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Archive for November, 2011

Annuities are one of the more confusing investment options available. Most investors have heard the term annuity but aren’t sure what they are and how they work let alone the pros and cons of annuities. In this article I hope to explain some of the benefits and downsides to help you decide whether annuities are right for your investment portfolio.

So what exactly are annuities? Well if I were to boil it up, annuities are a contract between you and the issuing company that results from you paying them money (either all at once or over time) which results them making payments to you either for a set period of time or for the rest of your life. Let me try to get in to a little more detail to help explain a little better.

The typical type of annuity is known as a fixed annuity. The way fixed annuities tend to work is that you make regular payments to the issuing company (commonly an insurance company). Once you reach a certain amount of money the annuity matures and you begin receiving payments back for the amount you paid in, plus some set rate of return. For example lets say you paid $100 a month to the annuity until it reached $20,000. Once you reach that $20,000 (and you meet all contract criteria like age requirements) you start receiving equal payments each month which is taken from that $20,000.

The number of payments you receive is set in the contract that you sign. Some annuity contracts pay you for a set number of years, and others will pay you until you die. If you live longer than the average person that the payment amounts are based on then the company will lose money and you will continue to receive payments, even beyond the $20,000 you contributed.

The major advantage of annuities is that the amount you earn with your annuity contract is tax deferred, meaning as it grows you don’t have to pay taxes on it until you take the money out. Once you begin receiving annuity payments you will then be taxed, but typically this will be at a lower rate assuming you start receiving payments at retirement.

Fixed annuities don’t pay a huge return typically, but there are variable annuity options that work similarly to a mutual fund and are tied to some investment securities like the major indexes or a particular sector. These variable annuities can be risky, but many come with a guaranteed floor amount that will pay you a smaller annuity return.

Ultimately annuities are an interesting way to save money for your retirement but they aren’t for everyone. Before investing in annuities be sure to consult your financial planner to understand all the risks and benefits that annuities have to offer.

If you want to get approved at the best possible terms when buying a car, it’s important you know a car lender’s credit guidelines before you apply for credit…especially if you’re bankrupt.

It will save you time and frustration–but more importantly, it will help you avoid credit inquiries that may lower your FICO credit scores up to 12 points per inquiry.

Step 1 in making a lease or buy decision is to determine a lender’s credit guidelines.

You start by asking if they lend to people with a bankruptcy. If so, on what terms?

That’s right. You have to be upfront that you’ve filed bankruptcy. Don’t hide it. We have to face the fact that some dealers just won’t work with people who’ve filed bankruptcy. So our job is to find the ones that do.

Some lenders will only lease to people with a bankruptcy. Others will only offer purchase financing. Yet still others will only lend using a hybrid of the two–this is especially common in Texas.

Ask the finance director at the dealership to direct you as to what structure the manufacturer prefers.

And here’s a quick tip for you: if your bankruptcy doesn’t appear on the credit report your lender pulls–then, in the eyes of the lender, you’re not bankrupt.

The only lenders I would consider using are:

- First choice: Captive lenders (car manufacturers)

- Second choice: Banks (not finance companies)

- Third choice: Credit unions

Ninety-nine percent of the cars I’ve leased over the years have been with captive lenders. Just one was leased by a bank.

That particular deal came from a conversation I had with Amy, the finance manager at the local Land Rover dealership here in Indianapolis. I told her I was open to her financing recommendations, but I preferred financing through the car manufacturer.

I told her my current FICO scores. She immediately said that with my scores she could do better through a local bank. I signed a credit application and told her to go for it.

The next day I signed a lease agreement with that local bank. Being open to her advice literally saved me hundreds of dollars a month on that car.

So be flexible…but be careful. It seems most car dealers call all of their funding sources banks. When in reality some are banks, some are credit unions, and most are sub-prime finance companies.

Here is a list of some of the most commonly used sub-prime auto finance companies:

1. HSBC Automotive

2. Capital One

3. AmeriCredit

4. WFS Financial

You want to pass on the sub-prime finance companies–unless you have exhausted all other options. Sub-prime lenders should be your last resort.

And only use credit unions if they report to all three national credit reporting agencies. How do you find out if a credit union reports to all three credit reporting agencies?

Simple–you ask. Ask the branch manager at the credit union if they report. And after you get the loan, check all three of your credit reports and make sure their trade line appears on each one.

The three worst luxury captive lenders to lease or purchase from after bankruptcy are:

1. BMW

2. Mercedes

3. Porsche

The three worst mainstream captive lenders are:

1. Honda

2. Kia/Subaru

3. Toyota

What makes these the worst?

Once these lenders see that you’ve filed bankruptcy, they are less likely to work with you. However, if they are willing to work with you, they’ll want you to be at least several years from discharge and have perfect credit during that time.

Now that I told you how bad the above six lenders are–there are times where they may offer you good deals. For example, if one of the above happens to be the biggest dealer in your area, they may be able to offer you special deals that a smaller dealer can’t.

Of course, things change all the time with captive auto lenders. They change their credit guidelines on a whim to meet their own financial goals. So, it’s always a good idea to at least research these dealerships–just don’t get your hopes up too high.

OK, so you’ve done your research and narrowed down your choice to one or two car manufacturers.

Step 2 in making a lease or buy decision is to purchase your FICO credit scores.

It’s important you have your most recent scores when you talk to car dealers (just like I did with Amy). It puts you in charge.

When you enter a dealership with your FICO scores, the dealer will know you’re a more informed consumer and cannot be taken advantage of. Just know that the FICO credit scores auto dealers use are a little different than what we see as consumers. The scores the dealers review are called FICO Auto Industry Option Scores. The good news…these FICO scores may be higher than your normal FICO scores if you paid all previous auto loans as agreed.

Some car dealers have told me that if your FICO scores are higher than the scores the dealer reviews–they may even use your scores to get a better deal.

You can buy your scores from myFICO.com.

Step 3 is to interview the remaining car dealers on a deeper level.

Start by asking them these questions:

- Which credit reporting agency do you use to make a lending decision?

- What is your minimum credit score requirement to get approved?

- What credit score is needed to get the best interest rate?

- Do your lenders prefer offering lease or purchase financing to a bankrupt debtor?

- What incentives are there to lease or purchase right now?

At this point it’s important to remain open to either leasing or purchasing. Evaluate your options and incentives. Remember, you’re buying the financing. In other words, the most important factor is the willingness of the lender to loan you money.

I personally view the lease versus buy decision in three ways:

1. If you’re recently recovering from bankruptcy, the only thing that matters is if you can get approved at an interest rate you can afford through a lender that reports to all three national credit reporting agencies. So you should only consider lenders that are bankruptcy friendly.

2. Once your credit scores begin to increase, you can start selecting cars based on which credit reporting agency the lender uses to determine if you qualify. Obviously, you should choose the lender who uses your highest FICO credit score to make a lending decision.

3. When your scores are high enough…or two years have passed after your bankruptcy…or your bankruptcy doesn’t appear on the credit report the lender uses, then you can choose almost any car you like. But make sure you still do your research and use your credit scores to help you compare interest rates, terms and incentives.

Getting the money you need isn’t always easy. For some people, the money always runs out before the expenses. Even working overtime and having a savings account doesn’t guarantee you’ll always have what you need. An unexpected event could occur and throw you for a loop. Title loans exist for when you need quick cash with no hassle. Below you will find some pros and cons associated with these loans.

Pros
1. The loans are easy to get. All you need is a checking account, car title and job. The lender isn’t overly concerned with your credit history, and probably won’t check your credit report. This means you can qualify for a loan even if your credit score is very low. If you tried to get a loan from a bank, they’d probably turn you down. People with bad credit have a difficult time getting loans from banks.

2. You get your money quickly. Once you’re approved, the lender gives you the money. Instead of waiting weeks for a decision, the lender decides on the spot if you get a loan. This is good if you’re in a jam and need the money as fast as possible.

Cons
1. You risk losing your car. If you cannot repay the loan, the lender gets your car. When you use your car title to get a loan, it means the lender legally owns your car if you default. You have no legal leg to stand on because you agreed to basically pawn your title. The only way to get your car returned is to pay what you owe.

2. The interest is high. The interest on title loans is generally higher than on bank loans or credit cards. The lender is taking a big risk by lending you money. To make it worth their time, the lender charges high interest. This means you have to repay what you borrowed plus interest.

The things mentioned above are only a few things to consider. If you need a loan, think carefully before using your car title as a bargaining chip.

Getting an offshore bank account is one thing, but having easy instant access to your offshore wealth can be another matter entirely. Many offshore accounts are opened remotely, and the majority of investors simply don’t have the time or resources to visit a tax haven in person every time they need cash.

One of the best ways to overcome this problem, that is both timely and cost-effective is to use a prepaid offshore credit card. Handily, “ultra-private” prepaid cards are also some of the most discrete methods available of withdrawing cash and making purchases with your offshore funds.

Prepaid offshore credit cards come in various formats. But first, what is a prepaid offshore card?

An offshore credit card is nothing more than a card issued by a banking institution or card provider outside of your home jurisdiction. Investors frequently see offshore credit cards as a discrete and easy way of accessing their offshore stash. Therefore in many cases the issuing bank will be located in a country with strict bank secrecy.

A prepaid offshore card is an offshore credit card that is “loaded” up front with as much money as you want to put on it. Rather than offering a line of credit, the card is simply a way of making all the purchases you want to make without borrowing anything. It is a credit card, so-called, because the prepaid offshore card often carries a brand name like Mastercard, Visa or Discovery and is internationally accepted.

A prepaid credit card differs from an ATM card or simple bank card because you can use it for much more. You can make purchases online, at PoS and withdraw from cash machines. Withdrawal/purchase limits will vary from card to card

Prepaid cards are loaded by being individually funded. As such they are not intrinsically linked to any offshore bank account, like an offshore debit card. Prepaid cards are a more discrete option if privacy is your aim.

The most common type of prepaid offshore credit card will bear the holder’s name. If you have a company you could also get one in your company’s name. Ultra-private “un-embossed” cards exist which carry no name, although some are not accepted by individual merchants. They carry only the credit card number within the magnetic strip and chip, so when swiped none of your personal information is recorded. Click on the link at the bottom of the page for more information about offshore credit card privacy.

What ID do you need for a prepaid offshore credit card?

Just a scanned passport copy and a proof of residence are required by some issuers. Others may demand more detailed references or additional identification. Some prepaid cards with very low-limits can even be procured with no ID whatsoever.Fortunately, using a prepaid offshore credit card does not require any check of your credit history. Since the card is prepaid, you are not extended a credit line and therefore these checks are unnecessary. This makes prepaid cards a more private option than regular credit cards, since credit history checks are some of the greatest sources of confidential information leaks.

During these financial hardships, people must take advantage of every opportunity in making their life stable. There are many alternatives in answering this problem of millions of people. One is the government grants being awarded to the public to aid them in their schooling, business, organizations, community development projects, and other purposes.

Because of the crisis, there are now many unemployed individuals. Most them still want to continue going to college and finish their studies. Even if they are unemployed and obviously cannot afford to go to school, they still have hope. They can apply for government school grants for adults and unemployed. Through these grants, they will be given financial assistance, which they can use in their school expenses such as tuition, miscellaneous fees, laboratory fees, book allowance, lodging, etc. The financial aid will be of big help to them. Plus the fact that they don’t need to pay it back after they finish college.

Applying for government school grants for adults and unemployed is not difficult. It is actually easy. You just need to go to your local college and look for the financial aid office. Then ask the people there how to apply for a government grant. After that, they will give you an application form. You just need to fill it out and submit it. Then wait for the approval of your application. Once your application gets approved you will see a bright future ahead of you. You will be given large sums of money for your schooling. And again, you don’t need to repay the government after you have graduated.

Government grants such as these are such a big relief to the needy public. At times of hardships, they can still hope for a stable future through these offered grants. You can now afford of a college education.

Government grants as an option of debt relief is not very popular. This is basically due to the lack of awareness amongst the people. Every year billions of dollars are kept aside for the purpose of giving away as government grants. People do not opt for these grants for debt relief because they think that either these grants are not available to individuals or they are not eligible to apply for the same.

Why Government Gives Grants For Debt Relief

When people are debt ridden, their expenditure decreases. This reduces the demand for various things in the economy because people will not have money to spend. Slowly this affects all areas of the economy, with the result that the economy of the state / nation suffers. Therefore it is imperative that the people have enough spending capacity so that the economy prospers.

Debt Relief With Government Grants

Government grants are more easily available than other forms of loans. This is because grants unlike loans do not require collateral or any other form of security. These thousands of dollars got as grants can be used for starting a new business, the proceeds from which can be used to clear off previous debts.

Grants are also available for clearing off debts incurred due to specific reasons like health care, education, business expenses etc. For e.g. a debt incurred for health care purposes like hospitalisation, medical bills, etc. can be cleared with the help of government grants. Debts incurred for setting up a business can also be funded using government grants. This makes government grant an ideal debt relief instrument.

Are grants easily available?

Grants are easily available to those people who can prove to the government that they are not in a position to pay off their debts. The social service office elaborately studies the financial position, outstanding debts and repayment capability of the debtor before issuing the grant. This is to ensure that the grant is going to the extremely needy people who have no other means to salvage their debt ridden situation.

Advantages Of Availing Government Grants For Debt Relief

1. A grant is easily available because no collateral is required to be got for it. The debtor just has to prove that he is not in a position to pay off his debts.

2. A grant is an aid from the government. It is not a loan. Hence it need not be paid back. It is both interest-free and non-taxable. It is given with the sole purpose of getting the finances of the debtor back on track, thereby making him debt-free subsequently.

3. With the availability of government grants for debt relief the debtors are saved from declaring bankruptcy.

4. Grants in comparison with other form of debt relief are a better option because they make the debtor debt free instantly.

Government grants are therefore an ideal debt relief option for those debtors who have no other option but to declare bankruptcy.