are equity funds and equity funds carry greater risk, and have greater volatility, than bond funds. (Of course, investors in subprime mortgage funds have found out that debt funds are not without risk!) However, equity funds also offer the potential for increasing income and capital appreciation.
Real Estate mutual funds cover a lot of territory and you want to make sure you know how your fund invests. I selected two top performing funds: CGM Realty and Cohen & Steers Realty Focus I (Cohen & Steers are the godfathers of real estate funds).
Take a look at their holdings. CGM's biggest holdings include two international mining companies, two real estate brokerage companies and one Real Estate Investment Trust. The Cohen & Steers fund's largest holdings are all US REITs. Both are excellent funds but they have very different investment strategies. CGM is more capital appreciation oriented where as Cohen & Steers is more income oriented.
The moral to this story is that you have to drill down into a funds' portfolio to make sure it's right for you. (In addition to looking at the stocks it owns, be sure to check to see if the fund uses leverage to enhance its return.)
Income oriented investors should focus on REIT funds(although I've avoided REITs that invest in mortgages for the time being). REIT stocks, in general, have declined more in price during the current market correction than has the Dow or S&P 500. Some argue that Real Estate Investment Trust stocks were overvalued. Whether or not that was true, many high quality REITs are now yielding in excess of Treasuries. Historically, this has been a good entry point.
Of course, many high quality Real Estate Investment Trusts are still yielding in the 2-4% range, so the correction in the REIT market may not be over. And, one of the drivers of REIT stock prices-buyouts by private equity firms-may be ending.
On balance, though, this appears to be a good time for income oriented investors to own REIT funds. Pick a good fund and you'll get high current income and an investment whose value and income stream will increase over time.
Advantages of Charitable Trusts to Businesses
Businesses can gain immensely from charitable trusts, though these trusts are nonprofit organizations that are set up for the benefit of some other party. That is the reason why most businesses are setting up charitable trusts for themselves. It is not too difficult to set up a charitable trust either. A minimum amount of $100,000 worth in assets is enough to be eligible to set up a charitable trust. In addition, there are several privileges that charitable trusts have.
The following is a list of these privileges:
- Charitable trusts will not cease to function even if they have not been able to fulfill their initial goals. These trusts have what is known as cy pres, a provision that allows charitable trusts to change their beneficiary options if they are not able to meet the first one.
- Charitable trusts can remain working perpetually, which is not the case with other organizations. Most establishments have a particular tenure after which they have to either renew licenses or cease to function, but charitable trusts can go on indefinitely if they so wanted.
- Charitable trusts are given permissions to establish themselves even if their beneficiary options do not seem to be quite concrete. Even if there is just a philanthropic concept, charitable trusts are given permissions to start.
Hence, it is very easy to start charitable trusts. That is what businesses do. The charitable trusts do fulfill the noble intention of serving some beneficiary, which could be an individual, a group of persons or an establishment. At the same time, the charitable trusts help the owners to manage their resources well.
The following is a list of benefits that the owners of charitable trusts are provided by the authorities:
- Charitable trust owners are exempted from a portion of their estates taxes. These taxes can even be waived off if the established charitable trust is large enough in its scope.
- Charitable trust owners are also benefited in terms of capital gains taxes. In this way, charitable trusts help to increase the overall income of the owner of the trust.
- In case of retirement or winding up of business, the charitable trust funds can be used as a sort of retirement benefit plan for the owner. The charitable trust will continue to work as long as there are funds in it. However, it will also pay for the expenses of the owner.
- Charitable trusts are very handy if there is a sudden demise of the owner of the assets. These trusts will then appoint a living trustee - or the living trustee could be appointed during the lifetime of the owner - and this living trustee will undertake the proper disbursement of the assets among the survivors. This happens if no will is made, and in many cases, even if there is a will, the living trustee can supersede the will in some points. An advantage of this arrangement is that the survivors do not have to wait for lengthy probate periods and nor do they have to pay heavy fees for legal procedures.
That is the reason why setting up a charitable trust is a worthwhile idea when the person is still alive. It will help to improve assets during life, and will help to properly disburse assets after death. Setting up a charitable trust is easier than setting up other organizations. However, since the rules differ from one place to another, it is necessary to look into state laws before planning to go ahead with the idea of setting up a charitable trust.
The following is a list of these privileges:
- Charitable trusts will not cease to function even if they have not been able to fulfill their initial goals. These trusts have what is known as cy pres, a provision that allows charitable trusts to change their beneficiary options if they are not able to meet the first one.
- Charitable trusts can remain working perpetually, which is not the case with other organizations. Most establishments have a particular tenure after which they have to either renew licenses or cease to function, but charitable trusts can go on indefinitely if they so wanted.
- Charitable trusts are given permissions to establish themselves even if their beneficiary options do not seem to be quite concrete. Even if there is just a philanthropic concept, charitable trusts are given permissions to start.
Hence, it is very easy to start charitable trusts. That is what businesses do. The charitable trusts do fulfill the noble intention of serving some beneficiary, which could be an individual, a group of persons or an establishment. At the same time, the charitable trusts help the owners to manage their resources well.
The following is a list of benefits that the owners of charitable trusts are provided by the authorities:
- Charitable trust owners are exempted from a portion of their estates taxes. These taxes can even be waived off if the established charitable trust is large enough in its scope.
- Charitable trust owners are also benefited in terms of capital gains taxes. In this way, charitable trusts help to increase the overall income of the owner of the trust.
- In case of retirement or winding up of business, the charitable trust funds can be used as a sort of retirement benefit plan for the owner. The charitable trust will continue to work as long as there are funds in it. However, it will also pay for the expenses of the owner.
- Charitable trusts are very handy if there is a sudden demise of the owner of the assets. These trusts will then appoint a living trustee - or the living trustee could be appointed during the lifetime of the owner - and this living trustee will undertake the proper disbursement of the assets among the survivors. This happens if no will is made, and in many cases, even if there is a will, the living trustee can supersede the will in some points. An advantage of this arrangement is that the survivors do not have to wait for lengthy probate periods and nor do they have to pay heavy fees for legal procedures.
That is the reason why setting up a charitable trust is a worthwhile idea when the person is still alive. It will help to improve assets during life, and will help to properly disburse assets after death. Setting up a charitable trust is easier than setting up other organizations. However, since the rules differ from one place to another, it is necessary to look into state laws before planning to go ahead with the idea of setting up a charitable trust.
Saving Money Can Be Enjoyable For Those In Texas
Money and fun aren't necessarily words that people automatically put together. But for people in the cities of Houston, Dallas and Austin, and throughout Texas, there are more than enough ways of dealing with the stuff to make the world go around a little easier.
Central to the idea of having enough money to live well, or at least in the "manner to which you would like to be accustomed," is that of saving money. Simply put, you need to spend less than you earn, which isn't always an easy thing to do. In fact, it may never be easy, but the good things in life are often those that require work.
While there are numerous options for saving money, deciding where that money will go, at least temporarily, is an important first step. Financial experts say most people who really want to save should maintain a savings account in a bank rather than put it in a money box or under a pillow at home, the idea being that having it accessible but not so available that you're likely to spend it on things that you might -- or should -- think about first.
A close second in terms of priority would be to organize your finances, something that's especially important when it comes to deciding how much to save and where.
Look at a savings account as a tool to help you get and stay organized when it comes to finances. Money put in a savings account should stay there, especially if the financial institution requires a minimum amount to earn interest on the money you deposit.
Those ubiquitous ATM cards may be a problem to some. If that's the case, putting the card in a safe but relatively inaccessible place may be what it takes to remove the temptation to dip into a savings account, especially if the temptation turns into a habit.
As the saved money grows, it may be time to consider a long-term deposit, which would have you move short-term savings into an account that earns even more interest. At the same time, moving the savings into a certificate of deposit (a.k.a., a CD), will force the prudent saver to "stay away."
But what if I need the money?
With a CD, the money is accessible, but only after the depositor pays a steep fine, typically the interest that would have been earned and then some. The lesson here is that it had better be, in fact, an emergency before you opt to break into funds deposited in a long-term instrument such as a CD.
Wise savers will want to shop around for the best features and benefits of the banks in their region. Banks in Dallas, Houston and Austin are typically very competitive and will want to earn the business of what they hope will be a long-term customer. One bank may offer higher interest rates but personal preference definitely comes into play. At any rate, wise consumers will want to understand their options and study the information carefully before making a decision on where to do business.
To say that money is important is probably one of the biggest understatements going. What's encouraging is that most Americans -- 96% in fact -- agree that saving early would help someone achieve a fruitful and stable life.
Increasingly, people are recognizing the value of saving as a way of insulating oneself from instances of health and natural adversity. More and more, today's youth are seeing the value of personal savings in achieving their long-term goals, defined as those that have a lasting effect.
Further reasons for savings include the ability to have flexible financial resources in the future. Experts advise that saving at least 20% of your monthly earnings, while using the remaining portion for your household, personal and unexpected expenses, will make a big difference in a person's ability to achieve their long-term financial goals.
For those with an entrepreneurial leaning, savings can also be a source of future capital for engaging in business enterprises. Savings can also provide more opportunity for someone venturing on their unexplored talents while earning a potential for increasing their money.
While young people may not want to think about it, savings is a great way to get in a habit that will follow them into later years. Indeed, in one survey, more than 23% of today's elderly said they failed to save and strategically use their money for preparing their way to retirement. The result was having to extend their entire retirement career working to cover basic expenses.
Setting goals is a key way to make a difference in achieving financial success. Goals should be attainable and consistent, two characteristics that are likely to help those who want to be successful in the future.
Managing money might seem to be a chore to some, but achieving financial success demands on taking care of the details, including those that have to do with money.
Central to the idea of having enough money to live well, or at least in the "manner to which you would like to be accustomed," is that of saving money. Simply put, you need to spend less than you earn, which isn't always an easy thing to do. In fact, it may never be easy, but the good things in life are often those that require work.
While there are numerous options for saving money, deciding where that money will go, at least temporarily, is an important first step. Financial experts say most people who really want to save should maintain a savings account in a bank rather than put it in a money box or under a pillow at home, the idea being that having it accessible but not so available that you're likely to spend it on things that you might -- or should -- think about first.
A close second in terms of priority would be to organize your finances, something that's especially important when it comes to deciding how much to save and where.
Look at a savings account as a tool to help you get and stay organized when it comes to finances. Money put in a savings account should stay there, especially if the financial institution requires a minimum amount to earn interest on the money you deposit.
Those ubiquitous ATM cards may be a problem to some. If that's the case, putting the card in a safe but relatively inaccessible place may be what it takes to remove the temptation to dip into a savings account, especially if the temptation turns into a habit.
As the saved money grows, it may be time to consider a long-term deposit, which would have you move short-term savings into an account that earns even more interest. At the same time, moving the savings into a certificate of deposit (a.k.a., a CD), will force the prudent saver to "stay away."
But what if I need the money?
With a CD, the money is accessible, but only after the depositor pays a steep fine, typically the interest that would have been earned and then some. The lesson here is that it had better be, in fact, an emergency before you opt to break into funds deposited in a long-term instrument such as a CD.
Wise savers will want to shop around for the best features and benefits of the banks in their region. Banks in Dallas, Houston and Austin are typically very competitive and will want to earn the business of what they hope will be a long-term customer. One bank may offer higher interest rates but personal preference definitely comes into play. At any rate, wise consumers will want to understand their options and study the information carefully before making a decision on where to do business.
To say that money is important is probably one of the biggest understatements going. What's encouraging is that most Americans -- 96% in fact -- agree that saving early would help someone achieve a fruitful and stable life.
Increasingly, people are recognizing the value of saving as a way of insulating oneself from instances of health and natural adversity. More and more, today's youth are seeing the value of personal savings in achieving their long-term goals, defined as those that have a lasting effect.
Further reasons for savings include the ability to have flexible financial resources in the future. Experts advise that saving at least 20% of your monthly earnings, while using the remaining portion for your household, personal and unexpected expenses, will make a big difference in a person's ability to achieve their long-term financial goals.
For those with an entrepreneurial leaning, savings can also be a source of future capital for engaging in business enterprises. Savings can also provide more opportunity for someone venturing on their unexplored talents while earning a potential for increasing their money.
While young people may not want to think about it, savings is a great way to get in a habit that will follow them into later years. Indeed, in one survey, more than 23% of today's elderly said they failed to save and strategically use their money for preparing their way to retirement. The result was having to extend their entire retirement career working to cover basic expenses.
Setting goals is a key way to make a difference in achieving financial success. Goals should be attainable and consistent, two characteristics that are likely to help those who want to be successful in the future.
Managing money might seem to be a chore to some, but achieving financial success demands on taking care of the details, including those that have to do with money.
Buying a new van? - things to consider with your van insurance
Buying a new van is an important process and there are a multitude of factors when considering the best option. It’s important to have a clear understanding of what you need the vehicle to do and how you will finance the van? Will you pay cash or are you looking to free up working capital by choosing a van lease with a regular monthly payment?
Costings:
Perhaps the best place to start is by looking carefully at your budget. Your budget should incorporate a number of considerations such as: day-to-day running costs, breakdown cover, maintenance, upkeep and livery. How economical is it to run? When making your calculations perhaps the most important cost consideration other than buying the van itself is the cost of van insurance. It’s critical to factor your van insurance into your overall cost.
Van Insurance:
Not withstanding the fact that insurance is legally compulsory, the basis of an insurance policy is in effect a difference of opinion between you (the insured) and the insurance company. The Policy and premium will be based upon a number of factors including: where the vehicle will be driven, where it will be parked at night, what it will transport, who will drive it etc.
Here are some tips that can help keep your van insurance costs down:
• Be smart. Pragmatism is the key. Avoid oversized engines or modified vans which might push up the premium costs.
• Is the van for business or personal use? Make sure your insurer is aware if the vehicle is only for personal use – it could save you a lot of money.
• How much cover do you really need? Don’t buy unnecessary coverage but be sure to take sufficient insurance. For example are you paying for EU coverage when it’s unlikely you will take the vehicle abroad? Does your policy sufficiently cover anyone injured in an accident?
• What about the excess? Could you afford to pay for small repairs yourself and thereby protect your no claims? A no claims discount can save you as much as 70%.
• Park the van securely overnight - on a private drive way or in a garage
• Leave the van empty overnight.
• Add safety anti-theft devices and other safety equipment. Secure doors, alarm system, ignition lock and immobilizers will keep the cost of your premium down.
Good quality, cheap van insurance is out there with some companies sifting through hundreds of policy options to find the best quality cheap van insurance available. Take this advice, go online and grab yourself a great deal today.
Costings:
Perhaps the best place to start is by looking carefully at your budget. Your budget should incorporate a number of considerations such as: day-to-day running costs, breakdown cover, maintenance, upkeep and livery. How economical is it to run? When making your calculations perhaps the most important cost consideration other than buying the van itself is the cost of van insurance. It’s critical to factor your van insurance into your overall cost.
Van Insurance:
Not withstanding the fact that insurance is legally compulsory, the basis of an insurance policy is in effect a difference of opinion between you (the insured) and the insurance company. The Policy and premium will be based upon a number of factors including: where the vehicle will be driven, where it will be parked at night, what it will transport, who will drive it etc.
Here are some tips that can help keep your van insurance costs down:
• Be smart. Pragmatism is the key. Avoid oversized engines or modified vans which might push up the premium costs.
• Is the van for business or personal use? Make sure your insurer is aware if the vehicle is only for personal use – it could save you a lot of money.
• How much cover do you really need? Don’t buy unnecessary coverage but be sure to take sufficient insurance. For example are you paying for EU coverage when it’s unlikely you will take the vehicle abroad? Does your policy sufficiently cover anyone injured in an accident?
• What about the excess? Could you afford to pay for small repairs yourself and thereby protect your no claims? A no claims discount can save you as much as 70%.
• Park the van securely overnight - on a private drive way or in a garage
• Leave the van empty overnight.
• Add safety anti-theft devices and other safety equipment. Secure doors, alarm system, ignition lock and immobilizers will keep the cost of your premium down.
Good quality, cheap van insurance is out there with some companies sifting through hundreds of policy options to find the best quality cheap van insurance available. Take this advice, go online and grab yourself a great deal today.
Why do couriers and delivery drivers pay more for insurance?
When you get a quote for your van insurance, the price will depend on a number of factors including your line of business and annual mileage. Courier firms and delivery drivers usually pay higher commercial van insurance premiums because they run high volume deliveries to a wider area and have a relatively high annual mileage. The insurance quotes that they receive will be higher than drivers that work within a small local area, or non-commercial van drivers.
If you use your vehicle or vehicles for transporting goods or people in return for payment, you need to get courier van insurance. Couriers and delivery drivers transport multiple goods for multiple customers, and need insurance that covers their vehicle and the goods in transit.
Those who transport goods of any sort around in their vehicle need a special type of commercial van insurance – extra goods in transit insurance - that also covers those goods. This will usually come as a separate policy from your usual van insurance policy, and it helps to provide cover for goods if they are stolen, damaged in an accident in your vehicle, lost, or damaged while in transit. You need both types of insurance because it is against the law to fail to do so and because it protects both your interests, and your customers’ goods in transit.
If your company runs more than one commercial van, you should get quotes for fleet insurance for all your vehicles. This can save you a lot of time and money, whether you run two commercial vehicles or 200. You must get coverage that covers all the different types of use of your vehicles to ensure that you are fully covered in any event.
Courier van insurance is not always cheap van insurance and often costs more because commercial vehicles are usually larger than average vehicles, and can inflict a lot more damage if you are unlucky enough to have an accident. However, paying that bit extra for special commercial courier van insurance is much better to protect you and your business, and you can save on your insurance costs overall by insuring all your named drivers, increasing your excess, and ensuring that your vehicle or vehicles are kept secure at night.
You can also reduce your overall commercial van insurance costs by combining your vehicle insurance with courier insurance under the same insurance company. This way, you get more benefits and pay less than you would by holding two or more policies with different companies. Taking out your insurance policies with one company also saves on paperwork and makes it easier to keep track of payments, and you are likely to benefit from multiple policy discounts and get relatively cheap van insurance if you stick with just one insurer. However, if you are not able to get any discounts, you may be able to get a fixed rate for your commercial van insurance and your goods in transit insurance, which means that your premiums will not increase in subsequent years.
Remember - there are many insurance companies out there who will offer you cheap van insurance – but make sure that you shop around to find not only the best deal, but the most comprehensive cover for your vehicle and the goods you transport, to fully protect yourself and your customers’ interests for years to come.
If you use your vehicle or vehicles for transporting goods or people in return for payment, you need to get courier van insurance. Couriers and delivery drivers transport multiple goods for multiple customers, and need insurance that covers their vehicle and the goods in transit.
Those who transport goods of any sort around in their vehicle need a special type of commercial van insurance – extra goods in transit insurance - that also covers those goods. This will usually come as a separate policy from your usual van insurance policy, and it helps to provide cover for goods if they are stolen, damaged in an accident in your vehicle, lost, or damaged while in transit. You need both types of insurance because it is against the law to fail to do so and because it protects both your interests, and your customers’ goods in transit.
If your company runs more than one commercial van, you should get quotes for fleet insurance for all your vehicles. This can save you a lot of time and money, whether you run two commercial vehicles or 200. You must get coverage that covers all the different types of use of your vehicles to ensure that you are fully covered in any event.
Courier van insurance is not always cheap van insurance and often costs more because commercial vehicles are usually larger than average vehicles, and can inflict a lot more damage if you are unlucky enough to have an accident. However, paying that bit extra for special commercial courier van insurance is much better to protect you and your business, and you can save on your insurance costs overall by insuring all your named drivers, increasing your excess, and ensuring that your vehicle or vehicles are kept secure at night.
You can also reduce your overall commercial van insurance costs by combining your vehicle insurance with courier insurance under the same insurance company. This way, you get more benefits and pay less than you would by holding two or more policies with different companies. Taking out your insurance policies with one company also saves on paperwork and makes it easier to keep track of payments, and you are likely to benefit from multiple policy discounts and get relatively cheap van insurance if you stick with just one insurer. However, if you are not able to get any discounts, you may be able to get a fixed rate for your commercial van insurance and your goods in transit insurance, which means that your premiums will not increase in subsequent years.
Remember - there are many insurance companies out there who will offer you cheap van insurance – but make sure that you shop around to find not only the best deal, but the most comprehensive cover for your vehicle and the goods you transport, to fully protect yourself and your customers’ interests for years to come.
Advantages and Disadvantages of Individual and Group Health Insurance
Switching from group to individual health insurance is a change many people are currently facing. There can be some big differences between the two types of insurance and their cost. Becoming familiar with some of those basic differences will help you to know what to expect.
Group health insurance
Group health insurance is purchased by your employer from a health insurance company. Everyone who is eligible can receive coverage under the plan. Group health insurance is less costly than individual health insurance, because you have the buying power of the group. The insurance company bases the premium upon a calculation of how much insurance the group as a whole will use. However, if you are buying individual health insurance, the calculation of your premium is not based on a group, it's based on you alone. That is why individual health insurance can be so expensive.
Individual health insurance
Individual health insurance is health insurance that you purchase from an insurance company on your own, and not through an employer. You can choose coverage for either yourself or your self and your family, individual policies often provide less coverage than group policies do. Under an individual plan, some services such as substance abuse treatment may not be covered.
Another important difference between group and individual health insurance is that with group insurance, the law requires the insurance company to cover everyone who works for that employer. With individual health insurance, companies are not required to issue you a policy. This can be very alarming for people who have pre-existing conditions. If you have recently lost your job, it can be surprising to find out that even though you have been covered under a group plan, there is no assurance that you will be able to obtain individual health insurance coverage.
In some states, health insurance companies are allowed to issue policies to people with pre-existing conditions, but they are issued with an exclusionary rider. That means that any services for the pre-existing condition are not covered. Each state has its own laws overseeing how individual health insurance is administered. Therefore, plans can very a great deal from state to state. Plans can also vary from one insurance company to another. Be sure to check around and compare quotes and plans from several different companies before making a decision.
COBRA as an option
One of the first options presented to people who have lost their health insurance coverage is COBRA. COBRA stands for the Consolidated Omnibus Budget Reconciliation Act and it allows you to continue on your employer's health insurance plan for up to 18 months after losing your job. However, there are several situations in which employees would not be eligible for COBRA coverage such as, if the company employed less than 20 people and went out of business, or if it dropped its group health insurance or went into bankruptcy.
One of the drawbacks of COBRA is the expense. Under COBRA you have to pay the entire amount of your health insurance coverage. Whereas when you were employed, your employer paid a portion of your benefits. One recent development that will be beneficial to COBRA recipients is that after March 1, 2009 recipients will only have to pay 35% of the cost of the monthly premium and the federal government will pay the remainder for up to nine months.
If you have recently lost your group health insurance, switching to individual health insurance will cause the cost of your health insurance to increase. Understanding the different types of insurance and how they work, will help you to prepare. If you have pre-existing conditions and are concerned about finding individual health insurance coverage, investigate COBRA and find out if it is an option. Also, check with several different health insurance companies and compare the costs before you make a decision.
Group health insurance
Group health insurance is purchased by your employer from a health insurance company. Everyone who is eligible can receive coverage under the plan. Group health insurance is less costly than individual health insurance, because you have the buying power of the group. The insurance company bases the premium upon a calculation of how much insurance the group as a whole will use. However, if you are buying individual health insurance, the calculation of your premium is not based on a group, it's based on you alone. That is why individual health insurance can be so expensive.
Individual health insurance
Individual health insurance is health insurance that you purchase from an insurance company on your own, and not through an employer. You can choose coverage for either yourself or your self and your family, individual policies often provide less coverage than group policies do. Under an individual plan, some services such as substance abuse treatment may not be covered.
Another important difference between group and individual health insurance is that with group insurance, the law requires the insurance company to cover everyone who works for that employer. With individual health insurance, companies are not required to issue you a policy. This can be very alarming for people who have pre-existing conditions. If you have recently lost your job, it can be surprising to find out that even though you have been covered under a group plan, there is no assurance that you will be able to obtain individual health insurance coverage.
In some states, health insurance companies are allowed to issue policies to people with pre-existing conditions, but they are issued with an exclusionary rider. That means that any services for the pre-existing condition are not covered. Each state has its own laws overseeing how individual health insurance is administered. Therefore, plans can very a great deal from state to state. Plans can also vary from one insurance company to another. Be sure to check around and compare quotes and plans from several different companies before making a decision.
COBRA as an option
One of the first options presented to people who have lost their health insurance coverage is COBRA. COBRA stands for the Consolidated Omnibus Budget Reconciliation Act and it allows you to continue on your employer's health insurance plan for up to 18 months after losing your job. However, there are several situations in which employees would not be eligible for COBRA coverage such as, if the company employed less than 20 people and went out of business, or if it dropped its group health insurance or went into bankruptcy.
One of the drawbacks of COBRA is the expense. Under COBRA you have to pay the entire amount of your health insurance coverage. Whereas when you were employed, your employer paid a portion of your benefits. One recent development that will be beneficial to COBRA recipients is that after March 1, 2009 recipients will only have to pay 35% of the cost of the monthly premium and the federal government will pay the remainder for up to nine months.
If you have recently lost your group health insurance, switching to individual health insurance will cause the cost of your health insurance to increase. Understanding the different types of insurance and how they work, will help you to prepare. If you have pre-existing conditions and are concerned about finding individual health insurance coverage, investigate COBRA and find out if it is an option. Also, check with several different health insurance companies and compare the costs before you make a decision.
Government Measures to Help with Health Insurance
The rising unemployment rate is causing not just job loss but also the loss of valuable health insurance coverage for many people. In response, the federal government has enacted new legislation to help with COBRA coverage as well as state aid to families with children.
Changes to COBRA
COBRA stands for the Consolidated Omnibus Reconciliation Act of 1986. Under COBRA, if you worked for a company that had more than 20 employees, then you are able to continue on the group health insurance plan for as much as 18 months. The downside of COBRA is that it can be quite expensive. In most states, recipients report that COBRA payments account for more than 75% of their unemployment benefit. However, under the recently passed Economic Stimulus Package, you could be eligible for assistance with 65% of your COBRA premium.
To qualify for the program you must have lost your job between September 1, 2008 and December 31, 2009. Your income must be less than $125,000 for an individual and less than $250,000 a year for a family. If you did not take advantage of COBRA initially, you can still sign up for it. If you did sign up for COBRA coverage, you won't get any money back for the premiums you have already paid, but you will be eligible for assistance from the point after the law has taken effect. Under the new law you will pay 35% of the premium, and the government pays the other 65%. Your assistance could continue for as much as nine months.
State Children's Health Insurance Program
Another measure the federal government has taken recently to help people with health insurance coverage is to expand the State Children's Health Insurance Program or SCHIP. The law will provide $32 billion to the program over the next five years and expand coverage to from 7 to 11 million children. SCHIP is designed to provide health care coverage for children up to age 19 and pregnant women, in families whose income is low, but not low enough to qualify for Medicaid. A portion of the funding will come from an increase in the tax on cigarettes.
Under SCHIP, the federal government provides the states with matching funds to provide health care for families with children. To qualify, families could earn only up to 200% of the poverty level. Under the new law, families can earn up to 300% of the poverty level and still qualify for SCHIP. Each state has set up their program differently, so programs can vary from state to state.
If you find yourself out of a job and out of health insurance, two recent measures by the federal government may provide some assistance. The first are changes to the COBRA program in which the government could pick up to 65% of the cost of your health insurance premium. The other is the expansion of the State Children's Health Insurance Program. Either of these options could provide short-term assistance with health insurance coverage.
Changes to COBRA
COBRA stands for the Consolidated Omnibus Reconciliation Act of 1986. Under COBRA, if you worked for a company that had more than 20 employees, then you are able to continue on the group health insurance plan for as much as 18 months. The downside of COBRA is that it can be quite expensive. In most states, recipients report that COBRA payments account for more than 75% of their unemployment benefit. However, under the recently passed Economic Stimulus Package, you could be eligible for assistance with 65% of your COBRA premium.
To qualify for the program you must have lost your job between September 1, 2008 and December 31, 2009. Your income must be less than $125,000 for an individual and less than $250,000 a year for a family. If you did not take advantage of COBRA initially, you can still sign up for it. If you did sign up for COBRA coverage, you won't get any money back for the premiums you have already paid, but you will be eligible for assistance from the point after the law has taken effect. Under the new law you will pay 35% of the premium, and the government pays the other 65%. Your assistance could continue for as much as nine months.
State Children's Health Insurance Program
Another measure the federal government has taken recently to help people with health insurance coverage is to expand the State Children's Health Insurance Program or SCHIP. The law will provide $32 billion to the program over the next five years and expand coverage to from 7 to 11 million children. SCHIP is designed to provide health care coverage for children up to age 19 and pregnant women, in families whose income is low, but not low enough to qualify for Medicaid. A portion of the funding will come from an increase in the tax on cigarettes.
Under SCHIP, the federal government provides the states with matching funds to provide health care for families with children. To qualify, families could earn only up to 200% of the poverty level. Under the new law, families can earn up to 300% of the poverty level and still qualify for SCHIP. Each state has set up their program differently, so programs can vary from state to state.
If you find yourself out of a job and out of health insurance, two recent measures by the federal government may provide some assistance. The first are changes to the COBRA program in which the government could pick up to 65% of the cost of your health insurance premium. The other is the expansion of the State Children's Health Insurance Program. Either of these options could provide short-term assistance with health insurance coverage.
Life Insurance - It Just Got Interesting
For the majority of our lives, the subject of life insurance has traditionally been one that each of us has probably wanted to ignore. It is often regarded as tedious, frustrating, dull, and not altogether essential - at least until you reach that age. On another level, despite its importance and the inherent sensibleness that is evident when an individual is seen to have taken out a policy, it is still very difficult to make the subject of life insurance seem interesting, positive and relevant - without seeming preachy.
Of course, all that is about to change. Drawing influence from a blog post at wnyc.org entitled: Life Insurance…Not So Dull After All, the interview contained therein highlighted the fact that, aside from what it might mean from person to person in regards to when/whether they should be thinking about it, life insurance on an industrial and business level is one of the most important factors in regards to the recession - and consequently one of the most discussable subjects for the press.
In that post, expert Aaron Elstein points out the likelihood of further bailouts for American life insurance (many insurers remain in a strong position) companies due to certain investments in bonds (i.e. mortgages) which have declined in value. In turn, such declining bonds will be sold at a loss and certain insurers will be losing money - and, in simple terms, may well struggle to pay out claimants without government aid. If that doesn't sound like the makings of a John Grisham novel, further life insurance-orientated news stories seem like the stuff dreamt up by Hollywood scriptwriters.
The Los Angeles Times (and other places) reported on April 8th of the story of two middle aged women who've been arrested and accused of life insurance fraud on a grand scale. The women (aged 60 and 66, and thought to have worked with others) are said to have bought life insurance policies in the names of fictitious people, waited until the policies had matured, held fake funerals, and then received the payouts from their own beneficiary bank accounts.
The couple are facing several charges and are said to have carried out two fake insurance claims for individuals called Jim Davis and Lara Urich, leaving agents etc stunned at the lengths some will go to. The Times stated: "the defendants are accused of faking the cremation of a "Laura Urich" and collecting $5,000 in funeral expenses and $50,000 in insurance death benefits through two purported beneficiaries, according to court records." Aside from being an important thing to consider when each of us reaches that certain time in our life - in 2009, it seems that life insurance could be the most intriguing subject of the time. And a great reflection of life in the 21st Century.
Of course, all that is about to change. Drawing influence from a blog post at wnyc.org entitled: Life Insurance…Not So Dull After All, the interview contained therein highlighted the fact that, aside from what it might mean from person to person in regards to when/whether they should be thinking about it, life insurance on an industrial and business level is one of the most important factors in regards to the recession - and consequently one of the most discussable subjects for the press.
In that post, expert Aaron Elstein points out the likelihood of further bailouts for American life insurance (many insurers remain in a strong position) companies due to certain investments in bonds (i.e. mortgages) which have declined in value. In turn, such declining bonds will be sold at a loss and certain insurers will be losing money - and, in simple terms, may well struggle to pay out claimants without government aid. If that doesn't sound like the makings of a John Grisham novel, further life insurance-orientated news stories seem like the stuff dreamt up by Hollywood scriptwriters.
The Los Angeles Times (and other places) reported on April 8th of the story of two middle aged women who've been arrested and accused of life insurance fraud on a grand scale. The women (aged 60 and 66, and thought to have worked with others) are said to have bought life insurance policies in the names of fictitious people, waited until the policies had matured, held fake funerals, and then received the payouts from their own beneficiary bank accounts.
The couple are facing several charges and are said to have carried out two fake insurance claims for individuals called Jim Davis and Lara Urich, leaving agents etc stunned at the lengths some will go to. The Times stated: "the defendants are accused of faking the cremation of a "Laura Urich" and collecting $5,000 in funeral expenses and $50,000 in insurance death benefits through two purported beneficiaries, according to court records." Aside from being an important thing to consider when each of us reaches that certain time in our life - in 2009, it seems that life insurance could be the most intriguing subject of the time. And a great reflection of life in the 21st Century.
Lady van drivers insure for less
For many years, the image of ‘White Van Man' has haunted the highways and byways of Britain. The looming presence of a white van in your rear view mirror suggested that the driver was likely to be male, somewhat aggressive in his roadcraft skills and probably in a hurry. Now, statistics are turning this misconception on its head - now more than a third of the UK's commercial van drivers are women, according to a survey by the AA.
Women tend to pay lower insurance premiums than their male counterparts as insurers consider them to be a lower ‘risk'. Women in their twenties pay on average nine percent lower insurance premiums than men of the same age. The same is true for van insurance, with specialist dealers offering lower commercial van insurance rates for women. Statistics have repeatedly shown that women drivers (whether in a car or a van) drive more cautiously than men and are less likely to have major incidents on the road. Claims by women are more likely to be for minor bumps and scrapes, rather than expensive write-offs. As a result, companies like Sheila's Wheels and other specialist insurers offer lower premiums for female drivers, believing them to be better, long term customers who are less likely to make a claim.
So why the sudden rise in numbers of ‘White Van Woman'? There are several reasons for the rise in the number of female van drivers, not least the increase in women running their own businesses and using small and medium sized vans for everyday business use. Women are not buying vans for their femininity - they are buying them as sound business investments that are practical, efficient and can help them to do their job with the minimum of fuss. Women are taking the lead in small businesses such as catering, events organisation and courier services and all of these occupations require the transportation of equipment that would be difficult in a normal family hatchback.
Although looks aren't really that important, the commercial van industry has responded to the increase in the number of women van drivers by making their vehicles what they consider to be more attractive to female drivers. Power steering, air conditioning and fancy alloy wheels are all increasingly common in new models of vans. But it could be argued that these additions appeal to both men and women, so it all boils back down to practicality again - vans are far more adaptable and practical than an average car. It's not just business use they can be put to. Outside of working hours, a van can also be a general workhorse for the average family, carrying everything from shopping, large DIY items and furniture through to hobby equipment like surfboards and canoes. It is this ability to ‘multi-task' that appeals to women and is why vans are becoming so much more popular with female drivers.
According to vehicle registration figures for 2000, one in 10 drivers of Britain's privately owned vans is now female, and in the past nine years that figure is bound to have increased. Cheap van insurance has given women more choice in the type of vehicles they drive and the advent of online comparison sites make it easier than ever for women van drivers to find reasonably priced commercial van insurance.
Women tend to pay lower insurance premiums than their male counterparts as insurers consider them to be a lower ‘risk'. Women in their twenties pay on average nine percent lower insurance premiums than men of the same age. The same is true for van insurance, with specialist dealers offering lower commercial van insurance rates for women. Statistics have repeatedly shown that women drivers (whether in a car or a van) drive more cautiously than men and are less likely to have major incidents on the road. Claims by women are more likely to be for minor bumps and scrapes, rather than expensive write-offs. As a result, companies like Sheila's Wheels and other specialist insurers offer lower premiums for female drivers, believing them to be better, long term customers who are less likely to make a claim.
So why the sudden rise in numbers of ‘White Van Woman'? There are several reasons for the rise in the number of female van drivers, not least the increase in women running their own businesses and using small and medium sized vans for everyday business use. Women are not buying vans for their femininity - they are buying them as sound business investments that are practical, efficient and can help them to do their job with the minimum of fuss. Women are taking the lead in small businesses such as catering, events organisation and courier services and all of these occupations require the transportation of equipment that would be difficult in a normal family hatchback.
Although looks aren't really that important, the commercial van industry has responded to the increase in the number of women van drivers by making their vehicles what they consider to be more attractive to female drivers. Power steering, air conditioning and fancy alloy wheels are all increasingly common in new models of vans. But it could be argued that these additions appeal to both men and women, so it all boils back down to practicality again - vans are far more adaptable and practical than an average car. It's not just business use they can be put to. Outside of working hours, a van can also be a general workhorse for the average family, carrying everything from shopping, large DIY items and furniture through to hobby equipment like surfboards and canoes. It is this ability to ‘multi-task' that appeals to women and is why vans are becoming so much more popular with female drivers.
According to vehicle registration figures for 2000, one in 10 drivers of Britain's privately owned vans is now female, and in the past nine years that figure is bound to have increased. Cheap van insurance has given women more choice in the type of vehicles they drive and the advent of online comparison sites make it easier than ever for women van drivers to find reasonably priced commercial van insurance.
A van can be used for more than just business!
If you've ever tried to get a large piece of furniture into the back of a family car, you'll know how restrictive hatchbacks and even estate cars can be. Despite a myriad of design features that involve magically folding seats and complicated under-floor storage, the average car just doesn't have the capacity that even a small van has. With the motor industry going through one of the most difficult periods in its history, now is actually the right time to think about choosing a van rather than a new car.
In 2008, the commercial van industry had a year of ‘two halves', according to the Society of Motor Manufacturers and Traders. Although the first half of the year was buoyant for van sales, the second half saw the recession really kick in hard. Consequently, all vehicle sales fell dramatically, including vans. However, this has actually put the buyer in a stronger position, as suppliers are now left with plenty of vans and are struggling to sell them. Prices are tumbling, making choosing a small or medium sized van a much cheaper option.
Vans don't just have a use as commercial vehicles. If your hobbies require you to move large equipment around then a van can be an ideal choice. Instead of precariously strapping your (expensive) surfboards to a roof-rack and exposing them to potential damage from flying debris or even running the risk of them detaching from the car half way to the beach, a van ensures that both you and your equipment arrive safely at your destination, ready to enjoy the surf. A visit to a DIY store can be much less stressful if those 8x4 sheets of plywood don't have to suffer the indignities of bungee cords and ratchet straps. A sofa that would probably end up as a potential driving hazard if shoe-horned into the average family car can slide easily into the back of even a small van. Although a van may not be the ideal choice for a family car if you have children, it can have plenty of other uses that will justify its place on your driveway.
Insurance is another aspect that you will need to consider when buying a van. Cheap van insurance for domestic use and commercial van insurance quotes can differ wildly, depending on the use you intend to put your van to. Commercial van insurance quotes can also cover the contents of the van (particularly if the vehicle is used to transport tools and equipment), but you may pay an excess for this. If you're planning to use your van purely for domestic and social use, the quote will probably be considerably less than for commercial and business use.
Van insurance can be a complicated issue, so once you've chosen the perfect van for your needs, take a little time to consider all the potential uses you will be putting it to and what kind of insurance you will need. Using an Internet site to compare quotes is now a popular way of choosing cheap van insurance, allowing you to see clearly what each policy offers and what additional excess charges you may be liable for.
With dealer's forecourts full of a wide range of vehicles to suit all tastes, and sellers ready and willing to haggle over prices to try and beat the vice-like grip of the recession, vans are cheap and plentiful. Insurance quotes are reasonable, even for younger drivers and as a result this is easily one of the best times to invest in a vehicle that will give you far more practical applications and uses than the average family car.
In 2008, the commercial van industry had a year of ‘two halves', according to the Society of Motor Manufacturers and Traders. Although the first half of the year was buoyant for van sales, the second half saw the recession really kick in hard. Consequently, all vehicle sales fell dramatically, including vans. However, this has actually put the buyer in a stronger position, as suppliers are now left with plenty of vans and are struggling to sell them. Prices are tumbling, making choosing a small or medium sized van a much cheaper option.
Vans don't just have a use as commercial vehicles. If your hobbies require you to move large equipment around then a van can be an ideal choice. Instead of precariously strapping your (expensive) surfboards to a roof-rack and exposing them to potential damage from flying debris or even running the risk of them detaching from the car half way to the beach, a van ensures that both you and your equipment arrive safely at your destination, ready to enjoy the surf. A visit to a DIY store can be much less stressful if those 8x4 sheets of plywood don't have to suffer the indignities of bungee cords and ratchet straps. A sofa that would probably end up as a potential driving hazard if shoe-horned into the average family car can slide easily into the back of even a small van. Although a van may not be the ideal choice for a family car if you have children, it can have plenty of other uses that will justify its place on your driveway.
Insurance is another aspect that you will need to consider when buying a van. Cheap van insurance for domestic use and commercial van insurance quotes can differ wildly, depending on the use you intend to put your van to. Commercial van insurance quotes can also cover the contents of the van (particularly if the vehicle is used to transport tools and equipment), but you may pay an excess for this. If you're planning to use your van purely for domestic and social use, the quote will probably be considerably less than for commercial and business use.
Van insurance can be a complicated issue, so once you've chosen the perfect van for your needs, take a little time to consider all the potential uses you will be putting it to and what kind of insurance you will need. Using an Internet site to compare quotes is now a popular way of choosing cheap van insurance, allowing you to see clearly what each policy offers and what additional excess charges you may be liable for.
With dealer's forecourts full of a wide range of vehicles to suit all tastes, and sellers ready and willing to haggle over prices to try and beat the vice-like grip of the recession, vans are cheap and plentiful. Insurance quotes are reasonable, even for younger drivers and as a result this is easily one of the best times to invest in a vehicle that will give you far more practical applications and uses than the average family car.
How Home Insurance Complacency Can Cost You £££s
As the recession continues to take its toll, it's more important than ever to ensure you're not paying over the odds for cover. Recent findings show that British householders are overpaying on their home insurance by £1.3 billion per year*, and that almost 58 per cent of UK homeowners have not reviewed their policies in the last three years.**
No reward for home insurance loyalty
While it may be tempting to automatically renew your policy with the same provider year after year, this kind of complacency makes little financial sense. Insurers know most customers will do so without looking at what else is on offer, so tend not to pull out all the stops in a bid to keep your business. Instead, they concentrate on offering the most competitive prices to new customers.
Shop around for a better home cover deal
As insurance premiums can vary considerably, the golden rule is to spend time shopping around; you may be surprised at just how much you can save in a pretty short space of time. When doing your research, don't forget to look at the level of cover as well as price, as the cheapest deal may not necessarily be the most comprehensive.
Top tips to cut the cost of home cover
* Shop around using an insurance comparison site to see if you can bring down the price of your premium. Just a few minutes tapping away on your PC could result in savings of over £180.**** Don't jump at the home insurance policy offered by your mortgage provider without checking whether you can get a better deal elsewhere, and don't assume you have to take buildings and contents cover with the same provider. Search for the cheapest individual buildings policy and then for the cheapest contents policy.* Further savings can be made by paying the whole year's premium annually rather than monthly, and by increasing the voluntary excess.* Be aware that while under-estimating the value of your contents may have the attraction of cutting the cost of your policy, it could be disastrous if you have to claim. For more information, read what not to forget when applying for home insurance. * Also ensure that you've got your ‘rebuild cost' right. Many people think that rebuild cost is the same as the market value when it is really a lot less. A rebuild calculator will work this out for you automatically.* Security improvements: a few additions to your home can also help you cut costs, such as installing a good alarm system, putting five-level mortice deadlocks on external doors, and adding key-operated locks to all accessible windows.* Safety improvements: for a relatively small expense you can also fit smoke alarms and fire extinguishers - all of which can significantly reduce the price you pay.
Help with getting through the quote process
Finally, make sure you have your old insurance documents to hand when going through the quote process as this paperwork can be used for reference - and will save you from running around the house when asked what type of locks you have on the doors.
You can find more useful tips on reducing home insurance premiums here.
*Assumptions used - 44 per cent (source Mintel) of 16 million homeowners who have not reviewed their home insurance in the UK multiplied by the average home insurance saving by the Confused site customers in 2008 of £185.25.**Mintel Home Insurance report 2008 and Mintel Aggregator report 2008.
***24% of customers who received a home insurance quote between 1st January and 31st March 2009 and provided a best alternative price saved over £180.74.
No reward for home insurance loyalty
While it may be tempting to automatically renew your policy with the same provider year after year, this kind of complacency makes little financial sense. Insurers know most customers will do so without looking at what else is on offer, so tend not to pull out all the stops in a bid to keep your business. Instead, they concentrate on offering the most competitive prices to new customers.
Shop around for a better home cover deal
As insurance premiums can vary considerably, the golden rule is to spend time shopping around; you may be surprised at just how much you can save in a pretty short space of time. When doing your research, don't forget to look at the level of cover as well as price, as the cheapest deal may not necessarily be the most comprehensive.
Top tips to cut the cost of home cover
* Shop around using an insurance comparison site to see if you can bring down the price of your premium. Just a few minutes tapping away on your PC could result in savings of over £180.**** Don't jump at the home insurance policy offered by your mortgage provider without checking whether you can get a better deal elsewhere, and don't assume you have to take buildings and contents cover with the same provider. Search for the cheapest individual buildings policy and then for the cheapest contents policy.* Further savings can be made by paying the whole year's premium annually rather than monthly, and by increasing the voluntary excess.* Be aware that while under-estimating the value of your contents may have the attraction of cutting the cost of your policy, it could be disastrous if you have to claim. For more information, read what not to forget when applying for home insurance. * Also ensure that you've got your ‘rebuild cost' right. Many people think that rebuild cost is the same as the market value when it is really a lot less. A rebuild calculator will work this out for you automatically.* Security improvements: a few additions to your home can also help you cut costs, such as installing a good alarm system, putting five-level mortice deadlocks on external doors, and adding key-operated locks to all accessible windows.* Safety improvements: for a relatively small expense you can also fit smoke alarms and fire extinguishers - all of which can significantly reduce the price you pay.
Help with getting through the quote process
Finally, make sure you have your old insurance documents to hand when going through the quote process as this paperwork can be used for reference - and will save you from running around the house when asked what type of locks you have on the doors.
You can find more useful tips on reducing home insurance premiums here.
*Assumptions used - 44 per cent (source Mintel) of 16 million homeowners who have not reviewed their home insurance in the UK multiplied by the average home insurance saving by the Confused site customers in 2008 of £185.25.**Mintel Home Insurance report 2008 and Mintel Aggregator report 2008.
***24% of customers who received a home insurance quote between 1st January and 31st March 2009 and provided a best alternative price saved over £180.74.
Forex Trading Software: Protect Yourself from Hackers
The question most often asked from investors is: Why are there so many different types of forex trading software and which one is the best? The answer is quite simple. There are many different companies that have their own currency trading software and many offer them for free. That is why there is an abundance of advertisements online promoting each one for its unique attributes. Choosing the program that is going to meet or exceed your needs is another issue and the importance of it is very high for several reasons.
Forex trading software is an important part of any trading system. One of the most important elements that should be sought out in any software program is the security feature. Most currency trading software programs typically are equipped with 128 bit encryption and SSL. These are two highly required features of any forex trading software program and will block hackers from gaining entry to your personal and financial details on your computer. Ensuring safe guards are in place before going online to trade foreign exchange is just smart business sense!
One of the good things to keep in mind while choosing a currency trading software program that is effective is that this market never closes. Literally. There is no shortage of buyers and sellers or forex brokers ready to strike up a deal at any time of the day or night. Making sure that the forex trading software has 24-hour support in that regard is also a very wise choice. Having technical support available at all times can actually enhance a traders success. Losing information in the middle of a trading transaction can be financially devastating and without technical help, it is likely not only will the investor have lost his trade prospect but also potential earnings.
It is in the best interest of the company who is distributing the currency trading software to provide the best type of software security wise as well as technical support. There are few companies who want hackers to steal your identity and money. They need the investor to secure a solid future for their brokerages so most will come equipped with the basic security and technical features. They depend on the investor's money to thrive so measures are typically taken to make very secure forex trading software programs.
The pivotal parts that set many currency trading software programs above the next is the downtimes that they experience. Before deciding on any program, it is sensible to find out the potential companies down time with that specific program. A forex trading software program that has relatively small downtimes and a capability to back up all information are the tools needed to get on the right forex track!
Forex trading software is an important part of any trading system. One of the most important elements that should be sought out in any software program is the security feature. Most currency trading software programs typically are equipped with 128 bit encryption and SSL. These are two highly required features of any forex trading software program and will block hackers from gaining entry to your personal and financial details on your computer. Ensuring safe guards are in place before going online to trade foreign exchange is just smart business sense!
One of the good things to keep in mind while choosing a currency trading software program that is effective is that this market never closes. Literally. There is no shortage of buyers and sellers or forex brokers ready to strike up a deal at any time of the day or night. Making sure that the forex trading software has 24-hour support in that regard is also a very wise choice. Having technical support available at all times can actually enhance a traders success. Losing information in the middle of a trading transaction can be financially devastating and without technical help, it is likely not only will the investor have lost his trade prospect but also potential earnings.
It is in the best interest of the company who is distributing the currency trading software to provide the best type of software security wise as well as technical support. There are few companies who want hackers to steal your identity and money. They need the investor to secure a solid future for their brokerages so most will come equipped with the basic security and technical features. They depend on the investor's money to thrive so measures are typically taken to make very secure forex trading software programs.
The pivotal parts that set many currency trading software programs above the next is the downtimes that they experience. Before deciding on any program, it is sensible to find out the potential companies down time with that specific program. A forex trading software program that has relatively small downtimes and a capability to back up all information are the tools needed to get on the right forex track!
More Than Just Accidents and Tools - The Importance of Farm Insurance
Insurance is something of a contentious issue at the moment, particularly in regards to the current economic crisis which is causing many of us to cut back on cover we do not consider essential. However, with an increase in thefts and burglaries in rural areas of the UK, farm insurance is becoming more of a necessity - and companies are highlighting the customisable nature of their cover in a sector where each customer has different priorities.
Public LiabilityDespite the specific individual needs of each farmer and their business, public liability cover is often considered a necessity when it comes to taking out insurance for a working farm or farmland. The reason for this is simply because if anything should go wrong (i.e. damage, injury or worse) involving a member of the public and for which you are held responsible, the cost can be ruinous and without insurance you may be forced to sell your business to satisfy the claim made against you.
Employers' LiabilityEmployers' liability cover is a legal requirement if people work for you, though the law does not state that you must have cover for yourself or a member of your family. However, employers' liability is there to give you piece of mind and financial security should an accident happen that is your responsibility.
Property Insuring your property against theft and damage is where farm insurance starts to become more tailored to your specific priorities, and the term "property" can mean anything from buildings, through machinery and vehicles, to animals (see below). With property insurance it is very much up to you to decide which property to insure and for what range of perils e.g. fire or flood.
Public LiabilityDespite the specific individual needs of each farmer and their business, public liability cover is often considered a necessity when it comes to taking out insurance for a working farm or farmland. The reason for this is simply because if anything should go wrong (i.e. damage, injury or worse) involving a member of the public and for which you are held responsible, the cost can be ruinous and without insurance you may be forced to sell your business to satisfy the claim made against you.
Employers' LiabilityEmployers' liability cover is a legal requirement if people work for you, though the law does not state that you must have cover for yourself or a member of your family. However, employers' liability is there to give you piece of mind and financial security should an accident happen that is your responsibility.
Property Insuring your property against theft and damage is where farm insurance starts to become more tailored to your specific priorities, and the term "property" can mean anything from buildings, through machinery and vehicles, to animals (see below). With property insurance it is very much up to you to decide which property to insure and for what range of perils e.g. fire or flood.
Online Day Trading
As the pace of life increases by the day, many opt to trade from their homes. But that option has opened up only because of better communication technologies and the easy availability of the same. There are definite advantages of day trading from your own home. You gat the comfort of your own home, and you can avoid the hassles of being on the floor of the stock exchange.
Also you are your own boss where no one else dictates you what to do. But it is always advisable that you first train yourself from a day trading firm. There are definite advantages of doing so. Once you work from their premises, you are exposed to the best software platforms available today. You also get to work on the most advanced hardware.
But the greatest advantage is that your peers there will share knowledge and experience which you will hardly get anywhere else. Yes, you can have the information about the markets from various sources. But how to interpret the same is the skill that you need to develop. And this is best done while interning in a day trading firm.
But before you get yourself into one of these trading firms just take some time to select one. There are n numbers of trading firms today offering you various courses with different fee structures. Some provide you incredibly low rates while others are on the high-end. It is advisable that you go for a slightly high-priced course, because they are generally the more reliable. So what would you be looking for in a day trading firm before you select?
The best way to find out about a particular trading firm is to spend a day or two in that firm to gauge the working atmosphere there. You can do the preliminary research on the net and consult your friends and a few professionals. But after you shortlist a few, it would be ideal if you can spend some time inside the offices of those firms to understand which one best suits you. Quite a few firms actually allow you that.
Find out what the firm requires your account size to be. It can be anything from $25,000 to $50,000. See if the figure suits you. Opt for a firm that has a screening process. This would mean they take in candidates who have some grounding on the subject and they are serious about the whole training thing. The best trading firms will allow you to keep the profits you make out of the trading you do. So if the firm is asking for a percentage of your profits, stay away.
Also you are your own boss where no one else dictates you what to do. But it is always advisable that you first train yourself from a day trading firm. There are definite advantages of doing so. Once you work from their premises, you are exposed to the best software platforms available today. You also get to work on the most advanced hardware.
But the greatest advantage is that your peers there will share knowledge and experience which you will hardly get anywhere else. Yes, you can have the information about the markets from various sources. But how to interpret the same is the skill that you need to develop. And this is best done while interning in a day trading firm.
But before you get yourself into one of these trading firms just take some time to select one. There are n numbers of trading firms today offering you various courses with different fee structures. Some provide you incredibly low rates while others are on the high-end. It is advisable that you go for a slightly high-priced course, because they are generally the more reliable. So what would you be looking for in a day trading firm before you select?
The best way to find out about a particular trading firm is to spend a day or two in that firm to gauge the working atmosphere there. You can do the preliminary research on the net and consult your friends and a few professionals. But after you shortlist a few, it would be ideal if you can spend some time inside the offices of those firms to understand which one best suits you. Quite a few firms actually allow you that.
Find out what the firm requires your account size to be. It can be anything from $25,000 to $50,000. See if the figure suits you. Opt for a firm that has a screening process. This would mean they take in candidates who have some grounding on the subject and they are serious about the whole training thing. The best trading firms will allow you to keep the profits you make out of the trading you do. So if the firm is asking for a percentage of your profits, stay away.
Online Trading And Security
As more and more people trade online, there has been also a rise in the number of hack attacks where your resources are used by hackers to make profits for themselves. These attacks are often carried out by stealing your identity and then accessing your online account with a online trading firm. Let us first understand how these hackers work.
The first thing the hacker needs to do is to steal your user name and password. There are numerous ways in which they can do this. And new ways are being developed all the time. Once they have your user name and password they can easily access your account and buy or sell whatever they want to. Exactly the way you do. So this hacker is most likely to sell all the shares that you have accumulated, and with the money he thus receives will but shares on micro-caps. What are micro-caps? Also known as penny stocks these are thinly traded stocks.
What the hackers do is by buying shares of that micro-cap with your money he drives up the price for the particular share. Once the price is quite high he sells his own holdings at a considerable profit. The money is then wired to an account in a different country or a series of straw men and dummy corporations are used to transfer it to their account.
As online trading get increasingly easy many investors drop their guard. That is criminal. You just cannot take it easy on the net. There are a few simple things you should practice while investing on the net. Always have all you transactions confirmed by your online brokerage firm. Never trade from unprotected computers. So you shouldn't be trading from office or library or a cyber cafe.
Regularly update the security features of the software of your computer. The most important software that you need to update are your internet browser, the firewall and the anti-virus software. Only open emails form a secure source. Never click on mails that you are doubtful about.
Never provide your account information to anyone. Even if the mail reads that it is from your brokerage firm, don't part with your log-in details. If in doubt call their customer support. They already have your details and they will never ask you for the same over email. Change your password regularly. And try to use all sorts of character to make is secure. Log-off the website after you are through with your transaction.
The first thing the hacker needs to do is to steal your user name and password. There are numerous ways in which they can do this. And new ways are being developed all the time. Once they have your user name and password they can easily access your account and buy or sell whatever they want to. Exactly the way you do. So this hacker is most likely to sell all the shares that you have accumulated, and with the money he thus receives will but shares on micro-caps. What are micro-caps? Also known as penny stocks these are thinly traded stocks.
What the hackers do is by buying shares of that micro-cap with your money he drives up the price for the particular share. Once the price is quite high he sells his own holdings at a considerable profit. The money is then wired to an account in a different country or a series of straw men and dummy corporations are used to transfer it to their account.
As online trading get increasingly easy many investors drop their guard. That is criminal. You just cannot take it easy on the net. There are a few simple things you should practice while investing on the net. Always have all you transactions confirmed by your online brokerage firm. Never trade from unprotected computers. So you shouldn't be trading from office or library or a cyber cafe.
Regularly update the security features of the software of your computer. The most important software that you need to update are your internet browser, the firewall and the anti-virus software. Only open emails form a secure source. Never click on mails that you are doubtful about.
Never provide your account information to anyone. Even if the mail reads that it is from your brokerage firm, don't part with your log-in details. If in doubt call their customer support. They already have your details and they will never ask you for the same over email. Change your password regularly. And try to use all sorts of character to make is secure. Log-off the website after you are through with your transaction.
Online Trading And Software
The main reasons behind online trading catching up so quickly are the tremendous improvements we have seen in the field of communication technology, especially in internet, the improved hardware that comes in our personal computers and the state-of-the-art software that are specially developed to serve the needs of online trading.
While previously the internet speeds were limited only to a few kilobytes per second today broadband allows several megabytes of data can be transferred every second. That is a rise of almost 1000 times within just a few years. Online trading requires a lot of data being transacted from your computer to the website of your brokerage firm. It is because of broadband that one is able to carry out online transactions uninterrupted and also in real time.
The improvements in hardware have also been critical. The RAM in today's computers has reached levels unimagined even five years back. With so much memory ready to be accessed our computers today can handle a lot of data at a single point of time, just what we need while conducting trade online. Even the storage space for data has gone up by leaps and bounds. So now you can store everything without the need for deleting any data. So you can fall back on data which can be years old.
Great strides have been made also in the field of online trading software. What are the primary functions of online trading software? It should provide an analysis of the stock picks considering the day's closing price, the movements during the day, the history of that particular stock, how other stocks of the same industry have performed and whether government policies will affect the rates. Of course it will also take into account data regarding financial data, earnings estimates, and forecasts.
Several companies offer such software, and many actually provide you an online demo version with limited usage. You can try out the software, and if it suits your needs, you can place an order for the same. The software allow you to view the data regarding stocks in various ways. So stocks can be listed according to prices, volumes traded, percentage change in price, etc. All this is made for you to have a better and easier grasp of how stocks are working. By now you would have understood how important online trading software is for you to invest online. So select the right one for you and start trading.
While previously the internet speeds were limited only to a few kilobytes per second today broadband allows several megabytes of data can be transferred every second. That is a rise of almost 1000 times within just a few years. Online trading requires a lot of data being transacted from your computer to the website of your brokerage firm. It is because of broadband that one is able to carry out online transactions uninterrupted and also in real time.
The improvements in hardware have also been critical. The RAM in today's computers has reached levels unimagined even five years back. With so much memory ready to be accessed our computers today can handle a lot of data at a single point of time, just what we need while conducting trade online. Even the storage space for data has gone up by leaps and bounds. So now you can store everything without the need for deleting any data. So you can fall back on data which can be years old.
Great strides have been made also in the field of online trading software. What are the primary functions of online trading software? It should provide an analysis of the stock picks considering the day's closing price, the movements during the day, the history of that particular stock, how other stocks of the same industry have performed and whether government policies will affect the rates. Of course it will also take into account data regarding financial data, earnings estimates, and forecasts.
Several companies offer such software, and many actually provide you an online demo version with limited usage. You can try out the software, and if it suits your needs, you can place an order for the same. The software allow you to view the data regarding stocks in various ways. So stocks can be listed according to prices, volumes traded, percentage change in price, etc. All this is made for you to have a better and easier grasp of how stocks are working. By now you would have understood how important online trading software is for you to invest online. So select the right one for you and start trading.
How To Succeed In Online Trading
Online trading is huge today with more and more investors opting to go online rather than stay with the tradition way of trading involving loads of paperwork, fighting it out on the stock market or haggling with the broker for lower rates of commission. Online trading allows you to trade anytime you want, from anywhere you want.
But if you have never traded before and it is only after online trading was introduced that you became interested on trading in stocks, then you must realize though the method of trading might have changed the fundamentals of trading haven't. So the first thing you need to know before you even start trading are the basics of a stocks and shares. There are plenty of books on the subject which will allow you to form preliminary ideas and give you tips on investing. Get a clear idea as to how the stock market functions.
Then get a hang of how the markets have been performing over the last year or so. Which industries have been on the rise, which are on the decline, and which are all set to show tremendous growth. This background on stock market will stand you in good stead when you will be going through the numbers and help you analyze and understand them better.
Online trading is not real time. This you have to understand. Yes your orders can be transacted in matters of minutes or even a few seconds. But remember there are millions who today trade online. So if you are trading on a particular stock there will be hundreds or even thousands who will be placing orders of the same stock at the same moment. So even in seconds there can be huge troughs and crests on the price of a particular stock. If you are unaware of such chances your plans can go haywire. The best option in such cases is to place price limit orders. Then you wouldn't be losing beyond what you expect.
Online trading is the future of stock trading if it is already not the present. The positive about it is that everyone can now participate on trading. But that also has a negative effect. Because of the ease many will opt for trading without being properly prepared. And with so many investors without knowledge as to how the markets work, the bigger players will have a field day. The market will also lose its stability. So if you want to succeed do your homework.
But if you have never traded before and it is only after online trading was introduced that you became interested on trading in stocks, then you must realize though the method of trading might have changed the fundamentals of trading haven't. So the first thing you need to know before you even start trading are the basics of a stocks and shares. There are plenty of books on the subject which will allow you to form preliminary ideas and give you tips on investing. Get a clear idea as to how the stock market functions.
Then get a hang of how the markets have been performing over the last year or so. Which industries have been on the rise, which are on the decline, and which are all set to show tremendous growth. This background on stock market will stand you in good stead when you will be going through the numbers and help you analyze and understand them better.
Online trading is not real time. This you have to understand. Yes your orders can be transacted in matters of minutes or even a few seconds. But remember there are millions who today trade online. So if you are trading on a particular stock there will be hundreds or even thousands who will be placing orders of the same stock at the same moment. So even in seconds there can be huge troughs and crests on the price of a particular stock. If you are unaware of such chances your plans can go haywire. The best option in such cases is to place price limit orders. Then you wouldn't be losing beyond what you expect.
Online trading is the future of stock trading if it is already not the present. The positive about it is that everyone can now participate on trading. But that also has a negative effect. Because of the ease many will opt for trading without being properly prepared. And with so many investors without knowledge as to how the markets work, the bigger players will have a field day. The market will also lose its stability. So if you want to succeed do your homework.
Forex Trading - To Avoid Failure in the Forex Market, Try These Tips
You might not know that you can actually make a lot of money doing forex trading. Forex trading combines margin leverage and a low minimum investment amount; this can be ideal for small investors.
However, in spite of its immense potential for profit, most forex traders lose their money within a year.
The reasons for this, I have found, can be summarized thusly:
1. Investors have unrealistic expectations.
Too many beginning investors read about how easy it is to make money doing forex trading, so that they can easily jump in and lose everything before they realize what has happened.
In fact, forex trading is not a way to get rich quick. You can indeed get rich, but you need to work hard and do a lot of research to be successful. Even then, every trade will not be profitable. Even experienced traders lose on some trades. What's most important is that you know when to cut your losses and get out of something where you're losing money, while you focus on what's making you a profit.
2. Investors don't do enough research.
It's easy to learn forex trading, but hard to really become expert at it. Even though experienced traders can make it look easy, predicting currency prices can be complex. If you are a small investor, you are at a disadvantage because large financial institutions can access resources you can't. They might have an entire staff just to analyze the most recent economic indicators. You, however, are on your own with your own expertise. Expect to spend a lot of time learning before you can expect to really profit from forex trading.
3. Forex trading is meant to focus on investing; it's not gambling.
Don't expect to beat the market without doing research. You can't simply operate on hunches and pick your currency trades that way. Most people who operate this way usually pick an occasional successful trade but lose everything over the long haul.
4. New investors don't focus.
Although it depends somewhat on the broker you use, you can likely trade in dozens of currencies. However, when you're just starting out, pick just a few to focus on that you can become familiar with. These include the Japanese Yen, the US Dollar, or the Euro; focus exclusively on them while you are learning. The more you know about them, the more data you have to analyze and spot trends, which will increase your chances of success.
5. New investors don't have a trading system.
Even though there are many, many trading systems available, many investors fail to pick one and then stick with it. Many, in fact, are free, which means you don't even have to risk any capital on it when you start out. Pick one that is right for you and what you want to accomplish. This will give you a much better chance of success.
6. New investors don't stick with their trading systems.
If you don't have a trading system, get one, and then stick with it. You have to follow it no matter what else is happening. Although this is easier said than done, you can't get greedy or nervous and ignore what it tells you. Follow what your system tells you to determine both when you should get in and when you should get out. If you ignore your system, you risk missing out on making a big profit or risk incurring a substantial loss.
The best forex traders know that it's just as important to know when you should get out of a trade as it is to know when you should go in.
However, in spite of its immense potential for profit, most forex traders lose their money within a year.
The reasons for this, I have found, can be summarized thusly:
1. Investors have unrealistic expectations.
Too many beginning investors read about how easy it is to make money doing forex trading, so that they can easily jump in and lose everything before they realize what has happened.
In fact, forex trading is not a way to get rich quick. You can indeed get rich, but you need to work hard and do a lot of research to be successful. Even then, every trade will not be profitable. Even experienced traders lose on some trades. What's most important is that you know when to cut your losses and get out of something where you're losing money, while you focus on what's making you a profit.
2. Investors don't do enough research.
It's easy to learn forex trading, but hard to really become expert at it. Even though experienced traders can make it look easy, predicting currency prices can be complex. If you are a small investor, you are at a disadvantage because large financial institutions can access resources you can't. They might have an entire staff just to analyze the most recent economic indicators. You, however, are on your own with your own expertise. Expect to spend a lot of time learning before you can expect to really profit from forex trading.
3. Forex trading is meant to focus on investing; it's not gambling.
Don't expect to beat the market without doing research. You can't simply operate on hunches and pick your currency trades that way. Most people who operate this way usually pick an occasional successful trade but lose everything over the long haul.
4. New investors don't focus.
Although it depends somewhat on the broker you use, you can likely trade in dozens of currencies. However, when you're just starting out, pick just a few to focus on that you can become familiar with. These include the Japanese Yen, the US Dollar, or the Euro; focus exclusively on them while you are learning. The more you know about them, the more data you have to analyze and spot trends, which will increase your chances of success.
5. New investors don't have a trading system.
Even though there are many, many trading systems available, many investors fail to pick one and then stick with it. Many, in fact, are free, which means you don't even have to risk any capital on it when you start out. Pick one that is right for you and what you want to accomplish. This will give you a much better chance of success.
6. New investors don't stick with their trading systems.
If you don't have a trading system, get one, and then stick with it. You have to follow it no matter what else is happening. Although this is easier said than done, you can't get greedy or nervous and ignore what it tells you. Follow what your system tells you to determine both when you should get in and when you should get out. If you ignore your system, you risk missing out on making a big profit or risk incurring a substantial loss.
The best forex traders know that it's just as important to know when you should get out of a trade as it is to know when you should go in.
Know about Different Order Types in Markets Forex
Forex is considered to be the leading marketplace globally with transactions of more than 1.8 trillion dollars taking place everyday. Forex prices keep on changing because of factors like world economy and political events that takes place in different countries. Though forex trading is not easy and has lots of intricacies, a person trading for a particular country’s currency, has to study and observe the present scenario and future prospects of that country’s currency.
Forex trading is a wide market place for selling and buying currencies and is also known as over-the-counter trading market. Global money managers, international money brokers, registered dealers, huge multinational corporations, private speculators and traders are the participants who are mostly involved in Forex markets.
A market order type is basically an order which is carried out to sell and buy at the current market price. Those customers, who are using AC Markets’ online currency trading platform, can click on the selling and buying button after completion of a specific deal size. The execution of the order is instantaneous, which means that the customer gets the same price as seen at that point of time.
The process of Forex trading involves certain steps that include:
A customer specification to the dealer about the deal size and currency pairThe dealer basically gives a two-way price, one is the Ask for price and the other is by biddingThe customer may ask for re-quote The dealer then confirms the trade. Usually under normal market circumstances ACMarket dealers respond to market orders within five to ten seconds.
Limit order is also an order which is basically placed to buy and sell at a certain price. This order contains two components, namely duration and price, where the trader specifies the price at which he wants to sell or buy a certain currency price.
Stop orders are also placed in order to buy and sell at a specified amount or price containing same two variables, duration and price. This order is basically used for a limit loss potential on a transaction. An OCO which is an acronym for ‘Order cancels Other’ stands for an order which is a mixture of two limit or stop orders. Two orders having price and duration variables are also placed below and above the current price.
For more information on Forex Currency Exchange, Online Currency Trading, Online Forex Market, Forex, Forex Trading, Online Forex Trading, Online Forex Currency Trading, Silver Trading and Forex Exchanges,
Forex trading is a wide market place for selling and buying currencies and is also known as over-the-counter trading market. Global money managers, international money brokers, registered dealers, huge multinational corporations, private speculators and traders are the participants who are mostly involved in Forex markets.
A market order type is basically an order which is carried out to sell and buy at the current market price. Those customers, who are using AC Markets’ online currency trading platform, can click on the selling and buying button after completion of a specific deal size. The execution of the order is instantaneous, which means that the customer gets the same price as seen at that point of time.
The process of Forex trading involves certain steps that include:
A customer specification to the dealer about the deal size and currency pairThe dealer basically gives a two-way price, one is the Ask for price and the other is by biddingThe customer may ask for re-quote The dealer then confirms the trade. Usually under normal market circumstances ACMarket dealers respond to market orders within five to ten seconds.
Limit order is also an order which is basically placed to buy and sell at a certain price. This order contains two components, namely duration and price, where the trader specifies the price at which he wants to sell or buy a certain currency price.
Stop orders are also placed in order to buy and sell at a specified amount or price containing same two variables, duration and price. This order is basically used for a limit loss potential on a transaction. An OCO which is an acronym for ‘Order cancels Other’ stands for an order which is a mixture of two limit or stop orders. Two orders having price and duration variables are also placed below and above the current price.
For more information on Forex Currency Exchange, Online Currency Trading, Online Forex Market, Forex, Forex Trading, Online Forex Trading, Online Forex Currency Trading, Silver Trading and Forex Exchanges,
Forex Trading - Profit and Loss Calculations
Most online forex brokers you pick will have a trading platform that can automatically calculate your profit and loss. However, you should still understand what goes on behind the calculations. You'll be able to keep tabs on your broker's honesty that way, but you'll also have surer footing yourself as a trader if you know all of the fine details behind those calculations you depend on so much.
Profit and loss calculations are relatively simple. You just need to remember two basic formulas.
When the US dollar, also known as USD, is the "quote currency," or the second of the paired currencies, the formula is:
Profit = Price Change in Pips Times x Units Traded
When USD, or US currency, is the base currency or the first currency in a pair, the formula is:
Profit = Price Change in Pips x Units Traded / Exit Price
As an example to illustrate this, let's use the following scenario. USD is the quote currency and we will also say that the broker requires 1% margin. This means that you can trade $100,000 in currency for only $1000.
Therefore, if you are looking at EUR or USD, currently trading at 1.2518/9, you predict that the euro will rise in value against the US dollar. Therefore, you execute a trade to buy euros and simultaneously sell US dollars.
Therefore, you buy $100,000 worth of units at 1.2519. Remember that you have to take the asking price, or the second number in the quote.
If your calculations are correct and the price rises to 1.2532/3, you initiate a trade to sell euros and buy US dollars. For this trade, use the bid price, which is 1.2532.
Since you bought at 1.2519 and sold at 1.2532, you profit was 17 pips, or 0.0017. To convert that into real money, we use the formula above, so that it looks like so:
Profit = Price Change in Pips X Units Traded
Which means:
Profit = 0.0017 X 100,000 = $170.
In other words, you made $170 on that trade. If you trade $100,000 in a currency pair with the US dollar the quote currency, a pip will be worth $10. 17 pips equal $170.
When the US dollar is the base currency, let's say you buy 100,000 units of USD/JPY (Japanese yen) at 117.22. The price goes up and you sell at 117.35. Therefore, you just made 13 pips.
To calculate what your profit was, use the second formula:
Profit = Price Change in Pips X Units Traded / Exit Price
Which means:
0.13 X 100,000 / 117.35 = $110.78.
So as you can see, this is relatively simple once you get the hang of it.
Profit and loss calculations are relatively simple. You just need to remember two basic formulas.
When the US dollar, also known as USD, is the "quote currency," or the second of the paired currencies, the formula is:
Profit = Price Change in Pips Times x Units Traded
When USD, or US currency, is the base currency or the first currency in a pair, the formula is:
Profit = Price Change in Pips x Units Traded / Exit Price
As an example to illustrate this, let's use the following scenario. USD is the quote currency and we will also say that the broker requires 1% margin. This means that you can trade $100,000 in currency for only $1000.
Therefore, if you are looking at EUR or USD, currently trading at 1.2518/9, you predict that the euro will rise in value against the US dollar. Therefore, you execute a trade to buy euros and simultaneously sell US dollars.
Therefore, you buy $100,000 worth of units at 1.2519. Remember that you have to take the asking price, or the second number in the quote.
If your calculations are correct and the price rises to 1.2532/3, you initiate a trade to sell euros and buy US dollars. For this trade, use the bid price, which is 1.2532.
Since you bought at 1.2519 and sold at 1.2532, you profit was 17 pips, or 0.0017. To convert that into real money, we use the formula above, so that it looks like so:
Profit = Price Change in Pips X Units Traded
Which means:
Profit = 0.0017 X 100,000 = $170.
In other words, you made $170 on that trade. If you trade $100,000 in a currency pair with the US dollar the quote currency, a pip will be worth $10. 17 pips equal $170.
When the US dollar is the base currency, let's say you buy 100,000 units of USD/JPY (Japanese yen) at 117.22. The price goes up and you sell at 117.35. Therefore, you just made 13 pips.
To calculate what your profit was, use the second formula:
Profit = Price Change in Pips X Units Traded / Exit Price
Which means:
0.13 X 100,000 / 117.35 = $110.78.
So as you can see, this is relatively simple once you get the hang of it.
Why Online Banking Beats Standing In Lines
For those of you who have never tried online banking you really do not know what you are missing. It is such a convenient way to pay your bills, keep track of the money in your accounts and make your investments. The beauty of it is that it is all done on secure websites with passwords and layers of protection for your money. This is only part of the convenience.
As well, it is done from your home or office computer during the hours that are easy for you to manage and not necessarily the hours your bank is open. If you have your pay checks deposited directly into your bank account you may never have to visit your bank during business hours. An ATM can provide you cash and you can pay your bills over the Internet. Not only is this convenient, but it usually costs you less to use these services then to do your banking in person.
The use of an Internet service through your bank offers you many services beyond simply paying your bills. You can also get your bank statements this way instead of having them mailed to you. You can transfer money between your various bank accounts. This means all you need to keep in your checking account is just enough to pay your bills until you transfer funds in to pay the next bill.
That allows you to keep your money in your savings account for longer and so to make the maximum amount of interest on your money. You can even use your banks web service to apply for loans or change your loan repayment structure. These applications are all available online. There are even banks that operate solely by offering online banking services.
They have been nicknamed virtual banks. These have the advantage of doing everything for you over the Internet and so can offer higher interest rates and lower costs as they keep their costs down by not having a facility for you to visit.
Other reasons to use these growing web based bank services is that you will never get a check returned to you because bank personnel could not read your handwriting or because you wrote the wrong information on the check. It will be right all the time because you will be feeding it directly into the computer.
You will not have to worry about being late with payments either. As long as you pay the bill a couple of days before its due you will be on time every time. That means having to work late, being ill, or out of town will never again make your payment late; five minutes on a computer, even at an internet cafe and you will be able to pay your bills using your online banking service.
As well, it is done from your home or office computer during the hours that are easy for you to manage and not necessarily the hours your bank is open. If you have your pay checks deposited directly into your bank account you may never have to visit your bank during business hours. An ATM can provide you cash and you can pay your bills over the Internet. Not only is this convenient, but it usually costs you less to use these services then to do your banking in person.
The use of an Internet service through your bank offers you many services beyond simply paying your bills. You can also get your bank statements this way instead of having them mailed to you. You can transfer money between your various bank accounts. This means all you need to keep in your checking account is just enough to pay your bills until you transfer funds in to pay the next bill.
That allows you to keep your money in your savings account for longer and so to make the maximum amount of interest on your money. You can even use your banks web service to apply for loans or change your loan repayment structure. These applications are all available online. There are even banks that operate solely by offering online banking services.
They have been nicknamed virtual banks. These have the advantage of doing everything for you over the Internet and so can offer higher interest rates and lower costs as they keep their costs down by not having a facility for you to visit.
Other reasons to use these growing web based bank services is that you will never get a check returned to you because bank personnel could not read your handwriting or because you wrote the wrong information on the check. It will be right all the time because you will be feeding it directly into the computer.
You will not have to worry about being late with payments either. As long as you pay the bill a couple of days before its due you will be on time every time. That means having to work late, being ill, or out of town will never again make your payment late; five minutes on a computer, even at an internet cafe and you will be able to pay your bills using your online banking service.
Business Banking - An Overview
Making a success of your business depends on planning and judgement. 'The bottom line' is all about managing your finances wisely, whether that means sourcing the funding you need to start up or keeping on top of your accounts. Everyone is in business to make money and most realise that to make money the foundations of your business need to be right.
Setting up or running a business calls for a separate account. Not only will this make your accounting a lot simpler, but also business accounts are tailored specifically to the needs of business clients. Many have a specialised team to deal with business accounts, and can offer help in the form of start up packs and individual advisers. Business accounts differ from personal accounts in that you will normally be charged for transactions - for making deposits and withdrawing funds, for example.
This guide gives you a broad overview of how to open and manage your business account, including:
1. Getting The Right Account For Your Business
How to choose and open your account - what factors to consider and what information you will need.
2. Finding The Finance You Need
Common ways to source funding to set up and run your business, including grants, borrowing, loans and overdrafts.
3. Keeping Your Accounts Healthy
Good practise for managing your account, including info on online banking and finding an accountant.
4. Professional Advice
How to find expert advice on accounting and tax issues. This section includes web addresses for professional bodies.
Having a good relationship with your bank will make a big difference to the success of your business, whether that means extra support when you're setting up or negotiating an overdraft to smooth your cash flow. Bank business managers can provide a useful source of advice and support - it's likely they have a good knowledge of the market as well as insight into businesses similar to yours. Based on your individual needs, they should be able to suggest ways to make your business banking more efficient, as well as offer practical solutions to make the most of your account.
Other Business Banking Information Sources
As well as your banking contacts, there are a wealth of other sources of help and advice. The government runs several schemes to help businesses get off the ground and keep running - from enterprise loans to business mentors who can guide you through the early stages of your project. Starting a business is a real challenge, but with good planning and sound management, you could turn your dreams into reality!
Setting up or running a business calls for a separate account. Not only will this make your accounting a lot simpler, but also business accounts are tailored specifically to the needs of business clients. Many have a specialised team to deal with business accounts, and can offer help in the form of start up packs and individual advisers. Business accounts differ from personal accounts in that you will normally be charged for transactions - for making deposits and withdrawing funds, for example.
This guide gives you a broad overview of how to open and manage your business account, including:
1. Getting The Right Account For Your Business
How to choose and open your account - what factors to consider and what information you will need.
2. Finding The Finance You Need
Common ways to source funding to set up and run your business, including grants, borrowing, loans and overdrafts.
3. Keeping Your Accounts Healthy
Good practise for managing your account, including info on online banking and finding an accountant.
4. Professional Advice
How to find expert advice on accounting and tax issues. This section includes web addresses for professional bodies.
Having a good relationship with your bank will make a big difference to the success of your business, whether that means extra support when you're setting up or negotiating an overdraft to smooth your cash flow. Bank business managers can provide a useful source of advice and support - it's likely they have a good knowledge of the market as well as insight into businesses similar to yours. Based on your individual needs, they should be able to suggest ways to make your business banking more efficient, as well as offer practical solutions to make the most of your account.
Other Business Banking Information Sources
As well as your banking contacts, there are a wealth of other sources of help and advice. The government runs several schemes to help businesses get off the ground and keep running - from enterprise loans to business mentors who can guide you through the early stages of your project. Starting a business is a real challenge, but with good planning and sound management, you could turn your dreams into reality!
Finance Banking Online Banking Practices
There are many online banking practices that offer more security features to bank customers that prefer to do all of their financial transactions through an internet portal or other financial outlet. These online banking practices are in place to reduce the threat of fraud and hinder the efforts of thieves who are interested in stealing not only your identity but all of the money in your accounts.
Many banks have altered their online banking practices by requiring customers to use specially encoded debit cards to receive money from an ATM. These debit cards require the customer to use a Pin Code during the transaction. The online banking practices would be lax if any banking card could withdraw funds from an account for any length of time and banks realize this and change some Pin Code expiration dates so that they will expire in 30, 60, or 90 day time periods.
Other banks have two debit cards available for issue and customers can alternate the use of each card to take care of a particular account, or to do their banking at a specific location. One of the banking practices makes it impossible for a card to be used in any other ATM. The debit card will work at the parent branch, but it can not be used to transfer money to banks, credit card accounts or at online retailer location.
Other online banking practices have been instituted to limit the amount of money that can be withdrawn from an account at any time. The daily limit can be set up in advance by the customer. The security features for this practice may seem tedious at times because customers lose access to large sums of money for emergencies. Some banking practices allow for emergencies and let customers use certain codes to withdraw more than the daily norm.
Many online banking practices make it impossible for banking customers to use any banking instrument for online gambling purposes. Banks have realized the great lengths that thieves will go to deplete money from bank accounts and feel that it is in the best interest of the customer if they prohibit gambling using money from credit limits that they set using their banking policies.
Many companies set up their own banking practices for their business accounts. Clients can use payment websites to transfer payments for services rendered by a company and the business is protected from fraud on several levels. The banking practices in place by the company prohibit any client from knowing the financial institution where the money is transferred to or the account number.
Many banks have altered their online banking practices by requiring customers to use specially encoded debit cards to receive money from an ATM. These debit cards require the customer to use a Pin Code during the transaction. The online banking practices would be lax if any banking card could withdraw funds from an account for any length of time and banks realize this and change some Pin Code expiration dates so that they will expire in 30, 60, or 90 day time periods.
Other banks have two debit cards available for issue and customers can alternate the use of each card to take care of a particular account, or to do their banking at a specific location. One of the banking practices makes it impossible for a card to be used in any other ATM. The debit card will work at the parent branch, but it can not be used to transfer money to banks, credit card accounts or at online retailer location.
Other online banking practices have been instituted to limit the amount of money that can be withdrawn from an account at any time. The daily limit can be set up in advance by the customer. The security features for this practice may seem tedious at times because customers lose access to large sums of money for emergencies. Some banking practices allow for emergencies and let customers use certain codes to withdraw more than the daily norm.
Many online banking practices make it impossible for banking customers to use any banking instrument for online gambling purposes. Banks have realized the great lengths that thieves will go to deplete money from bank accounts and feel that it is in the best interest of the customer if they prohibit gambling using money from credit limits that they set using their banking policies.
Many companies set up their own banking practices for their business accounts. Clients can use payment websites to transfer payments for services rendered by a company and the business is protected from fraud on several levels. The banking practices in place by the company prohibit any client from knowing the financial institution where the money is transferred to or the account number.
Understanding Virtual Banking
The technology has helped banks to improve its services and even offer some on a 24 hour basis thanks to the availability of account information, transfer of funds, bill payments and account management services that customers can access online by logging into the their personal page on their bank's website. Customers need a personal and confidential password to log in to the website just like the personal identification number used at the automatic teller machine.
Internet banking has been a welcome option for many customers but quite a number of sceptical customers still prefer to do it the old way. This group comprises those who may not be too comfortable with computers nor with the internet. It has certainly improved the pace at which business is transacted.
Gone are the days when you had no chance of paying that late bill in time because you remembered it when the bank was already closed, you can always get home and pay it electronically. And sending money to a friend or child in need no longer needs to be expensive and time consuming. And we can save the paper and sign less checks or none at all.
It is the growing number of virtual banks that are threatening traditional banks as we know them. Virtual banks offer most if not all their services online and are therefore able to offer customers no charge transactions and higher interest rates. ING and HSBC are good examples of virtual banks.
ING started its operations in Europe and is now established in North America. It is able to offer customers no account fees savings accounts at a higher rate than regular banks, there is no charge either for withdrawals at certain levels. ING also offers very competitive mortgage rates with many flexible options that traditional banks are just catching up to. And most of the services can be done online and completed by phone or by one time paper work.
Although internet banking is a welcome option that makes the lives of customers easier and improves business efficiency, it faces a negative aspect in terms of the chances of fraud. Electronic fraud occurs when criminals get hold of an account holder's details and log in names or password and use their account or move money from the account.
They may do this by hacking which is a way of illegally surpassing a website's security barriers to gain access to confidential information, or they may do so through phishing. Phishing is a practice whereby an account holder receives an email purporting to come from their bank asking them to confirm their bank details like names and passwords. They then use these details to access their accounts.
Sometimes confidential information falls on the wrong hands due to client carelessness; this is something banks cannot control. Banks try to use the latest security technology available to protect their clients.
Internet banking has been a welcome option for many customers but quite a number of sceptical customers still prefer to do it the old way. This group comprises those who may not be too comfortable with computers nor with the internet. It has certainly improved the pace at which business is transacted.
Gone are the days when you had no chance of paying that late bill in time because you remembered it when the bank was already closed, you can always get home and pay it electronically. And sending money to a friend or child in need no longer needs to be expensive and time consuming. And we can save the paper and sign less checks or none at all.
It is the growing number of virtual banks that are threatening traditional banks as we know them. Virtual banks offer most if not all their services online and are therefore able to offer customers no charge transactions and higher interest rates. ING and HSBC are good examples of virtual banks.
ING started its operations in Europe and is now established in North America. It is able to offer customers no account fees savings accounts at a higher rate than regular banks, there is no charge either for withdrawals at certain levels. ING also offers very competitive mortgage rates with many flexible options that traditional banks are just catching up to. And most of the services can be done online and completed by phone or by one time paper work.
Although internet banking is a welcome option that makes the lives of customers easier and improves business efficiency, it faces a negative aspect in terms of the chances of fraud. Electronic fraud occurs when criminals get hold of an account holder's details and log in names or password and use their account or move money from the account.
They may do this by hacking which is a way of illegally surpassing a website's security barriers to gain access to confidential information, or they may do so through phishing. Phishing is a practice whereby an account holder receives an email purporting to come from their bank asking them to confirm their bank details like names and passwords. They then use these details to access their accounts.
Sometimes confidential information falls on the wrong hands due to client carelessness; this is something banks cannot control. Banks try to use the latest security technology available to protect their clients.
Getting a Job in UK Banking
Getting a job in banking can be a drawn out process as recruitment cycles often take up to 6 months and the top banks may look at hundreds of candidates for a single post and go through 2 or more interviewing stages often in addition to a competency assessment. If you already work in banking or the finance sector you may be familiar with the recruitment process and if you're looking for a change of career within banking this article will discuss briefly the best approach to successfully finding a new job.
Agency or direct
At the start of your journey to find a perfect banking job you will usually be faced with 2 routes (although you can take both simultaneously). Whether you should use a recruitment agency to source suitable opportunities for you or go direct to financial institutions with your applications.
Using an agency
Agencies are widely used in financial recruitment particularly for skilled banking jobs as the recruitment process is a labour intensive one often comprising of weeks of processing under qualified or inappropriate candidates before arriving at a list of high quality potential employees. The banking sector more than most appreciate the added value of dealing with an agency for some or all of their recruitment rather than managing their own extensive human resources based recruitment programme.
Recruitment agency consultants are driven to match the best candidates to the clients banking jobs, usually more so than the person to whom responsibility falls within the client institution- often the HR department or busy heads of department who may not have the required time to properly process high volumes of applications.
For the candidate, using a recruitment agency can also offer some distinct advantages over applying directly to individual companies in response to banking job vacancy advertisements. An agency will be working closely with the banks with a range of vacancies both current and upcoming available. If an advertised vacancy does not prove to be suitable your recruitment consultant will often be able to recommend an alternative position to apply for.
If you have the skills and experience that an agency is looking for they will actively seek out new opportunities for you as they become available, this can take much of the time consuming work out of applying for a new job in banking as agencies will only put candidates forward for positions they feel they are well suited for and capable of obtaining. Agencies can also deal with the initial contacting of the financial institutions and get interviews arranged on your behalf.
Going direct
Many applicants prefer to go direct to recruiters rather than going through a specialist recruitment agency as this allows them to make direct contact with the companies they are applying for and pick their applications based on job vacancies posted by the banking institutions.
The easiest way to find job vacancies if you want to apply straight to a recruiter are to search job listings on online job boards, newspapers and corporate websites. The downside of applying for jobs this way is the time it can take to find appropriate advertisements, approach the recruiter, submit applications and arrange interviews often based on limited information about the position you are applying for.
Choosing an agency
If you choose to use an agency to find you a new job in banking it is important to approach an agency who understand the unique and often specialist nature of the banking industry and have direct relationships with the banks themselves. Banks will often not deal with recruitment agencies whom they do not have a working relationship with due to their HR procedures. So make sure the agency representing you are talking to the banks or financial institutions directly and are on their preferred suppliers lists.
The main advantage of an agency is having an agent working on your behalf so make sure you get on with your agent and you feel comfortable with them representing you in front of potential employers- if an agent expects you to lie about your skills or experience on a CV its unlikely they're working for your best interests.
Writing a CV
The CV is a critical part of successfully applying for banking jobs as its all an employer has to go on when deciding whether or not to invite you to interview. As the people up against you for banking jobs are going to have often very similar skills and experience due to the nature of the industry your CV has to not only be watertight in terms of the information it gets across but also make you stand out from a crowd of other financial experts. Banking is still a formal institution and you resume should reflect this, but some creativity will help to show your character and the effort you've put into your application- think about ways of presenting your CV with a unique personal touch, if you're photogenic a picture of yourself is often a good start (don't forget to smile!).
Again a recruitment agent should be able to help you get your CV up to a standard where they are confident it will be acceptable by the banks and financial institutions whom will be recruiting. There are lots of template CV's and CV writing advice available online by searching for 'banking job CV'.
The interview
Interview skills are a subject in their own right and beyond the scope of this article. There's a lot of things to remember you should and shouldn't be doing in an interview but most of these are common sense things about the way you want to present yourself. The best advice ultimately is make sure you do yourself justice, listen to the interviewers and think about the sort of things they want to hear from you. They want to find out about your personality and character as much as anything else so show you are a person they'd like to work with.
Again a Google search for 'interview tips' will give you plenty of helpful advice and a recruitment agent will also help to prep you before setting you up with interviews.
Agency or direct
At the start of your journey to find a perfect banking job you will usually be faced with 2 routes (although you can take both simultaneously). Whether you should use a recruitment agency to source suitable opportunities for you or go direct to financial institutions with your applications.
Using an agency
Agencies are widely used in financial recruitment particularly for skilled banking jobs as the recruitment process is a labour intensive one often comprising of weeks of processing under qualified or inappropriate candidates before arriving at a list of high quality potential employees. The banking sector more than most appreciate the added value of dealing with an agency for some or all of their recruitment rather than managing their own extensive human resources based recruitment programme.
Recruitment agency consultants are driven to match the best candidates to the clients banking jobs, usually more so than the person to whom responsibility falls within the client institution- often the HR department or busy heads of department who may not have the required time to properly process high volumes of applications.
For the candidate, using a recruitment agency can also offer some distinct advantages over applying directly to individual companies in response to banking job vacancy advertisements. An agency will be working closely with the banks with a range of vacancies both current and upcoming available. If an advertised vacancy does not prove to be suitable your recruitment consultant will often be able to recommend an alternative position to apply for.
If you have the skills and experience that an agency is looking for they will actively seek out new opportunities for you as they become available, this can take much of the time consuming work out of applying for a new job in banking as agencies will only put candidates forward for positions they feel they are well suited for and capable of obtaining. Agencies can also deal with the initial contacting of the financial institutions and get interviews arranged on your behalf.
Going direct
Many applicants prefer to go direct to recruiters rather than going through a specialist recruitment agency as this allows them to make direct contact with the companies they are applying for and pick their applications based on job vacancies posted by the banking institutions.
The easiest way to find job vacancies if you want to apply straight to a recruiter are to search job listings on online job boards, newspapers and corporate websites. The downside of applying for jobs this way is the time it can take to find appropriate advertisements, approach the recruiter, submit applications and arrange interviews often based on limited information about the position you are applying for.
Choosing an agency
If you choose to use an agency to find you a new job in banking it is important to approach an agency who understand the unique and often specialist nature of the banking industry and have direct relationships with the banks themselves. Banks will often not deal with recruitment agencies whom they do not have a working relationship with due to their HR procedures. So make sure the agency representing you are talking to the banks or financial institutions directly and are on their preferred suppliers lists.
The main advantage of an agency is having an agent working on your behalf so make sure you get on with your agent and you feel comfortable with them representing you in front of potential employers- if an agent expects you to lie about your skills or experience on a CV its unlikely they're working for your best interests.
Writing a CV
The CV is a critical part of successfully applying for banking jobs as its all an employer has to go on when deciding whether or not to invite you to interview. As the people up against you for banking jobs are going to have often very similar skills and experience due to the nature of the industry your CV has to not only be watertight in terms of the information it gets across but also make you stand out from a crowd of other financial experts. Banking is still a formal institution and you resume should reflect this, but some creativity will help to show your character and the effort you've put into your application- think about ways of presenting your CV with a unique personal touch, if you're photogenic a picture of yourself is often a good start (don't forget to smile!).
Again a recruitment agent should be able to help you get your CV up to a standard where they are confident it will be acceptable by the banks and financial institutions whom will be recruiting. There are lots of template CV's and CV writing advice available online by searching for 'banking job CV'.
The interview
Interview skills are a subject in their own right and beyond the scope of this article. There's a lot of things to remember you should and shouldn't be doing in an interview but most of these are common sense things about the way you want to present yourself. The best advice ultimately is make sure you do yourself justice, listen to the interviewers and think about the sort of things they want to hear from you. They want to find out about your personality and character as much as anything else so show you are a person they'd like to work with.
Again a Google search for 'interview tips' will give you plenty of helpful advice and a recruitment agent will also help to prep you before setting you up with interviews.
Subscribe to:
Posts (Atom)
