Secrets To Repair Credit Score For Good
January 1st, 2009 Subscribe To Our Feed
It seemed like just yesterday when you were eating mom’s home-cooked breakfasts and hitting up dad for occasional gas money. Suddenly, you’re thrust out into the world of adulthood without a clue or a personal finance plan. Even if you worked your way through high school, you likely spent all of your money on your first car, concerts, movie tickets, gas money, new clothes and fast food. With credit card offers in the student union and large lump sum loans assaulting you from all angles, it’s easy to find yourself suddenly paying the price for your spending spree. So how can you repair credit score history and back-paddle out of this mess?
The first step to repairing your credit score history is to understand the breakdown of that three-digit number and what factors into your score. According to a leading credit repair Attorney our payment history comprises 35% of the score, so always pay every bill and credit payment on time. This tells the lender how likely you are to pay them in full and on time, without hassle. Also, the more recent the mistake, the worse it will be for your score. Another 30% of the score is based on your outstanding debt, such as how much you owe on car loans or home loans and how many credit cards you have at their credit limits. You should have no more than three credit cards at 25% or less of their limits. This indicates whether you’re out of control, maxing them out, and whether you’re literally living on credit or not. The length of time you’ve had credit will account for 15% percent of your score because lenders want to see that you have a long-standing history of paying responsibly. Furthermore, 10% of the score is based on the number of inquiries made on your report. If you are applying too often for tons of credit cards, then this indicates that you may be in some kind of financial difficulty. The last 10% of the score is based on the types of credit you currently have, which should be a mix of unsecured credit cards and revolving loans to show you’re capable of managing money. Credit report repair should start with making timely payments, then working outstanding balances down to 30% of your credit limit, then on to things like type of credit.
To repair credit score numbers, you’ll obviously need to know what that magic number is. By law, you are entitled to one free credit report each year from Experian, TransUnion and Equifax, which are the three major reporting bureaus. Experts recommend that you order one from each bureau since they may all be different. Creditors only need to report to one of the bureaus, by law, so it’s estimated that 40% of all reports contain inaccuracies. You can gather these reports and engage in a little online credit repair at www.annualcreditreport.com. Once you have your report, you can clean and polish it by writing to dispute any inaccuracies.
Experts say that to repair credit score numbers, you should not close out accounts. It’s much better to use each card once a month and pay them all off in full. Generally, shredding and canceling your credit cards is bad when you’re trying to repair bad credit because it shows two things: one, that you have less available credit and are therefore using more of your credit limit, and also that you have a shorter credit history. If you’ve got way too many cards, then close out your newest accounts so you don’t lose your long history. Phase out your accounts over several months, rather than hastily all at once. Verify that the accounts you’ve closed are reported as “closed by consumer.” On the rest of your cards, keep moderate credit limits, keep your balances low (30% of available) and avoid revolving balances.
There is probably something you face every single day. No, it is not your reflection in the mirror or your family. It is the accumulation of bills and credit cards. That every day spending that begins to accumulate until you are faced with a mountain of bills and not enough paycheck to cover it all. People can easily find themselves snowed under by these bills and may even find themselves losing their home and their possessions when they cannot make payments in a timely manner. Bad credit is all too easy to get into but you can find your way out.
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Setting and Targeting Investment Goals
December 31st, 2008 Subscribe To Our Feed
Go out into your yard and dig a big hole. Every month, throw $50 into it, but don’t take any money out until you’re ready to buy a house, send your child to college, or retire.
It sounds a little crazy, doesn’t it? But that’s what investing without setting clear-cut goals is like. If you’re lucky, you may end up with enough money to meet your needs, but you have no way to know for sure.
How do you set investment goals?
Setting investment goals means defining your dreams for the future. When you’re setting goals, it’s best to be as specific as possible. For instance, you know you want to retire, but when? You know you want to send your child to college, but to an Ivy League school or to the community college down the street? Writing down and prioritizing your investment goals is an important first step toward developing an investment plan.
What is your time horizon?
Your investment time horizon is the number of years you have to invest toward a specific goal. Each investment goal you set will have a different time horizon. For example, some of your investment goals will be long term (e.g., you have more than 15 years to plan), some will be short term (e.g., you have 5 years or less to plan), and some will be intermediate (e.g., you have between 5 and 15 years to plan). Establishing time horizons will help you determine how aggressively you will need to invest to accumulate the amount needed to meet your goals.
How much will you need to invest?
Although you can invest a lump sum of cash, many people find that regular, systematic investing is also a great way to build wealth over time.
Start by determining how much you’ll need to set aside monthly or annually to meet each goal. Although you’ll want to invest as much as possible, choose a realistic amount that takes into account your other financial obligations, so that you can easily stick with your plan. But always be on the lookout for opportunities to increase the amount you’re investing, such as participating in an automatic investment program that boosts your contribution by a certain percentage each year, or by dedicating a portion of every raise, bonus, cash gift, or tax refund you receive to your investment objectives.
Which investments should you choose?
No matter what your financial goals, you’ll need to decide how to best allocate your investment dollars. One important consideration is your tolerance for risk. All investments carry some risk, but some carry more than others. How well can you handle market ups and downs? Are you willing to accept a higher degree of risk in exchange for the opportunity to earn a higher rate of return?
Whether you’re investing for retirement, college, or another financial goal, your overall objective is to maximize returns without taking on more risk than you can bear. But no matter what level of risk you’re comfortable with, make sure to choose investments that are consistent with your goals and time horizon. A financial professional can help you construct a diversified investment portfolio that takes these factors into account.
|
Investment goal and time horizon |
At 4%, you’ll need to invest |
At 8%, you’ll need to invest |
At 12%, you’ll need to invest |
|
Have $10,000 for down payment on home: 5 years |
$151 per month |
$136 per month |
$123 per month |
|
Have $50,000 in college fund: 10 years |
$340 per month |
$276 per month |
$223 per month |
|
Have $250,000 in retirement fund: 20 years |
$685 per month |
$437 per month |
$272 per month |
|
Table assumes 3% annual inflation, and that return is compounded annually; taxes are not considered. This is a hypothetical example and is not intended to reflect the actual performance of any investment. |
|||
Investing for retirement
After a hard day at the office, do you ask, “Is it time to retire yet?” Retirement may seem a long way off, but it’s never too early to start planning–especially if you want retirement to be the good life you imagine.
For example, let’s say that your goal is to retire at age 65. At age 20 you begin contributing $3,000 per year to your tax-deferred 401(k) account. If your investment earns 6 percent per year, compounded annually, you’ll have approximately $679,000 in your investment account when you retire.
But what would happen if you left things to chance instead? Let’s say that you’re not really worried about retirement, so you wait until you’re 35 to begin investing. Assuming you contributed the same amount to your 401(k) and the rate of return on your investment dollars was the same, you would end up with approximately $254,400. And, as this chart illustrates, if you were to wait until age 45 to begin investing for retirement, you would end up with only about $120,000 by the time you retire.
(This is a hypothetical example and is not intended to reflect the actual performance of any investment.)
Investing for college
Perhaps you faced the truth the day your child was born. Or maybe it hit you when your child started first grade: You only have so much time to save for college. In fact, for many people, saving for college is an intermediate-term goal–if you start saving when your child is in elementary school, you’ll have 10 to 15 years to build your college fund. Of course, the earlier you start the better. The more time you have before you need the money, the greater chance you have to build a substantial college fund due to compounding. With a longer investment time frame and a tolerance for some risk, you might also be willing to put some of your money into investments that offer the potential for growth.
Investing for a major purchase
At some point, you’ll probably want to buy a home, a car, or the yacht that you’ve always wanted. Although they’re hardly impulse items, large purchases are usually not something for which you plan far in advance–one to five years is a common time frame.
Because you don’t have much time to invest, you’ll have to budget your investment dollars wisely. Rather than choosing growth investments, you may want to put your money into less volatile, highly liquid investments that have some potential for growth, but that offer you quick and easy access to your money should you need it.
Review and revise
Over time, you may need to update your investment plan. No matter what your investment goal, get in the habit of checking up on your portfolio at least once a year, more frequently if the market is particularly volatile or when there have been significant changes in your life. You may need to rebalance your portfolio to bring it back in line with your investment goals and risk tolerance. If you need help, a financial professional can help you decide which investment options are right for you.
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New Tax Rules For 2008
December 31st, 2008 Subscribe To Our Feed
New zero percent tax rate
Currently, the maximum federal income tax rate for most long-term capital gains and qualifying dividend income is 15%. For 2007, individuals in the lowest two tax brackets receive the benefit of an even lower 5% tax rate. Beginning January 1, 2008, however (and continuing through 2010), the maximum federal income tax rate on long-term capital gains and qualifying dividend income drops all the way to zero for individuals in the 10% and 15% federal income tax brackets.
This presents an obvious planning opportunity: Consider making year-end gifts (up to $12,000 per individual gift-tax free) of appreciated assets to family members who are in the lowest two tax brackets. These family members would then be able to sell the appreciated assets after January 1, 2008, without any resulting federal income tax. There’s one big catch, though: New kiddie tax rules significantly limit the advantage of gifting appreciated assets to your children.
New kiddie tax rules
Special rules can apply when your child has unearned income. These kiddie tax rules may tax a portion of your child’s unearned income at your (presumably higher) marginal tax rate. Generally, the kiddie tax rules apply when a child has unearned annual income (e.g., interest, investment earnings, taxable gain resulting from the sale of an asset) exceeding $1,700 (2007 figure).
In 2007, the kiddie tax rules apply to children under the age of 18. The Small Business and Work Opportunity Tax Act of 2007, however, expanded the reach of these rules beginning in 2008. Starting January 1, the kiddie tax rules apply to children who are under age 19, and to full-time students under age 24. (There’s an exception for any child who earns more than one-half of his or her own support).
The good news: If you’ve already transferred investments to a child, or intend to do so, you still have a limited window to operate under the old rules.
Alternative minimum tax (AMT): what you don’t know could hurt you
If you’re subject to the AMT, traditional year-end maneuvers, like deferring income and accelerating deductions, can actually hurt you. The AMT–essentially a separate federal income tax system with its own rates and rules–effectively disallows a number of itemized deductions, making it a significant consideration when it comes to year-end moves. For example, if you’re subject to the AMT in 2007, prepaying 2008 state and local taxes won’t help your 2007 tax situation, but could hurt your 2008 bottom line.
Legislation signed into law in early 2006 brought the most recent in a long series of temporary “fixes” for AMT, but this temporary fix (in the form of increased AMT exemption amounts), expired at the end of 2006. If Congress doesn’t act, the number of taxpayers subject to AMT is projected to increase from 4.24 million in 2006 to 23.19 million in 2007 (Source: Joint Committee on Taxation, March 5, 2007). Congress is likely to take some action, but the specifics are uncertain, making it important to stay up to date on any new developments.
Don’t overlook IRA and retirement plan opportunities
Traditional IRAs (assuming that you qualify to make deductible contributions) and employer-sponsored retirement plans such as 401(k) plans allow you to contribute funds pretax, reducing your 2007 income. Contributions you make to a Roth IRA or Roth 401(k) aren’t deductible, so there’s no benefit for 2007, but qualified Roth distributions are completely free from federal income tax–making these retirement savings vehicles very appealing.
For 2007, the maximum amount that you can contribute to a 401(k) plan has increased to $15,500, and you can contribute up to $4,000 to an IRA. If you’re age 50 or older, you can contribute up to $20,500 to a 401(k) and up to $5,000 to an IRA. The window to make 2007 contributions to your 401(k) closes at the end of the year, while you can generally make 2007 contributions to your IRA until April 15, 2008.
If you qualify, consider whether it makes sense to convert some or all of your traditional IRA assets to a Roth IRA. Funds that you convert, to the extent that the funds represent investment earnings and deductible contributions, are considered taxable income. Nevertheless, the potential future tax benefit could outweigh the current tax bill.
Also worth noting
- Legislation signed into law this year increased the IRC Section 179 expense limit for small businesses to $125,000.
- Documentation requirements have tightened up for charitable cash contributions–beginning this year, you must have a bank record (e.g., canceled check) or a receipt from the charity, regardless of the amount of the cash contribution.
- This is the last year that a taxpayer age 70½ or older is able to make charitable contributions of up to $100,000 directly from an IRA to a qualified charity, without including the distribution in income.
- 2007 is also the last year for certain deductions, including the option to deduct state and local general sales tax (instead of state and local income tax) and the above-the-line deduction for qualified higher education expenses.
Talk to a professional
When it comes to year-end planning, there’s always a lot to think about. And, this year there are a few extra wrinkles. A financial professional can help you determine which year-end moves make the most sense for you.
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Working Your Money
December 31st, 2008 Subscribe To Our Feed
Unlike many other forms of speculation, investing can actually be fun and it is a great way to plan for your family’s financial future.
Provided you know a few of the basics, investing can be a fun and safe way to make extra dollars whether in real estate or stocks and bonds. This is probably the best way that any individual can plan to look after their family in future years. While the subject is very large, the information listed here is for guidance only and further information should be sought before you jump-in with both feet.
The most important aspect of this is research especially if you intent to invest money on stocks and shares as this is the most complicated of areas, in particular wit the number of companies. Although the stock market is a great place to make money, there is also a degree of risk involved. Not a place for short term financial gains, real estate is for people who are looking into the future where huge amounts of money can be amassed. Remodeling a home that you have bought inexpensively can be a great way to build up funds very quickly but be warned this does require work as well but the money gained can be put into another project almost immediately.
Real estate has its own set of problems which isn’t the case with the following area of interest for potential investors. Trading online is the cleanest way to earn money and almost anyone can have a go; you would be surprised at just how many people are now turning their hands to online investment. Traders have the capability of doing research, buying, selling and making money all with the simplicity of sitting in front of a computer. Be aware that because of the ease with which this can be done it has also been shown to be highly addictive and may cost more than you are prepared for.
While some people may depend on luck, they are very few as most rely on ‘old fashioned’ graft by studying what it is they need to know about investing to make the money they have set out to achieve. Do not turn trading into a something akin to the spin of a roulette wheel because if you do, you will surely fail when all that was required was some investigation into the markets. If you are looking for a resource to help you with this, you can visit a number of websites where you will find ample information about investments, and how to make money. Set yourself a limit of how much you can afford to lose and do not go beyond this because although investing is a great deal of fun it is also a very deep pit where money can be lost forever.
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Price Differences Between America and U.K.
December 30th, 2008 Subscribe To Our Feed
In a few short weeks I’m flying to Atlanta in the U.S. on a business trip. I haven’t been to the United States for a long time o I’m hoping that I might be able to pick up a bargain or two while I’m away.
The British pound is not as strong as it used to be against the dollar with today’s exchange rate around $1.52 for one pound. Nevertheless it still looks like I’ll be able to grab a few bargains while I’m stateside.
Games consoles are high on my list of priorities (according to my children). The Xbox 360 is currently priced at around £148.49 in British stores, which is equivalent to approximately $226. The same games console can currently be purchased for about $199.99 in the U.S.
A similar difference in price exists for the Nintendo Wii. In the U.K. this sought after console will cost £198.49 which equates to about $303. In the U.S. this unit will cost about $249. The Sony Playstation 3 costs £308.49 or $470.66. One of these outstanding games consoles will cost around $399.99.
Significant price difference between the U.K. and the U.S. can be seen across a whole host of products. Take petrol, or gasoline, for example. In the U.S. a gallon of regular petrol will currently cost roughly $1.35. In the U.K. one litre of petrol will cost about 89p. This equates to about £3.36 per gallon, or a massive $5.13. A huge difference compared with what our American cousins are paying for their gasoline.
When I fly over to Atlanta, in a few weeks time, I’m planning to leave my car at Heathrow so that I can drive home on my return. I’m therefore shopping around for the best pre-booked heathrow airport parking price. These charges currently range from £48 to £161 for a 1 week stay. This equates to $73.23 to $245.
Looking at the charges for parking at Atlanta airport, these currently range from $41 to $62. An enormous difference when compared with the same service here in the U.K.
So, while there are some modest but significant differences in the prices of various games consoles many other products and services are significantly cheaper in the U.S. So why do the Americans have it so good?
Always use a comparison service to get the best pre-booked price for UK Airport Parking.
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Healthcare Financial Management Is A Must For Your Business
December 30th, 2008 Subscribe To Our Feed
As the price of just about everything is on the rise, and as family budgets and business budgets alike are being stretched to the limit, it seems that effective healthcare financial management is even more important than ever. In these economic times of upheaval and uncertainty, making sure that financial management for healthcare is done well is a very high priority for the healthcare providers and the patients, as well as for the insurance companies paying the claims.
These days there are a number of financial management services for healthcare that provide specific solutions and have been specially designed for the healthcare organizations and the medical professionals involved in providing care for their patients. While there are many money management software programs and many common needs in the healthcare industry, not all of these solutions are right for every healthcare provider and so it is essential to find the right match in order to gain the best benefits for the situation.
Many of the healthcare financial management companies that offer professional money management services for the healthcare field provide basic, stock solutions that cover the needs and demands of most healthcare groups. These basic financial management solutions more than often will provide all of the functionality that is needed for the majority of healthcare providers.
This is because, in general, there is a great deal of commonality in practices and procedures throughout the healthcare industry, from individual doctors, to clinics, to large hospitals. These operations run under very traditional and standard practices and typically enjoy being able to implement standard financial management solutions, which are very effective in the overall business financial management needs of the organization.
At the same time, as with all companies in the business world, there are those healthcare organizations that have unique and special needs, in terms of the cash management products and financial management solutions that they need. For these providers, there are many healthcare related financial management solutions that can be custom tailored to perfectly match the needs of the business and help the company to reach any unique business objectives that have been set up by the management of the company.
Healthcare related financial management solutions are often able to provide the healthcare organizations with significant savings. There are many clients of some of the best financial management systems available that claim that they were able to save 20% to 50% by using the right financial management services.
The complete healthcare financial management classifications that are available today are fully capable of dealing with every facet of money management for a particular healthcare organization. Some of these functions include medical bill reviewing, medical audits, claims, collections and many other crucial functions that are all absolutely essential to operating a solvent healthcare concern in this day and age.
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