Personal Finance and Investment

In the last 40 years we have witnessed a staggering growth in personal lending. It seems that more often than not, people would prefer to borrow money for purchases than to save up the cash to do so on their own terms. As the personal lending industry has matured, many new loan products have come to existence.

Credit cards are a form of credit everybody is familiar with. Credit cards are one of the worst ways to borrow, because of their high interest rates. In such a scenario, it would be wise to pursue other options; this is where a personal loan can be quite useful.

Personal loans are provided through a financial institution, often in two forms; secured and unsecured. A general difference between the two is that a secured loan is backed by an asset, and an unsecured loan is not. An example of unsecured loan is a personal line of credit from your bank, or a credit card. Example of unsecured loan is borrowing on your credit card. Here is why in most cases is better to borrow using a personal loan instead of credit card.

If you can’t control your spending you are best advised to stay away from credit cards. Borrowers, who use personal loans, usually have better idea what they can afford, and are not that inclined to do impulse purchases. The main problem with credit cards is that they have higher interest rates compared to all other loan types, with the exception of payday loans. These consumer loans come with a much lower interest rate, often below 10%, which means that more of your monthly payment will go towards the principle of the loan, which will help you to pay off the balance faster. In contrast when you borrow fund on your credit card, you only have to worry about the minimum monthly payments, and in theory you can carry the debt forever. This is one of the things that makes buying thing on a credit card easier compared to personal loans. This will give you a set date for when your loan balance will be paid off.

The financial industry has come up with many new personal loan products, and sometimes the choices may be overwhelming. With so many lenders looking to get your business, it can be difficult to know the best way to borrow money without putting strain on your financial health. Choosing a personal loan with low interest rate and good terms, will enhance your buying power, while allowing you to repay your debt faster.

You’re young, you just landed a new job and you’re going to be getting a decent paycheck. You are still so new at your career, that you are certainly not even thinking about retirement. However, if you are willing to listen to older and wiser folks, it is a good idea to plan for your retirement early on in your career.

If you start with your first paycheck, you will get used to it, and you will never feel like you are missing the money. If your company has a 401-K or a TSP program available, jump on the band wagon immediately. If you don’t have these programs at your disposal, you can still start an IRA.

It is important to invest in your retirement account early in your career for two reasons. First of all, if your company is offering matching contributions, their part can be a good chunk of your retirement. Second, the longer contributions stay in your account, the more you stand to gain. Your money creates more earnings, which also get added to the amount that will continue to be invested to create more and more earnings as time goes by. This advantage is sometimes called “the miracle of compounding. As money sits in the account, it will continue gaining earnings, until the point that earnings are going to be higher than what you put into the account.

The size of your balance is going to depend on how much is contributed and on how much you earned on the contributions. To have a ballpark idea of what your balance can become in the future, let’s do some simple math.

Let’s imagine that your salary is $28,000 per year with no chance of increases in the future. Let’s now imagine that you have decided to save 5% of your base pay and that your employer matches your contribution. The sample growth projection we are analyzing now is for an assumed annual return of 7%.

After five years your account balance would be almost $17,000; after ten years your balance would increase to $40,000; and after contributing for twenty years, your account would have a balance of $122,000. Clearly your balance would continue to increase each year. If you contribute for forty years, which is not unthinkable if you begin working at the age of 23 and retire by the time you are 63, your balance would be $615,000. That’s over half a million dollars folks! Just from contributing 5% of your income from the day you start work!

Looking at the numbers, it’s hard to imagine why someone wouldn’t start investing immediately!

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The return rate of an investment is a metric used to measure how much the investment returns after a certain amount of time. For example, suppose a bank customer puts $1000 into a certificate of deposit (CD) account that is advertised at a rate of 5% per year. The bank customer should expect that at after a year he would get back $1050, which is 5%. Of course, the return on investment does not always mature exactly after one year, but instead is updated constantly such that at the end of the year it is at 5%.

However, the fixed rate of return for CDs and savings accounts is somewhat of a special feature. Many other types of investments such as stocks, bonds, high yield mutual funds do not have fixed rates. An investor who invests $100 into the stock market does not expect to get a guaranteed amount back over any time period. In fact, it is almost as likely that the stock has lost some money. This is true for many government bonds that fluctuate in base value even though government bonds pay out money at a bond rate.

Mutual funds behave similarly to stocks as each fund is a compilation of several kinds of stock. The return of the mutual fund will go up and down in the same way that its component stocks fluctuate. Given this information, some investors may finally understand why financial companies keep advertising “mutual fund rates”. Some companies even broadcast that they offer high yield mutual funds, but the definition of high yield mutual fund is unclear.

Mutual fund rates are a way for mutual fund companies to advertise their products. However, the rates are really “historical rates of return” which mean that they show how the mutual fund gained in value over time, but do not indicate any future behavior for the fund in question. Mutual fund companies like to advertise these rates to make the consumer feel more secure, but there will always be a disclaimer at the bottom of these advertisements that say the “historical rates” are not expected to hold in the future.

Mutual funds fluctuate in value for several reasons. One of them is that stocks fluctuate in value, and sometimes they all go up or all go down together during boom and bust times respectively. In addition, irrespective of whether it is economic boom or bust, individual companies hit hard times and can drop in value. Finally, companies occasionally issue “dividends” which are direct payouts to shareholders from profits of the previous year or quarter. Dividends help increase the value of a mutual fund that holds shares of such companies.

The take-home message is that advertised rates for bond, stock and GNMA mutual funds are merely historical, and furthermore are probably overly optimistic which is why they made it into such advertisements. As such, even high yield mutual funds need to be treated with caution.

Specialty resources on bond mutual funds are available. Additional resources supplied for commodity mutual fund can be located here.

Because we live in a day and age when it is easy to instantly connect to other parts of the globe, our economy and financial world has become much more global in scope and significance. If you find investment abroad to be appealing, you can participate in foreign investments in numerous ways and you don’t have to leave the comfort of your home to do so.

For those who are looking to diversify by putting their homegrown money to work overseas, here are four examples of international investment tools you should know.

Facts about Stock Mutual Funds

Mutual funds are bundles of stocks that are managed by professionals and available in share form to mutual fund shareholders and most of these invest specifically in foreign companies. Investing in particular regions is what you can do, such as Asia or Latin America, or you can also invest in several regions at the same time.

Foreign currency

Because most nations have their own currency, and because it is valued according to the assets of that particular country, you can invest through buying and selling foreign money. For example, you might consider buying the Japanese Yen if you think that the Japanese economy and its currency are going to outperform your USA dollars. In fact, in order to take advantage of the rapid fluctuations in this volatile kind of investment, some people buy and sell currency several times each day.

Others do it in a way that is much more time, when planning their vacations. If, for example, you are planning to go to Europe next year, then now would be a good time to buy Euros or European dollars in anticipation that they are going to be cheaper than they will be next year.

Facts about overseas property

How about buying property in other places if you like to invest in real estate buy want to diversify to foreign holdings? Combining business with pleasure is what you can also do if you buy property in another country and then use it as your own vacation destination. Or you can buy overseas and let a professional manage your property for you, without ever leaving your own home.

Learn about credit cards for college students at the finance blog, Saving Money Tips.

Replacement value is actually a term that means a lot as soon as you’re dealing with homeowners insurance rates. The fact is, homeowners’ insurance rates need to only be paid out toward a policy that insures the home’s replacement value.

Exactly what is the Replacement Value?

The replacement value is definitely the amount of money it could cost to change your property if it’s ruined in a fire or perhaps in some other way. Ensure that you obtain a policy which includes guaranteed replacement cost coverage. The best forms of replacement cost coverage policies are usually unending policies, where the insurance company agrees to switch the home in spite of the dollar expense needed to replace it.

Keep the Insurance policy Up-to-date

You also must ensure you regularly update your coverage. For example, in case you insured your property for around $300,000 five years ago, but it costs $450,000 to replace it currently, then you need to improve your coverage. Neglecting to do so leaves you responsible to cover the remainder of the costs.

Tips to Lower Monthly Premiums

There are some steps you can take to lower your monthly premiums. Remember that putting in smoke alarms and security systems will decrease homeowners’ insurance rates. Investing in a multiple policy system will provide you with a discount on all your insurance coverage. Having to pay a higher deductible will also significantly reduce your monthly insurance bills.

Always check that the insurance company offers unlimited replacement cost coverage. By doing this you are able to rest easy, realizing that your property will probably be covered if anything goes wrong with it. This is the prudent and clever strategy to use about covering your property. Therefore it is extremely essential to do your thing. Do some study and choose the insurance plan that you simply believe would be the best for you.

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Most of people receive numerous offers for 0% APR credit card on a daily basis. Yet, most of us just throw them away. Next time when you receive such an offer, we strongly recommend you not to rush and try to see a window of opportunity. Not only could you consolidate your current debts, but on top of that you could eliminate expenses by not paying unnecessary interests.

First thing we suggest is to transfer all your outstanding balances from high-interest credit cards to your new 0% card. From then on you’ll be only making a single payment each month instead of a few. Secondly, estimate the regular payment you would need to make every month to have your balance paid off by the end of the promotional period.

Stick to that payment each month and you will save a lot of money in interest fees. If you do that, by the end of the introductory period your debt will be paid off and you won’t spend a penny in interests anymore! In case if you don’t manage to pay off the balance, another option would be transferring the remaining balance again to a new 0% card at the end of the introductory period, further decreasing your monthly payments.

However, before taking the plunge and signing up for a new 0% credit card, we do have a few suggestions for you. First of all, go compare all deals available out there! Read the T&C’s very carefully:

• Is there a balance transfer charge, and if there is, how substantial is it?
• Does the 0% offer apply solely to balance transfers or to purchases as well?
• How long is the 0% introductory period?

Study the terms and conditions well or this new 0% card could turn out to you more expensive than the 16% credit card you already have in your wallet. There are much more credit card companies out there than you could possibly imagine - evaluate carefully numerous offers and choose the one, which is the most valuable to your needs. A wisely chosen credit card can save you lots of money!

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Do you often worry about money? Are you trying hard to catch up with your bills all the time? Here are some useful tips for saving money for those millions of Americans who are struggling to pay their debts:

CREDIT CARDS

Pay the balances on your credit cards fully each month.

Don’t buy things like meals and groceries with your credit card for. If you cannot find the money to pay cash for those, you can’t afford them, end of story!

Always check your credit card statements to make sure there are no charges for things you never paid for.

BANKING

Choose a bank, which does not charge a monthly fee for its services. To withdraw cash use only those ATM machines, which are affiliated with your bank.

INSURANCE

Review your health and car insurance policies. Shop around to get cheaper insurances that will save you money by offering a higher excess fee.

SHOPPING

Always do price comparison and only buy something when you have found a merchant that sells the item of interest at the lowest price possible.
Discount Coupons

Give preference to shopping at stores that offer instant rebates on regular basis. Visit discount shops for clothing and toys.

Get rid of compulsive shopping addiction by “sleeping on it”. Particularly, when making any major purchases.
Consider visiting yard sales that can be a great option for certain items you want to buy.

TELEPHONE

Cancel extra features on your home telephone such as call barring, call waiting, 3-way calling and caller ID.

Shop around to find the cheapest long distance service provider. Use affordable international calls companies. Use your mobile for emergencies only.

GAS, ELECTRICITY and WATER

If you have a water-meter installed, reduce your water usage, particularly hot water. Reduce your thermostat setting by 1–2 degrees.

Install ceiling fans.

FOOD AND BEVERAGES

Buy your soft drinks in multiple packs instead of getting them from fast-food restaurants or vending machines. That way you could save a lot of money and also avoid germs.

Make your own coffee rather than buying it at a coffee house.

Stay away from eating out. Put saved money in a fund or apply them to pay a bill.

If you do happen to be eating out, order soft drink instead of alcohol. You can celebrate later, when you get out of debt.

ENTERTAINMENT

Cancel your subscription to cable TV channels that you don’t watch. Stay with the basic plan or cancel the cable TV subscription for a while.

Rent DVDs instead of going to the cinemas or, if you do go, choose matinee rather than evening shows.

Check out if your local library rents movies on DVDs - they could be free!

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Introduction

These days shopping in “brick-and-mortar” shops looks so outmoded, dated, and tedious. Millions of people every year sit in their chairs wearing their pyjamas, while drinking coffee and shopping for groceries, clothes, gifts, household appliances or nearly anything else you can imagine.

One of the terrific benefits with online shopping is the various coupon, discount and money-back programs are available. If you click on a link, or use a discount coupon code, you can make substantial savings. Besides, you are getting get all the countless benefits of online shopping - no kids to drag through stores, no petrol expenses to drive there and back, and no crowds getting on your nerves.

So, once you appreciate the benefits to shop online, how can you find those savings? There are quite a few ways to save money while shopping online. We shall start with coupons.

Coupons

This is a rather standard method. Visit one of the rebate coupon websites (a few will be given below) and search for the store you want to shop in, or search by category, depending what you prefer. Make sure you hit “apply” or “claim” while entering the coupon code at the checkout.

If in the old days of online shopping, discount codes were abundant and generous (frequently you could get $10 off a $10 purchase including free shipping), these days decent coupon deals are difficult to find. Some stores hardly ever offer coupons, while others may offer free delivery on on orders of any amount. When you place an order, or even if you just came to do window-shopping this time, take the chance to register or sign up with the website for coupon newsletter. These direct coupon emails are frequently the best deals you could ever find.

Here are some first-rate coupon websites to help you started:

MyBargainBuddy.com - offers your compilation of excellent deals and coupon codes. A lot of the best deals require no coupon whatsoever, but if there’s a bargain that goes together with a coupon code, it’s even better.

DiscountCouponsOnline.co.uk - This websites offers the largest discount coupon and offers collection for all major UK online stores. The coupons and offers are daily updated and carefully looked after, and all expired deals are removed in time. So you can be sure that with this site you will find only current and 100%-valid discount coupons and offers.

MyCoupons.com — The most valuable feature of this website are the message boards, which are teeming with the voice of people saving money. First, explore the posts are marked as “sticky” in the beginning of each forum - there are often a number of useful links to printable coupons for favourite stores like Amazon and Toys R Us.

FatWallet.com - Many coupon codes are listed here together with alive message boards where you can find other great deals as well.
NB: If you are seeking a code for a particular store, don’t presume that if it’s not presented at one website, it doesn’t exist at all. Different sites offer different codes. Go to a few coupon websites before abandoning hope that a coupon code for that merchant does in fact exist.

Rebates

Here’s how one of the major online rebate programs works. Visit Ebates.com and open a free account. They offer a $5 bonus just for signing up, thus you automatically receive a free $5 off for your any purchases made through them. After that, when you decide to shop online, check out Ebates prior to going directly to any online store. Even if you found a discount coupon at another website, click on the store link at Ebates to make even more savings.

Suppose you are looking to buy a jacket from Kohls and you founda $10 off a $65 purchase. Fantastic! Now, with the coupon code in hand, go to Ebates and look for Kohls in the list of featured stores. Let’s say the store offers 2% money-back, so you click on the Kohls link at Ebates and make the purchase. Doing so, not only will you benefit from the discount code you used at the checkout, but in addition you get an extra 2% money-back from your purchase. Not bad, isn’t it?!. Here, Ebate can either send the money to your Paypal account or a cheque to your postal address.

Points

Not many people are aware of the different point programs on the market, but as you can obtain points without the need to buy anything, it’s worthwhile to find out about the points programs available.

Head to MyPoints.com and open an account. The website will send you emails with links (daily or, sometimes, even a few time a day). Every time you click on a link in the mail, you will automatically earn 5 points. However, if you sign up for an offer or purchase anything via that link, you can get additional hundreds or even thousands points per offer.

Although you can use those points for offline shopping as well, MyPoints is most efficient when shopping online. Basically, you get points for every link you click and every purchase you make. Majority of stores offer a particular number of points (on average - 2 to 5) per every dollar spent. As soon as you have collected at least 1,000 points, you can redeem them for gift certificates for groceries, clothing restaurants, petrol, travel etc.

Unfortunately, you can’t use both My Points and Ebates for the same purchase; i.e. if a store is featured through both websites, you’ll need to make a choice which offer is the best. However, as far as coupon codes from other suppliers are concerned, you can always try to combine them with deals from either the Ebates or My Points.