The Black Card - This is NOT an Advertisement

The Black Card – This is NOT an advertisement
Enrage or Motivated

So. I paid off the balance on 2 cars, all my credit cards and all those of my wife’s. Yippee. And recently we were pre approved for two new motor vehicles with interest rates of 3.25%. Wow!! Woe is me, the high interest we were paying for years because of our average credit rating. But that’s not the nature of my story.

After paying off all those credit cards, our credit rating shot straight to top score. We have been flooded with credit card applications. I open about 1 in 5 of those mailers, only to become enraged at the terms of every single mailer. It only confirms my resolve that banks are extremely greedy, self serving institutions, with a mentality of take and raping all they can.

Anyway, one of those mailers was an “Invitation.” The envelope was a flat back color. The return address read only the words, “BLACK CARD_TM”. So yes, I opened it and scanned it for the interest rates and other terms. The paper inside was in large print, on heavy expensive paper. There was a large off white return envelope and half fold large credit card with the application printed in even larger print inside. Kind of looked like a wedding invitation. The front off white card said in the first line, “By invitation, you have been pre-qualified to receive the exclusive Visa Black Card. Limited to only 1% of US residents.” Now, everyone knows that the 1% they imply, are the 1% richest people in the country. Trust me when I say, that is not me.

I continued to analyze the, “Invitation_TM”. It lists other terms & features. The interest rate was only a common, 14.99%, half as much as Discover card’s 29.99%. But hay, Discover card give you cash back. The Black Cards annual fee was $495, plus $195 for each authorized user. Ouch!

You might think that I would be more enraged by the annual fee, which, by its high number, is membership excluding. But I wasn’t. I’m use to excluding memberships like those of many golf courses. It was the implication, that unless my wealth fell into that of the richest Americans, “the 1%”, I would be excluded from membership to the card.

I was enraged enough to write this article. Maybe I should feel motivated?

11-3-11

Six Ways Retieries Can Beat Inflation - From Forbes September 2010

Let me list the ways so you can glean the info contained afterwords more quickly than I did through Forbes on-line, and between all of the pages and pages of ads.

1. Buy an annuity with an inflation rider
2. Get a fixed annual bump-up
3. Buy in stages (Like $150K @ 65 yrs old and another $150K @ 70 yrs olds)
4. Buy stocks instead
5. Buy a government annuity
6. Live with it (Use the money now @ younger age)

All Greek to the common man. BUT, you won't save a dime more unless you do something more than you are now. Take only one action step and you might enjoy some benefits. Don't believe what you read here, simply do your own research for a better comfort level. However, don't spend all your time researching and never taking any action.

In the next blog I will try and link definitions like

From FORBES September 15, 2010. By William Baldwin

"There's no perfect way to deal with the rising cost of living," says William Baldwin. But here are some options.

Let's say you have just retired and want to invest your savings to produce steady income. You could buy immediate annuities, which provide a nice payout since a lot of the money you get in the monthly checks is a return of principal. Absent special provisions, however, annuities die when you do. But while you are alive they pay well. Thus, they protect you from the risk of outliving your savings.

If you are a 70-year-old male, for example, you can get $630 a month for life from insurer New York Life by plunking down $100,000. That's a 7.6% annual payout, a lot more than you could get from other relatively safe investments, like bank CDs and U.S. Treasury bonds.

But annuities come with two hazards. One is that an insurer might go bust. You can protect yourself against the worst by buying only from insurers with high financial ratings and by spreading your capital around. Instead of buying one annuity for $300,000, you could buy three $100,000 annuities from different companies. It's unlikely that all three will go the way of AIG.

1. Buy an annuity with an inflation rider.

By accepting a lower initial payout, you can get a promise from the insurer to raise your check to keep up with the Consumer Price Index.

Advantage: You don't have to guess how high inflation will be.

Disadvantage: The rider may be hard to find--and is going to cost you a pretty penny. That's because the insurer doesn't know how high inflation will be, either, and has no cheap way to cover its bets. Note that the inflation-adjusted versions of U.S. Treasury bonds (called TIPs) carry a tiny 1% real yield.

2. Get a fixed annual bump-up.

With an automatic 2% annual increment (irrespective of what happens to the CPI), New York Life's payout for the 70-year-old male investing $100,000 drops from $630 to $533.

Advantage: Because the insurer knows in advance what its payouts will be, it can fund them by investing in conventional (not inflation-adjusted) bonds. Those bonds have much better yields than TIPs, so the insurer doesn't have to be so chintzy with its payouts.

Disadvantage: You might experience worse inflation than the 2% (or whatever you choose) that is built into your annuity policy.

3. Buy in stages.

Instead of putting $300,000 into annuities at age 65, you could do $150,000 now, then buy more at age 70, says Martha Kendler, who oversees annuity sales at Northwestern Mutual. If inflation has resurfaced by then, interest rates will be higher and you will get a better monthly return as a result. (Remember, the insurance company is covering its obligations by investing your cash in fixed-income assets like corporate bonds.) Even without any rise in interest rates, the monthly payout is going to be better for longevity reasons. That's because 70-year-olds, on average, don't have as many years left to collect as 65-year-olds do.

Advantages: You can invest the $150,000 for five years, and presumably will have more than that sum in 2015 to use on annuity purchases; you get a higher monthly payout per dollar invested, because you're older; and you get a peek at the Grim Reaper's plans for you. If your health is very poor at age 70 you just don't buy the second annuity.

Disadvantage: You've missed five years of monthly payouts.

4. Buy stocks instead.

The S&P 500 stock index yields about 2%. Stocks have a history of enjoying dividend hikes that, over a long period, more than keep up with inflation. Indeed, without being considered a spendthrift you could both cash the dividend checks and also sell off 1% or 2% of your portfolio every year to help pay the rent. It's likely that you could continue that spending behavior indefinitely without depleting your capital.

Advantage: If you can get by on just the dividends plus a 2% withdrawal of capital, you are likely to leave a nice pot for your heirs.

Disadvantages: There are two disadvantages. One is risk. Dividends get cut in a recession. And what if we get a 25-year bear market in stocks? What if you own a disproportionate amount of the next Enron or AIG? The other problem is that you cannot match the 6% to 8% payout that retirees can get on annuities. Take 7% a year out of a stock portfolio and there is a significant chance that, by time you turn 80, you will be sleeping on the sidewalk.

5. Buy a government annuity.

Here's the deal. You start collecting Social Security at age 62 (we're assuming you are out of the workforce). If you're still healthy at 70, you repay all your Social Security checks to that point and reapply. That entitles you to a much higher lifetime benefit, and this benefit is adjusted for inflation. "In effect you are buying an inflation-protected annuity from the government," explains Matthew McGrath, a managing partner at Evensky & Katz, Florida.

Advantage: The terms are very good. Each dollar spent at age 70 buys a much bigger increment in monthly benefits than you could get from a commercial insurer.

Disadvantage: The terms are too good. The SSA is moving to limit this option.

6. Live with it.

Plan on a fixed monthly income during retirement. Your purchasing power will gradually decline (assuming we don't get deflation). Maybe that's something you can stand. It would mean more traveling at age 65 than at age 75.

Advantage: You go to Europe when you are still young enough to enjoy it.

Disadvantage: Other costs, like medical costs, may go up a lot as you age.

Take action now and click here.

Teens and Credit Cards - Parents Too

Parents could learn allot from the following information written and meant for teens.

Credit Cards are convenient, easy to use, and provide the ability to buy now and pay later. But using a credit card means you have been loaned money to make your purchase and that money has to be repaid. If used appropriately, credit cards can help you establish good credit, which will provide you access to financial resources for major purchases in the future.

A few things to remember in order to build good credit:

• Manage your debt.
• Keep your debt levels manageable.
• Keep track of your purchases and avoid large impulse buys.
• Don’t use a cash advance to pay for normal, daily expenses or to make a payment on another card.
• Never borrow more than 20% of your annual net income.
• Never let your monthly card payments be more than 10% of your monthly net income.

• Choose your card carefully.
• Don’t choose a card just because there’s no annual fee or to get a free T-shirt.
• Shop around for a card that suits your borrowing habits.
• If you’re able to pay in full each month, choose a card that offers a rewards program.
• If you expect to carry a balance from month to month, which means you’ll be charged interest, look for a card with a generous ‘grace period’ (the amount of time before your payments are due) or a card with a low interest rate.
• Read the card agreement carefully and understand the grace period, annual percentage rate (APR), all fees and charges, repayment terms and credit limit (the maximum amount you can borrow).

• To avoid or minimize interest charges, always pay as much as you can.
• Pay your bill in full each month regardless of the ‘minimum amount due’ listed on your bill. This will avoid unnecessary finance charges and/or other fees, and improve your credit score.
• By paying the minimum payment due each month, it will take longer to repay the debt and cost you more in interest charges. The amount you pay in interest and fees could exceed your original purchase amount.

• Pay your bill on time.
• This will help you avoid a late fee of about $35 or more each month.
• One late payment may cause the interest rate on your card to default to a significantly higher rate.
• Continued late payments may be reported to the 3 major credit bureaus as a sign that you have problems managing your finances. It can also affect you when you apply for a job, housing or a future loan.
• If your credit rating gets downgraded, your card company could raise your interest rate, reduce your credit limit or even cancel your card.

From First Bank of Ohio

Teens and Debit Cards

Are you tired of having to run to the ATM every time your children need money? Do you want to provide some financial education to help your kids be more prepared when they are on their own? Or do you just want to ensure that your children have access to cash in an emergency situation? First Bank can help. Parents can open a joint checking account with children under the age of 21 that offers the child their own debit card – their First Card.

Our First Card works just like our standard First Bank Debit Card, with some added benefits:

• Daily limits are lower to align more closely with your childs spending habits.
• First Card is a MasterCard® debit card, so it is accepted anywhere MasterCard Debit is accepted.
• First Card can be used with a PIN to get cash back at participating merchants and at more than 900,000 ATMs worldwide. There’s no fee to use a First Bank ATM.
• And as the joint owner of the checking account, you can monitor the account and card usage online and even request that an email notify you if/when the account balance falls below a threshold you determine.
• If your child’s First Card is lost or stolen, report it immediately to First Bank and benefit from MasterCard’s zero liability promise.

MasterCard® SecureCode™ provides added peace of mind when making purchases online. Just like using a PIN at the ATM, a private code is required when using a First Card at participating online merchants. Once the cardholder’s identity is confirmed by First Bank, the purchase is complete. It's that fast, easy, and that much more secure! From First Bank of Ohio, Tiffin, Ohio

Teens & Money

People are more likely to make smart decisions that affect their finances and future if they understand how to manage and save money. Saving money may not be as much fun as spending it, but it’s still important to do.

Since teens are becoming more responsible for handling money and making decisions from everything to everyday purchases to paying for college or buying a car, it’s important that they understand how to make good decisions about their money.

The following is intended to assist parents in educating their teens on the basics of responsible money management. These sections provide information on budgeting, college costs, buying a car and more!

Financial Planning:

Financial planning is the process of defining goals, developing an action plan to reach those goals, and then putting that plan in action. It includes all aspects of your money: spending, credit, savings, and investments. With good financial planning you can live a better, more secure, life than someone without good financial planning that has to live pay period to pay period.
Some things you can do to help with financial planning are to figure out a budget and save money.

Next Blog, "Figuring Out Budget"

I'm Back

I've been off line for time trying to regain my health.

Will resume posting blogs.

Top things to Do In January to Start Your Year Off Right

Be specific with each goal.

1.) Contact your human resources department and make sure they have your home mailing address correct. They'll need to send you your W-2 for the tax year.

2.) Exercise at least 30 minutes each day.

3.) Update your beneficiaries for life insurance policies.

4.) Set your health goals for 2010.

5.) Set your financial goals for 2010.

6.) Schedule six month dental check-up.

7.) Schedule your 2010 preventive medical exams.

Get Out of Debit Quickly - A Step By Step Process

Get Out of Debit Faster With a Step By Step Plan - Do you think following any of the steps below will make you uncomfortable? GOOD. It should. Get over it. Get through it and begin to enjoy life for the first time in a very long time. Consider the alternative. You get paid on Friday and by Wednesday its all gone and there's a heap of bills to pay, and you still need to feed the kids and pay for transportation to work. You do this week after week, year after year, decade after decade. It makes you feel extremely uncomfortable, and causes extreme stress on your family and relationships.

1.) Cut your credit card and establish budget:
a.) Cut them, burn them, melt them, lock them up in a safe deposit box.
b.) Live on a cash bases.
c.) Keep a daily log of everything you spend money on.
1.) Categorize expense benchmarks to the following percentages:
a.) 10% Savings
b.) 15% Transportation
c.) 15% Debit
e.) 25% Life
f.) 35% Housing

2.) Reduce your interest rates:
a.) Call each of your credit card companies.
b.) Negotiate lower interest rates.
c.) If the first employee says "no," ask to speak with the supervisor, or a persons with the authority to change your rate.

3.) Bring more cash into the house:
a.) Feed and walk a neighbors dog
b.) Baby-sit
c.) Offer to paint someone's the inside of someone's garage or seal cinder block basement walls, shovel snow, tooter, take surveys, etc. Please comment with more ideas to make extra money.

4.) Prioritize your life. Ask your self some tough questions. Are you spending much of your money on college student loans for the children? How long do they have to pay that loan off? How long do you have to live? Have they searched high and low for every available scholarship? Have they applied for as many as possible? Are you trying to pay off their loans, while your credit drops lower and lower, and your debit gets larger and larger? "Tough Luv" may dictate that you discontinue (possibly for 1 to 2 years) paying on their loans, and redirect those payments towards eliminating your own debit sooner. Put together a 20 month plan, cut all spending that is NOT critical. Don't forget to set small reachable goals and reward yourself in some way. Let's face it, we all need to have some fun.

2 of 8 Ways to Ensure Financial Security

Eight ways you can ensure financial security.

Kiplinger wrote, that many of us reexamined what really matters in our lives. Things that seemed so important before the tragedy of 911 now pale in comparison. It says, “financial security may not have seemed a high priority at that time, but it is the cornerstone of a well led life that makes so many other good things possible for your family. Kiplinger gives eight for your family.

Let's blog on 2 of them:

1. Invest In Yourself – Your earning power is the most valuable asset you’ll ever own. Keep your earning power growing through continuous education, training and personal growth.

2. Protect Yourself and Your Loved Ones – Before you attempt to acquire ANY financial assets, make sure you have enough insurance against life’s big risks: serious illness, disability, and even death. My personal experience with this is that it’s so confusing. Trusting someone to give you sound advice on life and other insurance seems impossible.

Mike Silberstien, Northwestern Mutual told me once, “You can only buy insurance when you don’t need it. And the best time to buy it is when you least need it – when you are youngest and healthiest.”

A younger healthy person can get more than five times the coverage than a slightly older smoker with fair to poor health, and pay the same monthly premium. Save yourself a bundle and get protected at an early age.

Kiplinger’s Personal Finance and The Kiplinger Letter.

Family, Freinds, Life, Living

Today, rather than press on with the work that really needed to be done, I thought I would simply visit people within our workplace and listen to what they had to say, ask a question and then listen some more.

I continue to so very impressed with the quality of folks we have working with us. More so, I found that family, friends, life and living are 1st and foremost in their lives. It makes them feel good to give, and give, and give without any expectations in return.

Some are making gains and advances in their personal lives and mental health, and it shows up BIG time. Still others made the lives of others in underdeveloped counties better, and brought back a renewed appreciation for life and purpose here in the US.

I am so honored to be invited to be part of their lives through their stories. Their stories help me lead more effectively.

What Good is Wealth Without Health??

What Good is Wealth Without Health?

A wealthy person has said and maintains, “There are more important things than money, but everything that is important in life seems to be affected by money.”

New Spin on Introduction – If ya don’t have money, sometimes you can’t afford good health. Recently an employee was showing obvious signs of distress (breathing, extremely high blood pressure, etc.) and looked very sick. I believe she ended up being carted away by the ambulance. She couldn’t afford the co-pay for medications and therefore couldn’t buy the drugs necessary to maintain her health.

Correction - Last month I wrote that required expenses increased significantly in just one year to $320/month. Based on my conversations with several people, I need to restate that number to $440. Sorry, but that’s just the way it is. Dr. Phil might say, that's just “gotta” be that way.

Wealth Tip - A friend that is employed by a large successful retirement fund managing accounts says, people should not spend/invest money into a retirement fund until they have ELIMINATED ALL OF THEIR DEBT. My friend emphasized ALL and said firmly, “that includes your home.” But explained that what ever I do, I should always run the numbers. That is, using a compound interest chart, plug in what you put in the fund while trying to also pay for and pay down debt, compared to what you could pay in without all that debt in a shorter period of time.

The answer is in your hands 26 times a year - Last month I wrote that since we just gotta make more money, and another job or two is not answer. I suggested that the answer might just be in your hands 26 times a year. A few readers were anxious to know what the answer might be. One guessed “Pepsi.” I’m thinking he’s a Pepsi drinker. The answer iisssss - your paycheck. Yes – your pay check.

Anyone that is an employee and that has taxes taken out of their pay checks can reduce their tax liability (the amount of taxes owed) by subtracting business expenses. After establishing certain real expenses, change the “number of exemptions” on your W-4 in the payroll department of your employer. Employees can claim nearly the same business expenses as big corporations. However this assumes that you have your own businesses, and that you work at that business. You might even make more money.

So between the increased number of (business) exemptions on your W-4, regardless of whether you make a little extra money from that small business, you have eliminated the gap between the increased cost of living $440 and what you might otherwise make through your employer.

Warning – Many employees already use increases of exemptions on their W-4’s throughout the year to receive more money on their paychecks. They don’t have a business but they do have a home and mortgage interest paid. They use this extra money on their paychecks to “get caught up on monthly bills like gas and water,” or they pay for vacations, etc., rather than to reduce overall long term debt and to create wealth.

Tax Refunds - Here We Go Again

Well most of the tax year is now behind us. Many will get a tax refund in early 2009. A few will need to pay the IRS. How well did you do?

According to a recent IRS Newsroom article, federal tax refunds totaled $202 billion in 2003. Nearly 100 million taxpayers or 3 out 4 taxpayers got refunds. The average refund was about $2000.

This refund comes from money you overpaid the IRS all year long, and is based on how much you tell your employer to withhold from your paycheck each week. Taxpayers had an average of $40 a week too much withheld.

The article says that taxpayers that pay too much throughout the year want their tax refund, “ASAP, yesterday, not one day after ASAP.” The article says it’s ironic that the same people who could have kept their money when they had it – but chose not to – are such hurry to get it back?

And many repeat this process year after year after year, the article says. Some say they use the extra tax withholding as a “forced savings” method. But the IRS says, the article syas the IRS doesn’t pay interest and that these people would be better off keeping the money each week and either investing it or eliminating debit.

that paid too much want

Acai Berry Shocker: ABC, Fox News, CNN, USA Today

Be careful of What you read and hear. People, News papers and TV often say and do things to get your attention. They may affect your decisions. Ba able to discern right from wrong, and do your own research and draw your own conclusions. Even if a so called expert, Rabbi, preacher, or politician says its so.

I read the following headline and immediately thought Acai Berry must have been another hokes. Headline: "Acai Berry Shocker: ABC, Fox News, CNN, USA Today
Will Acai Beerry Really Help Youu Lose Fat?"

Turns out the study reveled the following:

"Week Four: By week four I could absolutely say that I was shocked by the results of these products. Everyone here at the office couldn’t believe it either. I actually even lost another 3 lbs of body fat which helped me finally get down to my ideal dress size. I can now see first-hand why so many people are raving about these products. The results speak for themselves. And because of all the additional health benefits, I definitely plan to continue taking the Certified Acai supplement regularly."

Creating Extra Money

Tip of the Month – Use dept elimination software to calculate how much you should pay on each credit card (bill) each month and systematically eliminate everything from the high interest “bad debt” to the lower interest rate debt in a very short period of time while using the same amount of money you now spend each month on those same bills. What’s left? Lots and lots of cash.

Do something different

“A day will never be more than you make of it.” By Josh Hinds “If your day consists of doing the same things you did yesterday, last month, and last year financially, and you are no farther ahead than you were then, do something different.” JC

Congratulations to one of our readers. She made a bold move recently and started her own small business. She did something different, and if she follows the tax codes she may save between $3000 and 10,000 in taxes this year alone.

Do something different and prepare your own “net worth statement.” According CNN/Money, “It’s hard to figure out how to get somewhere if you don’t know where you are.” Regardless of whether financial net worth is negative or in the positive, it is where you need to start build from that point on. Net worth means that have calculate all of your expenses (liabilities), and subtract those dollar amounts from your assets (things of value including savings, retirement, houses and car values, etc. The sum is your newt worth or owner’s equity. Although, unless you need to for insurance purposes, you shouldn’t include jewels and furs.

The average net worth by age is about $900 for 25 year olds and under; $15,000 for 25 to 34 year olds; $95,250 for 35 to 44 year olds; and $163,334 for 45 to 54 year olds. (source: CNN/Money)

The average net worth by income is: Under $25K (x 1000) is $12,500; $25K-$49,999 is $75,000; and $50K-$74,999 is $168,450.

“People fail because they don’t start, and they don’t start because they’re afraid to fail.”

Kids at mall on black Friday 2009>>

A coworker got me a book for Christmas, entitled “The Most Important Thing I Know,” a compilation of handwritten quick quotes written by such notables as Colin Powell, Stephen Covey, Laura Schessinger, Magic Johnson, and many more.

Martina Navratilola, a tennis star wrote that Katharine Hepburn once told her, “It’s not what you do in life, it’s what you finish!” Ms. Navratilova continues writing, “But many people don’t even start, because they are afraid of failure.” To me she says, “The only failure is when you don’t even try. So set your path, be brave, do your best and smile, because you are doing all of the above.”

Well what do you know. Even Ms. Navratilova recognizes what I’ve heard, read and written over and over and over again. People fail because they don’t start, and they don’t start because they’re afraid to fail.

Spend More Time Searching for Scholarships

Spend as much time searching for scholarships that match your profile, as you would working a part time job! The returns could make your parents' salary look insignificant. Trying to get this concept through to college bound students is like get a square peg through a round hole. Still we must try and get them to understand. Anything is better than graduating with student loans. Be aware that there are many scholarship scams.

Try a SallieMae scholarship search and the parent and college child might ultimately be better off after graduating with less debt. Still, there might be a need for some short term cash, while at the same time building credit. Try Idol White