Monday, February 26, 2007

What Is Renter's Insurance Really All About?

Renter’s insurance is protection intended for anyone who leases an apartment, home or other live-in dwelling. Buying renter’s insurance can protect you against the hazard of fire, theft, windstorms, falling objects, smoke, and vandalism. Another of import facet of renter’ insurance is that it protects you against liability in the improbable event that person rans into injury or injury in your home.

While it is true that your landlord more than likely throws insurance on your abode his insurance normally only covers the existent edifice you dwell in. The load of replacing your personal property lies on you. The landlord’s insurance definitely will not cover any legal duty for injury or damage to a invitee or their property. In many cases rental insurance may even supply for the cost of a legal defense.

It is also of import to do certain you are aware of the different types of coverage and that you supply yourself with adequate protection. Personal property coverage protects the assets in your home such as as your piece of furniture and clothing. It also supplies protection for those things you may have got with you while traveling or away from home.

Loss of usage coverage pays for life disbursals when an insured loss forestalls you from habitation of your home. This includes nutrient and shelter for the continuance of clip while your home is being repaired or replaced for up to two years.

Inflation coverage routinely augments the amount of your insurance coverage as cost of life disbursals increase. Personal liability coverage grants payment for legal accountability according to the bounds of your individual policy for damages based on bodily injury or property damage, which are incurred in your home.

Medical payments to others coverage pays the medical disbursals for visitants who are accidentally injured while a invitee on your premises. This coverage makes not pay out to you or your household members who dwell with you.

When buying renter’s insurance you will need to do a determination as to whether to see your ownerships based on their existent cash value or their substitution value. Actual cash value payouts will be based on how much your property is deserving station depreciation, meaning if you lose a 10-year-old computer to weave or violent storm damage you will be paid the cost to replace the same 10-year-old computer. Substitution coverage pays a tax return without consideration of depreciation.

The best thing about renter’s insurance is that for the amount of protection it supplies it is still relatively cheap and if you purchase your renter’s insurance from the same company that sees your automobile you may be eligible for a of import discount.

As with any insurance that you purchase it is important to do certain you understand exactly what may or may not be covered by your renter’s insurance policy. Some losings that may not be covered include but are not limited to deluge or belowground H2O damage, earthquake, clay or landslide damage or even atomic hazards. Although your renter’s insurance may not cover these catastrophes it is highly likely that optional or further coverage may be available for an further premium.

Saturday, February 24, 2007

What Is Permanent Life Insurance?

Unlike term life insurance, lasting insurance policies such as as universal life, variable universal life and whole life supply long-term financial protection. This type of insurance will cover you for the continuance of your life and continued on clip insurance premium payments. Permanent policies supply you with not only a death benefit but in some states of affairs a cash savings. It is because of these extra fringe benefits that lasting life insurance be givens to be more than expensive than term life.

Some characteristics of lasting life insurance also include degree insurance premiums so you desire to purchase this type of insurance while you are considerably immature and in good health. This volition aid lessening the cost of your premiums.

Permanent policies can also bring forth dividends. You earn dividends when your insurance premiums turn out to be higher than your existent life insurance costs. If this is the lawsuit your insurance company may choose to pay you the difference in the word form of a dividend. Because it is hard in predicting your existent costs, dividends are not guaranteed.

Guaranteed cash values are another plus to buying lasting life insurance. Some of the cash you pay into your policy may collect as a guaranteed cash value. This agency if you call off your policy these cash values go yours. Or you could simply borrow against them as a policy loan while your policy is still in effect. The existent measure of your guaranteed cash value is dependent upon the sort of policy you purchased, its size and the length of clip you’ve had it. When borrowing against your cash value you must stay cognizant of the fact that the amount you borrow will diminish your death benefit and your guaranteed cash value.

Although lasting life insurance is more than expensive than term life insurance there are methods of getting the most included in your policy for the least amount of money. Don’t just purchase the first policy you are offered, as with anything else you purchase store around for the best rates. Purchase an appropriate amount of life insurance; don’t bargain an excessive amount if not absolutely necessary. As declared earlier bargain insurance while you are immature and in optimal health, don’t delay until you happen out you have got a medical status and suddenly make up one's mind you are not unbeatable and may need to purchase life insurance after all. If you smoke quit, if you imbibe make so in moderation. If you are fleshy start exercising and ticker your diet. If your employer offers life insurance, take it. These grouping insurance programs often are much cheaper than individual policies and in most cases you may not have got to submit to a physical wellness screening.

Wednesday, February 21, 2007

Understanding Fixed Income Securities: Expectations

I’ve come to the conclusion that the Stock Market is an easier medium for investors to understand (i.e., to form behavioral expectations about) than the Fixed Income Market. As unlikely as this sounds, experience proves it, irrefutably. Few investors grow to love volatility as I do, but most expect it in the Market Value of their equity positions. When dealing with Fixed Income Securities however, neither they nor their advisors are comfortable with any downward movement at all. Most won’t consider taking profits when prices increase, but will rush in to accept losses when prices fall.

Theoretically, Fixed Income Securities should be the ultimate Buy and Hold; their primary purpose is income generation, and return of principal is typically a contractual obligation. I like to add some seasoning to this bland diet, through profit taking whenever possible, but losses are almost never an acceptable, or necessary, menu item. Still, Wall Street pumps out products and Investment Experts rationalize strategies that cloud the simple rules governing the behavior of what should be an investor’s retirement blankie. I shake my head in disbelief, constantly. The investment gods have spoken: “The market price of Fixed Income Securities shall vary inversely with Interest Rates, both actual and anticipated… and it is good.”

It’s OK, it’s natural, it just doesn’t matter, I say to disbelieving audiences everywhere. You have to understand how these securities react to interest rate expectations and take advantage of it. There’s no need to hedge against it, or to cry about it. It’s simply the nature of things. This is the first of three successive articles I’ll be writing about Fixed Income Investing. If I don’t improve your comfort level with this effort, perhaps the next one will strike the proper chord.

There are several reasons why investors have invalid expectations about their Fixed Income investments: (1) They don’t experience this type of investing until retirement planning time and they view all securities with an eye on Market Value, as they have been programmed to do by Wall Street. (2) The combination of increasing age and inexperience creates an inordinate fear of loss that is prayed upon by commissioned sales persons of all shapes and sizes. (3) They have trouble distinguishing between the income generating purpose of Fixed Income Securities and the fact that they are negotiable instruments with a Market Value that is a function of current, as opposed to contractual, interest rates. (4) They have been brainwashed into believing that the Market Value of their portfolio, and not the income that it generates, is their primary weapon against inflation. [Really, Alice, if you held these securities in a safe deposit box instead of a brokerage account, and just received the income, the perception of loss, the fear, and the rush to make a change would simply disappear. Think about it.]

Every properly constructed portfolio will contain securities whose primary purpose is to generate income (fixed and/or variable), and every investor must understand some basic and “absolute” characteristics of Interest Rate Sensitive Securities. These securities include Corporate, Government, and Municipal Bonds, Preferred Stocks, many Closed End Funds, Unit Trusts, REITs, Royalty Trusts, Treasury Securities, etc. Most are legally binding contracts between the owner of the securities (you, or an Investment Company that you own a piece of) and an entity that promises to pay a Fixed Rate of Interest for the use of the money. They are primary debts of the issuer, and must be paid before all other obligations. They are negotiable, meaning that they can be bought and sold, at a price that varies with current interest rates. The longer the duration of the obligation, the more price fluctuation cycles will occur during the holding period. Typically, longer obligations also have higher interest rates. Two things are accomplished by buying shorter duration securities: you earn less interest and you pay your broker a commission more frequently.

Defaults in interest payments are extremely rare, particularly in Investment Grade Securities, and it is very likely that you will receive a predictable, constant, and gradually increasing flow of Income. (The income will increase gradually only if you manage your asset allocation properly by adding proportionately to your Fixed Income holdings.) So, if everything is going according to plan, all that you ever need to look at is the amount of income that your Fixed Income portfolio is generating… period. Dealing with variable income securities is slightly different, as Market Value will also vary with the nature of the income, and the economics of a particular industry. REITs, Royalty Trusts, Unit Trusts, and even CEFs (Closed End Funds) may have variable income levels and portfolio management requires an understanding of the risks involved. A Municipal Bond CEF, for example will have a much more dependable cash flow and considerably more price stability than an oil and gas Royalty Trust. Thus, diversification in the income-generating portion of the portfolio is even more important than in the growth portion… income pays the bills. Never lose sight of that fact and you will be able to go fishing more frequently in retirement.

The critical relationship between the two classes of securities in your portfolio, is this: The Market Value of your Equity Investments and that of your Fixed Income investments are totally, and completely unrelated. Each Market dances to it’s own beat. Stocks are like heavy metal or Rap…impossible to predict. Bonds are more like the classics and old time rock-and-roll…much more predictable. Thus, for the sake of portfolio smile maintenance, you must develop the ability to separate the two classes of securities, mentally, if not physically. For example, if your July 2005 Market Value fell, it was because of higher interest rates not lower stock prices. More recently, the combination of higher rates and a weaker Stock Market has been a Double Whammy for portfolio Market Values, and a double bonanza for investment opportunities. Just like at the Mall, lower securities prices are a good thing for buyers… and higher prices are a good thing for sellers. You need to act on these things with each cyclical change.

Here’s a simple way to deal with Fixed Income Market Values to avoid shocks and surprises. Just visualize the Scales of Justice, with or without the blindfold. On one side we have a number that represents the Current Market Value of your Fixed Income portfolio. On the other side, we have a small “i” for interest rates, and “up” or “down” arrows that represent interest rate directional expectations. If the world expects interest rates to rise, or even to stop going down, “up” arrows are added to “i” and the Market Value side moves lower… the current scenario. Absolutely nothing can (or should) be done about it. It has no impact at all on the contracts you hold or the interest that you will receive; neither the maturity value nor the cash flow is affected… but your broker just called with an idea.

The mechanics are also simple. These are negotiable securities that carry a fixed interest rate. Buyers are entitled to current rates, and the only way to provide them on an existing security is to sell it at a discount. Fortunately, one rarely has to sell. Over the past few years of falling interest rates, Fixed Income securities have risen in price and investors (should) have realized capital gains as a result…adding to portfolio income and Working Capital. Now, that trend has reversed itself and you have the opportunity to add to existing holdings, or to buy new securities, at lower prices and higher interest rates. This cycle will be repeated forever.

So, from a “let’s try to be happy with our investment portfolio because it’s financially healthier” standpoint, it is critical that you understand changes in Market Value, anticipate them, and appreciate the opportunities that they provide. Comparing your portfolio Market Value with some external and unrelated number accomplishes nothing. Actually, owning your fixed income securities in the most freely negotiable manner possible can put you in a unique position. You have no increased risk from a reduction in security prices, while you gain the ability to add to holdings at higher yields. It’s like magic, or is it justice. Both sides of the scales contain good news for the investor… as the investment gods intended.

Tuesday, February 20, 2007

What If You Absolutely Positively Could Not Lose - Would You Play the Stock Market?

Seniors on fixed incomes face a unique problem. Where do
they invest their savings to get maximum return on
investment with limited risk? Some of the traditional
places like CDs and Treasury Notes are extremely safe,
however the yields tend to be very low. Stocks and Mutual
Funds while offering a potential for a higher yield have a
risk factor that most seniors find unacceptable.

What if you knew you absolutely positively could not loose,
Would you invest in the stock market? Imagine if their was
a way that you could enjoy the upside potential of the
stock market with absolutely no downside Risk, would you
be Interested?

Equity Indexed Annuities may be the Solution you are
looking for. Many insurance companies are now offering
Equity Indexed Annuities. These annuities allow you to
mirror the gains of popular stock market indices like the
S&P 500 or the Dow Jones Industrial Average while not
loosing any of your investment capital.

In simple terms if the stock market goes up your Annuity
also goes up but if the stock market goes down your
Annuity does not loose any value. An Equity Indexed Annuity
is not an Investment in stocks or Mutual funds instead it is a way the Insurance allow your Investments to mirror the gains of the stock market with no downside risk.

Many Popular Equity Indexed Annuities are set up using a
monthly tracking Method. Once a Month the insurance
company will look at the stock market index to determine
the gain or loss. If the index goes up 2% then they
put a plus 2 on your scorecard. If the index goes
down 4% then they put a -4 on your score card. At the end
of the year the Insurance company totals your scorecard for
the year if it is positive (say 8%) they would then add 8%
to your annuity value however if it is negative your
annuity value would stay the same. If you started the year with
an annuity value of $10,000 your annuity would still be worth
$10,000. It doesn't matter if your score card has a
Negative 1%, 10% or 99% you will not loose one cent of your
$10,000 starting value.

Every year your Annuity Value is reset, Using the above
example if you Annuity started the year with a $10,000
Value and your score card shows a plus 8% for the year your
Annuity would know be Reset to $10,800 and the process
starts again. To sweeten the Pot even further many
insurance companies are offering Bonus Equity Indexed
Annuities, these vehicles work exactly the same as Equity
Indexed Annuities but the insurance companies will add a
Bonus of up to 10% to your Annuity. If you place $10,000 to
start in your annuity with a 10% Bonus Annuity the
insurance account would now add $1,000 making your Bonus
Equity Indexed Annuity now worth $11,000. In addition you
could receive this 10% bonus for any funds you add in the
first 5 years.

With Equity Indexed Annuities from popular insurance
companies You can have it all. A way to earn some huge
Gains from the Stock market while being totally insulated
from any downside risk and a Bonus of up to 10% of all money added in the first 5 Years.

Monday, February 19, 2007

Keeping It Interesting

Some lines from a film never go forth your mind; I don't retrieve the linguistic context always, but I make recollection the dialog. "The Big Chill" is one of the few movies I have (VHS). At dinner, William Hurt, Jeff Goldbloom, and Uncle Tom Berenger reason about their past like domestic dogs growling for a Meleagris gallopavo leg at Thanksgiving. JoBeth William Carlos Williams conveys unagitated by chastising the men, and to that Injury answers with a smirk, "Just trying to maintain the conversation lively." It's one of those "had to be there" moments.

Bond bargainers "keep the conversation lively" . Rich Person you noticed that long-term rates have got got fallen while short-term rates have risen? Low long-term rates maintain the lodging market active (a positive, maybe), with the inexplicit suggestion of a slowing economic system (a driblet in long-term borrowing by corps suggests a slow down in the economy). All of this is happening as the Federal Soldier Modesty torsions rates higher!

An interest rate anomaly happens when short-term rates get close to exceeding long-term rates. This is known as an "inverted output curve". Inverted output curved shapes preceded the past five recessions. "Something strange have been going on in the chemical bond market", composes E.S. John M. Browning (Wall Street Journal, May 31, 2005). Markets get long-term trends right, usually.

Low interest rates urge positive stock returns; however, market volatility looks to withstand such as optimism. One twenty-four hours pillory are up, and the adjacent down. Person said, "When interest rates are low equities grow." Many stock analysts get slap-happy moments with low interest rates. Optimism makes not travel markets; pessimism does. John M. Browning wisely detects "...the predominant position in the stock market is one of celebration..." when it ought to be fear. (WSJ, May 31, 2005)

Some economical experts make anticipate deterioration economic conditions. "Over the past 35 years, the sceptics say, Federal rate additions have got tended to stop with trouble." (WSJ, May 31, 2005) Most recently, the bubble chewing chewing gum stock market popped during 2000 left pillory looking like pinkish bubble gum on a child's cheeks.

No simple declaration maintains investors from the dangers of an upside-down output curve. Every analyst, economist, and initiate have an opinion. What matters is the reaction of the chemical bond market, and the current short and long-term yields are "keeping it interesting".

My point? There is no manner to foretell every plus social class move (up or down). Broad variegation within the chemical bond existence supplies aggregative benefit to your portfolio. This makes not intend owning every conceivable bond; it makes average integrating chemical chemical chemical bond management consistent to attain your ends within the linguistic context of your hazard tolerance.

* These are the major bond (fixed income)asset social classes U.S. Government

* International Fixed Income

* Municipals (tax efficient accounts)

* High Yield

* Emerging Market Debt

"When a thing discontinues to be a topic of controversy, it discontinues to be a topic of interest." - William Hazlitt, English Language litterateur (1778 - 1830)

Sunday, February 18, 2007

CD Rate Calculators

Certificate of Deposit rate calculators are utile in determining the amount of interest an investor will earn on a CD. If an investor comes in information about the initial sedimentation amount, the number of calendar months for the cadmium to mature, interest rate offered by the establishment etc, he/she tin cipher the amount of rate of tax return that tin be earned on CD.

The calculator gives consequences relating to the elaborate agenda of the Annual Percentage Output (APY) and the termination balance of the cadmium on the day of the month of adulthood date. Annual Percentage Output is the effectual annual rate of interest earned for the cadmium without considering the frequence of combination the interest amounts along with the starting balance of the CD. Sometimes investors have got the option of reinvesting the interest amount to the gap balance of the cadmium in which lawsuit they will get a higher chemical compound rate of interest.

The APY measurements the existent rate of interest that an investor can earn annually. The APY is also utile for comparing the interest rates of different CDs and their combination frequencies. Compounding is the procedure of reinvesting the interest amount so that investor will get interest on that peculiar CD’s accumulated interest.

A cadmium rate calculator also allows an investor to take that peculiar frequence that the CD’s interest is added to his account balance. A higher frequence allows the investor to get further compounded interest on the accumulated interest sooner.

If an investor wishings to maximise outputs on CDs while maintaining liquidness simultaneously, a cadmium laddering calculator is useful. The workings of cadmium laddering can be explained with the aid of the following example. Suppose Mr. Type A have $50,000 in cash reserves. If he purchases a $10,000 one-year CD, a $10,000 two-year four hundred and so on until his last investing is in the 5-year four hundred of $10,000 so that each twelvemonth is a rung on the ladder, then whenever the one-year cadmium maturates he reinvests that money in a five-year CD. By that time, his five-year four hundred have four old age left until it matures. As each year's cadmium come ups due, he will revolve it into a five-year CD. By implementing cadmium laddering, his sum interest income will be much higher. cadmium laddering calculators are very much utile for the determination of these upper limit outputs if the investor comes in a few inside information about his investing amount.

Using a cadmium rate calculator is a great manner to maintain path of interest earned from CDs. A cadmium laddering calculator is used to maintain path of complex investings made over time.

Friday, February 16, 2007

Money Management - The Holy Grail Of Trading

Money management determines how much to put on the line on each individual trade. This is a critical component of any trading system - hazard too much and the opportunities of going flop are too high, hazard too small and the reward for trading is too low.

The chief methods for calculating merchandise size are:

Fixed Fractional

The number of contracts to trade is determined by a fixed percentage of current equity. As lone whole hereafters contracts can be trade this, effectively, intends that the bargainer utilizes 1 contract per $x of equity. For illustration 1 contract per $10,000.

Fixed fractional, however, necessitates unlike accomplishment at different contract levels. For 1 contract every $10,000 to travel from 1 contract to 2 necessitates a net income of $10,000 from 1 contract. To travel from 10 contracts to 11 still necessitates $10,000 net income but from 10 contracts. So for smaller account sizes it will take a long clip for the money management to actually kick in and for larger account sizes the number of contracts traded will leap wildly around.

Using fixed fractional the number of contracts traded would be calculated as equity/x, where x=dollars per contract ($10,000 in the above example).

Contracts - Equity Required $

1 - 10,000

2 - 20,000

3 - 30,000

4 - 40,000

5 - 50,000

6 - 60,000

Fixed Ratio

Fixed ratio adds a variable to the fixed fractional method.

Fixed ratio adds delta to the calculation. The delta is a factor which is required to travel to the adjacent contract level. The lower the delta the more than aggressive the money management is.

The expression is:

equity required to merchandise former contract size + (number of contracts x delta) = Next level.

Eg starting with a alkali of $10,000 for 1 contract and a delta of $5,000:

Contracts - Equity Required $

1 - 10,000

2 - 15,000

3 - 25,000

4 - 40,000

5 - 60,000

6 - 85,000

Comparing the above tabular array to that for fixed fractional it can be seen that at the lower account degrees less equity is required whereas as the account turns the number of contracts traded goes less aggressive.

Wednesday, February 14, 2007

Thought Fixed Rate Will Give You a Respite from the Perils of Variable Rates! Think Again

Slight increases in the interest rates raise your hackles. Tension grips your mind as to how you are going to make the extra payment. Preparations begin right then to provide for the repayment, though it requires a huge cut in the monthly expenses.

Cautious is what describes your state. A fixed rate mortgage will be the solution to the stress that they are facing as to the repayment.

A Fixed rate mortgage, as the name suggests limits the interest rate to a particular level. The borrower is protected against any increases in the interest rate. He keeps on making a lower repayment, when his contemporaries who did not have a fixed rate to protect them, pay a higher interest.

Apart from the savings that a fixed rate results into, it also has an added advantage. The borrower is not required to make regular calculations considering the newer rates. He keeps on paying the same monthly repayment that he paid at the beginning.

This however is not free from any disadvantages. We deal with the disadvantages of the fixed rate mortgages in the following paragraphs.

A borrower normally opts for a fixed rate mortgage to protect him/ her from hikes in interest rates. But they fail to consider a situation when the interest rates start falling. The entire statistics of the borrower fails and he feels cheated.

In such a scenario he is left with no options except to continue making the repayments, or look for refinancing the mortgage through remortgage. Continuing with the repayments will mean that the mortgagor pays higher than what he actually owes.

Even remortgaging will not produce the desired results. The lenders accept to remortgage the fixed rate mortgage only when they find it having some potential. Also the borrower will have to accept the remortgage at the lenders terms. This means that the borrower will have to face a loss in both the cases – whether he chooses to continue repaying or he goes for a remortgage.

The second drawback of a fixed rate mortgage is that the rate of interest is not kept fixed for the entire period of repayment. The interest rate is fixed for the initial few years. After that the borrower has to pay a repayment according to the interest rate prevailing in the market.

Other alternative interest rates can be tried to get the optimum method of charging interest. The other methods commonly utilized are as follows:

• Variable interest rate
It is the vicissitudes presented by a variable rate that leads to people going for a fixed rate mortgage. These are desirable till the interest rates are falling. Once the interest rates start ascending they become a menace.

• Capped rate
A capped rate combines the good points of both fixed rate and variable rate mortgage. The interest rate is allowed to fall freely, but not allowed to rise above a particular level. This means that the borrower is assured that he will always pay a lower amount. But the period of capped rate is limited. The normal period for which the rate is capped ranges from 1 to 5 years.

• Discount rate
A discounted rate is a cut-off allowed by the lender during a small period. This is normally allowed in case of first time buyer mortgages. The first time buyer is not burdened with the excessive repayments from day one. The borrower can get the mortgage refinanced after the completion of the discount period to avoid paying higher rates.

• Tracker rate
While lenders assure that they will incorporate any changes in the interest rate right from the time it is effected, they seldom do. This means that till your lender incorporates the downfall in the interest rates, you have lost several pounds. A tracker rate is linked directly to the base rate and helps to save in case the interest rates fall.

Thus the next time you plan to take a mortgage, take stock of the various interest options available. You don’t have to stick to the variable interest rate. Neither is fixed rate the only option available to you. Capped rate, discounted rates and tracker rates can also be taken to suit the situation one is in.

Monday, February 12, 2007

Help with My Annuity

The shouts are heard from the distance, "I need aid with my annuities." Nothing have changed...just a alone senior who can't trust anybody with her rente because every clip she inquires for advice, person seeks to do her invest in a different annuity...Sound familiar? Well you are not alone.

Often modern times when speech production to a senior about their annuities, I inquire them their biggest complaint. Time and clip again they state that it is hard to happen person who can assist them with their rente without trying to sell them another one. It is not uncommon. The truth of the matter is, many rente agents are not out to assist the client, but to assist themselves (I am certain you are not surprised). They desire to do the "fast buck" without sees for the client's needs or investing objectives. The unfortunate portion is that, this isn't going to change.

Honest aid with an rente is hard to find. Insurance agents don't get paid for their time, they usually only get paid for making a sale. So it's no wonderment why they always urge another annuity. I once visited person who needed aid with an rente that an agent "talked him into." The problem was, in order to get into this annuity, the agent talked him into surrendering his old rente and paying a $13,000 resignation charge to do so-AND THE rente HE put option HIM INTO WAS worse THAN THE rente HE GOT HIM out OF...When I asked him why he called the other salesperson in the first place, he told me he just needed to make a small backdown from his rente and didn't cognize how...And the agent tricked him into switching it into another annuity and paying a huge resignation charge which he could never retrieve owed to his age...Fortunately it wasn't too late and we were able to change by reversal his transaction.

However, good aid is hard to find. There is no doubt. This may come up as no surprise but my recommendation to anyone who needs aid is to first purchase the book "Annuities: The Lurid Truths Revealed." Sure, Iodine wrote it and certain I have got a vested interest in saying that, but at least it speaks about rentes in a manner that anyone can understand them. And at least it points out all the things people who have rentes or are looking for rentes need to be careful of. Most importantly, it points out the soiled small secrets that agents never state you about annuities.

The underside line is this. If you need aid with your annuity, you need to be vigilant. Many agents are out there for their ain good and you must be aware of this. Use your resources and learn the right inquiries to inquire your agent before making a determination (Also establish in the book). Sure, you may just give up and never get aid but the worst determination is no decision. Aid with your rente is hard to find, but not impossible...that's wherefore I wrote the book!!! Good fortune and remember...

Ignorance is not bliss...

Saturday, February 10, 2007

Annuity Investment Guide

While there is not a deficiency of information on annuities, there certainly is a deficiency of good information. In an age full of information, we are constantly bombarded with irrelevant data. Annuities are great investing vehicles. Annuities are bad investing vehicles. Annuities were my mom's worst nightmare. You have got heard all the stories. So what make you do?

When it come ups to rente investing ushers what we have got tried to make is offer the truth. "Annuities: The Lurid Truths Revealed," is about getting quit of the investing noise that we are bombarded with constantly. It is a no-nonsense approach about the good, the bad, and the ugly of fixed annuities, variable annuities, equity index annuities and even life insurance to minimise estate taxes. It was written because I believe there is not a good adequate rentes investing usher to assist the average individual understand their annuities.

Furthermore, it was written because people need to cognize the truth about their annuities. They need to cognize the soiled small prevarications insurance agents are using to sell annuities. It is outrageous to see so many people fooled by their investing counselors and financial advisors. One subdivision actually negotiation about how to state a good agent from a bad agent. Furthermore, it just states in apparent English what rentes are good for and what rentes are not good for. People can actually read this rente investing usher and walk away feeling at least knowledgeable in the country of an annuity.

So if you are looking for the right rente investing guide, you have got come up to the right place. Come to and see what we have got to say. Learn the truth about your rentes from an indifferent perspective. We'll even state you what's wrong with rentes so you don't purchase something that doesn't suit your needs.

For the most part, information is free, but wisdom is priceless. And as one wise adult male once said, "If you believe instruction is expensive, seek ignorance!" Knowledge and instruction about rentes and investings is valuable. Get it from a trusted beginning and read an rente book that tin truly assist you make up one's mind on rentes and your future.

Ignorance is not bliss...

Friday, February 09, 2007

Can Your Annuity Do This?

Many people purchase rentes according to their agent's recommendations. However, many people make not even cognize what they own. It is a good thought to take stock list of your investments, and particularly your annuity. It is of import to understand what your rente can and cannot make and what have it has. Here are some of the things you definitely must be certain to cognize about your annuity:

1. What interest rates are you currently getting?

2. Are the interest rates getting worse?

3. What is the evaluation of your insurance company? (Critical)

4. What are your resignation charges?

5. Are your principal ever at risk?

6. What retirement & income options makes your rente have? 7. Are your rente Medicaid Friendly?

8. Did you properly designate your donee annuitant and even ownership of your annuity?

9. How safe is your annuity?

10. Are your rente topic to duplicate taxation?

12. What is your minimum guarantee?

13. Are you eligible for a 1035 exchange?

14. What haps in the event of your death? Are your donees entitled to all of the money or are there penalties?

This is a good beginning stock listing list. These inquiries are of import in assuring you are doing what is right for you. As we said before, the best annuity is the 1 that is best for YOU. And by taking stock list of what you own, you can now measure it against your have ends and do certain there is a match.

By the way, this is a good procedure to travel through periodically. As you know, your needs change over time. And as they change, you must do certain your investings are always in line with your goals. If they are, great. If they aren't, well, change your goals---or change your investments! But do certain there is a match.

Hopefully this helps. And remember, it's not what you know; it's what you make with what you know. If this do sense, then draw your rentes out and take inventory. There is no better clip than the present.

Wednesday, February 07, 2007

The Annuity Game

Many prospective clients have said that they have already met with a financial planner or insurance agent and were encouraged to make the purchase of a large annuity for tax benefits. The reason the agent wants to sell an annuity is how lucrative the commissions are on these products.

Annuities may work in your portfolio but normally they won't unless you own shares in the company pushing them. The most common style is the tax deferred annuity. In the case of a deferred annuity, you pay up front or with a series of installments, and you don't have to pay taxes on the increase until you withdraw. You will then receive regular income.

Do you recognize this scenario? Retirement plans such as an IRA can postpone tax day until after your investments have compounded. This fact alone makes tax-deferred annuities redundant Why buy them, then? Except for some important exceptions, you normally should pass on annuities.

Here is the case against annuities, as made by the Motley Fool, business magazines and certain Fee-Only investment advisors:

1. Tax-related arguments other than that mentioned above. Capital gains that you make in the market are taxed at a lower rate when you hold your stocks long enough before selling, currently a year. The IRS treats annuity payouts as ordinary income.

2. Most annuities charge too much in fees and commission. When you add everything in, you do not enjoy the same low fees over the years like you would through a Fee-Only planner or Vanguard-style index fund. Annuities also charge you for things like "mortality and expenses charges."

Don't even think about cashing the annuity out early - you may pay a surrender charge as high as seven percent.

Then there are management fees, just as with a mutual fund. Normally they will be lower but still more than those of an index fund. When it's all said and done, your annual fees may reach two percent - nearly twice what a Fee-Only planner would charge.

3. The insurance coverage that annuities offer isn't that great, etiher. They also don't work out very well as death benefits. Fortune says annuities are "an inefficient way to buy life insurance, and almost no one collects on it anyway."

4. To grow your investment, the annuity providers often use products producing less than stellar in yields. A fixed annuity means you are guaranteed a certain return, but then it's so low inflation could overwhelm the earnings..

With a variable annuity, you can decide to a limited extent how to invest your money. But it will have to be placed in what amounts to as an in-house mutual funds. Sounds a bit like the dealings of certain brokerages where not-so-objective planners direct you to their own dogs?

Another choice could be an equity-index annuities. You'll be guaranteed a return of several percent, but your upside is limited, too. If you're a long-term investor, why not invest in the funds yourself?

5. Annuities tie up your money so you can't invest it somewhere more profitable.

I According to the Motley Fool, annuities "are desirable only for those who:

* "Have contributed the maximum to their 401(k) plans and IRAs and desire further tax deferral on investment gains."

* "Prefer investing in mutual funds as opposed to individual securities.

* "Will keep the annuity for at least 15 to 20 years." But, let us add here at ElderAdo, that argument is rather irrelevant to most people who are retired or close to it.

* "Are in a 28 percent or higher income tax bracket today, but expect to be in a lower income tax bracket in retirement."

* "Don't need the annuity proceeds prior to age 59 1/2.

* "Are unconcerned that heirs must pay ordinary income taxes on any appreciation.

* "Desire a 'guaranteed' income for life in retirement."

The later argument can be very powerful and persuasive. Remember the tradeoff. When history repeats itself, the "guaranteed income" will be much smaller than the rewards of proper investing in the stock market.

The SEC is examining the marketing materials of the biggest underwriters of annuities, including, says Forbes, ING Golden American, American Skandia and Allianz Life. It quotes Paul Roye, director of the agency's Divsion of Investment Management: "The industry is on notice."

That says it all. If you feel you must buy an annuity, be certain that the person recommending it is not going to receive a commission. Boldly ask how he or she will benefit directly or indirectly from a sale, and watch out for the fees today and down the road.


* Annuity Gratuity, Carrie Collidge, Forbes, Feb. 19, 2001.

* Annuities: What's to Like?, The Motley Fool, July 5, 1999.

* The Money Manager: Finally, a Warning about Annuities, Carolyn T. Greer, Fortune, July 5, 1999.

* The $6.4 Billion Ripoff, Barron's, March 27, 2000.

Monday, February 05, 2007

Annuity Help

Many people today are looking for rente help. The biggest challenge looks to be that most of the aid is biased. What exactly make I mean? I intend that there is always a vested interest for the individual who is helping you with your annuities. They are out to sell you something so you don't cognize if they are doing it for your best interest or for theirs.

For instance, let's state you were looking for a fixed annuity. If you work with an agent who have a prejudice towards variable rentes or gets paid more than for merchandising variable annuities, you may stop up with something that doesn't suit your needs. Also, if you stop up with a banker or financial advisor who makes not make a good occupation at addressing your financial needs and concerns, you may stop up with the investing of the twenty-four hours instead of the investing that's right for you. And by the clip you recognize it, it may be too late.

So how make you get aid with your annuity? First and first you must assist yourself. What is really good is to take stock list of where you are currently and where you desire to be. Look at your current investings and your goals. Take a snapshot of your financial situation. This may sound simple but most people don't make it. But the cardinal is to make it before you seek aid from an outside source.

Look, the ground is simple. The more than you cognize going in, the better the opportunity that you will get what you want. Doing your financial homework is a critical piece of getting the right help. A good financial advisor will inquire you to assist him understand you so you can assist him to assist you. This is important to your financial future. Getting aid with your rente or your investings intends helping yourself first.

The most of import facet of this come ups at the clip you need to do a financial determination about your rentes or your investments. If you cognize what you want, you will be able to calculate out what you don't want. For example, if you desire safety of principal and the advisor offers you a variable annuity, you can easily state no because you cognize that won't suit your goals. Also, the antonym is true. If you don't cognize what you want, you may cognize what you don't desire and that may be a good topographic point to start.

The underside line is rente and investing aid gets with yourself. Understand your financial situation, your clip frames, your needs for liquidity, and your goals. The specific investings and rentes you will utilize to carry through your ends will come up second. The more than than you assist yourself, the more likely it is you will stop up with the right annuity. Good fortune and remember...

Ignorance is not bliss...

Saturday, February 03, 2007

Should You Put Your Annuity in an IRA?

Let me begin by answering that question...if an rente suits your investing aims than there is no ground that an rente should not travel in your IRA. Okay all you smarty trousers out there who maintain arguing that it is tax deferred and it makes not belong in your IRA...SO WHAT??? The fact that it is tax deferred is only one ground why people purchase annuities.

Now, allow me elaborate on my ideas here. If you are buying an rente strictly for tax purposes, then it is obvious that an rente should not travel into your IRA. However, there are many great benefits that an rente can supply for an IRA. For example, fixed annuitiesare supply a safe manner to get a tax return higher than a CD. So if you would set a cadmium in an IRA, why not a fixed annuity? So you'll already have got the advantage of tax recess but now you get the extravagance of higher rates and a safe return. Furthermore, it is one further manner to diversify a portfolio.

With a variable rente (although I am not a fan of) you get a guaranteed death benefit. So no matter whether your rente travels up or down, the death benefit can never travel lower than the original amount invested (less any withdrawals). So there is an advantage that no stock or common monetary fund can supply for you. So why wouldn't you utilize it?

The underside line is that rentes are another type of investing vehicle. Although many people reason that they should not be used in an IRA, I believe that they have got not fully though about the benefits of an annuity. There are many benefits an rente can offer and if these benefits fit your needs, than I can truly say, it may be appropriate.

However, before you put in an annuity, or anything for that matter, it do sense to cognize what's right for your peculiar situation. Furthermore, it is good to cognize how rentes really work and which one is right for you. For this type of information, check out "Annuities: The Lurid Truths Revealed," which can be establish at This book is very enlightening and states you what to look out for, which rente is right for you, inquiries to inquire your agent, and much more.

So for those of you who state an rente is not right for an IRA, I'm sorry but you are wrong. The reply is it depends. It depends on the client's state of affairs and what the client is looking for. If it can be establish in annuities, then travel for it...

Ignorance is not bliss...

Thursday, February 01, 2007

Facts You Should Know About Types of Loans

When you set out to borrow, you often come across terms like unsecured loans, revolving loans, adjustable rate loans, etc. While these terms are more or less self-explanatory, it is still useful to be clear on their exact meanings and what they imply before you finalize a loan contract.

Unsecured versus secured loans

As the name implies, a secured loan is one where you offer some kind of collateral against the loan. The agreement is that if you default on the loan, the lender has the right (but not the obligation) to take possession of the asset you have pledged.

In most cases, this asset would be what the lender has financed. For example, when you take a home loan, you offer the home as collateral.

There may also be cases where you may need to offer additional collateral over and above the asset that is being financed. This happens, for example, when the lender is financing close to 100% of an asset that is prone to rapid reduction in market value. In such cases, the lender may insist on your putting up another asset so as to provide a reasonable margin of protection in case of default.

Unsecured loans are those where such collateral arrangements do not exist. These loans are granted based on your credit standing, ability to repay and other factors.

In cases where there's a choice available to the customer to take either a secured or an unsecured loan, the former may be offered at a somewhat lower rate. That is, assuming every other factor remains equal. This is because of the lower risk involved to the lender, who has recourse to a specific asset in case you default. However, this situation is comparatively rare in consumer financing, although it is more common in financing businesses.

Installment versus revolving loans

A revolving loan is one where you have access to a continuous source of credit, up to a pre-determined credit limit. If the limit is say, $10,000, you can borrow any amount up to $10,000. And typically, you can repay all or part of the amount you borrowed at a time of your choosing, within the overall tenor of the loan.

You pay interest only on the amount you borrow for the time you borrow it. Sometimes, banks may charge a commitment fee for making a revolving line of credit available to you. This fee is usually charged on the average unutilized amount of your limit.

You can also re-borrow the amount you have repaid. In effect, you have a loan that's always available to you on demand.

Unlike revolving loans, installment loans have a fixed repayment schedule. In most cases, the full amount of the loan is drawn down (i.e., borrowed) at once and both repayment schedule and amounts are fixed in advance. You do not have the option to re-borrow the amount that has been repaid.

Adjustable rate versus fixed rate loans

A fixed rate loan is one where the interest rate charged is fixed for the entire duration of the loan. The advantage is that you are immune to fluctuations in interest rates and can budget your cash outflows precisely. The disadvantage to you (the borrower) is that should interest rates fall, you lose in terms of opportunity costs. That is, you could have obtained a lower interest rate had you opted for an adjustable rate loan.

In practice, you can always choose to refinance the fixed rate loan at a lower rate if interest rates fall sharply enough to justify it. Bear in mind that your current lender may charge a pre-payment fee if you choose to repay before due date. So the difference in interest rates between your old fixed rate loan and the new loan should be large enough to justify a switch.

An adjustable rate loan is one where the interest charged fluctuates in line with a benchmark rate. This benchmark rate is usually the Prime Rate, which is what the US Treasury charges its prime (or best) borrowers. The advantage of an adjustable rate (or floating rate) loan is that what you are paying is more or less in line with the market. If interest rates decline, so do your costs and vice versa. The disadvantage is that your cash outflows for interest are unpredictable.

As a borrower, if you hold the view that interest rates are going to decline, it is best to opt for an adjustable rate loan. But arriving at the correct view consistently is easier said than done. Predicting interest rates is a game where even professional market participants and institutions frequently go wrong.

If it is important to you to be able to budget for your interest obligations in advance, a fixed rate loan may be the best choice. After all, you can refinance it should the interest rates fall significantly.

Keeping these basic facts in mind should help you make more informed borrowing decisions.