Chill Maadi

By the time you finish reading this, you will be equipped with the knowledge about insurance. Well the first thing to note is that there are two major types of life insurance- whole and term.

However, we will discuss more about whole life insurance. What exactly is a whole life insurance? A whole life insurance is bought on a permanent basis and the insurance remains in effect until the pay out of the policy.

The policy will pay out upon the death of the insured or upon an event as specified in the policy.

Have you ever thought of the benefits? Well below are the benefits of a whole life insurance over term life insurance.

Guarantees

There is something that a whole life insurance can offer which term life insurance can’t. It is stability. Whole life insurance carries stable premiums, a guaranteed pay out and guaranteed coverage.

Another important thing that whole life insurance can offer you is that there are no limits as to time and often the pay out can occur before death.

Cash Value

If these benefits do not seem attractive enough you should read on. One of the greatest benefits a whole life insurance policy can offer you is cash back. What is cash back? This means you can borrow against the money or even cash out early.

This is considered one of the best policies because you cannot get that with term life insurance as there is no cash value.

However, if you borrow a certain amount from the policy you bought, you may not need to pay back but this means that the final pay out will be less the loan amount.

Flexibility

Most whole life insurance policy is very flexible. You can alter the benefit amount and change things according to your needs as years go on.

Additionally, because the policy carries cash value that you can cash out with at any time, you always have the option to take your policy elsewhere without losing the money you have paid into it.

However, whole life insurance is not for everybody as the premium are higher but it is the best option for people that needs a secured future for their family.

Life insurance is something that anyone with dependents and people who rely upon them should look into purchasing. It can give you the comfort because you will know that your loved ones get the pay out upon your death and that can help immensely in such a trying time.

Re-shopping a home mortgage loan can save you money, but it can also become a costly mistake. Elizabeth Warren and Amelia Warren Tyagi explain when to sign and when to run from a home refi contract.  From their book All Your Worth: The Ultimate Lifetime Money Plan.

1. Arm Yourself Before You Call. You can save a lot of time in the long run and make things a lot easier if you get ready before you start shopping.

• Clean up your credit report. The mortgage lender will start by ordering a copy of your credit report, so your best bet is to clear up any errors ahead of time. Order a copy of your credit report from each of the three big credit bureaus: Equifax, Experian, and TransUnion. (Depending on where you live, you can get your report for free or for a meagre fee.) Steer clear of anyone who offers to clean up your credit report for you; they charge a lot of money, and most of them don’t do any good anyway. This is strictly a do-it-yourself job. If you find any errors, notify the credit bureau immediately.
• Here are some common errors to look out for: mistakes in your name, Social Security number, and other personal information; accounts that are not yours; bankruptcies that are more than 10 years old, and additional negative information that is more than 7 years old (by law, the credit bureau is required to remove that information); credit inquiries that are more than 2 years old; missing notations when you’ve disputed a charge; list of credit card and mortgage accounts that are in good standing; closed accounts that are incorrectly listed as open.
• According to a recent poll, 1 in 4 credit reports contains an error serious enough to keep you from getting a good loan, so be sure to take the time to check your credit report before you apply for the mortgage.

• Gather your financial information. Gather your pay stubs, tax returns, bank statements, and the like. You’ll need this before you can finalise your applications, so you might as well gather it ahead of time. You can usually get a more accurate quote if you have all the information at the time you apply.

• Find out your current mortgage balance. This should be listed on your monthly mortgage statement. If you’ve thrown that out, then call the mortgage company and ask.

• Learn how much your house is worth. The lenders will need to know this so they can calculate a “loan-to-value ratio” (which tells them how much equity you have in the house). The more capital you have, the better your interest rate. Eventually, you will need an official estimate of the value of your home, but having a general sense ahead of time can help you with your shopping. So check out the open houses in your neighbourhood and take a look at the real estate section of the newspaper, so you get a ballpark estimate of what your house is worth.

2. Get multiple quotes. Before you buy something big — say, a washing machine or a new television — you probably check prices at two or three stores. Well, your mortgage probably costs 200 times more than your washing machine, so you should talk to 400–600 mortgage companies, right? Okay that’s a bit much, but you get the point — shopping hard for a mortgage can save you far more money than shopping for pretty much anything else. So put in the time to get it right. Here’s our rule of thumb: Five quotes before you quit. Five different mortgage companies with lots of information and plenty of range to compare. And if the quotes are all over the place, then you may want to get five more. The bottom line is that the time you spend here pays off big time.

3. Never forget that the mortgage broker does NOT work for you. The mortgage broker, like an insurance broker, gets you price quotes from a lot of different places and gets a commission for his services. So far, so good. But, mortgage brokers (unlike most insurance brokers) often get extra commissions from the lender if they talk you into taking a mortgage with a higher interest rate than you qualify for. That’s right: They get kickbacks for steering you to a bad deal. And it’s perfectly legal, so you’d better beware.

Yes, it is your money. Yes, you choose which lender will have your mortgage. Yes, the broker will tell you that he “checked with all the banks” and that he found you “a great deal.” But the fact is, mortgage brokers are a lot like car salespeople. The more you pay, the more they make. A recent study at Harvard Law School showed that people who went to mortgage brokers paid, on average, over $1,000 more than people who went directly to the mortgage lender.

Does this mean you should never use a mortgage broker? Not necessarily. Some reputable brokers will give you an entirely fair quote. (And some mortgage companies will steer you to a bad deal if you don’t use a broker.) But you should never count on a lone broker, a single Web site, or just one lender to show you all your options. The lesson is straightforward: You must get on the phone and get quotes from several different sources. If you’re not sure if a particular company is a mortgage broker, ask. And keep asking questions until you are sure you have the best deal.

4. Do not increase the amount of money you borrow. There are lots of people (including several so-called financial experts) who will tell you that it’s smart to “cash-out” your home equity and take on a bigger mortgage. Well, we’re here to tell you it isn’t intelligent. It is just plain dangerous. You are not “cashing” anything. You are only borrowing money that you will have to pay back someday — and you are doing it in the most dangerous way possible. If something goes wrong and you can’t pay, the mortgage company gets to take away your house. Remember this simple rule: When you refinance your mortgage, don’t let the bank talk you into taking on a single dollar of new debt.

5. Watch out for fees, points, and other fine print. Picture this: a team of lawyers fanning out through a forest to lay bear traps, which they carefully cover over with leaves. Then switch the image: The forest is just a mortgage agreement, and the leaves are just words to cover up what they are doing. But the traps are real, and you need to make sure that they aren’t in your contract. Here’s a list of the questions to ask, along with the answers you want to hear:

• What is the interest rate? By law, every mortgage lender must quote you the annual interest rate. (You may also be quoted the Annual Percentage Rate, or APR, which lumps certain fees into the total cost.) Once you have the annual interest rate, you can make an apples-to-apples comparison on the interest rate, which is probably the essential part of the loan. Here’s a rule of thumb: Unless you have recently declared bankruptcy or have abysmal credit (and we’re not talking about a couple of late payments) if someone wants to charge you more than the average market rate, this is probably a bad deal.

• How many points are on the loan? A “point” is just jargon for an extra fee of 1% of the total amount of the mortgage loan. Generally speaking, there is a tradeoff between points and interest rate: A loan with fewer points will have a slightly higher interest rate, and vice versa. If you think you will sell the house or refinance again in the near future, then your best bet is usually to avoid the points and pay the higher rate. Regardless of how long you plan to stay in the house, you should steer clear of any mortgage that charges more than 1–2 points. Don’t assume that all big lenders charge about the same fees. Not long ago, when most companies were charging less than 1 point on refinancing, Wells Fargo reportedly charged some customers as much as 10–12 points!

• What are the closing costs, origination costs, and other fees? Ask for a “Good Faith Estimate” of closing, origination, and other costs, and use this information when you do your comparison shopping. If the fees are unduly large, or if the estimate is in a range that is too wide to be useful (for example, we heard of one company that tells people that the fees are anywhere from $0 to $12,000!), walk away. This isn’t a company you can trust for the next 30 years.

• How long is the payoff period? The typical mortgage payoff period is 30 years. But if someone tries to steer you to a 40-year loan or an “interest-only” loan (where you never pay off your mortgage!), run the other way. And if you have a relatively short time left to pay on your mortgage — 15 years or less — get a 10-year or 15-year loan, rather than a 30-year. Lower monthly payments are great, but not at the cost of keeping you in debt for more years than necessary.

• Is this a fixed or variable rate? If rates are low, then it is a good idea to lock in the rate for as long as you plan to live in your house. You will pay slightly more for a fixed-rate loan, but the security is worth it; the rate on a variable loan can go up at any time. If you think you will stay in this house for the rest of your life, get a 30-year fixed-rate mortgage. If you are pretty sure you will move on in a few years, you might consider a mortgage that is fixed just for the first 5 or 7 years, which tends to be cheaper than a 30-year fixed loan. Brokers call such mortgages ARMs, for adjustable rate mortgages. At the end of the 5- or 7- year period, the rate can vary, but by then you will have sold the house and moved on. But stay away from any ARM that lasts less than 5 years; the risk that rates will rise while you’re still living there is just too high. And if you’re not really sure whether you’ll move or stay put, your safest bet is still a 30-year fixed loan. It costs a little more, but 30 years of easy sleeping is well worth the price.

• Is there a balloon payment? If the answer is yes, walk away. A “balloon payment” is a giant payment that will be required of you at some point in the future (on top of your usual monthly payments). These are notorious scams that have cost countless homeowners tens of thousands of dollars in extra fees, and many have even lost their homes.

• Is there a prepayment penalty? If the answer is yes, walk away. If you need to sell your home, or if you want to refinance to obtain a better rate in the future, a prepayment penalty leaves you at the mercy of your mortgage company — paying extra for the privilege of paying off your loan.

• Is there a Yield Spread Premium (YSP)? This is industry-speak for the kickback that gets paid to brokers for steering you to a bad deal. Ask if the loan has a YSP. If the answer is yes, walk away. And if you can’t get a straight answer, run away. These aren’t people you want to deal with.

• Do I have to take out Private Mortgage Insurance (PMI)? When you buy a home with a small down payment (less than 20% of the purchase price), most lenders require that you take on Private Mortgage Insurance (PMI). If you get in trouble and the bank forecloses, the PMI will pay the mortgage company off. It doesn’t benefit you and it doesn’t help you hold on to your house, so it’s really only there to help the mortgage lender, not you.

Having the vision to start your own business is not an easy task. This is because there are no second chances when you commit a mistake. When mistakes are committed especially when you are trying to raise capital, you have no other options but to take the consequence.

Mistakes cost you time and money, which are both in short supply. Therefore, you want to make as few of them as possible. If you make enough errors in judgment, you might be forced to terminate your project. Alternatively, you might find yourself having to continuously pump capital into a failing business just to keep it alive.

The first option is a complete disaster in itself, even if the means to raise capital was very efficient. This is simply because there is no more contingency budget for the exceeding budget. As for the latter, it would just negate the whole way of how to effectively raise capital, simply because it just goes to waste.

The whole point behind optimum means to raise capital is by preventing unnecessary expenses which could lessen the whole budget so as to have allocation difficulties already. This is the most difficult to master, especially first time businessmen. Besides having not much control and knowledge of the cash flow, there is much room for errors which would translate to more expenses.

When planning to raise capital, take the typical startup expenses into account: the cost of renting or buying a location for your office, employee’s salaries, logistical/transport costs, warehousing services (if applicable), and so on. You must also make an allowance in your capital computation for any unexpected costs that may crop up. Be careful not to underestimate the required budget.

Because you’re trying to raise capital, you have to pitch a good business plan to your potential investors. Make sure you’ve considered all of the above costs, and show them accordingly. However, your presentation to investors should really center on the potential profits your business will make.

When you are delayed in meeting your commitment you will have to pay the penalties. This will also mean a depletion of your raise capital. This happens when you are not totally focused in achieving your dreams. You might have other interests that you are more interested in then you meeting your commitments.

Trying to raise capital can be very difficult, but planning properly will give you a head start in the tricky game of business. You should enlist all the free help you can get and take stock of all your assets and resources. You may have more going for you than you realize.

Financial planning for the future is something that every person thinks about. There are many reasons why you need to plan for the future. It may be for your children future-their education. It may be for your retirement. You may also be simply planning ahead, putting away money to buy your dreamhouse or to buy a car.

There are a lot of means by which to make your money grow for you. Most Indians invest in gold. It is an age-old tradition because the value of gold is always appreciating. A lot of people also invest in bank fixed deposits. They are a very good way to lock in a particular amount of money for a particular time period.

Postal savings are another way to put aside a small sum of money each month. Mutual funds are also an excellent way to plan your future. However, many people avoid mutual funds or invest in the stock market. This is mainly due to the obvious risks involved in such investments.

But as the saying goes ‘there is no such thing as a free lunch!’ In order to obtain good returns, you have to be willing to take certain risks. A Mutual Fund is an investment tool that pools the money of a group of people so as to build a huge corpus. The money thus pooled is then invested in the stock market by a group of financial experts. These experts are called fund managers.

Investing in mutual funds is not as daunting a task as many would imagine it to be. All that is required is to have a demat account with a bank and one can then log in to the many online trading portals. These trading portals provide all of the necessary information to investors that are considering investing in mutual funds.

There are many kinds of mutual funds that are available for investment. They are basically classified equity funds, fixed-income funds and money market funds. All mutual fund plans are variations of these three asset classes. Equity funds that invest in fast-growing companies are known as growth funds while those that invest in companies of a certain sector are known as sector funds or specific funds.

Investing in equity funds involves a certain amount of risk as equity basically refers to shares of a company. But equity funds do in the long run, provide good returns. Fixed-income funds are more suited for those investors that wish to lock their money away and also take advantage of the tax benefits that they offer.

The most important thing to remember when you invest in mutual funds is diversification. Investors should invest in a basket of securities right from high-risk to the most stable. This helps to keep the investment portfolio balanced, even during market fluctuations.

Once your portfolio hit 500,000 or more, you then should begin to consider stepping away from mutual funds and allow a professional adviser to manage your money. Until that time you should consider the 5 reasons why having ETFs are the best way to build your 500,000 nest egg.

Number One: You will have an actively managed account by a team of professionals that will help your money to grow with out the worry of day to day trading yourself. These actively managed accounts can also be far less costly to you as the investor because these managers are often working with hundreds of millions of dollars of buying power, which means lower costs overall.

Number Two: Diversification is very important and ETFs can allow you to have funds within a number of different sectors and categories. As a result you then mitigate your risk since all your money will not be within one or two stocks.

Number Three:  There are clear guidelines that these fund manager and companies that run the funds must follow, which allows you to have clear transparency into the activities that they are involved in, in bringing you a return on your investment.

Number Four: Continuing in the vein of diversification, you can offset continued risks by purchasing into funds which represent varying degrees of risk.  That is, best large cap funds versus best index funds can be very different but blending them can create a healthy portfolio based on your needs.

Number Five: ETF Funds are very accessible to the mainstream investor and can carry significant reductions in costs.  Whereas you can receive allot of costs with individual stock, bond and commodities purchases.  There are two ways in which you purchase into these funds; load and no-load.  Each can have its benefits, so consulting with a professional adviser is always recommended.

As you can easily see, these are just 5 of the many reasons why you should be investing in ETFs until your portfolio has reached the magic value of 500,000.  Again, diversification does provide you with the opportunity to reduce the risks involved in investing into the market.

In these current times when the prices and rates of homes and establishments are going down and getting cheaper by the day, many people are thinking about entering the world of real estate investment by buying investment properties for themselves and their families.

Investors who have been in the market for years and decades will immediately tell you that they cannot easily just give out that one best and sure-fire successful strategy to a person or a family interested to buy investment property.  The marketplace’s playing field is just too volatile and unpredictable.

But if you are thinking of purchasing and investing, do not despair.  This article will be giving out expert advice on how to buy investment property.  There may not be one single strategy that will assure one to find the best real estate properties, but these three extremely simple (yet often overlooked) tips will surely give you a heads-up on the marketplace.

Expert Advice # 1: Scrutinize Locations

Location, location, location—you know that this is the most important aspect of starting up a business.  It also happens to be an overlooked aspect when people buy an investment property or home.  A location of a certain house determines its price, along with its potential to increase worth in the future.

An expert tip:  look at its neighboring households.  Is it a quiet neighborhood or is it an area prone to crime?  Find out the profile of the homeowners.  Knowing these bits of information may seem useless now, but will give you an idea of whether the area the house is located in is promising.

Remember, do not just think about its present condition.  You have to look at the future and see whether buying an investment property will yield profit and an increase in worth in the coming years.

Many wise people have benefited from choosing the right location when it comes to making a property investment.  They usually research on an up-and-coming area, purchase a property while it is still cheap there, and then in five years, the area becomes so trendy that everybody wants to own property there.

Expert Advice # 2: The Right Crowd

The next best tip when it comes to property investments is to surround yourself with the right people who can help you to buy investment properties that are truly worth your hard-earned cash.

For example, establish a network with bank employees.  These employees usually have first-hand knowledge of properties and homes that experience bank foreclosures.  Being in contact with bank employees gives you the immediate advantage of finding out the sales of these properties before other people do.

You should also include in your network some experienced real estate agents who are masters at navigating the market.  Get advice and tips from them. Consult your planned purchases.  They have guided many other homeowners and investors before, so they are the best people to approach.

Expert Advice # 3: Turn to the Internet

A simple buy-and-sell website like Craigslist can already help you in finding cheap but often quality investments.

Additionally, browse through the online corporate websites of the many property investment companies in your country or location.  Find out how the system works.  Learn from their processes and understand how to get the best deal out of your investments.

And finally, if you are interested in dabbling in other types of investments to diversify your portfolio, you should take that extra step of looking at the bigger picture.  Examine the stock market and find out if it is the right time to invest.

Owning property is part of the Western definition of success.  Investment properties have stayed popular because property holds and steadily increases in value.  Recently, rental properties have also emerged as ideal investment opportunities.  Those considering such investments should know that while rental properties may generate more income than waiting for an undeveloped lot to increase in value, but they also require a whole lot more time and work.

Rental Properties

Many people choose to make their property investments in rental properties because people will pay a fee just to live or use them.  The income is much more obvious and immediate.  Even if you think you already know everything you need to know to run a rental property, do yourself a favor by becoming informed about laws in the area.  The important things to know are the legal details of the tax laws, standards your property must meet to be considered habitable, and all of the paperwork.  Messing up in any one of these areas could cost you dearly since most of the laws about landlord and tenant relationships tend to favor the tenants in most disputes that arise.  As more people specialize in working the system to gain their own advantage you will find out that choosing your tenants carefully will save you a lot of hassle and money.  Demographic information is also important in choosing your rental property.  If the commercial center of town is showing signs of moving in a certain direction you want to be in that area, not in the old building someone is selling because they can’t keep it full of tenants.  In short, doing quality research on the laws and the area will pay off when you finally get your rental property and start looking for tenants.

Undeveloped Properties

While rental properties are a relatively new pursuit for average people, the traditional approach of buying investment property and waiting for it to become more valuable is still alive and well.  Such property investments are usually purchased near a town or city so that as it expands and needs more land the property can be sold for a much larger amount.  Land is a very logical investment because it is a limited natural resource; it will become more in demand and therefore more valuable as long as population continues to increase.  Despite all these advantages, property investment contains some risk.  Don’t let the enduring value of land as an investment fool you into thinking that a property investment needs to be less researched than others.  Doing your research can keep you from making mistakes like buying an  investment property for a really great price and later finding out that it has really expensive property taxes.  An investment property calculator that has all of the required functions is essential for determining the right price for a property before buying.

When looking into annuity investments, it’s easy to be overwhelmed by all of the different terms. In order to understand the variation of annuity products you need to learn about all the concepts. One can explain annuities by describing every part. For example, annuities can be fixed or indexed. There are also variable annuities. It’s important to know that most annuities are part of these three categories. To find the best financial option you need to be well informed. Try to learn about every variation of the annuity products before making a decision of which one to invest in.

Fixed rate annuities provide fixed dollar payments with a fixed interest rate. The variable annuities will allow variable dollar amounts. The indexed and variable annuities will depend on the market.

Another notable point is that all types of annuities are classified in two big categories. The annuities can be immediate or deferred. Depending on your individual  situation, either one might be a better choice.

The immediate annuity will have a very fast distribution. The deferred annuity will start distribution after a period of time. You have the option to pay both annuities with a single payment. For the deferred annuity you can also choose to setup a periodic payment plan. This will allow you to pay an amount of money every month. It’s up to you what type of annuity you choose.

Another way to classify annuities is according to the distribution period. This way an annuity contract can be made for a fixed period of time or for lifetime. The person with whom the contract is based upon is called the annuitant. It’s also interesting to know that you can create an account with more than one life insured, and establish it so that the account terminates upon either the first death or the last death.