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Free Credit Card, Loan, and Money Management Assistance to help Americans effectively use secured and unsecured credit cards, loans, and to manage money, income and personal expenses.
Personal Credit Identity Theives are often people close to you. Many people who commit ID fraud target family and friends, the very ones who trust them most. The reason why is because they typically have easy access to the victim's identification information, as well as access to the victim's credit cards and other banking information. Christmas credit card application Personal Credit
When cardholders consistently go over their credit card limits, it could result in the account being closed. Other effects could be a decrease in the credit limit or penalties from the credit card provider such as an increase in interest rates. Credit history can be influenced with an over-the-limit status and this may affect more than one credit card.
With credit more important than ever, charging more than the limit hurts credit scores and may indicate poor financial management. Some creditors may consider such an applicant a credit risk for loans. The best plan when there is such negative information on personal credit, is to start paying more on the balances and stop charging for a short time. Credit balances need to be only about 30% or less of the credit limit.
With the new legislation, consumers will have more warning and options for their accounts. The new rules will not eliminate all problems. Consumers considering to close accounts to avoid higher fees, need to understand that there is no guarantee of getting approved for other cards at lower interest rates. It may be a good idea to hang on to credit card accounts and keep balances low to possibly get better interest rates in the future.
Calculate how much interest and total money a person who charged on your credit card owes you.
If you let someone charge a purchase on your unsecured credit card and that person wants to make monthly repayments, don't forget that your issuer will charge interest.
Many people don't bother to pass the interest charges on to their friend, but why should you pay it? If the charge cannot be paid in full, then you should pass the interest charges on to the borrower. Here's how:
If the person will be making monthly payments to repay the charge, use our Credit Card Interest Calculator. In the 'balance' box, enter the amount of the purchase. Next enter your credit card's interest rate and the amount of the monthly payment your friend will pay to you. Click the Calculate button, and you'll be shown the maximum* number of months to collect the monthly payment. *You may not have to collect the full monthly payment amount on the last month. Refer to the total amount that the borrower should pay you by the end of the loan term.
If the person will make a lump sum payoff a month or more after the charge, use our Credit Card Payment Calculator. In the 'Desired number of months to payoff' box, enter the number of months it will take until your friend gives you the full lump sum payment. After you click the Calculate button, you'll be shown several bits of information. Ignore all of the data except for the total 'Principal and Interest paid' amount. That's the amount to charge your friend. Personal Credit
When a card issuer reduces your credit limit, it may not have too much of an impact on credit scores. However, if you close a credit-card account after a rate increase, it can hurt if you had a large credit line and a low balance as your credit history will no longer include unused credit from that account to calculate the percent of total available credit you're using. Personal Credit
Your personal credit score is a numerical summary of your credit report. Because it's a number, creditors and lenders can easily review your credit risk and make a decision about approving you for a loan or credit card. Credit scores range from 300 – 850. Consumers with high credit scores are considered to be less risky borrowers than those with lower credit scores. Higher credit scores can make it possible for you to get lower interest rates on credit cards and loans and thus lowers the cost of having credit.
Consumers with low credit scores usually have higher interest rates and could be denied credit for credit cards, loans, and other credit services. There are many methods of credit scoring and some lenders have their own credit score. The most used method for a credit score is the FICO score, named for Fair Isaac Corporation who is credited with developing the score.
The three major credit bureaus have their own version of the FICO score. Equifax uses the Beacon system, Experian uses the Experian/Fair Isaac system, and TransUnion uses the Empirica system and all though the systems differ each gives comparable scores. Credit scores are not provided with the free annual credit report. They can be purchased from the credit bureau issuing a credit report. Personal credit has become very important and has an impact on getting credit and at what cost. If you will be seeking a home, new auto, or other services, review your credit to see if you may need to rebuild scores before applying for credit. Personal Credit
If you manage your personal credit to try to avoid bad credit scores, consider asking for higher credit limits on credit cards to help credit scores. By increasing the available credit, it could lower the ratio of debt-to-available credit and boost scores. Higher credit limits may be much easier to get now, but that could always change. Higher scores can help get personal loans for a home or auto with better terms.
You don't have to make more debts even though you request a higher credit limit. Always monitor credit to make sure debts don't exceed about 30% of the available credit limit. Consumers must use credit and have good payment habits reported to major credit bureaus as a way to keep building scores. There are many great choices for credit cards for consumers who have bad credit or good credit that could be used in a positive manner. Learn how to manage credit and use credit services to increase the chances for getting low interest rates on loans.
Consider applying for a Discover card that offers a tool called Spend Analyzer. It breaks down purchases by category and tracks spending over time. This can help cardholders see exactly where their money is going and track unnecessary spending habits. Other card issuers also have features that allow cardholders to manage their accounts, but Discover is one issuer that tries to give members features that really help with managing their credit. Personal Credit
For consumers who have been a victim of identity theft, you may be eligible for a free Security Freeze but a copy of a valid identity theft report that was filed with a federal, state, or local law enforcement agency may need to be provided. A Security Freeze can be added to a credit report so all third parties like credit lenders or other companies, whose use is not exempt under law, will not be able to access your credit report without your consent.
A Security Freeze can delay or interfere with applications made that involves access to credit reports. For example for loans, credit, mortgages, insurance, rental housing, employment, investments, licenses, cellular phone service, utility service, Internet credit card transactions, and extension of credit at point of sale.
When reports are frozen, companies that provide information will not be allowed to update name, address, SSN and date of birth information on your credit report if there has been any changes made while files are frozen. The consumer would need have the information updated by contacting the agency through the mail. When applying for new credit, the prospective lender or company will not be able to access credit reports, until the consumer either removes or temporarily lifts the Security Freeze. There are some who are exempt from Security Freezes as defined by law.
A Security Freeze is available to all consumers who live in the United States, including Puerto Rico, Guam and Virgin Islands. The TransUnion Security Freeze will be applied only to the TransUnion credit report. To do a Freeze at other consumer reporting agencies, the consumer must contact them directly.
There are situations that a credit report will be provided to another party even though it has a Security Freeze. For example, for companies that have a financial relationship with you, State or local agency, law enforcement, trial court, Child Support Agencies or a private collection agency acting on a court order - warrant or subpoena, and a person or entity for the purpose of providing a consumer with a copy of their credit report upon the consumer's request. Security Freezes can be great when identity theft has been experienced. Personal Credit
Personal credit needs to be good to be able to get a secured loan. But when money is needed to pay a huge tax bill, unexpected expenses, or other needs, a fast cash payday loan may be a solution to get money. Some consumers wonder if a personal loan is possible when bad credit is a problem. Any time credit is needed, a good step is to review credit reports to decide if it needs to be rebuilt before applying for a loan for thousands of dollars.
For poor credit consumers looking for unsecured loans, it makes getting approved for the loan risky for the bank or lender. A home loan or auto loan is a secured loan as there is collateral to secure the loan. A payday loan is an unsecured loan and there are many lenders who may not care about someone's personal credit.
A typical payday loan application usually requests the applicant's full name, Social Security number, income, and other types of financial information. It may require banking information if the funds will be deposited into a checking or savings account. Some lenders do not require a credit check but may require information about employment. Usually the amount that can be borrowed is from $200 up to $1,500. The application process can be quick and usually does not require a formal closing. It may consists of a written application, a promissory note, and a payment schedule which means there is much less paperwork than applying for a secured loan. Grants for Organizations and Individuals
A federal grant is financial assistance from a federal agency and the grant recipient must carry out a public purpose authorized by a law of the United States. Federal grants are not federal assistance or loans to individuals and may not used to get property or services for the federal government's direct benefit. There are 26 Federal Agencies that offer over 1,000 grant programs in different categories.
Here are the 26 agencies that provide grants: The Department of Health and Human Services, Agency for International Development, Corporation for National and Community Service, Department of Agriculture, Department of Commerce, Department of Defense, Department of Education, Department of Energy, Department of Health and Human Services, Department of Homeland Security, Department of Housing and Urban Development, Department of the Interior, Department of Justice, Department of Labor, Department of State, Department of Transportation, Department of the Treasury, Department of Veterans Affairs, Environmental Protection Agency, Institute of Museum and Library Services, National Aeronautics and Space Administration, National Archives and Records Administration, National Endowment for the Arts, National Endowment for the Humanities, National Science Foundation, Small Business Administration, and the Social Security Administration.
There are infomercials and websites that advertise free money, however few are available to individuals and there are none available that provides personal financial assistance. You can find out if you are eligible to apply for grants on Grants.gov website and you can watch a tutorial. If you register as an Individual, you will only be able to apply to grant opportunities that are open to individuals. An individual cannot submit a grant application to a grant opportunity that is just open to organizations.
Some examples of Organizations are: Government, State, Local, City, Township, Special District, Native American Tribal Governments, Education, Public Housing, and Non-Profit Organizations.
Small business loans and small business grants may be awarded to companies that meet the size standards that the U.S. Small Business Administration (SBA) has established for most industries in the economy. The most common size standards are as follows:
* 500 employees for most manufacturing and mining industries
* 100 employees for all wholesale trade industries
* $6 million for most retail and service industries
* $28.5 million for most general & heavy construction industries
* $12 million for all special trade contractors
* $0.75 million for most agricultural industries
About one-fourth of industries have a size standard that is different from the levels above and they vary from $0.75 million to $28.5 million for size standards. This is based on average annual revenues and from 100 to 1500 employees for size standards based on number of employees. With some exceptions, all federal agencies, and many state and local governments, use the size standards established by SBA.
Visit the website: govbenefits.gov to get all the FAQs about grants and grant information for organizations and individuals. Government Money
The government has rural housing repair loans and grants programs and these may provide loans and grants to low-income homeowners. Homeowners use these programs to repair or improve their homes or to remove health hazards of their rural dwellings. Loans can be arranged for up to 20 years at a low interest rate. There are some grants for who are 62 years of age or older and can be used only to pay for repairs and improvements to remove health hazards. Loan or grant combinations may be arranged for people who can repay part of the cost. Low-income for this program is defined as those below 50 percent of the area median income.
Some program requirements are that you must be a U.S. citizen or permanent resident who lives in a rural area. There may be some loans of up to $20,000 and grants of up to $7,500. A real estate mortgage is required for loans of $7,500 or more and full title services are required for loans of $7,500 or more. Grants may be recaptured if the property is sold in less than three years and loans and grants can be combined for up to $27,500 in assistance. Visit the govbenefits.gov website for this information. Government Money
The Bureau of Engraving and Printing redeems partially destroyed or badly damaged currency for free. The U.S. Treasury handles about 30,000 claims each year and redeems mutilated currency. They use experts to examine mutilated currency and will approve the issuance of a Treasury check for the value of the currency determined to be redeemable. If you want to know what mutilated currency is see the descriptions below:
* More than one-half of the original note is not clear
* It is in such a condition the value is questionable and needs special examination.
Currency can become mutilated in many ways like by means of fire, water, chemicals, explosives; animal, insect or rodent damage; and by burying. Regulations issued by the Department of the Treasury, mutilated U.S. currency may be exchanged at face value if more than 50% of a note identifiable as United States currency or 50% or less of a note is identifiable as U.S. currency and the method of mutilation and evidence demonstrates to the satisfaction of the Treasury that the missing portions have been totally destroyed.
Use our free IRS tax calculator
Some things affect all taxpayers. The personal exemption, for example, has increased, to $3,650 each for the taxpayer and dependents, up $150 from 2008.
And tax brackets have been adjusted upward by about 5 percent since 2008. That means you might not jump to a higher tax bracket if you earned more.
Others revisions are more likely to affect low and moderate income workers. Income limits for the earned income tax credit have been raised and there's a new category -- families with three or more children. The Internal Revenue Service says one in six taxpayers claim the credit.
Still other changes affect those at higher income levels. The exemption for the alternative minimum tax has been increased once again, this time to $70,950 for joint returns and $46,700 for individuals. If your income is higher than these amounts, you could be subject to the AMT tax. These changes are among those that happen every year, to keep taxes in line with inflation. But there are a host of other revisions, new for 2009, that will make filing your tax return this year a little more complicated.
For one thing, the standard deduction for taxpayers who don't itemize has become a little less standard.
The standard deduction itself has increased to $11,400 for married couples filing jointly, $5,700 for individuals and $8,350 for heads of household. As before, it is even bigger if you are blind or 65 or over.
But new this year, you can take more of a standard deduction if you paid state or local real estate taxes, bought a new car and paid sales or excise taxes and met the income limits, or were a victim of a federally declared disaster. If you choose to increase your standard deduction by one or more of these items, you'll have to file a new form Schedule L. Otherwise, you can just enter the standard deduction on Form 1040.
The three deductions -- for state or local real estate taxes, sales or excise taxes on new car purchases or net disaster losses -- also can be taken by people who itemize.
There are expanded tax credits for home purchases and education. And a tax credit for making your home more energy efficient has been reinstated.
Tax experts caution people to be careful that they're claiming every deduction and credit to which they're entitled. A credit reduces the amount of tax you owe; a deduction reduces the income on which taxes are assessed.
You're likely already receiving the benefit of the Making Work Pay credit under the stimulus bill that Congress passed last year. However, you may have to pay a portion back if you're a married couple and both spouses work, or if you have more than one job. If you're a low- or moderate-income worker, you might have some money due to you. A new form, Schedule M, will have to be filed to claim the credit.
Avoid errors and file online to get a fast tax refund: Some errors are mathematical. Others involve omission -- like failing to include your Social Security number or those of your dependents. Make sure you pick the correct filing status -- head of household or surviving spouse vs. single, for example. And don't forget to sign your return.
Last year, the IRS received more than 141 million tax returns. Of those, about 70 percent were filed electronically. More than 110 million filers were due refunds, averaging $2,753 each.
The IRS encourages people to file electronically, saying it reduces errors and enables people to get their refunds more quickly. People who file electronically and use direct deposit can get their refunds as soon as 10 days after they file.
This year, the agency estimates that it will take taxpayers using form 1040 an average 21.4 hours to complete their taxes. That includes record keeping, tax planning, and completing and filing the return. The more complicated your return, the more time it will take to complete it.
Changes for homeowners: One major thing that taxpayers will find different this year is the homebuyer tax credit. In 2008, the credit was actually an interest free, long term loan. For people who purchased a home in 2009, the credit is a true credit -- it only has to be paid back if you stop using the home as your principal residence within three years of purchase. The credit is $8,000 for first-time homebuyers, defined as those who haven't owned a home in the last three years. Congress also added a credit for long-time homeowners who purchase a new principal residence -- $6,500. To qualify, a homebuyer would have had to live at least five years in a previously owned home. There are income limitations for both.
Expanded credit for college education: The new American opportunity credit provides a maximum annual credit of $2,500 per student for each of the first four years of college. The Hope credit that the new credit replaces temporarily covered only the first two years and for most people was smaller. To be eligible, taxpayers would have to pay $4,000 or more in tuition, fees and course materials. The credit, which phases out at higher incomes, is 40% refundable. This means that even people who owe no tax can get an annual payment of the credit up to $1,000 for each eligible student. What about those students who take more than four years to finish college? If you're in your fifth year, you're out of luck. However, there is another credit -- the lifetime learning credit -- that may be available for students in their fifth or sixth year of college, or in graduate school.
Other tax changes: Other changes include the reinstatement of the credit for making your home more energy efficient. The maximum credit has increased, to $1,500 for $5,000 in expenditures on things like insulation, storm windows or an energy efficient furnace.
For people who lost jobs, the first $2,400 in unemployment benefits is not taxable.
To benefit from most of the tax breaks, you would have had to take action before the end of 2009. But there are a couple of exceptions. You still might be able to claim the homebuyer credit if you have a signed contract by April 30. And, if at the end of the day you find you owe the IRS money or want a bigger refund, you may be able to contribute to an individual retirement account until April 15 and take a deduction on your 2009 taxes.
If you're covered by a plan at work, you may be able to deduct a contribution of $5,000 -- $6,000 if you're at least 50 -- if your modified adjusted gross income is less than $65,000 if you're filing as an individual, or $109,000 if you're married filing jointly.
Three tax deductions -- for state or local real estate taxes, sales or excise taxes on new car purchases or net disaster losses -- also can be taken by people who itemize.
There are expanded tax credits for home purchases and education. And a tax credit for making your home more energy efficient has been reinstated.
Tax experts caution people to be careful that they're claiming every deduction and credit to which they're entitled. A credit reduces the amount of tax you owe; a deduction reduces the income on which taxes are assessed.
You're likely already receiving the benefit of the Making Work Pay credit under the stimulus bill that Congress passed last year. However, you may have to pay a portion back if you're a married couple and both spouses work, or if you have more than one job. If you're a low- or moderate-income worker, you might have some money due to you. A new form, Schedule M, will have to be filed to claim the credit.
Government Grant Money
When applying for a grant, be sure to locate a grant that interests you and apply. Be sure to record the Funding Opportunity Number and/or CFDA Number and then use a few basic steps to get started. You usually need to download an application package to complete and then submit the package. If there are any problems trying to locate or apply for a grant, usually there is a resource or user guide page on the grant website.
There are grant programs for federal or state grants, and there is a difference between organizational and individual grant applicants. An organizational grant applicant is for one who submits a grant on behalf of a company, state, local or tribal government, academia, or other type of organization.
A grant for an individual is a person who submits a grant for themselves and is not doing it for some type of organization. Visit the grant.gov site to search and apply for grants.
By downloading an application package, you can complete the forms at your leisure and you could have someone help you complete them. To submit electronic grant applications, you would need the status of an Authorized Organization Representative (AOR). It is easy to check your grant status by logging into Grants.gov, if you registered your username and password. Visit the grants.gov website for this information and more, as well as listings of grants. Don't be scammed by websites that want to charge large you large amounts of money just to give you information about grants. Government Money
A good example of government money are grants or funds. For example a grant was given for neighborhood revitalization in New Orleans. This was a $1 million dollar grant from the American Recovery and Reinvestment Act (ARRA). This was to help Urban Strategies, Inc. foster a self-sufficiency and safe neighborhoods in New Orleans. The goal is to revitalize the Harmony Oaks community and implement a building program for local nonprofits to promote economic recovery and help low-income families secure and retain jobs. The efforts revolved around transforming Harmony Oaks into a vibrant mixed-income community and rental units, home ownership units, a K-4 charter school, a health suite, and a recreation facility.
Some grants can be used for social means to help families and children get out of cycles of poverty. There can be grants to turn areas into thriving economically benefiting areas for people. The one million dollar grant was awarded through the Strengthening Communities Fund (SCF) at the Department of Health and Human Services. They awarded millions to 84 grantees to build nonprofit organizations help with some economic recovery issues in their communities. Money to help low-income individuals find and keep employment, earn higher wages, and achieve self-sufficiency are indeed important uses of funds. Visit the Grants.gov. website for these details and more information. Government Money
If you are looking for government money in the form of a job, there are some summer experiences that would allow some people to work with those who manage the business of our Nation. That is right, the Federal Government might be able to give you that chance if they select you. Summer jobs are at times available in Federal agencies throughout the United States and there are many types of positions. Review the government's website for information to the job site of the US Federal Government.
The information on their website may help you find a job and you may be able to create an online resume. Once you have located the summer job, review the steps to complete an application. Be sure to specify the title of the job and the announcement number on applications. Always make sure applications are fully completed and write down any phone numbers you may need. For summer jobs, it may be important to start early in the year, and be sure to note any deadlines. Free personal finance software to help manage finances. Investments and Retirement:
There are options for investments before and after retirement. One thing anyone can do is to learn new financial skills and to take financial classes to gain knowledge about money, investing, and finances. If this type of learning is not for you, a financial expert can be very valuable. Money is necessary after retirement for paying expenses and bills. Some facing retirement only plan for fun activities like traveling, but it is important to meet all possible expenses and make sure retirement money does not give out. It is not wise to sit back and wait for retirement benefits to start but to help build funds that will last through the retirement years. Strive to keep retirement funds growing to have the best possible retirement.
* Create a detailed retirement plan.
* Consider bonds as an investment as they mature over time.
* Start saving and keep saving before retirement even starts.
* Research investment options yourself or get a financial advisor to give advice.
* Don't leave retirement years to chance, take an active part in planning for them.
* Review insurance companies and financial institution investments to get the most out of investing.
* Stocks can be an option as businesses can grow and profit and shares can increase.
* Consider buying real-estate as an investment as the price of properties can increase and it could be sold.
* Consider getting an IRA ( investment retirement account ), there are several types and they can have tax advantages.
* Review affordable insurance plans, weigh the pros and cons of each company, and choose a plan that will fit your medical needs and budget. Life Insurance
Agents sometimes try to promote a cash-value insurance policy as a way to invest for retirement and that it is like a savings. Yet retirement plans like 401(k)s force you to save too. The money that builds up in a cash-value policy can grow tax-deferred but money in IRAs and 401(k)s do too. Cash-value insurance can be a costly way to invest as it can be more expensive than a regular term insurance policy. There may be a surrender charge if the policy is dropped within the first 10 years or so. A surrender charge varies by insurer and the type of policy and it could exceed the total amount of the first-year premium.
Then there are annual investment fees and it can be difficult to know how much you are paying. They are usually disclosed in variable life or variable universal life policies. Investment management fee could be as high as 2% a year along with an annual fee called the mortality and expense charge or M&E. This is a fee to assure the insurance company makes some profit. Fees for a cash-value life insurance can pull down returns. When life insurance is needed, consider getting term insurance and then consider IRAs, 401(k)s or other types of retirement plans. Insurance Investment
Sometimes Agents try to sell consumers a cash-value policy as a way for them to invest for retirement and may say that the investing component is a forced savings. But consider that retirement plans like 401(k)s is a way to force you to save too. Money that builds up in a cash-value policy can grow tax-deferred, but money in IRAs and 401(k)s do too and a cash-value insurance could be a poor investment that is costly.
The cost of the insurance protection itself can be more expensive than what would be paid for a regular term insurance policy. There many be marketing and sales commissions along with a surrender charge that may be levied if the policy is dropped within so many years. The amount of a surrender charge varies by insurer and type of policy, but could exceed the total amount of a first-year premium. Then there are annual investment fees which can be difficult to know the cost. In policies where they are disclosed, they could be 3% or more, year end and year out.
The investment management fee, which could be as much as 2% a year and the annual fee, or mortality and expense charge is a fee to assure an insurance company gets a profit. The fees for cash-value life insurance can pull down the returns. Index mutual funds often have annual expenses under 0.5%, and many mutual funds charge about 1% which is less than 3% for an investment component on a cash-value policy. Consider the options of getting term insurance and to invest for retirement, invest in IRAs, 401(k)s or similar retirement plans. Invest Retire
Most would like to save on taxes in retirement years and a secure retirement means financial plans must always be monitored. Finding ways to help retirement life be less taxing has never been more important. The best goals are trying to keep what has been earned instead of what you could earn.
Be aware that if income during retirement is about $60,000, you would need around $80,000 to cover federal taxes. It is important to plan for such reductions in funds. With this in mind, the best way to plan is to try to keep what you have. Review all sources for income before retirement years roll around. Figure current taxes as well as what taxes may be during your future retirement. Once you do this, figure in withdrawals that take tax information into account. Plan on about 25 or more years for retirement years. Inflation and how your income will grow or be reduced are factors to consider. Try to determine with these things in mind, what value your nest egg will be in retirement years.
Investing in a mix of assets that fits the risks you are willing to take, and how inflation can affect income are things to work around. When working, it could be better to put assets in accounts in which the tax on income and capital gains is deferred until retirement age. This is because distributions will be taxed at a lower tax rate. The other advantage is that any gains that could be eroded by current taxes, would be left to accumulate. Some IRAs and 401(k)s allow for contributions that are excludable from current income.
Almost 70% of pre-retirees plan to work part-time or full time in retirement years. Some plan never to retire. Yet by continuing to work, Social Security benefits are reduced by $1 for every $2 of earned household income over $13,560. When you attain full retirement age, benefits are reduced by $1 for every $3 of earned income over some $36,00 for the months until you reach full retirement. After reaching full retirement, there is no reduction in benefits due to earned income. Social Security benefits may be taxable if household income exceeds $25,000 for single people and $32,000 for couples. It can be important to get professional counseling and consult a tax advisor for retirement years as investing and taxes can be complicated. It is very important to consider risks and expenses carefully before investing any of your hard earned money. Investing Insurance Retirement
Mutual funds are is one of the best investment vehicles and can be a good part of a retirement plan, and you can get professional management. Smart people can have the job of selecting investments for the fund you’ve chosen while you are doing other things. There is also some diversification, as there could be a hundred stocks or more in one fund. The disadvantage to a mutual fund is that there is no guaranteed, return and stock mutual funds can increase or decrease in value due to fluctuations in the market. This means you may either make money or lose it.
A savings account or a CD with a major bank has FDIC insurance to cover your losses but for an investment to have a chance of out-pacing inflation, it can’t be tied to any particular fixed rate of return. Federally insured CDs and savings accounts are good for retirement planning, but not as a means to wealth-building.
Research some stock mutual funds so that you can compile some questions to ask a financial advisor. Evaluate the track record, management team, and types of stocks within the fund. Review the fund’s earlier track record and how the fund has performed over the last one, three, and five years. Sometimes a 10-year history is available but it may not be helpful because things can change over the years. Keep in mind that past performance doesn’t guarantee future results, but it could give you an idea whether the fund manager knows how to maximize returns. If you check the track record of a particular fund, find out if the same manager is in charge.
Consider the fees because there are a variety of charges associated with mutual funds like commissions, marketing charges, and fees due upon sale to name a few. Of course the more charges you pay, the more your return is reduced and you will want to evaluate the risk factors. Look at a fund’s risk category to see if the funds are low, medium or high risk.
This is only the basics of what you really need to know to make a good decision. Never invest without doing some research and get advice from a qualified financial advisor. It is best not to invest in anything you don’t understand and don't be in a hurry to invest. Most consumers believe you should never have all your eggs in one basket, but have a mix of stock funds, bond funds and cash savings and align these with your investment objectives and retirement plan. Financial advisors can give advice for the type of investments based on your age and risk tolerance.
It is important to do some math, for example, if you invested $1,000, and in one year it earned a 50 percent return, and the next year it lost 50 percent, a thousand dollars making a 50 percent annual return would total $1,500. If it then loses 50 percent, it would now total $750 and you lost money. Look closely at the risk factor and your principal amount. Aggressive growth stock mutual funds can be the highest risk as compared to money market funds which would be the lowest on the risk scale. Money market funds usually pay more interest than regular savings accounts, but as interest rates rise in the general market, money market returns also rise.
Usually the younger you are, the more you may want investments in stock funds, which may be able to give you a higher return in exchange for higher risk factor. This means that less money would go into bond funds and cash investments. As you get older, some of your nest egg should stay in stock funds to help hedge against inflation, but more of it should go into bond funds and cash investments. Again it is important to do some research and seek professional help to get a plan that suits your individual needs and goals. Get free bill reminder software. |
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