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Archive for the ‘News’ Category

Introduction.

With savings not really returning very much with such low interest rates the one savings plan it really does make sense to put your money into just now is your 401(k) pension plan. Of course how much you can actually save in to your pension fund will to some extent depend on how much you earn and what percentage of your monthly paycheck has to go on essentials. As a minimum you should be aiming to save 15% of your annual salary, of course if that’s not possible then put by the absolute maximum you can afford. Don’t forget too, if your employer pays into your pension they’ll quite probably contribute half the amount you pay as part of your remuneration package. Even if you can only afford to save 6%, with the employer contribution that could be 9% – which sounds a lot healthier.

What can you expect.

Quite simply the more you save and the longer you save money into a pension plan – the more you’ll get out of it come your retirement. The biggest problem with pension plans is that many people start saving for their pension later in life than they really should. The net result of that is that at age 45, even on an annual salary of $50k, with a relatively modest 9% pension plan including the employers contribution the best you can hope for is a pension pot of $420k. With many folk living well into their 80s these days $420k won’t go far!

Boosting your pension.

So, how to boost your pension? Well, if your employer agrees, working for two more years could add $70k to the pension pot. Alternatively pushing your pension contribution up to 10%, 15% including the employer’s share, and the pension pot rockets to $520k. $401(k) pension fund interest rates are typically around 6%, so the real killer move is to look for a private pension fund that’s offering 8% or better and, hey presto, that pension pot of you’re is suddenly worth $560k. Finally, work a couple of years longer, increase your contribution and look for a better pension portfolio return – and you’ll be sitting on a pension pot worth over $800k!

Introduction.

Sounds too good to be true that you can get easy loans? Well it’s a fact that these days, with just a little bit of research on the internet, anyone can access an easy loan for just about anything they might want to do. Where are all these easy loans to be found – through peer-to-peer lending websites, also known as social lending clubs.

How it works.

Using a social lending club to borrow money is rather like buying something on an internet auction site like eBay. The difference is that rather than advertising some goods for sale you set up an advert requesting to borrow a sum of money. The lenders in the person-to-person lending website then make you offers, which you then choose from. For example, say you wanted to borrow $25,000 – perhaps to fund a wedding, start-up or develop a business, to pay off that last bit of your expensive mortgage or even to finally have that cosmetic surgery.  One lender might offer you the money to be repaid in 2 years at 8% interest, whereas perhaps another might offer terms over 3 years at 6% – you can then decide which you offer you can best afford. That might be a short repayment period or perhaps a lower rate of interest but over a longer repayment period. When registering with a social lending website, both lenders and borrowers do have to agree to some financial and personal checks – to make sure they’re who the say they are and so as to avoid any fraud occurring. Other than that, even if your credit rating would mean that many High Street banks and lenders would not even reply to your application to borrow money, you’ll find your application quickly approved and processed.

Borrower and lender.

Too good to be true you might well think but – by using a people-to-people lending website you really can access low interest rates to fund your project. Is there a catch, well no there isn’t but it does have to be said that social lending only works because the lender is prepared to trust the borrower. Despite the checks that are made on the borrower, the lender really is dependent on the honesty of the borrower when it comes to having their loan repaid. Having said that, if you fancy the idea of making some money as a lender on one of these websites, many lenders form groups of lenders, each contributing funds towards a loan, thereby minimizing their risks and exposure.

Introduction.

Summer 2010 and the unemployment rate stubbornly remains at around the 10% mark. Time was and only the unskilled and semi-skilled workers would worry about such a high unemployment rate but, since the recession of a couple of years ago ex-workers from across the employment sectors are struggling to find both new jobs and finances. The net result of this is that highly qualified and skilled workers such as accountants and IT specialist etc are now wondering what their 99er prospects are.

99er payments ending.

Therein lays the problem for millions of people in the USA right now – that for folk who lost their jobs at the start of the recession, the 99 weeks of federal unemployment support will shortly be coming to an end. Of course the effects of unemployment are devastating to all, but they are also relative to the individual concerned. The classic view that unemployed people must be unskilled workers with no means of personal financial support, other than that offered by the government, is no longer true. Along with this is the fact that not all 99ers will be hopelessly in debt and fighting to pay a sub-prime mortgage before their home mortgage is foreclosed. Such skilled and professionals who have found themselves in the unenviable position of being 99ers will, by and large, have had some financial cushion to help supplement the federal aid. However, with that aid coming to an end – what can they do before all of their savings become depleted?

Work for yourself.

The answer to that last question is that they should re-think their attitude to work and think – why should “I work for the man” when I can work for myself? For a very modest outlay they can equip themselves to become an online trader in things like Forex and CFD. Forex trading is where you make your money by finding the best deals in foreign exchange currencies using, requiring only a computer, fast broadband and a the specialist Forex trading software. CFD stands for contract for difference, whereby you make money trading shares online according the opening and closing prices that they are quoted at. If that sounds too complex – why not find your own niche market and become the number 1 online trader in that instead.

Introduction.

Whether you’re looking for a new credit card or are concerned about the safety of using your credit card – at last there is a new safe credit card that you can ask for. Currently only available as a Visa credit card it is the ultimate in new safe credit cards not only having an in-built chip, but also its own built-in keypad and LCD screen.

Visa CodeSure.

Following months of trials in Europe the new credit card known as Visa CodeSure can now be being rolled out to banks. The card is the same size as the normal credit card you’re already familiar with and, on the front, looks exactly the same too. The difference is when you turn the credit card over. By the signature strip you’ll now see a small screen and a tiny 10 digit pressure keypad. The significance of this is that now, prior to a transaction being you enter the PIN number only onto the card – not a card reader that is not permanently in your possession or control. The result of this is a massive reduction in the risk of credit card fraud by a reader recording both your credit card number and its PIN. Visa CodeSure also means the end of the need to remember your Visa Verified id and password when making online transactions or needing to carry your own separate card reader around with you. Instead on entering your PIN onto the card a unique one-time pass-code will appear on the card screen instead.

The cost of safe credit cards.

The cost of the new credit card to you should be $0 – with the banks themselves picking up the bill for a credit card which is, understandably, much more expensive than the current ones in use. However, with credit card fraud still rising by around 15% a year surely that’s a cost the banks won’t mind if they are truly serious about reducing credit card crime. One thing to watch out for as a user of these new credit cards is that they do have an on-board battery to power them, that has a life-cycle of about 3 years. No problem really as all the banks need to do is have credit card expiry dates within the lifetime of the battery. But, as it contains a battery, please do remember to be a green card user and dispose of it in an environmentally friendly way.

Introduction.

I guess it was only a matter of time before Mohammed Yunus’s Nobel Peace Prize in economics, for his pioneering work in micro-loans, – started to draw attention from the big banks and finance houses. The problem is quite simple really, what started out as a system whereby one person lent a relatively small amount of money to someone else for the purpose of, say, improving their sewing business in a developing country – has blossomed into a $60 billion a year loans industry.

Micro-Loans in the beginning.

As mentioned above the idea of micro-loans was originally very straightforward and low key. Rather than leaving any spare cash you had in a bank, instead you made micro-loans to individuals or small organizations and  businesses – who when they then repaid your loan had to pay a small amount of interest; often as little as 10% and way below commercial loan interest rates but generally higher than savings interest rates too. This made the micro-loan business more akin to a charitable system than a business one. However, to the people making the loans that didn’t matter as, by and large, they were as interested in their money doing ‘good’ as they were in turning a profit.

Micro-Loans today.

Fast forward a few years and the demand for micro-loans now by far out-strips the supply. Yes there are a lot of people out there that want to ‘do good’ with their spare cash; but there is only a finite supply of it. Needless to say the big banks and finance houses are stepping in to fill the void, ever keen to turn a dollar and even if it is to a high risk venture in somewhere like Nigeria. The sad part of this is, however, the interest rates that they are choosing to charge. No longer set at the charitable 10% – some of these big banks and finance houses are charging as much as 100% interest to high risk projects – as bad as if the borrower had gone to a loan shark. Ironically, they’re saying the high interest rates are because of the high demand for micro-loans in the first place! If you have some spare cash but do need to make a small profit on it and yet are basically of an altruistic nature – then providing micro-loans is something to consider. To get involved in micro-lending, look for a social lending website that is transparent about giving loans to poorer people to help them – rather than to just simply make a profit out of them.

Introduction.

Tired of that 9 to 5  job, tired of being tied down to doing ‘what the man says’ etc, then perhaps you’re ready to have a shot at home trading. Home trading isn’t just sitting in front of your computer at home selling the odd bit clutter that you no longer want on eBay, oh no. Becoming a home trader means that you’re moving into the world of stock trading, but rather than having to suffer the city rush hour – you’ll be surfing the internet from the comfort of your own home.

Stock trading systems.

There are several stock trading systems you can use to operate as a home trader from ones that are highly automated according to pre-set parameters to ones that give you personal and total control as to which stocks you buy or sell and at what prices. To go into home trading you do need to have a good head for money and at least an idea as to how the stock markets work, preferably by having previously had some sort of investment portfolio, even if it was managed by someone else. After that, if you think about the mess the so called professionals made of all our investments just a few months ago – surely you can’t do any worse than they did? Alternatively, using Web 2.0 technology you could join a group of other online stock traders to share expertise and information, in order to learn about day home trading as you go along.

CFD trading.

CFD or contract for difference trading is a way of trading from home over the internet without needing to invest any real assets. A CFD trader watches the changes in prices of stocks, indexes and foreign currencies looking for advantageous margins of trade between the opening and closing price. CFDs work by a seller agreeing to pay a buyer the difference in the value of an asset between the price at the start of a contract and its conclusion.

Introduction.

Everyone wants to find that elusive way to make money without any risk or too much hard work. Well the fact of the matter is that anyone with some spare cash can make even more money from it – if they’re prepared to be a little bit patient and take a small risk with it. The answer is quite simply to invest your spare cash in a business that’s either in need of a loan or looking for partners to perhaps finance a new project.

Considerations for investing in a business.

Quite simply with bank interest rates being so low at present – you might as well put all your cash under the mattress for all the money it will currently earn in the bank. So, instead of waiting for the day to come when the banks finally start to pay you a decent return on your savings – why not get that cash earning more money for you by investing it instead? If you’ve never invested in a business before this might seem like a big step to make, the key thing to do here is not just to randomly pick a business to invest in. Instead, find one that meets your values and ethics and, perhaps even more importantly, think about the people you’re investing your money with rather than just the business. If one business might seem to offer a fantastic return on your investment, but you don’t like the people you’re dealing with; your gut instinct to invest in  another company even if it offers a lower return might well be the best one to make.

What about social lending networks?

If you’re still not too sure about dealing face-to-face with someone to invest your cash in, why not look into social lending groups. Social lending groups have been around for a long time and now invariably operate through the internet.  Individuals, or small businesses, needing to borrow money advertise on social lending websites for potential investors. You can choose the type of businesses to invest your money in and, if the required loan amount is beyond your personal capability, you can join a group of lenders who together can make up the full loan amount.

Introduction.

As the money markets start to get themselves back into gear – what chance do first time buyers have of getting a good mortgage deal? Whereas before the credit crunch getting a 100% or even better than a 100% first time mortgage was as easy as a trip to the supermarket, post credit crunch all of the great deals simply melted away. The situation now is that without a big wad of money to put down as a deposit getting any sort of a mortgage is still tough for the first time buyer.

Things are improving.

The good news is that, even compared to six months ago, things are starting to look up in the mortgage markets, especially the highly competitive online mortgage deals. You’ll still not find that 100% or better mortgage offer, but the days of being asked for a whopping great 25% or even 30% deposit do seem to be over and deposit requests are falling and seem to be settling around 10%. Of course even a 10% deposit is still a hefty sum to find, a fairly modest apartment in most places will be $150k, so finding $15,000 as a deposit is still a big ask. So, is anyone out there prepared to offer 95% mortgage loans reducing the deposit requirement? Well, yes you will find online 95% mortgage offers for first time buyers, but the catch is that they will carry a higher rate of interest on the mortgage.

Loan to value calculations.

If you’re struggling to make a big deposit for the dream home you want to buy and so are looking for a 95% mortgage, the company making the loan will make a loan-to-value calculation to determine exactly what mortgage deal to offer you. To get the very best mortgage deals at present you still need to offer at least a 23.2% deposit, a lot yes but better than last year when it was 24.3%. So, without wishing to be too over-simplistic; if you can make their full deposit target you’ll get the best interest rate - let’s say 3.5%. If you can’t make that full deposit – you will still get your first time mortgage but with interest rates to penalize you, which on a 95% mortgage could easily exceed 5%.

Introduction.

If it’s something you’ve been thinking about but not acted on so far – there might never be a better time to start doing some FX trading of your own now that the Euro is so weak. After what began as concerns regarding how the Greek government could cover its huge national debts, being one of the 16 member Euro zone states, the whole economy of the Euro could come under threat leaving it wide open to FX speculation.

Europe and the Euro.

If you really are new to the idea of FX, it simply means foreign currency exchange – where you buy and sell foreign currencies making profits on them as there values rise and fall. The problem for Greece and the Euro is that unlike the US dollar, Japanese Yen or the UK sterling that are the national currencies of single countries, the Euro is a currency commonly used across most of the rest of Europe. Subsequently, if one country in the Euro zone has financial difficulties all of Europe can suffer by having to help bale them out. The net result of this is that on the FX markets the value of the Euro falls.

Why you should buy Euros for FX trading.

All of the major international currencies rise and fall in value on a daily basis. The problems that the Euro is having looks like it could well last some time and the value of the Euro could yet fall even more. So, you can currently buy Euros quite cheaply and by waiting for the value of the Euro to then rise again, when the economic crisis is over, then selling them you can make a huge profit – all just for being patient. Patience is something you need to have when starting out in currency FX finances. Big profits can be made overnight by dealing in Euros or just about any foreign currency – but the really big money is made by buying a foreign currency at its lowest value then using specialist FX software and services to calculate the optimum price to then sell it at.

Introduction.

We’re never afraid at “fntn.com” of advising anyone with a large amount of debt to destroy all but one of their credit cards. However, is that also good advice to give to people without any debt or those with a manageable level of debt? The past 12 months or so have seen millions of people see their credit limit on credit cards that they don’t use, or use infrequently, lowered. Why is that and what might it mean to you in the future?

Using credit cards and credit scores.

It’s a simple matter of fact these days that if you have a credit card but don’t use it, the credit card company may well reduce the credit limit or even cancel it. If you have several credit cards this won’t be a massive inconvenience, you can simply use one of the other credit cards you possess. However, if that was the only credit card that you owned or if you then wanted to apply for another new credit card – the fact that you’ve had one cancelled, or even the credit limit reduced, could well go against you! How can cancelling a credit card or having the credit limit reduced go against you? Well, as far as the credit card company is concerned their logic works along the lines of – you’re not using our credit card because you can’t afford to repay any debts on it, for good measure they’ll then lower your credit score too.

Maintaining your good credit score.

It might well sound a ‘topsy turvy’ old world but these days, in that to maintain a good credit score, you need to be able to almost constantly prove to the credit agencies that you can repay debts without any problems. Needless to say, using and repaying credit card debts is one of the things they look at for that. So, an inactive or cancelled credit card can be interpreted as potential credit trouble – as outlined above. Although you need to keep tight track on what you’re spending on your credit cards; do use them regularly, not forgetting to regularly and on-time pay them off. Also, don’t forget to keep track of your FICO credit score, and that you’re entitled to a free credit score report once a year from each of the credit agencies.