Should You Move Your UGMA/UTMA Accounts to a 529 College Savings Plans

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Both UGMA and UTMA accounts, together generally referred to as UGMA accounts because they're so similar, pale in comparison to 529-plan accounts, which were created in 1996.

"The biggest reason is tax savings." says John Wiggins of WhatIsA529Plan.com, "All the earnings from investments in a 529-plan account are tax exempt, while only a portion of the earnings in a UGMA or UTMA account are tax exempt."

Under one scenario, the 529-plan account would actually be owned by the UGMA or UTMA account. Experts in college saving say the tax advantages associated with 529-plan accounts, and the fact that the stock market has been so weak lately, make such a move doubly attractive.

In a 529-plan account, investments grow tax free and, under the Tax Relief Act, distributions for educational expenses are taken tax free as well. Only a portion of the earnings in UGMA and UTMA accounts are tax free.

When a child is under 14, the first $750 of earnings each year is exempt from federal and state taxes, the second $750 is taxed at the child's rate, and the rest is taxed at the parent's rate. If the child is 14 or older, all earnings are taxed at the child's rate.

Liquidating UGMA and UTMA account assets, however, and then taking the proceeds and putting them into a 529-plan account can bring a host of problems - most of them relating to ownership.

UGMA and UTMA accounts are custodial accounts, the contents of which belong to the child, meaning the assets of the 529-plan account purchased with the proceeds of the liquidated assets of a UGMA or UTMA account would belong to the child.

Normally, the assets of the 529-plan account belong to the parent.

UGMA and UTMA accounts also present a problem with respect to financial aid for college. Most financial-aid formulas impose a penalty for assets owned by the student.

They also pose a problem for parents who just need to get ahold of the money in an UGMA or UTMA account. Because the accounts are irrevocable gifts, the assets in them must be used for the child.

A 529-plan account is not irrevocable, although there is a 10% penalty on earnings for taking the money out before the child reaches a certain age.

Of course, issues of ownership can be sidestepped by just spending down an existing UGMA or UTMA, using the proceeds for the child's needs and buying a 529-plan account with new dollars independent of the UGMA, says Joseph Hurley, founder of Savingforcollege.com.

Even Mr. Hurley admits that such a solution might not work for a child from a family that just doesn't have the money to sink into a 529 plan.

Of course, the custodian of a UGMA or UTMA account could just liquidate the account and move the money into a 529-plan account without telling the 529-plan administrator where the money was coming from, suggests one financial adviser.

Such a move would be illegal, and the adviser recommends against it, but because there are no "UGMA or UTMA police," he says, he believes the practice is widespread.

Whatever the approach, it appears that 529-plan accounts are financial advisers' tool of choice for college savings. Consequently, it would be natural to assume that UGMA and UTMA accounts are on their way out. But Mr. Hurley says he doesn't think that's the case.

While many people use UGMA and UTMA accounts to save for a child's education, unlike 529 plan accounts, they are not necessarily intended for that purpose.

"Small custodial accounts still can be very useful," he says. "You don't have to use them for any particular purpose."

Here is a side by side comparison of 529 Plans and UGMA/UTMA Accounts:

	529 College Savings Plan	UGMA/UTMA Account
What you can do	Invest tax-free for college.	Invest on behalf of a minor for any purpose.
Ability to change beneficiaries	Yes.	No.
Controlled by	Person establishing the account.	Custodian, until the child is of age.
Uses	Qualified college expenses.	Any expense that benefits the child.
Impact on federal financial aid eligibility	Considered asset of parent or other account owner.	Considered asset of child.
Contributions state tax-deductible	Varies by state.	No.
State tax on earnings	Varies by state.	Depends on child's age.
Federal tax on earnings	No, if used for qualified expenses.	Depends on child's age.
Penalties for nonqualified withdrawals	Federal income tax plus 10% penalty tax; state penalties vary.	No.
Contribution maximum per beneficiary	$200,000 to $300,000 or more, depending on state.	None.
Investment options	Portfolios consisting of a variety of investments, including age-based options that adjust automatically.	UGMA: mutual funds and securities. UTMA: mutual funds, securities, real estate, royalties, patents, and paintings.
Estate planning impact	Contributions are removed from estate.	Contributions are immediately removed from estate.
Income limitations	No.	No.

Whatever decision you make be sure you contact your financial adviser for consul and help with doing this.

Index Fund Investors Do Better in the Long Run

If your not much of a gambler then index funds are best suited for you. Trying to find the hot stock or mutual fund is a lot of work and the odds that you will pick a winner are extremely low. The returns on index funds are better than the average active funds in every investment category  It's easy to build a portfolio of all index funds because there are funds covering every asset class in every market in the world.

Thirty-five years ago Vanguard CEO John C. Bogle along with his meager staff launched the first publicly available index mutual fund. It was named the Vanguard First Index Trust, later renamed the Vanguard 500 because it tracks the S&P 500 index.

Vanguard has recently released a white paper on performance entitled The Case for Indexing. It documents the poor results of active management versus indexes over the years — a result that worsens over extended periods. The following chart illustrates the decreasing success rate of active management.

A portfolio that holds only index funds in different asset classes has a very high probability of beating a portfolio that holds only actively managed funds in those asset classes. The table below highlights the probability of an all-actively managed fund portfolio outperforming an all-index fund portfolio.

There is a 30 percent chance that a single actively managed mutual fund will outperform an index fund over a 10 year period of time, but that probability drops to 9 percent when three managed funds in a portfolio are judged against three comparable index funds. The results get worse as more active funds are added and as more time passes. A portfolio with 10 active funds held for 20 years has only a 1 percent chance of beating a comparable all-index fund portfolio.

Index fund investing has proven to be the best strategy for most people. A low-cost index portfolio has the greatest probability for meeting long-term financial goals. 

Shopping for Car Insurance Online Has Never Been Easier

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A survey by the American Automobile Association (AAA) has found that, 62 percent of people looking for car insurance, begin their research on the Internet. Also most car insurance shoppers go to at least two online insurers websites prior to arriving at a decision.

Today we are using the Internet more and more to research most large purchases. With so many car insurance companies competing for our insurance dollars, competition has driven down the costs and it is of great benefit for consumers. The Internet has made it easy to find discount insurance quotes online.

Before doing some online shopping take time to prepare.

1. Get all your important documents together. Your going to need your drivers license. If you had any accidents, have that information ready. Also have your address and social security number ready. You will need the year, make, model, license plate, mileage, and VIN (vehicle identification number) from your car.

2. Use your computer to search for "discount insurance quotes." When you see your search results first check out aany companies you are already familiar with. Also find insurers that will show quotes from many car insurance companies. Some companies represent a lot of different insurance companies. They can compare reates for you and deliver the cheapsest one to you.

3. Choose the kind of coverage you need. It depends on the state you reside in what our options are for what required insurance you need to have. The website will know and walk you through the specifics of your states car insurance requirements.

4. Input all necesary information and get your free quote. There are too many insurance companies that offer free quotes, stay away from websites that require a deposit, credit card number, or any kind of fee.

5. Compare the rates and coverage along with the costs. When you feel comfortable about your selection you can pay with a credit card. You will be able to print out a temporary insurance I.D. car and later a formal one will be mailed to you.

Buying insurance online has been streamlined and simplified for the consumers convenience. Remember if you need to talk to a person or if you have any questions an 800 number is always provided.

Investing in Rental Property Can Be a Profitable Business If Done Right

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Investing in rental property seems easy. Buy a rental house, find some tenants, and let the money roll in. It's not as easy as it looks. Before jumping into this glamorous business be sure to investigate and get some buy to let mortgage advise . 

The Upside to Being a Landlord.

For some people, investing in anything but land is dumb. Owning a mutual fund or stock is like owning air, it's intangible you can't hold it or see it. Then we have the land owners who think that a piece of land is a real asset. It's solid, you can walk on it, if it is a house you can paint it or just look at it. It's real. For many, they would have it no other way.

1. Cash Flow.

As a landlord, if you have done it right you have a positive cash flow that puts money in your pocket every month. Your rental income, minus your mortgage and expenses is your profit. Your property is producing something for you.

2. Appreciation.

Your property is increasing in value every year if you purchased it right. Appreciation, though a small amount, over the years it can turn into a substantial amount. Even if there is not appreciation you still are going to experience an increase in the house value because of inflation.

3. Leverage.

Unlike buying a mutual fund or stock, with a rental home you only have to invest a percentage of the homes value. You control the entire investment, but only pay a small fraction of it's cost. The property is the security for the debt and not your personal property. Only the purchased property is at risk.

4. Tax Advantages.

Even if you do not receive a positive cash flow you still are deducting expenses. You are paying down your mortgage and are not paying taxes on this money. There are many types of deductions that can be beneficial in reducing your tax liability overall.

There are some good financial reasons to own rental property. Especially the tax advantages. But there are also quite a few downsides to owning a rental house. 

1. Bad Tenants.

Getting the tenants from hell is a distinct posibilty in the rental business. Many people do not respect other peoples property and treat your lovely rental like it's a dumpster. The nightmare scenarios are infinite.

2. Liability.

If someone gets hurt on your property you are responsible and could be in line for a lawsuit. Having adequate liability insurance is an absolute must or someday your tenants will be owning your nice rental home.

3. Vacancy.

There is the distinct possibility you may not be able to rent the home. Are you able to cover the mortgage and expenses for an extended period of time. It's important to have enough cash in reserve for this occurrence.

Investing in rental property can be a very profitable business but can also be a nightmare if done improperly. Make sure to check out your tenants with a background check. Get all your deposits upfront and have good lease that protects you in all contigencies. 

529 College Savings Plan - 3 Factors to Check Before Picking a Plan

If you are thinking about opening a 529 College Savings plan for your child you may be confused by the shear number of choices you have to pick from. You do not have to pick the 529 plan from your resident state. You are able to choose from any states 529 plan but be sure to check if your home state offers special tax incentives.

529 plans in themselves are not confusing but picking one that suits your needs and your pocket book may take a little extra time.

According to WhatIsA529Plan.com, there are 3 factors to look at to make sure you pick the right plan that does what you want it to, for the least expense.

1. Investment Options. There are as many types of plans as there are ways to invest in them. The plan you may chose has a wide selection of investments from conservative to speculative. Picking the right one for your goals and age of the child is imperative. You can even pick the types of investments whether they be within the U.S. or globally. Picking the right ones means the difference between good growth and poor growth. It would be smart to get some good advice and recommendations from knowledgeable professionals before investing.

2. Costs. Costs subtract from your bottom line. A percentage or 2 can really add up over the life of a 529 Plan. Don't let that 1% slip away into someone elses pocket, it belongs in yours, so shop around to get the smallest expense costs.

3. Tax Benefits. Before selecting a 529 Plan out of state be sure to check your in state plan. If it has tax benefits on your state tax return it pays to invest within state even if you prefer an out of state plan. Check with your states tax rules to see if you can still invest out of state and claim the tax deduction.

There are currently 21 states where residents can choose any 529 plan without considering the impact of a state tax deduction: 

No state income tax -- Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming

No deduction for any 529 plan contributions -- California, Delaware, Hawaii, Kentucky, Massachusetts, Minnesota and New Jersey

Deduction available for contributions to any 529 plan -- Arizona, Kansas, Maine, Missouri and Pennsylvania

All other states give a state tax benefit for saving to the "home state" 529 plan.

529 plans are a great tool for funding college expenses, and selecting the right plan can be complicated. A good starting point is your home-state plan if you get a state tax benefit. If you live in one of the 21 states listed above, I recommend using the Nevada, New York, Utah or West Virginia plans, as those states offer passive investment options at a low cost.

What are the Different Kinds of Business Insurance

Insurance

Running a business normally requires making a capital investment. Business insurance protects that investment against financial risks when unexpected events occur. 

Many governments tell businesses which insurances they must have to operate legally. Depending on what kind of business you have, determines what insurance you need to carry. There are many types of business insurance. Which will apply to your business.

There are several kinds of business insurance:

General Liability Insurance.

This type of insurance covers the business owner from accidents, injuries, and claims of negligence. This kind of coverage protects against payments when the result of bodily injury, property damage, medical expenses, libel, slander, the cost of defending lawsuits, and settlement bonds or judgments that are required during a legal procedure.

Product Liability Insurance.

If your company manufactures a product that is not safe then this insurance protects your company. Because of a defect know or unknown that occurs and produces bodily harm this insurance will protect you from financial loss. The amount of coverage depends on the type of product and the size of the business.

Professional Liability Insurance.

This is like product liability insurance but this type of liability covers services. This type of insurance also is known as malpractice insurance. It's coverage is also known as errors and omissions insurance. This kind of insurance protects your business against malpractice, errors, and negligence in provision of services to your customers.

Commercial Property Insurance.

This kind of insurance covers everything related to damage caused to your business. Property insurance covers damage to property from  fire, smoke, wind and hail storms, civil disobedience and vandalism. This insurance covers the need of rebuilding after some unforeseen event destroys your business completely or partially.

Property insurance policies come in two basic forms: (1) all-risk policies covering a wide-range of incidents and perils except those noted in the policy; (2) peril-specific policies that cover losses from only those perils listed in the policy. 

Home-Based Business Insurance.

If you have a home based business your normal "Homeowners Insurance" will not cover any business related liability or damage. You have to obtain specific business insurance or have a rider on your homeowners insurance to cover business specific liability.

It takes a business insurance specialist to to set up the proper insurance coverage to stay in compliance with governmental regulation and to have proper coverage for your specific business type.

The Viagra College Fund - Social Security Secret

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I recently came across a little know Social Security secret. This loophole in the Social Security rules and regulations is going to make a lot of retired fathers very happy. According to InvestmentNews.com, a parent who is receiving retirement benefits, can also receive benefits for their under 18 year old children. 

InvestmentNews' contributing editor Mary Beth Franklin had received a call from a client who told her that he was 68 years old and was collecting his Social Security retirement check. He went on to say he had a 5 year old child through remarriage.

Financial Planner Mary Beth Franklin told him that his child was qualified to also receive a check from Social Security. Franklin went on to say that the client called a few months later saying his child was now receiving a check for almost half of what he was receiving.

I couldn't believe this was really in the Social Security rules. I went to the Social Security Website. Here: Benefits for children

It clearly states that benefits could go to your children if you were disabled or the parent died. This is understandable. But it also says, if you are just retired.

The rules also say that the child could continue to receive benefits until the 19th birthday if secondary school was not completed yet.

The whole thing is crazy.

InvestmentNews' contributing editor Mary Beth Franklin did finish the story with some advice for the retired father. She said to put the income into a 529 College Savings Plan thus the name "Viagra College Fund".

A Credit Card or a Debit Card for Fraud Protection, That is the Question

This article comes from Odysseas Papadimitriou, founder and CEO of Card Hub, a leading marketplace for comparing and learning about credit cards, prepaid debit cards, and gift cards.

Mirrors on ATMs are an ever-present reminder that there very well could be someone out there trying to steal your hard-earned money. Even though fraud only impacts about 0.5% of all purchases made with credit cards and debit cards, no one wants to be a victim, so fears pervade, fueled on by the sensationalistic horror stories commonly run on the local news. But instead of always looking over your shoulder, why not get a spending vehicle that will naturally shield you from fraud liability? Such is the type of rationale that leads to me hearing the same question from consumers time and again: Will a credit card or a debit card better protect me from fraud?

To run the risk of being anticlimactic, let’s clear things up right off the bat. As long as you report suspected fraud promptly, you won’t be held liable for any unauthorized charges made with either a credit card or a debit card (non-PIN transactions). Not only does federal law limit liability to $50, but most, if not all, card networks and issuers have themselves voluntarily adopted $0 liability guarantees. Fraud therefore isn’t that big of a concern and your money should be safe whether you’re using a credit card or debit card.

Still, fraud can be a major pain to deal with, so it’s fair to wonder whether a credit card or a debit card makes for a simpler remedy to any potential problems.

The answer to this question pertains to the fundamental difference between these two plastic spending vehicles. While funds are removed from your bank account pretty much immediately upon a debit card transaction being made, the issuing bank initially pays for your credit card purchases. That means you have much more time to notice and report credit card fraud before being out any cash than you would debit card fraud. You could therefore conceivably end up bouncing a few checks as a result of being unaware that fraud had led to an insufficient account balance – which can complicate things quickly. Plus, you’d have to endure the psychological trauma of seeing your bank account empty.

The best answer to the question of whether a credit card or a debit card serves as a better safeguard against the ill-effects of fraud therefore has to be the former.

Simply using one piece of plastic as opposed to another is not the only way to ward off financial thieves, however. There are a number of simple everyday measures you can take as well, each of which will drastically reduce the chances of your cash or sensitive financial information falling into the wrong hands.

It all starts with exercising your right to free copies of your major credit reports every 12 months. Credit report inaccuracies (e.g. the presence of accounts you did not open, being listed as delinquent when you have always paid on time) can be obvious indications of identity theft. If left uncorrected, they will not only bring creditors to your doorstep asking for “their money,” but also lead to significant credit score damage. Some other fraud prevention tactics include:

• Using passwords to your advantage: Setting passwords for your bank accounts and other important financial information should entail more than simply plugging in the name of your pet and saving it in your computer. Rather, you should use a combination of letters, numbers and cases that is both memorable and secure. You should also change your passwords on a semi-regular basis.
• Not talking to strangers: When it comes to your money, introversion can be a good thing. You shouldn't even open e-mails from people you don’t know, especially ones with attachments. You also shouldn't give any financial information to people who contact you – only give your info to reputable companies that you have contacted.
• Going back to the basics: While fraud has a decidedly technological bent to it in this day and age, it pays to remember the basics, such as shredding credit card statements and other financial documents before throwing them out and getting a lock for your mailbox.

Ultimately, you should not let fear of fraud control your life. As long as you take commonsense measures to safeguard your money and are vigilant in reporting suspected instances of impropriety, both you and your money will be just fine.

5 Tips To Keep Your Business Growing

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Business is about increasing income and decreasing expenses while providing a superior product or service. When you first start your business you really just have an idea that you think could develop into a viable business. Many people think that a supply of capital is all you really need to get your new company off the ground. This is only one part of the puzzle.

When growing you business you need to seek out the target customers, who will need your service. If you don't, your business just won't grow, it will fail very soon. You need to do the research on where your potential clients are, how you can reach them, and how to convert them into paying customers.

Advertise your product or service. Finding the right place to advertise is very important to you getting your clients. The first place to start is online. You need a website that informs people who, what, and where you are. The majority of people search the Internet to find products and services. The day of the yellow pages book has been long gone. 

Contact by Phone. Having a good way for customers to contact you by phone is very important. Having a 0800 number increase the chances of you getting a call. Even if you are just a regional business, an 0800 numbers cost is insignificant to the amount of business it will deliver to you.

Reevaluate your business plan. As your business grows and expands you need to come back to your business plan and update it. When you first laid out your plan you were facing a set of circumstances that may not apply now. Set up a regular period of time when you evaluate your plan by adding or taking away from it.

Bringing on new employees. Getting present and future employees attune to the way your business runs is going to make your business run better and allow you to maximize profits. The key to this is training. Initial training followed up by continuing education will make your business run better. 

Your business is a living and growing entity that will only grow and stay viable by what the team leader does to make it work. 

College Financial Aid Choices Can Be Confusing - Infographic

When making plans for paying for your college education the process can be confusing. If you have ever filled out a FASFA form you know what complicated means. But many people make it through he maze of paper work because the government grants help take some of the sting out of paying hefty college costs.

This detailed infographic depicts the many different and complicated processes you have to go through to finance your child's college education costs. Gladly for me I only have to go through this one more year.

Brought to You by SNHU.EDU Online College Programs

Start Online When Shopping For Car Insurance

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According to a recent study by J.D. Power and Associates, 52 percent of people shopping for car insurance, start their search on the Internet. Also three-fourths of consumers visit at least one online insurers website before making a purchase.

This use of the Internet along with increasing use of smart phones and online shopping has forced the car insurance providers to have an increasing web presence. When I was young, you used to have to trudge down to the corner car insurance agent. Meeting face to face was the only way to apply for a policy. The Internet makes the whole process much easier to find cheap auto insurance rates online and you can even do it in you pajamas.

1. Before you start your online search have ready a couple of important documents. Your going to need your drivers license handy. If you have been involved in any accidents, have that information handy. Also have your address and social security number ready. You will need the year, make, model, license plate, mileage, and VIN (vehicle identification number) from your car.

2. When going online search for "car insurance" on Google. Check out companies that you have heard of before and ones you have been recommended. Find insurers that will show quotes from many car insurance companies.

3. Decide what kind of coverage you need. Depending on the state you reside in, your options for what necessary insurance you need can vary. The website will know and walk you through the specifics of your states car insurance requirements.

4. Enter your information and get your free quote. There are to many insurance companies that offer free quotes, stay away from websites that require a deposit, credit card number, or any kind of fee.

5. Compare the rates and coverage along with the costs. When you feel comfortable about your selection you can pay with a credit card. You will be able to print out a temporary insurance I.D. car and later a formal one will be mailed to you.

Buying insurance online has been streamlined and simplified for the consumers convenience. Remember if you need to talk to a person or if you have any questions an 800 number is always provided.

The New 1099-K Tax Form (Infographic)

 The new 1099-K tax form is just another confusing bit of tax law to make business do a little bit more work. As usual the Internal Revenue Service needs to make sure it gets all the revenue it can.

It seems the I.R.S. is not collecting an estimated $385 Billion dollars, this new tax form is going to cure that problem, they hope.



Brought To By Outright.com

How My Emergency Fund Kept Me Above Water

Emergency funds are nice things to have around because of the many nice things they do. The best thing they do is keep you out of debt. My emergency fund kept me out of debt today.

In my backyard I have a nice pool. It's a nice thing to have. It's pretty to look at but it's a shame no one ever uses it. The kids are to grown up and are always out, to busy, but my wife loves to lay beside it and soak up some sun on Saturdays. Last weekend, the pump finally burnt out. I have been nursing it for almost a year. The rear bushing has been making a horrible noise and I have been giving it a shot of WD-40 to make it behave. It gave up the ghost last weekend and I needed a new one. 

It Gets Worse!

Luckily my brother deals with foreclosed houses and was able to locate a nice, almost new pump. Things were looking up. An almost free new pump was going to solve my problem. I had it installed in no time and preceded to crank it up. It was running great. Better than ever, pressure was noticeably twice as much as the previous motor. As I was admiring my handy work a 8 inch crack developed on the filter tank. Water sprayed everywhere. The higher pressure from the new motor was to much for my 22 year old plastic filter tank. 

I must admit the tank was previously patched along the crack but sadly it couldn't take the increase in pressure, it was time to replace it. I was back on the phone to my brother but he had no good news for me but said he would try to hunt one down for me. 

While brother was on the job I did some searching over at the pool store. The salesman quoted me a price of $500 for a new filter tank. I was immediately depressed at this situation. I would of liked to not spend that kind of money but I had the cash in the emergency fund for things just like this. It's funny I almost forgot I had an emergency fund I haven't had to use for a few years, the last time was when the water heater went out. 

On a Mission.

I was determined to not pay $500 so I was on a mission to seek out a cheaper solution. I went on Craigslist and found many used filter tanks for sale. Most of them did look a little distressed but out of 12 filters I pick one that was the right size and the best price was $80. It was an alternative I was going to seriously consider. 

While I was online I searched the online pool stores and found they were selling the same tank as my local pool store for about $25 less. I was down to $475 for a new tank. I was determined to do better. Amazon was next. They had the same tank listed for $300. I was feeling better that I was going to save $200 on Amazon as apposed to my local store. I have an Amazon Associates account so that would knock 4% off the price plus I would have used my Chase Amazon card which would have given me another 5% off. I was down to $273 with the discount.

Lets Do Better.

Still I wanted to do better. It was on to Ebay! They had the filter I wanted at auction for less than $200. I searched Ebay's completed auctions and saw they were going for an equivalent price as Amazon. I placed the bid when the filter tank was at $175. When it finished I had won the auction at a bid of $220 with a shipping cost of $30. So I was buying a filter tank for $250, brand new, guaranteed for 1 year from a pool supply company with over 10,000 good recommendations. I felt confident in the purchase and I should have the new tank at my home by the end of the week. And I paid cash.

This whole experience was very eye opening for me. Before emergency funds I would of made the purchase of a new tank at my local pool store and I would of put it on my credit card. It was an automatic response that I had made throughout my life, and a very costly one. I never gave it a thought to shop around like I did this time. But the main reason I did shop around was I was spending real cash. Real cash makes you work for the best deal. Dave Ramsey is right when he says it hurts to spend real money. Buying with a credit card is painless and you don't even feel the need to get a better deal. At least I didn't.

Lessons Relearned

Overall the experience has retaught me that staying out of debt is something to be proud of. Having an emergency fund is something to be proud of. Taking control of your life is really something to be proud of. 

Do I Need Short Term Health Insurance?

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If you have health insurance, your are probably pretty happy just to have it, but maybe not to happy paying those large premiums. But what would happen if you are between jobs or insurance policies and still want to keep some kind of coverage. This is where short term health insurance plans comes in. 

During this gap in coverage you need something temporary, maybe just for a month or two. Normally, these plans are only good for a period of six months. 

They do not cover the same things as regular health insurance. The more advanced services like preventative medical treatments, immunization, and physical tests are usually excluded with this gap insurance. These plans are normally more expensive than regular and longer term plans. For those with pre-existing conditions it becomes even harder to get insurance.

The main reason people sign up for short term health insurance is there may be a waiting period in the start of a new job when you don't have normal health benefits. Possibly you are between jobs, short term health insurance will continue to cover you until you secure a new job and start proper health insurance.

College students sometimes need short term health care because they cannot be on their parents health care policy anymore. Short term health insurance gives them coverage until they can sign up at their new jobs. Short term policy's also start immediately, you do not have to go through any waiting period. They are also easier to sign up for, they do not have the extensive paperwork regular health policies have.

There are many benefits to having a short term health insurance. But before signing up for any plan be sure you understand how they work and if it is the best choice for you.

Arrange Your Car Loan Before Going to The Dealer

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Many people believe the best place to get your car loan is where you buy your car. It sounds right, because the dealer finances so many cars they must be giving the best deals. This seems to make sense but you probably will find better financing deals off the car dealers lot.

Just like when you are shopping around for the best deals on things you normally buy, why not shop around for car financing? How to get car finance means seeking out competitive loan vendors who will often give you the lowest interest rate. Competition between companies will give you the best results. But some people may be worried that multiple applications and credit inquires will damage your credit score. This is not true because the credit reporting agencies know this kind of multiple inquiry is not abnormal and they only count the inquiry as one. 

Car dealerships are trying to squeeze the maximum profit out of every car sale so a few points of interest on your car loan helps their bottom line. Margins are tight these days on car profitability so you may find out that you are going to pay a little higher interest rate when financing through your car dealer.

When you walk into your car dealers office and you already have arranged financing your car dealer looks at your deal as a cash purchase. You know the car dealer prefers getting a cash payment for the car purchase. This is your leverage in negotiating. A salesman will have to give you a better deal because they don't want a five figure amount of money to walk out the door into someone else car dealership. 

Knowledge is your advantage in car purchasing. Knowing the product well and its appropriate purchase price will make your car purchase a positive one. Also having payment options on a firm foundation will only increase your chances of getting the best value in your car purchase.

Save Money for College with Upromise Shopping

Upromise (Photo credit: Wikipedia)

Upromise is rewards program you sign up for that allows you to save money for college or pay off student loan debt. It's not a 529 College savings plan.

Upromise has its own website where you can earn rewards by making purchases through its portal. They have a list of over 600 online retailers who are partnering with Upromise shopping deals to save you money and add to your college savings. The cash back rewards range from 1% to 25% depending on the purchase and the store. Large stores like eBay, Target, Walmart, and JC Penny all have joined with Upromise. Also the Home Depot, The Apple Store, Dell, Verizon Wireless, and Macy’s are all on board with UPromise.

You an also register your credit and debit cards to earn cash rewards. Some restaurants that participate can earn you rewards of up to 8%. If you use your registered debit or credit card at Upromise program restaurants your earning a high percentage reward. Imagine over the years by just dining out 8% of the total is going into your account.

You can also use your Upromise at your grocery store, supermarket, and drug store. You can even just register your grocery or drug loyalty cards with Upromise and even use cash on purchases.

The best yet, you can register your friends to your account and earn rewards on their purchases.

How can I redeem my my earned rewards?

• Deposit your cash back into a 529 education investment account for you or a family member.
• Transfer your cash back to your student loan to help pay off your debt.
• Move your rewards to a Sallie Mae high-yield savings account.
• Request your rewards to be sent to you in the form of a check.

Upromise offers you a way to save money for college and get some pretty good discounts on everyday purchases you already make.

Would You Choose to Not Grow Your Business?

 (Photo credit: Wikipedia)

It's the reverse of all we were ever taught. Start a business, with a lot of hard work build it up, expand and then one day stop the growth. Surprisingly some businesses make the choice to stop growth and maintain a certain size.

The Small Business Administration reports that there are 22.9 million small businesses in the United States. The Bureau of Labor Statistics (BLS) states that 90 percent of all net job creation from 1996-2007 came from small businesses. There is of little question that if the US is to recover from this recession and if unemployment is to be driven down, small business will lead the way.

Any business school you can attend will teach you that the cornerstone of our capitalist system is to build a companies value and have an ever increasing shareholder value.

Why would anyone ever put the brakes on a viable growing company. Surprisingly there are 3 good reasons to do this.

1. To maintain lifestyle and avoid risk. I know a building contractor who has reach a level of $3 million dollars per year income. My friend takes out of this income enough money to live a very nice lifestyle for himself and family. At the level his company is operating at he has plenty of time for a personal life. He spends his time going on vacation and tending to hobbies he loves.

He is a well respected local business man who could easily double his companies income. He has decide not to go that route. He is comfortable and any expansion would put to a halt the lifestyle he now enjoys. He has a business he can handle and doesn't want to take on anymore responsibility.

2. To avoid regulation. Another building services company in the area has chosen to cut back on expansion plans because of complex and expensive regulation that will kick in when the number of employees reaches 50. After gaining a thorough understanding of the complexity of complying with the "FMLA" (the Family Medical Leave Act), the President of the company made a conscious decision to stop the growth of his company. Job creation came to a screeching halt. The president wasn’t opposed to extending the benefits of FMLA to his employees. Rather, he made an informed decision to avoid the considerable cost associated with the complexity of maintaining records and making judgments about what qualified for FMLA.

It was determined that his company could not absorb the costs of this regulation. Naturally, larger company's with thousands of employees and millions of dollars of revenue could integrate these costs into their spreadsheets.

I know many companies that do not want any employees because of complicated and expensive regulations. Companies like this chose to outsource and hire sub-contractors for all necessary personal needed.

3. Keeping a one man band effect on the company. There was a company that was in manufacturing and it had 35 employees. The owner of the company kept the entire business in his head. He daily told everyone what to do. There was no office staff. The host of employees did the manufacturing, ordering , billing, and customer installation. The owner would not hire any help to staff an office. All office duties were put on the manufacturing employees.

The company lacked a complete organizational section. Not having any office employees and having everyone doing everything was chaos. This owner by his own lack of business knowledge kept his company from growing.

Whether it’s satisfaction with the status quo, a desire to avoid the burden of regulation or not understanding how to delegate, many small business owners have implicitly or explicitly made a decision not to grow their businesses.

It’s completely reasonable for business owners to make an explicit decision not to grow because they are satisfied with the current size of their enterprise. That’s their choice.

Inside Travel Tips From a Reservation Agent

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Over at Reddit.com they are having a Q & A with a airline travel booking agent. Lots of questions are being asked and the answers are interesting and informative. Lots of questions like working for an airline, the flight benefits, using miles, earning miles, avoiding stupid airline fees, low fares, partner airlines, Skyteam vs Oneworld vs Star Alliance and a slew of other things.

Here are a few of the best ones:

Can you help me figure out the best way to get a seat with legroom?
Go with Economy Comfort or Exit Row. That may cost you a bit though. Also take a look on Seatguru.com to determine with seats have the most leg room. Unethically, you could call the reservations agents and say you have a medical disability that requires a bulkhead seat (you don't have to state exactly what it is and Delta agents are forbidden to ask).

Any tips on how to get any freebies/upgrades/benefits?
Yes, after your flight you should call or email (preferably the later) and let them know about every single thing you didn't enjoy about your flight (food, movie selection, rude flight attendant, tray table didn't work, wifi didn't work etc). The airlines have a specific department to deal with complaints and they'll give you tens of thousands of miles, free business lounge passes, travel vouchers, drink tickets etc.

Is there any way I can get an upgrade or something?
A doctor on my flight to Japan got upgraded mid-flight for helping out. that's not an official policy but I've seen nice flight attendants do it.

What are some of the best airlines to fly within the United States?
You mean best as in service quality? I haven't flown any other airlines within the US in years because Delta flies just about everywhere and it's free for me. However, I've heard great things about Alaska Airlines, Jetblue, and Virgin.

What is the fastest way to rack up miles? Credit Cards? Special promos or secret deals?
Credit Cards are the best. Some people run their businesses off their credit cards and rack up millions of miles pretty easily. Suntrust Bank also has a checking account with a Skymiles debit card. that account is nice because the electronic bill pay also earns miles. So you can pay your rent/mortgage via bill pay and get miles for it. And if the person or org you're paying doesn't accept electronic payments it mails them a check.

This is only a small sample of the questions being asked. Also the discussion and war stories the commentors are posting are very interesting. If you have a travel related question go over to Reddit.com and ask it. Also search on Reddit for other subjects your interested in. You will find liked minded people having an intelligent discussion.

Retirement Options Are Changing for the 50 plus Employee

 Mexican businessman Carlos Slim (Photo credit: Wikipedia)

Billionaire Carlos Slim said that boosting the retirement age to 70 would help to prop up the world’s struggling economies, according to a Mexican press report, cited by Forbes. He says the current retirement age was selected because at that time people worked more physical jobs.

Slim suggested the cure for our economic ills would be raising the retirement age in all countries to 70 thus taking the pressure off budget shortfalls. But for half of all Americans the idea is moot because they do not have the resources for retirement even with Social Security helping.

The normal job tradition of retirement at 65 is obsolete. So you must make sure you are a valuable asset to your employer so you can keep on working. One way to increase your value is continued education. You should consider going back to school but if you cannot attend day classes then an online line degree is your other option. There are online mba degrees that can provide you with the necessary education.

In the 1930's the age of eligibility for Social Security was 65 while the life expectancy was just under 60. Social Security was essentially old age insurance if you outlived your useful working years. Today the life expectancy is close to 73 and the eligibility age is 67.

In my own situation I also do not have enough saved for a retirement at 65 years old. The perfect storm of a divorce, 3 in college, and a 25% cut in business income have blessed me with working well into my seventies. Luckily, I'm fine with this future but what's OK for me is a real damper for others who were counting on retiring at 65 or earlier.

How will a company react to having mostly older employees? Just because an employee is older, does business have the right to judge your overall capacity to perform your job? In today's economy, business should integrate up to date policies concerning older workers. If a good employee has served a company well, their knowledge and experience must be utilized for training or supervising new blood that’s joining the team.

Society is used to having the old replaced with the new. Not because it's better but because there is a perception of improvement. But, new blood in a company can be good for the vitality and growth potential needs. Separately, they each can contribute something good, but together they offer a sum greater than the parts.

Being a valuable employee is hard work. Ask yourself, would you hire you? If the answer is no, maybe it's time to evaluate things. Here's a list of tips to consider:

1. Further your education. Just because you over 50, why do you think you think you shouldn't have continuing education? Your younger team members have more recent educational opportunities. These are the people you’re competing with for your job security. You may be knowledgeable but many employers look at youth and energy as positive attributes. Make sure you are staying up to date education wise. It couldn't hurt to take some online courses and maybe add a degree to your resume. When you are continually trying to better yourself you stay sharper and it shows the team leader you are trying to make yourself a more valuable asset to the organization.

2. Enhance your critical skills. Having a handle on your time management skills make you an asset to an organization. Being an organized team member by planning your days and weeks by priorities will give you peace of mind and allow you to have your goal on a clear track. Continued education with a masters degree organizational leadership could support this goal. A life in order will benefit you and your work production. Having good organization skills will be noticed by the organization.

3. Network outside of your company. Networking with people in other companies in your industry will keep you connected and it will benefit you and your company. Do not just network at your level; seek others above and below your level. Join clubs and organizations. Volunteer wherever you can make an impact. You will be enhancing yourself and showing the public that your company cares and wants to give back to the community.

4. Cultivate your work ethic. It may be a shocking thing to do but showing up on time for work and staying a full day is a radical thing to do in a company. Caring about your job and maybe coming in to work early and staying later will get you noticed by your boss. Start this habit and at least do it once a week. You will get noticed and if the day ever comes when your boss has to fire someone, the person giving a 150% to the company will not be at the top of the list.

5. Learn a new language. If your company deals with companies that are global, a foreign language will make you more valuable. Learn a language of a country your company deals with. When the day comes a translator is need you will be ready. When a promotion comes where a foreign language is needed you will be the top choice for it.

Its common sense that a company is going to only keep employees that are producing and an asset to increasing the bottom line. If you are contributing to that, then you are a valuable commodity to the company and you will have your job for a long time.

5 First Time Home Buyer Mistakes

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Buying your first home can be a great time if you are prepared. Finding the right home in the right place at the right price is sometimes an impossible task. On one of these points you may have to give in on. But the first time home buyer needs to look at more than these three criteria. There are many things to consider, that if not planned out well will turn a happy time into a disaster.

1. How much house can you afford. The biggest mistake many first time home buyers make is not knowing how much house they can afford. Knowing the true amount of house you can afford is not easy. Your mortgage company tells you one figure, the builder tells you another, and Uncle George tells you another. 

An easy way to get a quick and dirty figure is take your monthly expenses (excluding rent), including vehicle costs, student loan payments, credit card payments, groceries, health insurance, retirement savings and so on. Don’t forget major expenses that occur only once a year, like any insurance premiums you pay annually or annual vacations. Subtract this total from your take-home pay and you’ll know how much you can spend on your new home each month.

2. Getting pre-qualified for a mortgage. A first time buyer mortgage qualification consists of going to your lender and making an application to see if your credit and income are good enough to have a mortgage. No sense in wasting everyones time if you do not have the credit or income for a mortgage.

3. Consider additional home expenses. As a renter you had none of the expenses your going to have as a home owner. You have to add to your budget items like property taxes, insurance, roof repairs, furnace repairs, and a slew of other expenses seen and unseen. Some communities have homeowner associations with monthly maintenance costs.

4. Not having the home inspected before purchase. You need to know the true condition of the home before purchase. Suprises like a broken furnace, leaky roof, or termite damage is going to cost plenty to repair. These types of problems should be caught before purchasing a home. You may get a discount on the purchase price because of these defects. Having a good home inspection will give you the knowledge of the condition of your future home and definitely save you money.

5. Hire your own agent. This is the same as going to court and using your opponents lawyer. Having your own agent on your side helping you pay the lowest amount for the house will offset any fees you will have to pay. Agents are held to an ethical rule of acting in the best interest of their clients.

Buying your first home can be stressful and exhausting. Being aware of its pitfalls is half the battle. If you are aware of them ahead of time you are able to protect yourself and you won't make dumb mistakes.