Help Bankruptcy Blog

There will be times when we would experience some financial difficulties. With the ever increasing cost of living, which is already high to begin with, coupled with the ever increasing instability of employment opportunities, people need a bailout option in the event that the brunt of financial dangers fall their way. Thank God, therefore, for loans. Loans allow us to borrow the cash we need when we need it, and they can be lifesavers during those times of extreme financial distress.

But then again, loans arent for everyone. There are so many safeguards in place, security checks that aim to protect the creditor and, as observed by most, make life so much harder for the borrower. A home mortgage loan requires that down payment is paid for the subject house, for example. A construction loan requires a good business history of at least 3 to 5 years. These rather steep requirements make loans quite inaccessible for most people.

Enter Personal Loans

Personal loans offer a great alternative for people who want to acquire loans fast, with minimal requirements needed. Personal loans are unsecured loans, meaning, they can be acquired without the backing of collateral.

Personal loans are usually acquired through banks, building society or other lending institutions. To a certain degree, personal loans are often used synonymously with loans granted by family or friends, but in the technical and legal sense, such tag is a misnomer.

Why A Personal Loan Is For You?

Personal loans are one of, if not the easiest loans to garner, at least when it comes to applying for one. Let us take a look at the benefits of opting for personal loans.

* Personal loans can be granted quickly. Without the burden of too may procedural requirements, personal loan applications can be acted upon as early as two working days in most territories.

* Personal loans have lower minimum amounts compared to other loans. Personal loans can be acquired for as low as $3,000.

* Personal loans are perfect for debt consolidation. If you have a subsisting loan which has a high interest rate and locks up an important property as collateral, when you want to dispose of such property for extra funds, you could consolidate the same with a personal loan to free up the property and reduce the interests you have to pay. Also, you could opt to pay for the old loan with a personal loan instead, if your application for the latter is approved even with the existence of the first loan.

Why A Personal Loan Is Not For You

But then again, personal loans arent for everyone. Lets take a look at the disadvantages of this type of loan agreement.

* Personal loans are loans with a short tenure, the maximum of which is 5 years. If you secure a personal loan, you have to be doubly sure that youll be able to pay or it, together with the corresponding interests, within the said time period.

* Speaking of interests, personal loans have relatively high interest rates. As a general rule, the interest rate is proportional to the amount of loan you acquire. Such a rate can be a low 8% but it could spike up to as high as 30%. The average applicable interest rates, however, is somewhere between the range of 17% to 26%.

* These interest rates are not tax-deductible, which should play a crucial part in planning for a sustainable budget.

* Because personal loans are unsecured, lending institutions would check up on the applicants credit history. If your credit history is rather tarnished, you might find it hard to be granted a personal loan.

Should You Or Shouldnt You?

A personal loan is a great way to be granted the cash that you need really quick. If you find yourself in a financial bind that requires a fast fix, applying for a personal loan would be a prudent option. Just make sure that you would be able to pay for the same within the short period that will be provided, otherwise, as with other kinds of loan, you might end up in deeper trouble than when you started out.

financials

Is it the thrill of the gamble? Is it the chance to strike it rich by betting it all against the odds? Is it the fear of missing ‘the next big thing’? What motivates people to risk their hard earned money into the stock market? Know what motivates you will help you become a better investor.

I’ve seen it time and time again. Usually once a week, I get asked if there is some great penny stock that they can invest $500 into that will somehow turn into $1 million. If I knew that, believe me, I’d be investing a lot more of my money, my family’s money and letting all my friends in on the big secret. There is no holy grail when it comes to trading futures

First, if you can only afford to invest $500, sadly, you may have identified some shortcomings in your personal finance situation. The truth of the matter is, a $500 investment in penny stocks, is the exact same thing as going to Las Vegas and playing the slots. You may even find your odds are better there.

While I’m not suggesting that you head to Vegas instead of planning your financial future, the key is to know where you’re starting from and where you want to get to. You’ll need something more specific than ‘I want to be rich’.

What if you have a lot more than $500 to invest? What is your motivation for being in the stock market? Obviously it’s to make money. However, that may actually be the wrong approach to take when you’re investing.

That doesn’t seem to make any sense does it? Stick with me for a minute.

Instead of focusing on how much money you want to make investing in options or any other type of investment, focus on the amount you are prepared to lose when you’re trading.

Now before you decide to move onto the next article, read that question again. It may be the most important statement on your way to becoming rich.

How much money are you prepared to lose investing in the stock market?

Here’s why that 1 sentence will help you make more money than you have today.

When we invest in the stock market, we research the company, we look at trading history, we invest time. Before long, we’ve made the decision that this company is truly undervalued, and appears to be the best stock pick we can find.

That’s called due diligence, and it’s a major factor towards your success. So where does my “lose” factor come in?

Simply: how much money am I prepared to lose before I decide, maybe I missed something. Maybe I invested at the wrong time.

The fear of losing money will actually help you keep money. Here’s why.

If you say to yourself that you are prepared to lose $500 on this stock, you have helped set a stop loss for yourself.

Enter in your stop loss, and you no longer have to worry about making a 5% loss into a 20% loss. How many times have you invested in a company, only to watch the stock price move 5%, 10%….40% lower before you finally said, yikes, I have to sell and take whatever money I can get back!

I’ve done it before. Then I started using a stop loss. Now, I already know how much money I am going to lose if I am wrong, and if the stock price moves higher, I can move up my stop loss to protect my gain.

If you lose $500 on an investment, you need to make $1000 just to break even. What if you held too late and lost $1000. Now you need to make $2000 just to break even.

By increasing your stop loss as the price moves higher, you no longer have to worry about taking a profit, and watching it dissolve into a loss. If you’re now up $1500, it’s great knowing that regardless of what the stock price does, you’re going to make at least $1000?

There are many factors that we cannot control, including market makers, world events and just the general mood of investors around the world. Many great companies have experienced a downtrend for no apparent good reason.

Know your reasons for getting into the stock market, learn to control your emotions, and, know how much money you are prepared to lose. It makes selling the stock so much easier when the time comes.

by Joshua Geary

In our last blog, we mentioned that if you were thinking of converting some of your IRAs into a ROTH IRA, we said that the assets must leave the ROTH IRA by the end of the year; i.e. December 31.

But what if you change your mind about the conversion? That’s no problem at all. All you need to do is instruct your accountant or custodian to have it reversed through a mechanism called “re-characterization” but bear in mind that this has to be done by October 15 of the following year.

Re-characterizing means treating a contribution as being done to another type of IRA instead of the initial IRA to which the contribution was made. An easy way to illustrate this is, let’s say you make a $3,000 contribution to a traditional IRA. A few months later, you take that same contribution and re-characterize it as a contribution to a ROTH IRA. One thing you need to remember is that when you move this $3,000 contribution, it should include both the earnings and losses that it incurred while it was in the original or first IRA.

There are other things that must be looked into with a fine tooth comb before the year ends, and annual reviews become more critical as you get older. So if you’re in your mid-50’s and preparing a retirement strategy, you can avoid the penalties that are normally imposed by the IRS for failure to comply with end- of-year deadlines by diarizing the required transactions.

For more helpful information regarding self directed IRAs, Roth IRAs, and 401ks come by and see us at myrealestateira.com.

by Joshua Geary

We’re assuming that by this time, your self-directed IRAs and other IRAs as well as ROTH IRAs or other vehicles you may have – are all in place. But giving them a more in-depth scan would be a healthy resolution for the New Year. There’s always the chance that one or two areas could be improved – a difference of a few thousand dollars more for your pocket.

Before 2006 ends, here are some elements you may want to check:

(A) RMD – required minimum distributions. If you are 70-1/2 years old or if you are the beneficiary of retirement assets, you may be required to withdraw a certain sum for your retirement account each year. If you fail to make the RMD by the deadline date, you could end up making the IRS richer by paying a penalty of 50% of the balance of the excess accumulation. Speak to your IRA custodian about the use of the fair market value (FMV) of the previous year in determining the amount of this year’s RMD. Since he’ll be submitting to you an FMV statement on the 31st of January the following year, he’s the person who can explain this in detail. Make it your business to know every transaction detail that is carried out – it is YOUR money.

(B) ROTH IRA conversions – if you’re planning to convert your traditional IRA, simple IRA or SEP into a ROTH this year, the assets must leave the ROTH IRA by December 31. If your accountant believes that you’ll be paying lower income taxes this year as opposed to next year, then any ROTH conversions executed this year would generate lower taxes on the amount rather than if converted next year.

Get the most from your accumulated IRAs - discover and utilize available options at myrealestateira.com.

by Joshua Geary

Okay, so you’re only 30, you say, why worry about retirement when it’s light years away? That’s precisely the reason.

You need to think about retirement because it’s this time when you have the most mileage and leverage. Do it now while you’re still

years away from your 50s and 60s because acquiring retirement savvy does not happen overnight. Think of all the financial maneuvering

you can do with your 401(k) as an example. The 30s and 40s are you wealth-building years – they’re also the years when you’ll be

changing jobs quite often and taking your retirement plans with you to the next employer, or the next town, or the next state. As you

get into a mortgage and build a family, the word “retirement” may seem rather remote but this is the best time to take advantage of time

while it’s still on your side. So while the 30s and 40s may seem like exciting times peppered with career progressions and stock options

and salary perks, it is, alas, also a time for easily getting into debt. The average American family now needs a second vacation home,

will be buying a third car, looking at private schools, and of course investing in those dental braces that cost an arm and a leg.

As everyone ushers in 2007 with the usual fanfare and champagne and fireworks, you could start thinking about how to add some

spark to your IRAs and company-sponsored retirement plans.

You just might wake up one morning when you’re 55 and sigh, “dang, why didn’t I do it then…”

Get in on the advantages of youth in preparing for retirement with a self directed IRA or 401k. Check it out at myrealestateira.com.