Bank of America, Your New $5 Fee Doesn't Scare Me

Image via WikipediaBank of America is initiating a $5 monthly fee on people who want to use their debit cards for purchases. Customers using their card just at the ATM will not have to pay the fee. Already Wells Fargo, the other giant mega bank, has said it plans to test a $3 fee, which they say is because of new federal rules that made the cards less profitable for banks.

Out of all the banks, Bank of America has the most financial problems. It has more problems with bad mortgages, fallout from the sales of bonds made from those loans and questions about how it serviced its home mortgages. So it was inevitable they would be the first bank to try and recoup some of those losses.

The only way around not paying the fee is to have your mortgage with them or have more than $20,000 in account balances. So for the average customer, the fee will have an impact.

What should you do?

You can change banks and find one that doesn't have the fees. Many people are looking not to other banks but to an alternative thats been under the radar for many years, credit unions. These institutions main purpose is to serve the community. They are mostly local and sometimes regional. They are run under a non-profit business plan. So the fees are low or non-existent. The interest rates charged on loans and mortgages are lower than normal. Also the interest rates they pay are higher. They run the business totally for the benefit of the customer. In the U.S. you have the choice of many credit unions.

Go to CULookUp.com to find a credit union near you

Why not just pay the $5 fee?

If you have been at a bank for many years the hassle of finding and moving to another bank is just not worth the hassle over $5. I spend that much on one Starbucks coffee. Many people already have a bank they are happy with. They know where every branch is, the hours of operation, the ATM's, etc. It's not like they are charging you a exorbitant fee. For the price of a movie rental, you have the convenience you are already use to.

How Bloomingdale's Ruined My Weekend

Image via WikipediaYou never know how a trip to the mall could go so wrong. Well, one weekend my wife and I were planning a trip to the mall. My wife's goal was to go over Bloomingdale's. She had been wanting to buy a watch for quite a while. She is very careful how she spends her money so planning is step one in any purchase. She saw in the Bloomingdale's Sunday ad a watch that look very nice. She did some Internet research and concluded with the sale they were having, the price was right. Also the gift card she received from her boss along with a previous credit would make the purchase even more desirable.

The day of the sale came and we went down to the store to make the purchase. She has a Bloomingdale's store charge account and if she used it she would receive another 10 percent discount on the sale. The stars were aligning for the glorious purchase. But little did we know all would soon go very bad.

Credit cards are not you friend. 

The watch was selected, checked over, and ready to purchase. The discounts were in place and the price was the bargain of the decade. As the clerk rang up the sale she mentioned my wife's card is not being accepted as an open account. We were informed that the account was closed for inactivity. This was hard to believe because we still received advertising monthly from them in the mail. If it was closed why weren't we informed.

Things were looking very bad, we were informed, after a phone call to the company, that it was true; the account was really closed. But no worries the clerk said, just open a new one. And with the new one you will receive a new card discount on your first purchase. The clouds parted and the sun shone through again. Immediately, she filled out a new application. All vital information went into the clerks register and the process continued. The clerk had been happily chatting with my wife throughout the whole process until a look of disbelief fell on the clerks face. She exclaimed in horror, " You have been denied new credit." Well I can tell you this didn't go over very well with my wife. She is very protective and proud of her credit and credit score. She was mortified and quite upset.

Help! Get me out of here!

How would we get out of this situation and how could I get out of this mall as soon as possible? The clerk came up with the bright idea that I use myself as the Guinea pig and apply for the card under my credit. My wife agreed that there was no other choice for this problem. As she was hyperventilating I handed over the necessary information for the application. The whirring, clicking and flashing lights of the cash register soon produced a positive response. I passed, credit would soon be mine. The purchase was completed and we started to leave when the clerk said, "For being a new Bloomingdale's customer we would be receiving a $25 gift card in out first bill. My wife was strong and didn't go back to slap the clerk.

You may think the whole adventure was over then, it wasn't, my wife saw there was no reason to deny her credit so she was going to get to the bottom of this situation. She made calls to the Bloomingdale's credit card 800 number but never heard a satisfactory explanation. She was told that she would be receiving a letter in the mail from Experian explaining the reason why.

The letter soon came and indicated that she had "an excessive amount owed on accounts" nothing more. We went online, got her Experian credit report. There were no bad marks. All accounts paid on time and up to date. Besides a leased car, only $8000 in credit being used. Still no red flags.

Was all this hassle worth it? For me, I take it all in stride. But for my wife it was a problem. Was saving more than 60% on the watch worth all this hassle? It was for my wife.

Credit cards make you jump through a lot of hoops sometimes to save money. Their use can save you money, when not abused. We may feel we are using them to our advantage. But, whether it's reward points, purchase discounts, or other incentives it feels like we are slaves to them anyway. See you at the mall.

The Top Eight Reasons to Get a Seasonal Job

Image via WikipediaThe holiday season will be arriving soon and with money in short supply it's just what the doctor ordered. You may of been out of work for a while, this is a good time to get your foot in the door and maybe turn it into a permanent job. Sure it's only September but companies are now hiring for the up coming season. Don't be shut out, start looking today. 

You may already have a job, but having a seasonal job has many benefits. 

Here are eight reasons why a seasonal job might be a good idea.

1. Make money for the holidays. Whether you already have a full-time job and you want to work part-time to supplement your income, or you just need extra money for gifts, you’ll definitely have more green in your wallet after your first paycheck of the season.
2. Flexible scheduling. Are you a student on winter break? A parent who has to watch your kids now that school is out? Holiday jobs offer a variety of scheduling options, and because stores and restaurants are open later, there’s bound to be a shift that fits your needs.
3. Get a great discount. Don’t want to wait until Christmas Day to wear that sweater you've had your eye on all season? Many companies offer their workers employee discounts on merchandise, even if they’re only on the staff for the holidays. So you can get gifts for everyone on your list—including yourself—at cheaper prices.
4. Learn a lot in a few weeks. Though holiday jobs can start anytime in October, November or December, most are over sometime in January, making seasonal employment a great way to test the skills you already have, as well as pick up some new ones to use in your next job search.
5. Find your next job. A seasonal job is a great opportunity to get your foot in the door and make a good impression, which can turn into part-time or full-time work after the holidays. Some employers ask superstar seasonal workers to remain on the staff once the holidays are over, so if you do your best, you could have a spring and summer job as well.
6. Test drive a new job. A part-time job during the holidays allows you to try out a job you're interested in to decide whether or not it's really right for you. Whether you end up loving or hating it, your pockets will be fuller either way.
7. Make new friends. Most businesses are fully staffed during the busy winter months, so you'll have plenty of opportunities to meet new people and bond with coworkers. Suggest a company Secret Santa drawing and you could even get yourself an extra gift.
8. Get a reference for your next job search. When the hustle and bustle of the holidays is over, ask your boss if he or she would be a reference for you when it comes time to search for summer jobs.

Why Does Warren Buffet Want To Pay More In Taxes?

Image via WikipediaWarren Buffet, the "Oracle of Omaha, thinks the rich are not paying their fair share of taxes. He announced that he pays less taxes than the people that work for him, like his secretary.

 "Last year my federal tax bill -- the income tax I paid, as well as payroll taxes paid by me and on my behalf -- was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income -- and that's actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent." says Warren Buffet.

 Some claim that his calculations are off. The money he receives in dividends has already been taxed once at the corporate level. So his personal taxes are the IRS’s second taxing of the income. And that's why he takes his income in dividends only.

 Warren Buffet and the wealthy like himself are the exception and not the rule. He has control of a vast amount of wealth and capital. He isn't rich, he is super-rich. His company and many other prosperous companies are sitting on billions of dollars in domestic banks. Add to that the billions kept in overseas banks of American companies profits that will not come back to this country because of high taxation.

 Mr. Buffet is in the position to pay higher taxes. But the so called rich, those making $200,000 - $500,000 range are not being paid in dividends like Mr. Buffet. They are most likely being paid a salary with some bonuses. Are they the rich he is talking about. They are the ones that already pay high taxes and don't want the ideas of Warren Buffet to come into fruition.

 I compare Warren Buffet to the Henry Ford's, J.P. Morgan's, and John D. Rockefeller's of the last century. They were wealthy enough to bailout failing companies and do the right things to help this country before their were bailouts. It was done right at that time when fiscally healthy companies stepped in and bailed out failing companies.

 In 1907, during a vicious stock panic that threatened to engulf the U.S. financial system, J.P. Morgan single-handedly stepped in. "This is the place to stop the trouble, then," he said, while putting his own funds at risk to orchestrate a bank bailout. Amid the panic, John D. Rockefeller loudly deposited money in a troubled bank and pledged to buy stocks. In 1914, at a time of rising labor unrest, Henry Ford shocked his competitors (and the establishment) by announcing he would pay assembly line workers the above-market wage of $5 per day. These moves may not have seemed economically rational at the time. People who commit big sums to equities in the middle of crashes generally lose money, and businesses that intentionally pay unskilled labor above-market wages tend to go out of business. But they were actually very shrewd investments in the system. If U.S. markets ceased to function, J.P. Morgan's firm would have been among the biggest losers. Ford reasoned that his company would prosper if he could turn the automobile from a luxury product into a utility for the working- and middle class. He wanted to pay his workers enough so they could afford to buy his products. It worked out pretty well for Ford and his heirs.

My View:

 Mr. Buffet should forget about his tax ideas and concentrate on what he knows best, building companies and making money. We should of put him in charge of the so called bailouts. He could of done the whole thing in less time and at half the cost. It should of been left to the private sector to heal itself. The government is pathetic at anything financial or business.

 Warren Buffet should use his goodwill and knowledge to lobby the administration to think like a business man.

Save Money By Not Making Dumb Financial Mistakes

One of Dave Ramsey's great quotes is "A budget is people telling their money where to go instead of wondering where it went." Being on top of your money is the only way your ever going to have any. In life our money seems to want to sneak away. We let this happen by not paying attention to where it's going.

There are common mistakes we all have made when handling money. I see them repeated over and over again. I have listed just a few, there are many more.

Spending More Than They Make.

This is the most obvious mistake yet it's the most ignored. If I could give just piece of advice to people looking for the one thing they could do to improve their finances, it would be live on less than you make. So if you find yourself struggling to make ends meet, take a hard look at your budget and begin living on less than you make today.

Keeping Up With the Joneses.

A lot of times it doesn’t matter how much money we make, we still want to keep pace with our neighbors or friends.This is a sure way to get into trouble. What’s ironic is that many times those same people we’re trying keep pace with and impress are buying things they can’t afford with money they don’t have either. Think of how much better off we’d be if we’d just learn to be content.

Missing payments on Credit Cards and other Bills.

In the past I’ve been late on credit card payments. In today’s world of online banking, scheduled payments and online calendars, there is no excuse for this. Missing a payment and/or being late can really cost you. Many cards are now charging $30+ dollar late fees, and if you have a low interest rate and miss just one payment, your rate can increase significantly.

Don’t make this mistake. Use online banking and schedule your payments monthly.I would suggest scheduling the minimum payment at the beginning of the month to insure it gets paid. If you can pay more on it later in the month, than either bump up the minimum or just schedule another payment. Many online banking sites now have payment reminders as well that will send you an email x number of days before the bill is due.

Not Having an Emergency Fund.

An emergency fund, next to spending less than you make, is probably one of the most significant things you can do to change your financial life. It allows you to stay on budget, avoid using credit cards, and reduces your stress level when it comes to money. Just knowing that if something goes wrong or that something unexpected comes up and you can financially cover it gives you a tremendous peace of mind.

Not Saving for known upcoming expenses.

Upcoming expenses are expenses you know you will have to pay. For me, these are things like: property tax, Christmas, home owners insurance, and yearly home owners association dues. You may have others. These are expenses for which you know the amount and you know when you will need to pay them.
In the past, we always intended to set money aside and just never did, thinking we would have the money when we needed it. We seldom did, so we ended up using a credit card to pay for it. Dumb, dumb, dumb.

The concept is simple, take the expected payment, divide by the number of months between now and when it’s due, and begin setting this money aside. I set-up an automatic transfer from our checking account to our emergency fund.

Purchasing new vehicles.

New vehicles lose a large portion of their value as soon as you drive them off the lot. I highly advise that you let someone else take the initial hit on a new vehicle, it can save you a tremendous amount of money. I recommend buying something 2-3 years old. Generally they are still under warranty, in very good condition and just as reliable as a new car.

My View.

If people are asked about their future, they can usually paint a fairly happy picture. They will be retired, their bills will be paid off, and they will roam the world while living off their perfectly adequate nest egg. The reality is that many individuals have no plan for the future. They may have desires, but their current habits will never get them to their desired state of living in the future.

Does a financial plan guarantee success? Of course not. However, the mistake that many people make is not having any sort of long-term financial strategy and hoping that things will simply work out somehow. Thinking that way may reflect the positive outlook of the individual, but it may also mean that they will someday experience disappointment at their lack of serious financial planning.

Myths and Legends of Property Investment for New Investors to Avoid

The property investment market can be a great place to invest. The core elements of successful property investment are excellent capital risk management and a good eye for good properties. The myths and legends of the market, however, aren’t based on business principles, and that’s what makes them dangerous. If you’re a new investor, it’s a good idea to learn how to tell the truth from the hype.

A certain level of sales pitch in any property deal is understandable. Inflated statements of market potential, misleading information about local markets, and “dubious” predictions of capital and rental returns without mentioning costs are just hot air, and usually a lot of it.

These are some of the typical myths:

• The property market always goes up: It goes up relative to economic conditions like demand and prices. If credit is tight, sales are usually slow, unless you’ve got a line of credit which can cover high prices. A 10% variation in the average house price in Australia can cost $40-50,000. That’s enough to put an investment behind the eight ball for years in a slow market. 

• New estate properties are always good value for investors: New estates can be very good value. The issues for these new estates aren't obvious. A new estate out in the back of beyond is by definition a new home buyers’ market. Prices can be slow movers, and location issues may or may not be good selling points to commuters. Lack of infrastructure like schools and amenities may also be a negative factor for buyers. 

• Rental properties just keep going up: Rents go up, but so do maintenance costs and upkeep. Rates also tend to go up. The rental market is also fickle. Tenants may simply look for cheaper rates, meaning a rental property can go untenanted for quite a while. If you’re relying on rent to pay a mortgage, that can be trouble. 

• Property investment is money for jam: No, it isn't. The most successful property investors are experts. They’re also very good financial managers and know how to cope with market movements, slow sales and rental property management. To get the best out of an investment property involves good business sense and having a very good knowledge of markets and returns on investment strategies. 

• Commercial properties always bring good returns: Don’t bet on it. The commercial property market has its share of duds. The many “retail ghost towns” around the world are a silent and expensive testimony to the realities of many commercial property investments. Commercial properties need to be proven viable to provide credibility to their potential returns. 

For new property investors, the bottom line is this: Property investment can be an extremely good method of wealth creation, particularly over time. It is not a Get Rich Quick type of investment. Investments can go sour. Intelligent, informed investment in good property markets, preferably including getting professional advice regarding purchases, is the best working method for making money.