A Successful Business Starts With A Good Accountant

Accountants (Photo credit: Tax Credits)

Entrepreneurs are fascinating people. They eat, live and sleep business. They live to create and build businesses. Their mind is always in gear with ideas to make money. They have a new idea about every five minutes on how to make money in a new and different way. They're our front line soldiers in growing the economy and getting the economy going again.

The one thing entrepreneurs are not good at is financial record keeping. They don't have the training needed to file complicated tax returns or the time to be familiar with tax law. That's where a good accountant can be of vital help.

Here are five ways an accountant can help your business:

1. Accountants can interpret and make sense out of your financial information. Your business generates huge amounts of data. Your invoices and accounts receivables can tell a lot about your business and its possible future. An accountant can interpret and organize this data. They can tell you if your business is growing or heading off a cliff. An accountant can give you the necessary information for you to make critical decisions in an intelligent way.

2. Accountants can see things clearer than the business owner. The business owner is stuck out in the field running the day-to-day operations of the business. They are not able to see the whole picture. An accountant can see things from a different perspective that would otherwise be missed. Accountants see the big picture and when you see the big picture you see new horizons and opportunities that can be taken advantage of.

3. Accountants have experience in the business world. Accountants are not only doing work for your business but they are doing work for many other businesses. They see the intricate workings of other types of industries and are able to use this knowledge to help your business. Not being locked into just one business as the entrepreneur is gives them a broad perspective. This perspective makes them a valuable asset to your company. Their experience lends itself to being a help in planning your business growth.

4. Accountants understand taxes. Taxes are not a simple problem for a company. The laws change almost every year and keeping up on them is a job unto itself. Rules and regulations having to do with payroll and government departments need to be kept up on. Your accountant can do this for you. Using an accountants knowledge of tax law will guarantee, you will be paying the minimum in taxes.

5. Accountants will see you through tax audits. When the tax man sends you a letter that you owe back taxes, there is no more frustrating and daunting experience. Clients of an accounting firm like www.liptrottandwoosey.co.uk are glad they are there to help them through all there accounting needs.

Can you survive without an outside accounting service? Maybe. But the help, guidance and knowledge given by a good accountant can be the catalyst that will make your business thrive.

Health Care or Social Care - What Will You Need In Retirement?

(Image credit: Getty Images via @daylife)

When we look forward to retirement we usually imagine vacation and holiday time. Some think about visiting exotic places or playing a lot more golf. If we are healthy these dreams can come true. But eventually health issues begin to occur more frequently and some kind of long term care may be necessary.

Today, there is an issue of government claiming that some health issue remedies are not in it's inventory of services to provide the aging population. You can claim a medical health issue and hopefully they say that is an appropriate reason to provide care but if the issue is a social service need, it may determined that it doesn't fall under their jurisdiction and they shouldn't be asked to pay for it. 

Naturally there are some services that fall into a gray area which could fall under both social and health care. You could have a patient that needs help with dressing and eating, this falls under the heading of a social need. But if the feeding must be done intravenously this could be called a health need. 

Issues like this are not clearly defined in a health care framework so parties disagree to who should cover the need. 

Another care issue is a patient diagnosed with Alzheimer disease. Though a medical health condition and a metal health condition, it does not need medical care but just social care. Where does it fall under current law? Do health services pay for the care or does social services pay?

There are too many of these kinds of issues falling through the cracks of our current law framework. Many people who can not afford to pay end up selling assets like their homes to move to care facilities. It is possible to get a care fee refund and you can appeal the ruling of the law. It's not something an ill person needs to have happen to them. Seek appropriate professional help to help you alleviate this problem.

Using Your Credit Card--To Save Money

 (Photo credit: Wikipedia)

A few simple steps will help you get the max out of your credit cards.

Advising someone to use a credit card as part of a sound financial plan sounds like telling someone to eat ice cream as part of a weight loss plan. The truth, however, is that credit cards can be used to your advantage.

The best way is to use them as a temporary replacement for the cash sitting in your bank account, rather than for cash you don't have. In other words, it isn't about carrying debt, but about carrying a credit card that's going to pay you back for you using it, and taking advantage of an interest-free loan between the time the purchase and paying the credit card bill.

What about those of us who carry a balance some (or all!) of the time? You still want to maximize your return. The card's interest rate is your biggest concern, but these tips will help you recoup some of that interest payment, or keep you from needlessly paying more.

Never pay before the due date

Most, if not all, major credit cards come with the option to set up automatic payments every month. Unless you tend to have erratic and low balances in your checking account, take advantage of this option. And when you do, set the payment date as the latest one allowed without incurring late fee. The reason: a credit card gives you an interest-free loan during the period between the purchase and your next billing cycle.

For instance, if you buy something May 1 and your monthly billing cycle ends May 15, with a payment due date of June 1, the credit card has loaned you interest-free money for 30 days). To maximize the savings, keep your cash in a high-interest savings or checking account.

One word of warning: it's always better to pay early if you fear you'll spend the money before the due date. The money you'll earn in interest is microscopic compared to the fees charged for late payments.

Take full advantage of cash-back rewards

Many credit cards offer cash-back rewards, typically equal to one percent of your annual spending. Others sweeten the deal by paying back a higher percentage on purchases for things like groceries, gas, or from specific vendors. Sites like billshrink.com help you figure out which card is likely to pay out the most, based on your spending habits. For instance, at one time the Chase Freedom Card paid 5% percent cash back on purchases from a rotating selection of merchants (check for current offers; they change quickly). They also paid a $100 bonus for spending $500 on the card within the first three months.

Avoid balance transfer fees

We've all seen the offers--"0% Interest on Balance Transfers for 12 Months!" And, yes, it's typically too good to be true. That's because many of those cards also charge an up-front fee (often 3 percent) based on the size of the transfer. So transfer $10,000 to the card and you'll pay $300 for the privilege. If you pay the balance off in a year, that $300 fee is the equivalent to more than 5% annual interest. And if you don't pay off the balance, forget about it--the hike in interest rates after the promotional period will likely wipe out the savings in no time.

Shop through credit card sites

Many card companies have negotiated special discounts with retailers, particularly those who sell online. When shopping, check your credit card site first. The American Express Blue card, for instance, offered savings on everything from car rentals to flowers to meals.

Don't pay a fee (usually)
Contrary to evidence from recent history, banks are smart. If they don't charge a fee, they've determined that they're better off giving you a card and earning money from interest you'll pay over the life of the account. Fee-based cards still want to earn money from your interest payments, but they also think you might find their "special" benefits worth ponying up an additional $50 or $75 a year. Unless you're a particularly big spender, the no-fee cards typically will end up costing you less (the aforementioned American Express Blue has a fee-based option, which pays higher percentages of cash back--only worthwhile if you rack up big charges). If you're uncertain, compare the fee and no-fee options and see how your spending habits affect your benefits.

Matthew Malone writes for the leading Roth IRA and online retirement planning resource, RothIRA.com. He is a CBS SmartPlanet contributing writer whose work has appeared in The New York Times, Cosmopolitan, Smartmoney.com, Fortune.com, Forbes.com, and other publications.

How to Sustain the Latest Downfall in Share Economy with Real Estate Markets Overseas

Interest Rates (Photo credit: 401K 2012)

The real estate market was a great market. Amazing opportunities always presented themselves when you joined this market as a seller or even as a buyer. However, with the latest downfall in share economy, the real estate market has taken quite a beating. However, real estate market overseas can still maintain itself if a few things are done. Although the methods are not perfect, they will help the market.

Buyer’s Confidence is Everything

When you are worried about a particular product or market, you will not buy it or get involved; it’s common sense. This is known as buyer’s confidence and in the real estate market; buyer’s confidence is everything. If a buyer is not confident in the real estate market, they will not buy a house. In a weak economy, low buyer’s confidence could spell disaster.

In order to improve the real estate market, you have to get buyers interested in purchasing homes. Any fear they may have about it must be dispelled. When it comes to overseas real estate, the task is even harder. However, it is not an impossible task either. You have to make homes appealing to international buyers that they won’t be able to resist.

There are a number of ways buyer’s confidence can be increased. These Include:

• Low Interest Rates – If you have ever looked at the real estate market carefully, you will notice that interest rates grow with the market but also go down with it when the market does. These fluctuations in interest rate are due to the market itself. For international buyers, lower interest rates may determine their purchase. This is particularly true due to exchange rates.

This helps homes sell faster and, consequently, improves the real estate market. However, online estate agents state that interest rates drastically increase when the market improves. They state that lenders should increase the interest rate very slowly as it nurtures continuing buyer’s confidence.

• Better Mortgages – One of the biggest deciding factors during the property acquisition stage is negotiating a mortgage. If the terms of the mortgage are not to the borrower’s liking, they will not take it. For example, when a high interest rate, short payment plan and harsh penalties are in the contract’s terms, no international resident will buy a home.

International clients need to be assured that they will be able to pay off the mortgage. One small hiccup and they won’t buy a home overseas. To sustain the real estate market, it is imperative that lenders provide better mortgages. Reduced interest rates, softer penalties, better penalty periods, refinancing and better payment plans are only 5 ways through which the real estate market can sustain itself.

When international residents are happy with the terms in the mortgage, their buyer’s confidence will significantly increase and they will buy homes on foreign soil.

One of the easiest ways to improve mortgage terms is by removing any down payments. Most down payments range from 10% to 15%. This is usually high for most people, especially international buyers (due to the exchange rate).

They can pay off the house over the contract length but are unable to pay the initial down payment. By removing the down payment, more people will be able to buy homes.

• Improve the Neighborhoods – Nobody wants to live in a ‘bad’ neighborhood. When a potential buyer learns of a bad neighborhood, they are automatically deterred from buying a home in it. International buyers are deterred faster.

Online estate agents state that although real estate prices of ‘clean’ and ‘good’ neighborhoods are high, people still buy homes in them because of the neighborhood.

Affordable Refinancing

When the share economy is unstable or has gone, one easy way of improving it is by offering better refinancing. For those who don’t know. Refinancing is a process by which you replace your current mortgage with another, more flexible, mortgage. When a better mortgage surfaces or interest rates go down, you can refinance your home.

When the share economy suffers a downfall, it is not easy to maintain any market. Maintaining the real estate market in particular is a difficult job. However, that does not mean that it’s impossible. When lenders and the government work together, anything is possible. Even though the share economy may not be exceptional at this time, real estate market overseas can help sustain the economy.

About the Author:
The above article is written and edited by Shannen, who is a freelance writer for various blogs and communities related to finance. In her free time she writes articles related to online estate agents, real estate properties, debt relief etc.

Coffee Consumption Linked to Delayed Alzheimer's Onset: Study

Coffee cup (Photo credit: @Doug88888)Now and then on this blog I like to relate interesting news about my other favorite subject, coffee. I have been known to be obsessive about it but I believe there are many unknown health benefits. We have been told over the years to moderate our coffee consumption but I know how many people enjoy their morning jump-start. I have been trying to tell my wife how great coffee is and now here is the proof. The little brown bean is responsible for delayed onset of Alzheimer.

A group of researchers from the University of South Florida and University of Miami have found that higher caffeine consumption is linked with a delayed onset of Alzheimer's disease, even in older adults who already have mild cognitive impairment (thought to be an early sign of Alzheimer's and/or dementia).

"These intriguing results suggest that older adults with mild memory impairment who drink moderate levels of coffee -- about 3 cups a day -- will not convert to Alzheimer's disease -- or at least will experience a substantial delay before converting to Alzheimer's," study researcher Dr. Chuanhai Cao, a neuroscientist at USF, said in a statement.

Researchers cautioned that the study doesn't mean drinking coffee is guaranteed to save someone from Alzheimer's, but rather coffee may help to lower the risk of Alzheimer's.

They don't want to go out on a limb here but they also say with all good things take in moderation moderation is key. Excessive coffee consumption is associated with cardiovascular problems, including an increased heart rate or blood pressure and irregular heartbeats, Harvard Health Publications reports.

So when enjoying your daily coffee coffee take comfort in the fact that you are not only self medicating your coffee addiction but also you can tell your friends your keeping Alzheimers at bay.

How To Pick A Financial Adviser

(Photo credit: Jo@net)

This week I went to see my Certified Financial Planner (CFP) for my yearly face to face meeting. Over the years I have been seeking help with my finances. I really believe in having a planner look over your shoulder in your financial life. Even if you do some of your own planning, having a second opinion can give you peace of mind that your doing the right thing.


Many people just don't feel comfortable sharing their financial life with anyone and I can understand that. I highly recommend you get some help if your just beginning to save for retirement or even an old pro.

How Do You Get Started With A Financial Planner?

BEST FIRST MOVE: Ask trusted friends whether they would recommend their own financial advisers. If so, listen to how they describe these advisers—they should paint a picture of a trusted partner who is dedicated to understanding them and how they make financial decisions.
If your friends do not strongly recommend their financial advisers, ask your lawyer or accountant for referrals, If this doesn’t pan out either, ask other members of your community whom you respect.

QUESTIONS TO ASK...
When you meet with a candidate, be sure to ask...

What professional certifications have you earned?
Make sure he/she is a Certified Financial Planner (CFP), a Certified Investment Management Analyst (CIMA) or a Chartered Financial Analyst (CFA). These designations ensure that the adviser receives ongoing financial training and has passed a difficult exam. Titles such as “investment adviser” or “financial adviser” do not have the same guarantee.

If he had been your client in 2008 and lost a lot of money, what would you be telling me now?
The answer should include some basics—such as how to rebalance your portfolio following stock losses and how to sell securities that have declined in value to offset taxes—as well as suggest a long-term perspective. 


The adviser also should understand that his job is about managing a client’s emotions as well. The amount of risk that a client is predisposed to take does not often correspond with the amount of risk that makes sense for his situation, and the adviser must be able to steer clients into an appropriate portfolio in a way that still allows them to sleep at night.

I’m retired, and my portfolio has lost a lot of money. What can I do to get my savings back on track? It’s an excellent sign if the adviser’s suggestions include spending less and saving more and/or taking a part-time job during retirement. A financial adviser must be willing to provide painful advice when necessary just as a doctor must be willing to tell a patient to “lose weight” or “stop smoking.” You should be extremely wary if an adviser suggests some aggressive strategy to “make it back.”

What should I be doing to manage my financial risk? 
Many financial advisers will discuss asset selection and diversification. That’s fine, but it’s a bad sign if the adviser doesn’t also mention insurance. 


Insurance is crucial for risk management—if you don’t have enough, one mishap or lawsuit could cost you everything you own. Types of insurance to discuss could include homeowners’, umbrella, business, auto, life, health, disability and long-term-care insurance.


Note - ( This question on insurance through me on my first visit. But later I understood how important it is to protect the assets you already have.)

I’m worried about the ever-changing economic forecasts on the news. What should I do?
The adviser should encourage you to turn off the news and spend your free time thinking about more enjoyable matters. Becoming wrapped up in the endless recovery coverage wont help you make informed decisions—it will lead you to make knee-jerk emotional decisions that are likely to be detrimental to your mental and financial health.

What financial decisions will you make for me?
This is a trick question. The adviser should answer that he will provide guidance on a wide range of financial decisions but will not make your decisions for you.
The adviser might take the lead in making decisions about specific investments if this is what the client wants—but he still should discuss these decisions and what they mean with the client before proceeding. The best financial advisers have a collaborative approach but are also likely to have strong opinions.

What words would your clients use to describe you?
Most advisers will cite words such as intelligent, experienced, trustworthy and prudent. Make sure the list includes “accessible—it shows that the adviser understands that being available when needed is part of his job. The list also should include a word like “confidant” to show that the adviser stresses a personal connection with clients.

How many clients do you have?
If it is more than 250 (for a solo practice), it’s unlikely that he can give each client the time and attention that each deserves. If you’re investing millions of dollars, anything more than 100 clients is probably too many, unless there is a strong support team. Large portfolios tend to be more complex and time-consuming for advisers, and if you have this much money, it is worth it to pay a little more for one who can give you extra attention.

Note - ( This can be a highly subjective view and I may get a different opinion from CFPs)

How often will we meet?
You should have at least two face-to-face meetings per year. If your assets are well into the millions, you should probably have four meetings. Phone conversations can be useful, but most people feel more comfortable when they have in-person contact with the adviser who is handling their money...and this gives the adviser a better chance to learn his client’s goals and fears.

How do you charge?
Select an adviser who charges a fee for his services, not one who charges commissions. Don’t make a decision based on price. Base it on your sense of an adviser’s competence, perspective and “fit.” Chemistry is vital. (Fees often are based on the amount of assets under management even though the adviser should provide guidance beyond investment advice.)

What is your typical client’s net worth?
This adviser might not have much experience with the financial issues most important to you if his other clients have significantly more or less money.

QUESTIONS A FINANCIAL ADVISER SHOULD ASK YOU...
During an initial interview, a financial adviser should seem like a doctor trying to diagnose the source of a patient’s problems—not a salesperson trying to make a sale.

QUESTIONS AN ADVISER SHOULD ASK...
• Have you lost sleep over the markets recently? This helps the adviser understand your risk tolerance, which will help him design your portfolio.
• Which of your financial goals is most important to you? Most clients have a long list of goals. They want to buy a second home, retire at a certain time, travel, help pay the grandkids’ college bills, leave an estate, etc. These days, few can afford to achieve them all.
• What is your history with money? Did you grow up rich or poor? How did your portfolio fare in the last bull market? The last bear market? Good financial advisers understand that the way money has affected your life in the past will have an effect on how you react to financial issues in the future.
• What do you want from a financial adviser? The adviser should understand that financial planning is not one size fits all. It is his/her job to adjust the services provided to fit your needs and desires.


Opinion - I have been lucky to know advisers who have had the heart of a teacher. They really want to help you be successful with your finances. Most advisers are great people with a zeal for helping their clients. Find one that can help you with your financial planning.

Should You Charge Your Grown Kids Rent?

Cover via AmazonThings sure are different these days. With the bad economy and lack of jobs more kids are coming back to the nest to let the parents take care of them. I guess I was lucky, I moved out at 23 years old and have been supporting myself ever since. 


In my house we have 5 grown kids and one 12 year old. The oldest has been out for several years, three are in college, and one is just bumming around. With the 3 in college, one lives at home and the others away. The ones that are away love their freedom and do not want to come back. But the one resident child we have has no intention of leaving for the near future. His failure to launch or even prepare to launch is frustrating us.

It has crossed our minds to charge him rent. Financially it is our plan to downgrade in house so as to cut down our expenses and save more for retirement. Plus the large house takes a lot of money for maintenance, which could be used for savings and fun. With no plans to leave the home we are getting anxious over the problem.

Related:

• How Do You Help Your Grown Kids Financially Without Hurting Yourself?
• Baby Boomers Spending More Cash On Their Family, Than On Their Own Future

There are two sides to this issue. Many parents see it as their duty to continue to care for their children no matter how long it takes for them to become independent. They may feel as if they are taking advantage of their children by taking rent money from them, especially if the child is living at home to save for a house of her own.

On the other hand, many parents believe that charging rent helps their children mature and learn responsibility.

As this chart depicts there is a increasing trend of the so called "Boomerang Kids" coming home more and more. 

Under 35: Living with Parents vs. Homeownership rate

I think when a child reaches 23 years old and up they have an obligation to contribute to the family home. Is $50 per week so much to ask? Some parents believe and I do to that you are teaching that it's OK to depend on mom and dad when things are not going to well. Being able to come back to the nest may get to be a habit if the grown child is given free room and board. Are we as parents teaching are children well by making it easy for them. Free rent can encourage an entitlement sentiment in your children. For their sake charging them rent teaches many lessons. 

Now if there is some financial hardship for the child not to pay, then letting them stay for free is giving them necessary help in time of need. 

Strike a Balance

If you feel bad about taking money from your children then I propose you take it anyway and save it for when they move out. It can be used as a deposit, money to cover moving expenses, or to buy furniture. Your conscience can be relieved with this option.

However, the decision is ultimately yours as a parent.  You should make your decision based on what is best for your child. Does your decision move them forward or just enable them? Just make sure when your adult child moves back in that the ground rules and financial expectations are clearly outlined.



Related:

• Loans To Your Children - Great Idea?
• Top 3 Ways to Help Your Adult Children Become Financially Independent

Top 6 Ways to Get Your Spouse Out of Credit Card Debt

 (Photo credit: Wikipedia)

Credit card debts can be a big problem both for you and your spouse. No matter who is actually responsible for piling up the huge debts on the cards the other has to bear the burden of it too. At times it may get difficult but you just cannot leave your spouse to suffer alone. Stress, tensions and heated arguments will only make matters worse. It is better that you keep your calm and find a way out by which you can help your spouse resolve his/her debt issues instead of fighting on it.

A helping hand from your end is all that your spouse can ask for! The rest of the things are sure to fall in place. So here are some quick ways to deal with the credit card debts of your spouse without affecting your relationship:

1. Know the problem in details: You need to know how grave the financial situation is and how much debts you actually have to deal with. Ask your partner to be honest about the debts and to share all the necessary information with you. Analyze your financial situation well and deal accordingly. Assure him/her that together you can resolve the problem and there is nothing much to worry about.

2. List down your debts: It is also important that you make a list of all that debts that you or your spouse owes. It will help you to have an idea of the money that you need to save in order to pay them off completely. You can thus design your budget plan better.

3. Design a monthly budget plan: It is important that you make a monthly budget plan and stick to it. You need to reduce your monthly expenses as much as possible so you can save some money to pay off the debts at the end of each month.

4. Follow the budget plan: Just designing a plan will not help. You need to make a realistic plan that you will actually follow. Make sure that you stick to the budget as much as possible and follow a lifestyle accordingly.

5. Keep track of expenses: You need to be extra cautious of every penny you spend. Keep track of expenses of both your own and that of your spouse. Do not buy things that you don’t need. Impulsive buying during such time is not a good idea. Before buying an expensive item make sure that you both agree on the purchase of that particular item.

6. Note your credit report improvement: If you start paying off your debts every month, your credit report will slowly show some positive changes. Take a note of it and make sure that the paid off debts are marked and your negative points are removed accordingly.

You also need to make sure that you handle all of it calmly. Keeping a grudge against your partner or making a relationship sour will not be a fruitful solution. You need to maintain proper understanding in order to resolve such a situation.

Author bio: Jonny is a financial advisor with EasyFinance.com. He helps people to resolve their credit card problems and also problems related to home equity loan, personal loans, and other loans.

Get Yourself Out of Debt Now! (Heres How)
How to Get Out of Debt, Stay Out of Debt & Live Prosperously By Mundis, Jerrold

Invoice Finance and its Operations

There comes a time in a business when funds are needed. The business may be doing well but cash flow needs are inevitable. In order for the business to continue in operation, measures to bring in cash flow are approached. There are ways that can bring in operational cash flow to your business. Invoice Finance comes in handy. Before you choose this method to finance your business, it is good to understand how it operates.

Invoice finance is available for all trading people. Invoice financing is basically, the sale of your invoices. Normally they are sold at a discount, to a factor for instant cash. A factor in this case is the third party. Invoices are transactions between the seller and buyer. When a third person comes in this deal then he or she is a factor.

When you issue an invoice, it means that there is money expected. After invoicing, the money is received at a certain period. The agreed period must reach maturity before it is paid. A factor can avail this money on accounts receivable in advance. This money is availed in a certain percentage that is also agreed.


This method of invoice finance can be embraced. You will not need to go through the bank loans procedures to finance your business. It is an easy and quick way of obtaining cash flow. As we all know that banks loan procedures can be a hassle.

On the same note, it is good to understand that a certain discount will be allowed for a sale of an invoice. The factor only gives quick cash and not loaning the business. Also bear in mind that completion of services must have been rendered before a sale of an invoice. Credibility of your client must be met too. This is good approach too, because you can choose the invoices to sell. Moreover, you do not have to sell all your invoices. Choices of the most beneficial ones can be made.


There are banks too who deals with invoice finance services. Going to a bank can a better option. You will be in a position to decide which bank to visit. You can consider some details like speed, efficiency and dependability before buying a service from a certain bank. Banks coverage is a vital tool too. Don't choose a bank that is limited to a certain region too.

In matters quick cash, choose a bank that carries out the service online as well as round the clock. Some take credit history seriously, so if you don't meet these criteria, apparently they are some banks that exempt this detail. Whichever one you choose, consider one that is friendly to your kind of business.

So, is your business in dire need of quick funding? You can relax because invoice finance service can rescue you. If you have just ventured into a business, you are safe too. This can also serve as a source of your capital. You only need to meet the credit worthiness.

Kate Ford is Tech writer from the UK. Catch her @thetechlegend on Twitter

Shopping for Life Insurance? 4 Things to Consider

Universal Life Insurance Company (Photo credit: Thomas Hawk)

Life insurance, for most of us, is not a huge priority in our minds. Especially if you are middle aged with young children, you probably think that you have lots of time to make decisions in regards to life insurance. But the truth is that life insurance is as important for your children and spouse as is saving money for your kids' college tuition. Here are a few things together as you shop around for a life insurance policy.

1. Don't be fooled by whole-life insurance.

While life insurance can be fairly complicated, you should know from the get-go that life insurance falls into two major categories—term life insurance and whole life insurance. One thing that's important to be privy to when shopping for life insurance is that whole life is almost always going to be a sucker bet. Life insurance agents get as much as 80% commission on whole life insurance, so they'll obviously try to push these types of policies much more vociferously than term life insurance. Whole life can be fairly risky, since the policy is tied up not just in premiums you personally pay, but in investment funds as well. Since most people have so many other, more secure options to invest in, like 401ks, it's best to separate life insurance from investment. Don't be conned into whole life.

2. It's not worth lying in your application to cover up health or lifestyle risks.

Unless your employer covers life insurance, most people don't really start thinking about life insurance until they're older and in poorer health. Of course, if you smoke, are very much overweight, have unusual or costly health problems, or your job is particularly risky, you're going to end up paying more for your life insurance policy. Many people try lying on their applications. Perhaps they try to cover up a smoking habit. While you can probably get away with lying about smoking on a tenant application, lying about smoking for life insurance is very risky. If you are found out (and trust me, life insurance companies investigate), you can be denied coverage. Even worse, after your death, your dependents may never see a dime and may even be entangled in legal problems in the courts. Be honest.

3. Do your research.

Even for those who are experts in insurance, life insurance can be a jungle. Don't just jump on the bandwagon with any policy or company. Spend as much time researching as you can. Read reviews, and understand precisely what you are getting yourself into. Despite my previous work experience in the insurance industry, I won't hesitate to say that the industry is filled with scams. You'll not necessarily get the very best deal, no matter which company and policy you decide on. But you can certainly mitigate risk by becoming as informed as you can. Don't overlook the power of knowledge.

4. The earlier you acquire life insurance, the better.

As noted earlier, most people don't think about life insurance until they are older, just as most people don't start investing for retirement until they are nearing the end of their careers. If you want to score an affordable policy that will fully take care of your dependents in the event that you pass away, then apply for life insurance immediately. Of course, it's not impossible to get decent coverage in your later years, but it'll be much more expensive, and not quite as secure.

More than even health insurance, life insurance can be very complicated. However, if you do your research and follow the above steps, you future (and the future of your loved ones) will be protected. For more information about life insurance, check out this CNN Money series. Good luck!

Susan is a freelance blogger who enjoys writing about automotive and health news, technology, lifestyle and personal finance. She often researches and writes about automobile, property and health insurance, helping consumers find the best insurance quotes online. Susan welcomes comments.

5 Reasons to Invest in a 529 Plan

 (Photo credit: Wikipedia)

According to a recent survey 50% of American families do not have a monthly budget, save for retirement or college expenses. The lack of personal finance knowledge in America is a major problem. A new survey by brokerage firm Edward Jones claims that 62% of these households never heard of a college savings 529 plan.

The 529 plan is the best way to save for a child's education. It's the primary way to accumulate a nice tax-free investment account for your child's education. 

According to the Edward Jones survey, the number of people who understand what a 529 plan is rises with a family's income. Only 27% of those surveyed who make less than $35,000 a year knew was a 529 plan was versus 57% for those making between $75,000 and $100,000. And 62% of respondents earning more than $100,000 a year were familiar with 529s.

• Roth IRA vs. 529 plan - Which is Better for College Savings?
• 10 Frequently Asked 529 Plan Questions

5 Reasons to Invest in a 529 Plan

1. When you invest in a 529 plan, it's safe from federal income taxes and almost always state taxes as well. As long as the cash remains inside the account no taxes are generated.

2. You can take out money for qualified college expenses such as tuition and room/board without paying taxes.

3. The states offer their own 529 plans and about three dozen of them offer residents some sort of tax deduction for their contributions. Consequently, you should look first at your own state plan if your state offers a tax benefit. If the state plan is weak, look elsewhere. 

4. For competitive reasons, the costs of 529 plans have been dropping, which is great for investors. When evaluating plans, make sure you look at what the built-in cost of these plans will cost you because you won't be getting an invoice. The fees are withdrawn automatically.

5. These college savings plans routinely include age-based investment options. Age-based investing is easy because the accounts automatically grow more conservative as the children near their college years. 

Pension Reform Needed Around The World [infographic]

A sustainable pension system still eludes many countries. The employer doesn't want to fund it and taxpayers do not want to pay for it through taxes. For us 50 plus people, the system will see us through but the ones who will have the most difficulties with a funded retirement are the workers 40 and younger. The broken pension system we now have, plus the poor economic environment we now are experiencing, have created a the perfect storm. 

Here is an infographic depicting current U.K. pension reform problems.

This is an infographic on pension reform is supplied by Money Infographics, a site that hosts personal finance infographics

How Much Debt Does It Take To Be Considered Drowning In It?

Many college students have graduated this past semester and are finding the prospects for jobs very limited. In a recent report, 2/3 of these students have a debt of at least $25,000. This amount reflects only students attending public colleges. Private college debt is said to be much larger.

These students should at least be congratulated for finishing their degrees. But as their reward for doing a great job they are finding a poor job market and a hefty monthly debt payment soon to begin. As a bonus, congress wants to raise the interest rate on the money owed.

If you were fresh out of college with no job and $25,000 in debt, would that be considered drowning in debt. According to FinAid.org the payment would be about $290 per month, on a 10 year repayment plan. This payment would be impossible even if the student had a job. You would need a salary of $34,000 and you would pay 10% of your income toward your student loan.

For new graduates finding an entry level job that makes that much, is tough to find. Add to that living in a medium to large city that might have such jobs is pretty expensive. Plan on spending 30-40% of your income on a resident.

With these kinds of obstacles in the college graduates way, it's no wonder the rate of student loan default is on the rise.

If these trends continue, the outcome won’t be good for this generation of college students or for the country as a whole. Especially if the cost of higher education continues to rise as predicted in this graph:

According to the Wall Street Journal, the administration has laid out a 3 part plan to help take off some of the pressure. 

1. 10% of Income — The income-based repayment program, which puts a percentage cap on the amount that individuals must pay toward their student loans, currently requires that people must pay at least 15% of their income, but Obama’s plan will drop that number to 10% starting in 2012 rather than in 2014 as previously mandated.
2. Forgiveness after 20 years — Also, starting in 2012 instead of 2014, participants in the income-based repayment program will have their debts automatically forgiven after 20 years rather than 25 years.
3. Consolidation of loans — Obama’s plan will allow people to consolidate all their federal and government-backed loans, which can translate to lower interest rates and lower monthly payments.

The proposal could cost the government as much as $1 billion. But the slow moving government has much to do to get this plan off the ground. Time will tell what the final result will be.

How Paying the Minimum Payment Makes You A Frog

 (Photo credit: Wikipedia)We don't realize how often companies use psychology on us to make money. There are many ways psychology is used but did you know it's used on your credit card statement. In a recent study the amount of your minimum payments can influence how much of your balance you decide to pay off each month.

Specifically, according to the Wall Street Journal, the study looked at how people’s behavior changed when they saw a specific number marked down as a required minimum payment on their hypothetical credit card bill:

"A random sample of 591 Americans saw a made up credit-card statement showing a balance of $1,739, and an annual percentage rate of 12%. Some people saw no further information, while others were informed that a minimum payment of 2% of the balance was due."

What they found is that people who did not see any minimum payment number desired to pay a higher amount of their balance — significantly more than 2% — whereas people who were shown the minimum payment number were inclined to pay closer to 2% (meaning they’d be in debt longer).

We can speculate that this is because the 2% amount acts as an anchor in determining what you consider a “reasonable” payment to be.

Maybe you had planned to pay off the balance in 6 months, but since the bank is only asking you for 2% on your credit card statement, you figure that’s the right course of action. After all, they’re your bank, they must know what’s appropriate for you, right?

And that’s how you become the proverbial frog in a pot of boiling water. You wouldn’t allow the bank to take $1,000 or $5,000 or $10,000 in interest payments from you in one day, but by convincing you to succumb to the minimum payments myth they quietly take that much from you over the course of several years. It happens so gradually that you might barely notice until it’s too late.

What You Can Do About It?

You need to fight this inclination to pay only minimum payments. Add up the dollar amount of the interest you will be paying over the life of the payback period. Realize that all that interest will be coming out of your pocket for no good reason. Ignore the minimum payment, double or triple it and send that amount in every month. Get the thing paid off and don't be a frog.

Why Is Your Phone Number Your Greatest Business Tool?

 (Photo credit: ronploof)

Starting a business comes from a dream of wanting to be successful in the field you have chosen. You pride yourself on doing professional work and having that work reward you. But as a small business you need to build a solid reputation. The customer needs to feel confident in your business or they won't call you for your services. One way to do that is to offer freephone numbers for them to contact you.

Even though many people use the Internet to look for goods and services your phone number is still of utmost importance. Surveys reveal that the use of the Internet is growing at a fantastic rate, but your phone number is the main way customers contact you.

A local phone number is adequate but a free phone number will help you expand your business from a small start up to a regional or national company.

Here are 5 Reasons you Need A Business Phone Number:

1. Providing good customer service is one of the most important ways a company is likely to get ahead and move from merely breaking even to becoming very successful.

2. Call centers need to increase their customer satisfaction and ensure they stay ahead of competitors in the current difficult economic market, in result making it important to employ freephone numbers for customers to contact them.

3. Marketing can play a big part in an enterprise's success and there are numerous methods of advertising and getting people's attention. However, for many smaller firms these may not be viable at present as they do not have the money or resources to spend on large campaigns spanning several different types of media. 

4. A 0800 number presents a national image, so no matter where an organisation is based it can attract clients from all over the country, thus encouraging even more business and driving up revenue.

5. Memorable phone numbers also promote brand recognition, as they help people to differentiate between different enterprises and build up relationships. In particular, 0800 numbers are well suited for this purpose, as they are free for consumers to contact from landlines.

6. If a company has a local number, it is most likely to be perceived as a smaller business offering more specialised, localised products and services to those living in certain parts of the area. While this is ideal for some firms that will no doubt be happy to create a friendly, personalised image to people who are likely to return with repeat custom and tell their friends and neighbours about their experience, this is not the case for organisations with aspirations of international trade and a nationwide reach.

7. If people see that the enterprise is willing to cover the cost of the call, they may consider it to be looking after its customers and therefore have no hesitations when it comes to returning with more business or recommending the service to a friend.

The way your customers contact you is of utmost importance to the success of your company. Your company is in competition with hundreds of other businesses. It's important to distinguish yourself from them, one way is at distinct and easy to remember phone number.

Are Zombie Debts Stalking You?

(Photo credit: Images_of_Money)Collecting old debts - even debts for which you are not legally responsible - is becoming a very profitable venture. Companies can buy those debts (sometimes referred to as "zombie debt") for pennies to the dollar, then go after the people who they think are most likely to pay up. A phone call can turn into badgering, harassment, threats to sue, and other inappropriate (and sometimes illegal) actions. If you ever get a collector asking you to pay up on a debt that's "come back to life", here's how to make sure your rights aren't violated.

1. Do not acknowledge the debt. If you're not sure whether you actually owe the debt, don't say anything that could indicate that the debt is yours, and certainly do not agree to make any kind of payment. Doing this can give the company the legal right to collect the debt, which they might not have had if you didn't acknowledge the debt.

2. Don't fall for any traps.

• illegally "re-aging" debts (reporting the old debt to the credit bureaus as if it's new)
• promising to wipe off a red checkmark on a credit report
• bait-and-switch credit card offers (they tack on the balance of the zombie debt)

3. Get it in writing. Ask for proof that you owe the debt, like the credit card agreement you originally signed, along with an account history. If they don't have that proof then they don't have the right to take action against you. Again, make sure you don't acknowledge the debt. Keep repeating: "I want to see evidence of this debt in writing. I do not acknowledge this debt."

4. Check the statute of limitations to make sure you're not responsible for the debt anymore. The statute of limitations essentially defines how much time you can go without paying a debt before a collector's right to collect through the court system expires. Every state in the US has different rules and exceptions regarding when the time period officially begins, how long it lasts, and what can "revive" the statutory period, so you really do need to check the laws or consult an attorney in your own state. Until you can do that, however, keep the following in mind:

• Even if the statute of limitation expired, agencies can still try to collect the debt; they just can't do it through the court system. (If your debt was discharged through bankruptcy, they can't attempt to collect it at all.)
• Moving to a different state, even temporarily, can affect the length of your statutory period.
• Do not allow the collector to convince you to make a payment to "show your good intentions" (such as if you're on your way to court). This can "reset" the statutory period and essentially bring the debt back from the dead.
• If the statute of limitations has expired, and you don't meet the criteria in your state for extending it, send a letter to the collectors stating those facts.

5. Write a letter explaining that you are not responsible for the debt, you do NOT acknowledge it, and you demand they stop harassing you or you will take legal action. If you've done your homework and you know that you are not responsible for the debt (such as if your statute of limitations expired and you don't meet the criteria in your state for extending it, or you declared bankruptcy), send them a letter through certified mail and get a return receipt. If you've filed for bankruptcy, send them your discharge order with your letter. If they insist on taking you to court, be prepared to tell the judge that you notified the collector in writing that the statute had expired.

6. Watch your credit report carefully. They might try to report the debt or taint your credit history. As mentioned earlier, collectors could post an old debt as if it's new, or lie about the date of delinquency (in an attempt to start a new statutory period). Dispute any questionable entries with the credit bureau and the agency. Again, asking for proof of the debt as advised earlier can make their claims invalid.

Some articles concerning debt:

• Seniors in Debt: Debt Consolidation for Older Adults
• What You Don’t Know About Debt Will Cost You
• Five Ways to Pay Down Your Debt Before Retirement

10 Money Conversations Most Families Never Have

. (Photo credit: BrethrenBenefitTrust)The conversations between adult children and their parents concerning money and financial subjects rarely happen. Even thought these conversations are difficult to have they are a necessary part of an estate transition. 

Sadly, these necessary conversations usually are forced to take place when the elder parents are to sick or impaired mentally.
It's important that this has to change and open conversations need to take place when all parties are in good health.

According to a report by the Alzheimer's Association, 5.2 million -- or 1 in 8 Americans -- over the age of 65 have Alzheimer's disease. The same report also cites a study which estimates 13.9% of Americans over age 71 suffer from some form of dementia. If you suddenly had to take over a parents financial affairs would you know where to start.

For the good of all the family you should start as soon as possible to get organized. It will be a benefit to yourself and your parents.

1. Have they named a durable power of attorney to manage their finances?
The first step is to find out if they have named a Durable Power of Attorney (POA). Without a POA in place, you'll have to go to court to get guardianship of your parent in order to access accounts on their behalf.

2. Where do they keep their financial records?
Whether they keep their money and documents in a bank, a safe, or under the mattress, you need to know where to find records when you need them. What is the location of keys or codes to lock boxes or safes?

3. What are their bank account numbers and names of their financial institutions?
In addition to knowing where they keep their money, you need specifics on all account numbers. What banks do they use? Who is their mortgage company? Do they have an investment firm?

4. What are your parent's monthly expenses?
Gather information on their mortgage, car payment, credit card debt, electric bill and other expenses.

5. How do they pay their bills currently?
If there are automatic deductions being taken out of a checking account, you need to know about it. Do they use online banking, or only paper checks?

6. How much is their annual income and where does it come from?
Does your parent receive a monthly pension check? Do they have dividends coming in from investments? Do they get money for a disability, or alimony?

7. Do they receive Medicare, Medicaid, or Social Security?
If your parent becomes incapacitated, you may have to investigate the status and eligibility of government assistance.

8. What kind of medical health insurance do they have in addition to Medicare?
Do they have health insurance provided by an employer? If they are retired, are health benefits included as part of a pension?

9. Do they have long-term care insurance?
A "regular" health insurance plan does not cover the cost of assisted living or a nursing home. Did they purchase a long-term care insurance policy to cover the cost of those residences? If not, and they can no longer live on their own, what can they afford in terms of housing?

10. Do they have an accountant or financial planner?
Who is it and how do you contact them? Have they done any estate planning?

These and many other questions need to be answered before a situation becomes to difficult. Even if many of these things can not be revealed presently, a file or drawer where all of this type of information can be found quickly is a necessity.

The Advantages of Trading Indices

(Photo credit: Wikipedia)

Stock market indices are a major component of our daily financial news. Indices have to be understood in their proper context for anyone who hopes to invest using the information on any given index. Stock market indices are used to measure or track a market by its performance and this will give a fair indication as to its ups and downs.

Indices are financial products that are constructed from the constituents of a particular global exchange, such as the UK 100 or US 30. Trading indices are widely used by financial professionals as well as individual investors, for portfolio protection.

Some of the advantages of trading indices are:

24 Hour Market.

While the international stock markets operate during regular trading hours most of the major indices are open for trading 24 hours a day. When the UK or US stock market closes at 4:30pm, you can find the UK 100, US 30, or the Germany 30 index will continue trading all through the night. Unlike many other financial markets, investors can watch index fluctuations caused by economic, political, or social events and be able to respond immediately. They do not have to wait to markets to open in the morning. The electronic platform provides a level playing field. 

Liquidity

The major global indices are the most heavily traded asset type in the world. It has a large daily turnover with many traders all over the world. Volume and open interest in the stock indices continue to grow - a clear indication of the growing liquidity and strength of these contracts.

Leverage

Indices are traded on margin, typically 1%, which is quite often referred to as 100:1 leverage. With some companies it can be even less. If you trade on margin you are using your money more efficiently. You only have to allocate a small portion of your position to trade. More leverage provides greater exposure to price changes and allows you to take larger positions.

Independently Operating

Major indices are so large and heavily traded that they are beyond the financial control of any individual participant. Even government economic controls can not influence it.

Investing in indices is of course much easier and cheaper than investing in every stock in the index itself. Of course investing in an index doesn’t guarantee that you will make money but historically returns on indices have been in the region of 10-11%. Trade indices with CMC, it just takes a little patience over the long term to see a return on your capital.