Making Enlightened Financial Investments In Difficult Times

In times like these where the stock market is floundering and points rise and fall like an eccentric EKG, it pays to avoid getting bogged down in emotion and remember a few sound principles in investing.

Even though your fellow investors will swear you must have an "inside track", keeping a level head and a solid foundation are crucial to success in any market. Here are a few tips you can use to make rewarding and enlightened investments in trying times.

• Read That Prospectus - Lots of people just toss these aside, but your prospectus can give you insights and comparisons between your types of funds as well as risk level, fees, past performance and how well the assets are being managed.

• Check Out Their Background - You can find out the disciplinary history of any brokerage or sales representative by calling the NASD BrokerCheck at 1-800-289-9999 or visiting their site at www.nasdbrokercheck.com . You'll find out if any actions have been taken by securities regulators or criminal authorities against the brokerage firm.

As an added tip, ask if the brokerage is a member of the SIPC or Securities Investor Protection Corporation, which helps protect consumers in the event that the firm becomes insolvent. If the market value of your securities goes down because the market suffers, those losses are not insured, though.

• How Are They Paid? Find out how the salesperson is paid. Some representatives are paid based on the amount of money you invest or how many transactions you conduct on your account.

Oftentimes bonuses are paid for selling the firm's own products. Ask for a copy of the brokerage's commission schedule and find out what fees or charges you are required to pay when you open, maintain or close your account.

• Diversify - Don't put massive chunks of your portfolio into a single type of investment or family of shares. This way when the market fluctuates, you won't be as severely affected by its movements.

• Avoid Fads - You don't want a repeat of the dot-com bust from the late 1990's. The same applies to investing in other current fads like variable annuities, gold or whatever the industry of the day is. Go with what you know and don't hesitate to ask a professional for advice if you're uncertain about investing by yourself.

Above all, some of the best decisions you can make are based in the cold, hard facts that every investment industry and company has to make available to shareholders and clients.

By keeping informed of news, trends and reports, you can learn how your investments are doing, when to buy and when to sell. Read the fine print carefully and don't be afraid to change direction, risk and goals as your needs change throughout the years.

Remember, you're in control at all times, and keeping a down-to-earth, realistic outlook will help keep your financial boat steady while others are tipping or sinking.

The More You Know,

Judy O'

Reverse Mortgages: How they Work, And What You Should Know

Reverse mortgages are becoming more and more popular, as more and more seniors are working to make ends meet beyond what Social Security and their retirement income pays. But what exactly is a reverse mortgage and how does it work?

Here's a basic guide that should tell you whether or not a reverse mortgage is right for you, or a loved one.

In a normal mortgage, you pay money to the lender each month toward your home loan. A reverse mortgage is a loan from the lender that gives you extra cash as long as you live in your home. Reverse mortgages are only available to seniors aged 62 and older. If you die, sell your home or move out (for example, into a nursing home or hospice care) - you (or your surviving family) must repay the loan.

If you live alone or are strapped for cash, you may not give a reverse mortgage much thought. However there are a few things to keep in mind before you sign anything.

For example, the amount you owe on a reverse mortgage generally grows over time. There are additional fees and closing costs for a reverse mortgage that you may not be aware of. In addition, because you keep the title to your home, you are still responsible for things like maintenance, property taxes and utilities.

The amount of money you can actually borrow in a reverse mortgage depends on several factors, such as your age, the value of the home and current interest rates. The older you are, the more you can borrow. You must be 62 or older to qualify, or if you're married - you and your spouse must both be 62.

Two Types of Reverse Mortgages

There are two types of reverse mortgages, HECMs - (Home Equity Conversion Mortgage) - which make up nearly 90% of the reverse mortgages in the U.S, and Jumbo.

HECM loans have become so popular because they are federally insured and generally pay a higher amount, especially if you have an average-value home. However if your home has a high value, you'll get more benefits from the Jumbo plan over time

Added Costs and Fees

Reverse mortgages generally cost more than other kinds of home loans. Fees are generally 2% of the home's value plus a mortgage insurance premium of 2%. Then factor in the cost of things like title searches and home appraisals and the costs can add up quickly.

One thing to be extra cautious of is the idea that you can use the reverse mortgage loan to take out a deferred-annuity. High cost annuities can bar you from getting much-needed retirement savings while paying extraordinary commissions to the people that sell them. Seniors, and single senior women in particular, are often victims of this bad advice.

There are several other options available for tapping into your home's equity before considering a reverse mortgage - especially if the high fees offset the advantages of extra cash. Know the policies and do your research if you're considering a reverse mortgage. It could pay off in more ways that one!

The More You Know,

Judy O'

Learn How to Avoid Bankruptcy While Paying Off Debt the Affordable Way

Bankruptcy seems like an easy fix for mounting bills, constant calls and credit cards that are bursting at the seams. But as simple as it sounds, bankruptcy is a drastic measure that should only be taken into consideration when all of your other options are exhausted.

In the meantime, here are several other options to help you avoid bankruptcy while still working to pay off your debt - no matter how much you currently earn, or what you owe.

1. Eliminate or Cut Back on Spending - You may think you've budgeted as best you can, but there are still several areas where you can eliminate, or at least cut back, on unneeded items until you've paid down your debt.

For example, cable TV, an expensive cell phone plan and subscriptions or memberships you no longer use are all prime candidates for elimination.

2. Work with Your Creditors - It's hard to imagine that your creditors are really just average people trying to make a living too. But when they come calling (or knocking!), instead of trying to come up with excuses or explanations as to why the bills haven't been paid, explain your situation to your creditors and see if you can work together to come up with a plan.

Remember, the companies you owe money to would rather see something - anything - from you rather than nothing at all. Some companies even have special programs aimed at reducing your monthly payment or interest rate. Taking the time to work out a payment plan that you can both live with will help make those sleepless nights a little easier!

3. Consider Credit Counseling. A law passed in 2005 requires you to actively consider credit counseling before filing for bankruptcy. Even if you think the monthly payments set up by the consumer credit counseling office are unmanageable, you may be able to find excess spending in your budget where you least expect it (like buying food that ends up going to waste or buying that "must have" pair of shoes that are sitting in your closet with the tags still on them).

Even taking a small step such as doing a realistic monthly budget of where your paycheck goes can go a long way in helping you spot "leaks" in your debt management plan. You may be surprised at what you learn!

4. Sell What You've Got - It may hurt to get rid of the "fun stuff" but considering that filing for bankruptcy is no fun at all - it's a realization that you have to consider. Consider selling off any recreational vehicles - such as a boat or RV, or downsizing your car or home.

Declaring bankruptcy could cause you to forcibly lose the things that are nearest and dearest to you, so the more items you can part with to make some money back - the better off you'll be in the end.

These are just a few of the steps you can take to avoid bankruptcy. Remember that bankruptcy can haunt your credit report for years to come. The steps you take now can help you secure your financial future.

The More You Know,

Judy O'

The Fundamentals of Real Estate Investing

With the volatile stock market raging like a bucking bronco, many people have turned to real estate investing as a way to make extra money during uncertain economic times.

There's no doubt that if you listen to the late-night real estate infomercials, you'll believe that real estate investing is easy money. The fact is - nothing is ever "easy money". Getting started in real estate investing isn't difficult though - and you can make money on it. You just have to keep these following tips in mind before you start.

1. Real estate investing does not make more money than the stock market. It might seem like it does "right now", but in keeping pace with inflation and compound interest, real estate investments just don't give you the same kind of wealth.

If you like the fast-paced thrill of buying and selling on Wall Street and playing the numbers game, real estate investing isn't for you. On the other hand, if you don't mind watching the housing trends, buying low and selling high, or fixing up houses to resell - real estate investing may be an ideal path for you.

2. Look for mentors you can work with - Having a knowledgeable real estate agent who knows the area, and a real estate attorney who can write up all the necessary contracts and paperwork, are two invaluable people to your investment-seeking team. It also helps to find a reliable mortgage broker you can create a relationship with to help seal the deals.

3. Buying the first property is often the hardest - What some investors do is buy a multi-family unit, live in one apartment and rent the others, generating income without the added expense of their own rent. The real estate agent (or agents) you work with can also help you spot a great deal and know when to move on. Once your first property builds up enough cash flow, you use that income to purchase another property and continue the cycle again.

4. Should you buy a course? There are lots of excellent real estate investing courses out there. There are also a lot of hyped up salesmen promising you millions in your sleep. If you feel like learning real estate investing yourself is too difficult or overwhelming, having a mentor to follow will help. You can read about the courses we recommend by following this blog.

In the end real estate investing can be a lucrative career with lots of potential - if it's done right. The key is to align yourself with people "in the field" who are knowledgeable, dependable and willing to answer your questions as well as those of your prospects.

Being able to learn from the pros, knowing your local area and building the background needed to spot a good deal and jump on it are the crucial fundamentals of top real estate investors. Learn these skills and your options for profiting will be wide open.

The More You Know,

Judy O'

How to Reduce or Eliminate Your Debt - Permanently!

Everyone dreams of living the debt free life. But enjoying a life without debt is more than just pure luck or amazing wealth. You too can live debt-free by making just a few easy changes to your financial lifestyle.

1. Consider Credit Card Offers - Carefully. All those "pre-approved" offers in the mail might seem like a mere annoyance, but some of them may provide you with a low rate to entice you to transfer.

Read each one carefully and consider the length of the rate, and whether its fixed or variable. You may be able to shift your balance over to a lower-rate card and get it paid off sooner.

When you get a new card, get rid of the old one. You don't want a dozen credit cards with balances creeping up on you every month! And by transferring your balances to a lower rate card, you may be able to save a substantial amount of money in the process.

Don't forget to look at the "card fee" too. Some cards will charge you a yearly fee of $20 in exchange for half of the interest rate of what you'd pay with a no-fee card!

2. Pay with Cash - One of the biggest drawbacks of using credit cards is the urge to buy something when you're out shopping - thinking you'll simply pay it off at the end of the month. This is the easiest and fastest way to built up excess debt.

To avoid this temptation, only pay with cash. If you can't afford it - don't buy it. Having only cash on hand makes you consider your purchases more thoughtfully and carefully.

3. Budget and Cut - Make a realistic list of your monthly expenses to see where your hard-earned money is going. You may be surprised at how much you're paying for things like your cell phone bill and cable TV subscription.

It's difficult to make cutbacks and sacrifices - so one idea is to create a "money jar" for the excess expenses in your life. Each month when the bills are paid, set aside a certain percentage for the money jar, and put the rest toward eliminating your debt. Once the money in the jar is gone - that's it. You'll be surprised to see just how much you can save with this method!

4. Put an End to Late Fees - One of the most insignificant things you may not even consider are late fees. A day here, a day there - no big deal, right? But in the fine print on some of those credit cards, you may find that the late fee is as much as 15% or more on top of what you already owe! Plus carelessly forgetting to pay on time can also put a strike against you on your credit report.

Make a concentrated effort to pay on time, every time. Paying more than the minimum will also help discourage the debt from piling up. But you have to take action. Start today and you'll see that in no time at all, you'll be free from the grip of debt - for good!

The More You Know,

Judy O'

Best Selling Financial Secrets Revealed!

Some of the most closely-guarded financial secrets are also some of the insider clues you can use to pay off debt and live a comfortable, secure life - no matter how much you may or how much you owe.

Entire books have been written just to scratch the surface on one particular "secret" - but we're revealing the best ones for free, right now.

1. Compound Interest - People who don't understand it, pay it. People who do understand it, can make an astounding amount of money from it. Compound interest is money that is paid on top of the principal - creating a "new" principle amount which then earns additional interest.

At first this may not seem like much, and the percentage of compound interest compared to "simple interest" is much lower - but over time, that small percentage can add up to a surprisingly large amount. Look for bank offers that advertise "interest compounded daily". It makes a considerable difference in the long run.

2. If you've been a longtime customer at a specific bank, credit card company or credit union, and you get hit with a fee for a minor slip-up, ask if you can have the charge waived. You may be surprised to find that many financial institutions are very accommodating to longtime customers if they only ask.

The same applies to getting a lower interest rate on your credit card or getting an annual fee waived. Inquire and see what it can do for you - you may end up paying considerably less in interest charges just by asking a simple question!

3. Bypass the Broker - Avoid paying high brokerage fees by buying government bonds, treasury notes or bills directly. The minimum investment for bonds and 5-10 year notes is $1,000. For notes with shorter maturity rates, the cost is $5,000 and bills are $10,000 (at minimum). The nearest branch of the Federal Reserve Bank can help set you up with a Treasury Direct account - saving hundreds or even thousands of dollars in broker commissions on unsafe or unsecure products you don't need.

4. Look for Bargain Banks - With such stiff competition between them, many banks offer no-fee checking and free ATM withdrawals. Use this to your advantage to avoid high monthly or per-transaction fees. Sometimes choosing to get your statement electronically can also reduce banking fees.

Remember, some of the best discounts and savings can be had just by asking or reading the fine print. What you learn could save you a bundle and keep you from paying questionable fees for services you don't remember signing up for.

These are just a few of the tips you can keep in mind to help you save more, invest wisely and start making your money work for you.
When you take the time to fully understand the service being offered, you put yourself in a much better financial position than those who don't - and that's advice you can bank on!

The More You Know,

Judy O'

How To Avoid Real Estate Foreclosure In Tough Economic Times...Before It's Too Late

If you're one of the millions of people whose homes have suddenly gone into foreclosure - it's hard not to panic. But you have options to stop foreclosure and protect your home.

Here are the steps you can take to avoid foreclosure. The sooner you act, the sooner you'll be able to keep from losing your home!

The first step in putting a home into foreclosure comes from the lender. The lender files a Notice of Default when you have failed to make your payments on time - or at all.

Once this happens, your options are limited, so it's best to work with your lender before they file the notice. Ignoring your lender's calls, letters or being too embarrassed to speak up can do more harm than good. Explain your situation to the lender and they may offer to work with you in one of the following ways:

1. Offering Forbearance - Forbearance is when the lender agrees to give you time to make up the payments. This is especially useful if outside circumstances, such as a lost job, medical emergency, divorce or other stressful situations have caused you to fall behind.

2. Creating a Repayment Plan - Some lenders will let you add an extra amount - say $100 or more - to each payment to make up the difference. The lender may even agree to lower the interest rate or even freeze it if it's adjustable to help make payments easier on you.

3. Refinance at a Lower Rate - The lender may increase your loan balance to include the back payments. Refinancing at a lower rate is ideal at a time when your adjustable rate mortgage (ARM) is high, and fixed rates are low.

If the lender is unwilling or unable to work with you on creating a payment plan or making the payments more flexible to meet your current situation, you still have other options.

For example, you could sell your home at its current market value. Consider a real estate agent carefully and ask for a comparable market analysis to find the selling price of your home. If your home's value is less than what you paid for it, you may be able to do a short sale.

A short sale happens when the lender is willing to accept less than the amount due. This kind of "debt forgiveness" is rare - especially when it makes more sense to foreclose, and the IRS could consider the amount you've been "forgiven" as income - so consult a CPA and a lawyer before considering a short sale.

If you're not sure where to turn during these troubling times, you may want to call a Housing Counseling agency. These non-profit organizations can help you restructure your bills and payments to make paying your mortgage easier and more straightforward so that you avoid foreclosure.

By following any one of these tips, you should be able to not only avoid foreclosure, but create a manageable budget and keep you home without any desperate measures affecting your future credit score.

That’s all for now. Hope this helps.

The More You Know,

Judy O'

It's Going To Be Fine In 09...If You Know What's Best For You!

You may think you know what's best for you; but, the question is, Do THEY?

(Do Financial Gurus Really Know What's Best for You?)

There's a lot of talk lately on the current financial situation and the economic ups and downs that come along with it. During times like these, many people turn to financial "gurus" to help them make sense (and cents!) of the situation.

But do the financial gurus really know what's best for you? The answer is yes - but only if you know where to look, and who to trust.

Because the fact is, the financial gurus who know what they're doing don't parade and promote themselves as "gurus". They simply work together with you to create a plan that makes sense, offer their recommendations and inform you of market trends and help you decide accordingly.

When plans like this work, people naturally proclaim that the person is a "guru" and he or she gets catapulted into near superstar-status. But the truth is, what it all comes down to is that these people have solid, reliable knowledge and are willing to share their insights to help you benefit and create a long-term financial plan you can live with.

Many financial gurus have written books or developed courses. If the advice you're getting, or the column you're reading makes sense and you agree with the "guru's" insights, it may be worth picking up their books or their course to learn more. Obviously you shouldn't have to spend your life savings to get straight-shooting financial advice, but at the same time, it pays to pay for good information.

The true financial experts likely draw from several financial areas to provide you with well-rounded advice. Avoid those who emphasize only one particular method for creating wealth (which is always their method!).

In addition, real financial "gurus" will give you straightforward steps to follow - not beat around the bush with theory and concepts. Be skeptical if all of the person's advice sounds repetitive and they throw in questionable or unethical methods under the guise of legitimate wealth. Some of the best advice in good old-fashioned saving will still ring true today.

Lastly, don't be afraid to check references. If all you've got are a few initials and a city name from a late-night infomercial, you have every right to be skeptical. Real financial experts won't be afraid to post testimonials with contact information where and when they can (keeping their clients' privacy in mind, of course!)

The fact is, the real professionals genuinely want you to get out of debt, pay off your credit cards, pay off your mortgage and enjoy a life free of financial worries - and they don't hesitate to offer you actionable steps to make that happen.

In the end, only you know what's best for your financial situation - but there's no reason not to have the help of a trusted, informed advisor to guide you. Learn from them and rely on their knowledge to help you make a more informed decision and then take the necessary steps to help yourself. That's the kind of good advice that costs you nothing but pays you back!

So, be careful about who you choose to listen to. As to whether or not they're telling the truth, I'll leave it up to you to decide.


The More You Know,

Judy O'