Archive for June, 2011


Will Where You Are Make You Rich?

Anyone who’s into investing and earning more from their money may have already heard of Robert Kiyosaki (don’t tell me you haven’t!). Robert was a man who wasn’t particularly good at school and who even failed in a couple of businesses, but is now a best selling author, a successful entrepreneur, and of course, a millionaire. Two of his most successful products are the book Rich Dad, Poor Dad, and the game, Cashflow 101. These products tell of how his failures molded him to become better, and what he did to attain financial freedom.

In his book, Robert talked about financial freedom and the process of getting there. He introduces the Cashflow Quadrant, which is the letters E-S-B-I divided into four quadrants. E stands for Employee, S stands for Self Employed, B stands for Business Owner and I stands for investor. According to Mr. Kiyosaki, In order to be financially free one must learn to move from the E and S quadrants to the B and I quadrants.

1. E quadrant – E stands for employee. You know who you are. Do you have a stable job with benefits? That’s exactly what the employee is after. Money is also known as hours. For example, your charge is $30 per hour, or $60 per hour. Money comes only when you work, and if you decide to take an unplanned day off, you just won’t get paid.

2. S quadrant- S stands for the self employed. These people left their corporate jobs to build their own business. Sounds great right? The problem is, they have now turned their business into another job. They work day in and day out thinking that their working at their business, when in fact they are still stuck in a job they made for themselves.

3. B quadrant – B stands for business owner. This is where we can see the difference between the S and B. The B can easily leave his business for a year to find it growing even bigger when he comes back. The B has successfully built a business system that allows him to leave his business whenever he pleases but still earn money.

4. I quadrant - I stands for investor. These people are those who just seemingly laze around doing nothing, but yet money seems to come to their hands. These people have worked hard early on in their lives, looking for the right investments that will give them money even if they don’t work another day in their life.

Just by reading the descriptions, you already know the difference between those who lie at the E,S,B or I quadrant. It’s the E and S who slave day in and day out for the rest of their lives, working hard for money. While it is the B and I who have mastered the art of having MONEY WORK FOR THEM. Just by definitions alone it’s obvious why Mr. Kiyosaki recommends that people start the shift from the E and S to the B and I.

What about you? What quadrant are you on?


Jumbo CD Rates Remain Up at 1.26%

Because of the way the economy has been going, we can’t expect CD rates to be performing well. Despite the dips and lows that fixed rate certificate of deposits have been facing, it comes as a surprise that their comrade, the jumbo CD, seems to be going up instead.

Jumbo CD rates may not be at their best performance, but they sure are holding up to the rates of the past. The highest CD rate for a 1 year jumbo CD is from E-Loan, with a 1.26% APY and 1.25% rate compounded daily. Coming closely at second is Aurora Bank with 1.23% APY and 1.22% also compounded daily. After Aurora Bank’s rate is a tie between Ally Bank and Discover Bank, both at a 1.20% APY and 1.19% compounded daily.

For those who choose to keep their money in jumbo CD’s for longer though, you can rejoice at a rate as high as 2.40% from First Internet Bank of Indiana. Again, Aurora Bank comes at a close second with a 2.39% APY. Ever Bank then comes at third with a 2.36% APY. These rates apply for jumbo CD rates at the longest term of 5 years.

Past 1 year jumbo CD rates have gone up to 1.45%, but the rates today aren’t too far off despite the economic instability. This allows individuals, small businesses and company owners to breathe a sigh of relief knowing that they can still see some growth with their money. All of these banks have a $100,000 minimum deposit policy.

Jumbo certificates of deposit essentially have the same perks as other fixed rate CD’s, and at this time of unpredictability, it’s good to know that the jumbos are still prevailing.


Why a Roth IRA is Good For You

401(k) plans are starting to take a backseat with the birth of the Roth IRA. The Roth obviously has several advantages over the regular retirement plan, and as soon as you’ve started earning in your job, investing in a Roth just might be one of the smartest investment decisions you’ve made just yet.

So what exactly makes a Roth so smashing? Here are some of the reasons:

1. Tax FREE! - Anything that’s tax free should be worth celebrating. And we only ever get this with the illegal stuff. That’s why it’s good to know that every penny you invest in a Roth plan won’t be charged with a single bit of tax. This could mean a whole lot of savings for you, and a bigger chance to earn more with the interest.

Here’s an example. Let’s say a 25 year old faithfully invested $5,000 per year in his Roth IRA. By the time he retires, he would now have an amazing $1.4 million saved in his Roth at an 8% interest. Without tax, he can enjoy this money without having to pay Uncle Sam a dime. If however, he were charged with tax, his $1.4M will be reduced to only $1M. Ouch.

2. Varied Investments - Stocks, bonds, mutual funds, real estate, you name it, you can invest in it. This makes the Roth IRA more flexible than 401k’s and other retirement plans.

3. Diverse uses – Although the Roth IRA is made especially for retirement, it can be used for other essential life events. These include first time home buying, your child’s education, and even through tough times. There are some rules of course, which you have to be familiar with. And since the Roth really is for retirement, try to keep in mind that that’s what you’re going to use it for.

Obviously the Roth IRA is like a gift from the government. But as always, there’s some strings attached. You can only contribute to the Roth the money that you have earned yourself. Meaning, any inheritance from your parents won’t be counted as a contribution. Also, you can’t contribute more than you make. If you earn $5,000, then you can only contribute $5,000.

The Roth is also partial to the rich, because you can only contribute the full $5,000 per year if your income is less than $105,000 for singles, and $166,000 if married and filing a joint tax account. Income more than that can be phased out incrementally. That’s why it’s wise to start contributing to a Roth while you’re still young and your salary is still within the lower limits.

Despite the restrictions of the Roth, it still beats that regular 401(k) and for anyone who does have the means to contribute, doing so will be a wise decision that will pay off for the rest of your life.


UniWyo Gives 3.65% – On A Checking Account!

With CD Rates dropping like hot potatoes, it comes as a shock to see a nifty rate of 3.65% (the highest CD at this time is 3% by Navy Federal). But guess what, this incredible rate isn’t even for a certificate of deposit, rather, it’s for a checking account.

Yes, it’s something completely new, and it’s certainly a different kind of rewards checking account. That’s why UniWyo Federal Credit Union has named it the Xtraordinary Checking Account. Instead of giving away iPods or cash, UniWyo is rewarding their customers with higher rates. And that’s not all, you also get the chance to earn some money by signing up to their E-statements.

Just like any rewards card, you will have to qualify for the 3.65% rate. It’s easy though, all you have to do is meet these requirements:

* Sign up E-statements from UniWyo
* Have at least 10 debit card transactions per month with an average transaction amount of $5.00 or more
* Deposit directly to your Xtraordinary Checking account at least once a month
* Have an aggregate deposit/loan balance of $5,000 or more

The best thing about it is, you can qualify monthly! If you missed to make at least 10 debit transactions in a month, you can go ahead and try it again next month without fear of having defaulted from the special rate.

As always, there is the fine print. So here’s what you need to know. The special rate will only apply to balances up to $25,000. All balances over $25,000 will be awarded a rate of 0.15% APY. When qualifications for the month are not met, rates will also be 0.15%. And lastly, the rates are subject to change without prior notice.

So those are the things you need to watch out for with this promotion. If you think you can handle the fine print, then go on and head down to UniWyo. One good thing about the fine print though is that no minimum balance is required. So you won’t suffer from any penalties should you fail to deposit in your checking account. UniWyo is located in of course, Wyoming.


Mortgage Rates Dip!

As the US Economy experiences lows, and the stock market is going down with it, the housing market continues to be troubled indeed. This results in mortgage rates going down as well with fixed 30 year mortgages at 4.66 percent, compared to last week’s 4.71 percent.

15 year fixed rate mortgages are also experiencing a dip with a 3.83 percent rate, compared to last week’s 4.00 percent. Only the jumbo fixed rate mortgage digressed from the pack, with an increase in 3 basis points up to 5.23 percent this week.

Apparently the weakness in the housing market was reflected in the declining sales of existing homes, including single family units, town houses, condominiums and cooperatives. Although these might be distressing times for the US economy, these lows in mortgage rates can actually be a cause of rejoicing for those who are looking to a buy a new home.

Just like savvy stock market investors who actually thrive on economic crisis, home buyers can expect a buying spree, that is if they have the means. Real estate investors who have made it through the crunch can now use their creativity to purchase properties at all time low prices.

Here are some banking institutions that can give these low mortgage rates as reported. All rates are for 30 year fixed mortgages in annual percentage rates.

1. Ever Bank – 4.238%
2. AimLoan.com – 4.351%
3. Mortgage Capital – 4.375%
4. Total Mortgage – 4.400%
5. Pleasant Valley – 4.457%
6. Aurora Bank – 4.540%
7. WSFS Bank – 4.510%
8. Investors Savings Bank – 4.660%
9. Quicken Loans – 4.750%
10. CapWest Mortgage – 4.803%

Rates may vary with different states, so make sure to double check if the rates are the same for your area. Also, your state just might have some juicy finds when it comes to low mortgage rates. As Warren Buffet would say, “Be strong when others are fearful, and be fearful when others are strong”.


3 Steps To Getting Rid of That Student Loan

Finally, you’re fresh out of college and excited to start a new chapter in your life. But before you completely immerse yourself into finding a job and making it big, there’s just one little thing that needs attention. Your student loan.

Ok, so maybe student loans aren’t a little thing at all. In fact, it has now only dawned upon you that you’ve reached the time where you won’t be getting any money out of the loan, but instead you will need to find money to pay it off! Before your grace period ends, here’s what you can do to get your student loan in order. Oh and by the way, playing it dumb just won’t get you off the hook.

1. Find out how much you owe – This is certainly the first step you can take to paying it off. You have to know just how much you owe after all these years. You can do this by digging through your old boxes and folders, or by asking your parents if they still have those papers you signed in the beginning. If you’re not a very organized person, log on to National Student Loan Data System where you can see your student loans. Also, you can contact your university’s financial aid office, they can help you sort things out.

2. Choose a Repayment Plan – There are several ways for you to repay your plan. One is standard repayment. With this plan you are expected to pay a set amount to your lender every month, with up to 10 years to pay off your loan. Standard repayments usually require you to pay more than other repayment options, but this will also get you out of the loan quickly. Extended repayment plans still demand a set amount every month, but the term can be extended for as long as 12 to 30 years. Then again, interest will also rise. For graduated repayments, your payment method will start small but then build up to larger monthly payments. Although it may seem like a good choice at first, you can end up paying 1.5 times more than the original amount.

3. Find Other Ways to Lower the Amount - As the saying goes, everything can be negotiated. Although your student loan amount may be hard to budge, original and administrative fees may be easier to waive. Negotiate with a customer service representative what you can do to help make the burden easier. Maybe something as simple as paying online can help reduce your costs.

The sooner you clear yourself off the student loan, the better for you. The thing is, loans don’t only stop with education. You can eventually find yourself applying for a car loan, or a home mortgage, getting you stuck in the rat race faster than you can say cheese. So start being financially responsible as soon as you graduate. Smart decisions early on can help you live a better life in the future.


Navy Federal Credit Union 12 Month CD Rate At 3%

Navy Federal Credit UnionNavy Federal Credit Union is offering a 12 month CD rate of 3%, which is currently the highest yielding 12 month CD. It’s call the Special EasyStart Certificate and comes with a few stipulations. This CD requires a minimum deposit of $50 and has a maximum of $3,000. By putting the maximum deposit of $3,000 at 3% for 12 months, you would end up making $91.25 by the end of the 12 months. These are not the best rates, but if you are planning on holding onto your money, these rates are better than almost all savings account rates and earnings are guaranteed.

Be sure to visit the Navy Federal Credit Union’s website to learn more about this Special CD offer. You can also find the best CD rates by viewing our CD rates page.


The Difference Between Bad Debt and Good Debt

DEBT.

Whenever we see the word, we shudder. It’s that word that makes our stomachs churn, our minds reel, our hairs stand up… ok, so maybe the last one is an exaggeration. The point is, many of us believe that debt is bad, bad, BAD. The irony of it though, is that the ones who think that debt is BAD, are the ones who actually sink into the hole of financial ruin. On the other hand, the ones who believe that debt can be GOOD, are those who seem to be on the road to financial freedom. So what exactly is it about debt? Is there really such a thing as Good Debt?

The simple answer is YES. Good debt does exist. It just depends on how you use that debt to either get ahead, or be left behind. Here’s the simple principle behind it:

Good Debt puts money in your pocket. While Bad Debt takes money out of your pocket.

Does that sound confusing? I mean after all, when you take on debt, that means you’re already in way beyond your means! Well, the thing is, even if you’ve taken on a loan that’s much bigger than your current income, it’s completely fine, as long as that loan can pay for itself.

Let me give you an example. Let’s say you took on a loan to buy a property. Obviously you’re going to need to pay the bank back every month. Let’s say your monthly amortization is $3,000 per month. Now, you’ve taken this property and had it rented out for $6,000 per month. This allows you to pay off your $3,000 monthly amortization, while keeping the other $3,000 for yourself! Basically, what you’re doing here is using other people’s money to gain even more money. This type of good debt is also known as leverage. Sounds familiar?

Now what about bad debt? This one is more familiar to us. Let’s say you needed to buy a car, desperately needed it to get to and from your workplace. You take on a loan and surely, this is good debt right? After all, the car is a necessity! Well, it may sound that way, and it may feel that way. But is this debt putting money into your pocket? Of course not! In fact, it’s even taking more money out of your pocket with the gas, maintenance, and cleaning you need to do.

So when it comes to debt, it’s important to look at the numbers, and not at your feelings. Even though it may feel good to obtain something, (because it’s being sold so cheap, it’s a bargain! or I really need this thing, it makes my life so convenient!) the bottom line is, does this debt give you money or does it make you lose money?

It’s really all a matter of logic. So save yourself from the trouble of bad debt, and go the next level by learning all about good debt, and what you can do to master it. Next thing you know, you’ll be so deep in debt, but yet so rich at the same time. Because you know, you’re deep in GOOD debt.


CD Rates Continue Their Slide Down, But For How Long?

Over the past few years interest rates have fallen to record lows. Low interest rates are good if you are in the market to buy a house, refinance your current mortgage or car loan, but for most of us we have seen our interest rates increase on our credit cards (Thank you CitiCards for the increased rate from 14% to 29.99%, even though I have perfect credit and never missed a payment) and our interest rates fall on our certificate of deposits, to record lows.

By taking a look back just a few months we can see that interest rates are still falling. We reported on February 22, 2011 that Walden Savings Bank had a 6 Month CD at 0.75% with a minimum deposit of $1,000. That same certificate of deposit sits at 0.60% for the 6 Month term. We also reported on April 6th, 2011 that Aurora Bank had the current best 1 year CD rate at 1.25%. Now just over two months later that same CD from Aurora is down to 1.21%.

Even the longer term CD’s are seeing drops in interest rates. The 24 Month CD from SalemFive ($10,000 minimum deposit) has dropped from 1.75% on February 21st 2011 to 1.30% on June 23rd 2011. Most major banks have been lowering their rates, while many credit unions such as Melrose Credit Union out of New York has held their rates steady for the most part. Melrose’s 2 year CD has been at 1.66% APY since February. In fact Melrose holds the top spot for the 24 month CD at 1.66% with a minimum deposit of $5,000. This is a credit union that has opened its door’s to anyone located within the USA. You will want to visit their website to view their terms and conditions for opening an account.

Thus far CD rates have fallen throughout the year, while some have held steady. If you plan on investing money into any CD, its best to research as much as you can before making a decision on which bank and term to go with. You can easily find a list of the best CD rates from our CD Rate table for your research. In an unstable economy, rates can continue to fall, so it could be wise to put your money in a higher interest, longer term CD or it could be just as bad to be stuck in a CD with a low interest rate while CD rates increase.

*We cannot make any financial advise and take no responsibility for the actions people take from visiting our website. Please consult your financial advisor before making any investment decisions.


Benefits of Having A Checking Account

Checking accounts are those bank products that always seem to be getting the promotions. Banks are always throwing around promo after promo just to get you to sign up to a checking account with them. If you’ve managed to deflect all the free Ipod Touch promotions, here are the real reasons why you should open a checking account:

1. Security - Carrying around a check book is much safer than bringing large sums of cash. You’d be less prone to muggers and even if someone did steal your bag, they wouldn’t be able to do anything with your checkbook since it doesn’t have your signature in it anyway.

2. Convenience – It becomes easier to make large payments with a checking account. Plus, you won’t have to go to your bank to arrange for a manager’s check since you already have a booklet of blank checks in your drawer. You can also pay bills with a check, without needing to go to the bank to withdraw or to an ATM.

3. Management - Having a check book makes it easier for you to see where your expenditures are going. The nature of the check book requires you to note down every time you deduct something from your account. Withdrawing from the ATM can make you easily forget what you withdrew the money for, but with a check book, you can clearly state it there, keeping you in track of your money spending habits.

4. Establish Credit – And finally, one of the most important benefit of having a checking account is that it helps you build your credit score. This can be useful in the future, especially if you’re thinking about taking up a loan or mortgage.

The next time the bank announces another Ipod Touch promotion or a free $100, go ahead and take advantage of it. After all, checking accounts are good for you.

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