Mosby Group

If you are fortunate enough to be employed with a business that offers a health insurance policy, you should do everything possible to maximize the benefits of that policy. Here are a few facts about employer health insurance policies to help you understand what you have or don’t have.

Generally employers pay a large portion of the monthly premium. Some employers are nice enough to pay the entire premium. Occasionally you’ll have some options as to the coverage that can affect the amount of the premium you are responsible for.

Often, only full time workers are offered health insurance and even then they must wait a certain period of time before they are eligible. Keep this in mind if you are offered a part time position or are thinking of changing jobs.

If you are laid off, there will probably be a provision to allow you to keep the insurance coverage, but the employer will no longer be subsidizing the premiums. Be prepared for a major jump in the cost of coverage and pay close attention to your insurance rates.

If you have certain pre-existing conditions, the insurer may deny you coverage and your employer is not responsible for remedying this. Since most employer health policies are group policies, the restrictions are often tight to prevent a condition of one person from driving up the costs for everyone.

Health insurance is one of the greatest perks an employer can offer. You should not take this benefit for granted. If you are considering changing jobs, make sure you get all the facts about your new employer’s health benefits before taking the leap. Difference in coverage can be a major reason to stay with your current job. This is especially important if you are currently ill since the new insurer may not accept you into the policy. Make sure you don’t set yourself up for a difficult situation.

The average savings account earns you just over 1% interest. If this is your preferred form of savings instrument, perhaps it’s time for you to broaden your horizons and increase your earnings. There’s no need to risk your life savings to enjoy a better return on your money. Savings bonds are a way to earn a higher interest rate on your savings and are just as safe as a savings account.

The United States federal government issues several different types of bonds that have varying interest rates and maturity periods. These are collectively referred to as savings bonds. Once purchased, these bonds are tied directly to the financial stability of the U.S. government. As long as the United States government doesn’t dissolve, you are guaranteed payment at maturity.

Generally the bond is purchased for an amount lower than the face value of the bond. Over time, interest accrues and in a certain predetermined period of time, the bond can be cashed in for the face value. After maturity, if you choose to not cash in the bond, it continues to earn interest at a rate that can vary over time.

The interest rates of the various types of bonds vary according to the market and are tied directly to interest rates. Inflation can greatly affect the returns paid by savings bonds.

Savings bonds were first created as a way to pay for the cost of debts accrued during World War I. The government realized that the program was so popular that it never went away. Currently there are two main types of savings bonds known as series EE and series I. The series EE bonds pay returns that are equal to about 90% of the average yield on 5 year treasury bills over the previous 6 months.

Though you won’t enjoy the returns that you would through successful trading of riskier investments, you will find that the interest rates are extremely competitive against other safe investments. That makes them an excellent way to round out an investment portfolio and hedge against risk.

Bonds are tax free during the life of the savings bond. You will owe no taxes on the interest earned until you decide to cash in the bonds. Since you determine when that time is, you can plan for the best tax benefits. Savings bonds offer other tax benefits if they are used to pay for education related expenses. This makes them a popular option for saving for a child’s education. As a final bonus, these savings bonds are exempt from all state and local taxes.

Though bonds can usually be cashed in just six months after they are purchased, the best strategy is to view them as a medium term investment and hold them for at least 5 years. This is generally considered the amount of time that allows the bond to reach its maximum performance value. After this period of time many people find it advantageous to cash them in to purchase additional bonds.

Many Americans find a 401K plan included as part of their employment benefits package. Unfortunately the 401K doesn’t come complete with instructions about how to best utilize it. Most people simply leave it as it is and expect it to be there when they reach retirement age. They are often surprised to hear that a fellow employee’s account has grossly out earned their own and don’t understand why. Plainly speaking, a 401K is an investment account and to get the most out of the money you and your employer are putting into it, you need to understand a few things about investing.

Most people are utterly lost when faced with anything having to do with investing. Because they have never learned, things such as the stock market, mutual funds, bonds, etc. seem like well guarded secrets revealed only to the in crowd of brokers and big investors. The truth is that investing, like most things, is much simpler than it first appears to be.

Most 401K plans are either entirely or at least heavily invested in mutual funds. Mutual funds are basically a group of financial instruments consolidated into one single “fund.” Mutual funds invest in stocks, bonds, and other instruments of varying risk levels. The least risky type of fund is called a money market fund, which pays the lowest interest. Bond funds, due to their risk, usually pay the highest rates.

After you understand where your money is going, you next must decide how much to allocate each month. Most employers will match a certain amount of an employee’s investment so you should at least invest enough to receive the maximum your employer will match. If you don’t you are essentially giving money back to your job and no one wants to do that.

Once you determine how much you can afford to invest (and you should invest the absolute maximum you can), the next step is to decide where the funds will go. This is called asset allocation and is very important. For most people, about 50% of the money they invest each month should go directly into a safe money market fund. The other half will be used to invest in some riskier and more lucrative options such as stock and bond funds. About half into each is a good initial plan. If you already have money invested in the plan, don’t forget to reallocate it into the 50, 25, 25 scheme.

At least once a year, you need to check how the different sectors you are invested in are doing. You will find that over time your assets are no longer divided into the 50, 25, 25 breakdown. This is because one type of investment is paying higher return rates than the others. At first you might think that it would be best to put all your money into the one that is paying best. Avoid that temptation. By remaining diverse, you can better handle changes in the market. Those funds that paid well one year may tank the next. If you were smart and reallocated some of the earnings into the safe money market, you should be well insulated against that loss. Check to see if your plan offers an “automatic rebalance” feature and if it does you can set it to automatically redistribute your assets.

Though there are many more things to learn about investing than this article can teach you, if you take the steps recommended above, you will find yourself years ahead of most of your coworkers in the investment game. If you stay diligent in your asset allocation and invest as much as you can possible afford, your 401K should be ready to support you when you hit retirement age.

Insurance is a major part of many American’s budgets and can quickly cause strain on those with financial problems.  Finding the best rate is an important part of a solid budget plan, but this is often easier said than done.  Dealing with insurance companies is like going to the dentist; we have to do it, but we dread it.  Here are a few tips to ease the pain.

All states have an insurance regulatory department.  It’s always a good idea to become familiar with insurance regulations in your state.  The department can offer you information as to the trustworthiness of the insurance agents and in many cases can even provide information about rates.   This is the best source of objective data on insurance agencies in your state.

Once you are armed with the basics of insurance regulations for your area, it’s time to start searching for the best deals.  One of the best places to start your search is online.  Several sites offer comparisons of dozens of insurance providers, all laid out in an easy to read format.  You can easily compare such things as coverage, terms as well as actual  insurance rates. There should be links to the company’s site so you can in many cases secure the policy without ever leaving home.  One thing to look out for with these sites is preferential treatment to certain agencies.  Less reputable sites might omit a preferred company’s competitors, though they offer a better deal.  For this reason it’s important to check with a variety of sources and closely compare the results.

States have something called a guaranty fund for insurance companies.  Licensed companies pay into this fund, the purpose of which is to pay claims in the event the company goes under.  For this reason it’s important to check that the company is both licensed and taking part in the fund.  If not, you could find yourself holding the bill if the company fails.

To avoid the possibility of a default, check the company with which you plan to do business.  Make sure that there are no problems looming on the horizon and that all is in order with the company finances.  There are a number of websites that will provide you a financial outlook.  Most of these sites also rank insurance companies on a variety of factors including customer satisfaction and complaints.

Your state insurance department can provide further information on complaints including detailed information as to the cause and resolution.  Another source is the National Association of Insurance Commissioners, which maintains a database of all complaints reported by individual state agencies.

Don’t forget to check with friends and family.  This can be the best source of honest opinions about a particular agency in your area.

Always make sure that you promptly receive a written policy after you make the first premium payment, if not before.  This is your guarantee that the policy is in effect and has been registered with the parent company.

Arming yourself with information is the best way to ensure you get the best deal when acquiring a policy and that you are treated fairly when making a claim.  An informed consumer is a consumer who will not be taken advantage of by unscrupulous insurance providers.

Unfortunately most people aren’t made out of money and their spending must be carefully regulated.  The first step in taking control of one’s finances is to plan a budget.  The second step is sticking to it.  People come up with budget plans all the time.  They often look good on paper and the person has the best intention of following it, but more often than not the budget soon gives way to over spending.  There are three major reasons why most budget plans fail.  Once you understand those reasons, you can design a more realistic budget that you should be able to maintain.

Unrealistic

On paper, almost all budgets look great and seem like the right solution.  Most of them just don’t work when implemented in the real world with its unpredictability.  No matter what the budget says, you can’t argue with the facts that life throws in your face.

When planning your budget, you have to be realistic about several key points to come up with an overall realistic budget.  If you fill your budget with underestimated expenses and overestimated income, then of course you are headed for failure.  After you get your basic bills listed, consider how often unanticipated expenses creep up.  These unplanned for bills are a huge reason for budget failure.  Plan some padding for when they do occur.  If you get lucky and are able to avoid these expenses, then you can use the money to pay down debt at the end of the year. See how to save for a rainy day.

Consensus

Budgeting by one’s self enjoys the governmental simplicity of dictatorship.  When you are part of a couple or a family, the democratic process kicks in and you must have an overwhelming majority for the budget to succeed.  This turns out to be quite difficult because just like in a real government, everyone feels they are getting a bum deal.  When it comes to the family budget, vetoes are frequent and absolute consensus much be reached.

Once you have designed a preliminary budget, you have to present it to the family.  Be prepared to make changes.  Sometimes it’s advisable to factor in a little pork that you can use as a bargaining tool at the table.  Be prepared to explain and justify every budget decision you have made.  If you can make a good case for why it is necessary or in everyone’s best interest, you’ll be on the road to a finalized budget.

Lack of Fun

Entertainment is often one of the first things that gets cut from a budget and one of the last things that you will actually give up.  It’s pretty easy to see how that will quickly lead to failure.  Cutting entertainment funds can be a quick way to balance a family budget, but one that invites failure.  Cutting fun out of the plan often works for a short time and then a rebound period occurs where you spend more than you would have if you had simply planned for it.  Spending money on entertainment that wasn’t part of the budget soon leads to ignoring other areas of the budget at your convenience.

The solution is to factor in some fun from the beginning.  You know you’re going to spend the money so it’s better to plan for it.  By allowing yourself the occasional movie, meal out or whatever, you can enjoy them without guilt and stay within your budget.  This helps make sticking to the budget a habit and can contribute to its success.  Don’t of course go overboard, but try to stick away what you can afford.  After all, that’s the purpose of a budget in the first place.

Many people find that by avoiding these three common mistakes that they are much more capable of following a realistic budget.  If something in your budget proves unrealistic don’t be afraid to make changes.  Just remember to not make changes to make up for not sticking to the budget in the first place.

Great Websites for Affordable Prices

In this day and age, no self respecting company can do without a website.  A company without a website is generally frowned upon by practically everyone.  Without a website, your business is perceived as backward, old fashioned, small time, etc.  If you are still of the thinking that websites are expensive, then the sad truth is, you probably are a little backward.

There are a lot of online services out there that give you access to first class freelance professionals, who do web design, content development, graphics, programming, and virtually any job that does not physically have to be done by a person sitting beside you.  You can now have a world class professionally designed website for far less than you think, and significantly less than it would have cost as early as two years ago.

The sites are actually akin to a virtual market place.  You can seek professionals according to skill, level of skill, budget, experience and location.  You can view their CVs online; they also usually have samples of their work posted.  Many of these professionals have been doing this for some time, and will have reviews posted from people who have hired them using the service you are using.

If you don’t have the time to sift through the thousands of providers the system generates, you can simply post your job, the qualifications you require, and see who takes a nibble.  You’d be surprised at how many talented and experienced professionals actually respond.  You can go over their files, and hire the ones you want, or if you really want to be sure of your hires, you can schedule interviews with them.

If you aren’t comfortable working with someone whom you can’t communicate with face to face, you can also try your local college.  Web design is a level playing field, and the best designers are not always the most experienced ones.  There are thousands of wonderkids out there who are just aching to prove they are great web designers.  They will often work for much less than a professional web design outfit; and they can produce something of comparable quality.  They may even offer their services for free just to expand their portfolios.

If you are a do-it-yourselfer but you know nothing about web sites, there are actually pre-made websites out there that are akin to “kits”.  You can actually learn to build them within a few minutes, and then put up an improved site after you’ve acquired the know how to do so.   Giving your company an online presence through a website has become so easy and affordable, that you can’t really afford not to have one.  The success of your business very much depends on it.

If you have put down a lot of money on an existing mortgage, then there is actually a way to refinance it.  This is particularly attractive if your original mortgage was a fixed mortgage at a relatively high mortgage rate.  With the current economic crises though, a lot of people were faced with the rather odd situation of having homes that were worth a lot less than their existing mortgages.  Some did have mortgages with favorable rates though, which brought up the question:  Is it possible to sell your home but retain the mortgage?

This is possible with something called a portable mortgage.  A portable mortgage is one that you can transfer from one home to another.  If you have a favorable interest rate, you retain it when you transfer it to the new home. And you don’t have to shell out for the closing costs of a new mortgage.  It also gives you ready cash to use to make a down payment on a new home.

You may also want to look into an assumable mortgage.  Whereas a portable mortgage transfers from home to home, an assumable mortgage is transferable from owner to owner.  This allows a new buyer to simply take over mortgage payments on the existing home.  When market rates suddenly spike, a lot of buyers look for such homes that were bought when rates were still favorable.  The drawback is that the full cost of the home is not always covered by the assumable mortgage, and the buyer may need extra cash or financing.

Credit card abuse is arguably the single largest reason that most Americans are in debt.  While being heavily in debt is a financial problem, it has far deeper consequences than just monetary ones.  People in debt often suffer emotionally and physically as well, as the resulting stress can and does take its toll.  While credit card companies have repeatedly tried to wash their hands of this problem, citing the fact that it is individuals who cause their own problems, there is now new legislation that, at the very least, passes some of the responsibility to credit card companies.  The Credit Card Accountability, Responsibility and Disclosure Act became active in February 2010.

The bill was actually authored in May of 2009; it seeks to eliminate the extremely high and rather controversial penalty fees that credit companies have been slapping on credit card users for decades.  This is great for the greater majority of credit card users who are decidedly less than responsible.  However, those who are good at managing their money and who have managed to stay out of debt are likely to suffer, as credit card companies have threatened to take away reward programs to compensate for their loss in income.

The important provisions of the Credit Card Accountability, Responsibility and Disclosure Act are as follows:

Banks now need to grant a 60 day grace period before slapping on penalties for delayed bill payments.  Not a big deal for habitual good payers, but this could be a godsend for those who often have trouble meeting payment deadlines.

Credit Card companies cannot raise interest rates without giving at least 45 days notice.

Credit Card bills must now be sent 21 days ahead of the due date to allow customers enough elbow room to put together the money needed to settle the bill.

Holidays and weekends will not be counted when reckoning due dates, and they will not be counted in as far as calculating penalties.

Payments made on multiple bills with varying interest rates will now go to the bills with the least favorable interest rates.

Financial institutions now need to formally grant permission before a customer is allowed to spend more than the issued amount on the credit card.

The minimum age for credit card holders is now 21.  This rule can be amended based on an individual’s specific set of circumstances.

If there are dormancy fees on a credit card, they must now be clearly stated on the credit card’s documentation, the font size for such a statement should be at least 10 points.

Bear markets and bull markets arise in the U.S. stock market, in overseas markets, commodities markets and virtually all systematic markets or exchanges in existence. Bull markets are preferred by investors for the reason that this pattern causes an upward pattern in values; conversely, bear markets happen when values decline. There is not anything new about this idea. Bear markets and bull markets have been with us since the beginning of organized markets.
Prices fluctuate in any market, and over a time period prices are either rising or falling. The value pattern is either up or declining. Visualize it like this: when a bear attacks it comes in tall and mauls the victim down; when a bull rushes it advances low and rears its head up when it attacks.
Of utmost worry to most investors is the repeated bear market or bull market, which normally lasts for a number of months or for a few years. To be eligible by common explanation, a plunge of 20% or more from a previous market high, or a rise of 20% from a preceding market low must occur to have a cyclical trend.
Why are investors so concerned regarding these market trends? As a general process, most investors become profitable in a bull market and experience a decline in a bear market. You would be tremendously profitable as an investor if you could anticipate the variation in development. Investors that trade with a higher-than-average risk can make money in every market-if they predict the impending trend correctly.
The majority of individuals become profitable in stocks by taking a sustained position. Put differently, they keep their stocks for an extended period hoping the market trend will be rising. On the flip side, others attempt to profit by using a short position, betting that prices will fall. Leave short positions to the speculators. Prices go up more regularly than they drop in the stock market. Put differently, most of the time, the U.S. stock market trend is up.
As encouraging as bull markets can be, bear markets can be conversely disastrous. A bear market evolved in late 2007. In 2008 alone, U.S. stocks on the whole declined in roughly 40% of their worth. As a result, overseas markets did poorer as well.
If you are an ordinary or uninformed investor, study to cope with shifting market cycles. Do not let a bear market spook you, and do not let it chase you from the investment environment. Panic selling of your stocks and mutual funds is just not the sensible course of action. History of market cycles reveals a bull market will return in the anticipated outlook.
Take the occasion to teach yourself about investing. Even a well balanced investment portfolio may lose some amount of profit. But you won’t get mauled, and your investment collection should bounce back in the next bull market.
It is crucial to bear in mind, market cycles come and go;  but historically, the trend has always risen.

Check out my friend Sally’s blog.

Difference Between an IRA and a CD
Even though nearly all of us fail to understand how to save, we all would like to retire happily. In spite of the procedural aspects, the fundamental principle is easy to identify with. The differentiation between an IRA and a CD is slight, because they encompass lots of parallels. Let us evaluate IRAs initially. There are two types of IRAs, a traditional IRA and a Roth IRA, and the disparity between the two is significant.

A traditional IRA (Individual Retirement Account) allows a person to save up for their retirement in a method that is provisionally tax free. If you put money into a traditional IRA it is going to be withheld from your yearly earnings, which means the amount will not be susceptible to taxation. If you’re age fifty or over, you may contribute up to four thousand dollars per year into a traditional IRA.

If you remove your cash from a traditional IRA earlier than you are sixty, you’ll get hit with a ten percent penalty. Remember that, regardless of when you come to a decision to take the funds out of your traditional IRA, once it’s out it’s taxable. Early withdrawal penalties might be waived if the funds are utilized for a home purchase or educational purposes.

The second kind is referred to as a Roth IRA, named after the Senator William Roth. The main benefit of a Roth IRA is the capability to withdraw direct contributions (funds contributed, less profit) tax free, with recuperation of the earnings portion tax free in five years. The downside is contributions will not be deducted from your yearly earnings and will not be tax deductible.

An additional drawback of choosing a Roth IRA applies to wealthy persons. Because the Roth IRA was established as an enticement for middle class Americans to save, it is susceptible to an income constraint. A Roth IRA is not suggested for persons that earn in excess of $150,000 per year. For joint taxpayers the limit is one hundred and sixty six thousand dollars.

A CD (Certificate of Deposit) is a means to invest cash which is insured by the lending institutions. A CD is viewed as a secure and steady way to generate profits, as it earns greater profit than a savings account but lower than some volatile savings. CDs are risk free, although come with a strict penalty for withdrawal previous to end of term. You must shop around for the best cd rates.

No matter whether it’s in a CD, IRA, or a 401k (where your employer adds funds to match your own), you need to be saving a minimum of ten percent of your yearly salary for retirement. Putting away for retirement is the most imperative event a young individual can do. We struggle with the expectation that we can take pleasure in our golden years in financial confidence, but the only way that’s going to occur is if we begin now.