Don’t let your money manage you.

As the United States, one of the world’s wealthiest countries, struggles with debt and a still-uncertain economy, Americans are closely watching the steps our leaders are taking to address long-term fiscal problems. The state of our nation’s economy has also caused many individuals to re-examine their own personal finances and money management plans.

In a new book titled “Wealth: Is It Worth It?” the founder of Chick-fil-A, Inc., S. Truett Cathy, examines the potential dangers that accompany the pursuit of personal financial success. In a video message on WealthIsItWorthIt.com, Cathy says, “We are misled to think money will bring happiness.”

Having grown up in a financially poor family during the Great Depression, Cathy now owns the Atlanta-based restaurant chain with annual sales approaching $4 billion. Using his own life lessons as inspiration, Cathy shares the following money management tips in his new book.

• Earn money honestly – There is no substitute for hard work. Cathy worked behind the counter of his mom-and-pop restaurant for 21 years before he opened the first Chick-fil-A restaurant at the age of 46 in 1967.
• Find balance – Find work-life balance by remembering, “What’s Important Now – WIN.” Cathy says there were times when his family had to suffer due to his absence for work, and other times when his business had to suffer because his family needed him.
• Save reasonably and spend wisely – Everyone needs a budget. Create a plan for spending and saving that allows you to buy the things you need and put enough aside for long-term requirements.
• Shop smart – Buy the things you need on sale. Even now, Cathy likes to buy his clothes on sale and his cars used. When shopping with his grandchildren, he takes the opportunity to teach them to only buy what they need.
• Manage risk – Avoid unnecessary risks. While we can’t avoid all risks, Cathy says too many people take on too much risk in their desire to generate more wealth. He notes instead of saving money to create wealth, people borrow money to create the appearance of wealth. Likewise, companies, in an attempt to grow bigger faster, borrow more money than they can manage.
• Think long term – Set long-term personal and financial goals. Cathy, who interviewed former Indianapolis Colts head coach Tony Dungy about the definition of success, points out that according to Sports Illustrated magazine, 78 percent of professional football players are bankrupt two years after they retire. Poor investments and poor spending decisions too often cost them everything. Cathy says to stay focused on your long-term goals rather than compare your progress to others, referring to Chick-fil-A as the “tortoise” in a race with a “hare” competitor in the ’90s.
• Give generously – Don’t wait to start giving. In the book, Cathy also interviewed billionaire investor Warren Buffett, who says giving to others is a philosophy he and his wife decided on back in their 20s. Cathy says the happiest people he knows are those who give away their money and the saddest are those who hold their possessions in their hearts instead of their hands, or who hoard because they fear what the future may bring.

“Money and possessions for their own sake are a hollow victory,” Cathy says. “Real victory is what you do with the money, not the fact that you have it.”

How To Keep Your Money From Managing Your Life is a post from: RateNerd - unadvertised deals from banks.

                          

In his new book, author Rick Ferri shows how “passive” investing techniques using index funds and ETF funds actually help investors make more money over the long haul.

Rick Ferri makes the case for using low cost index funds and ETF funds to keep expenses low, capture the returns of the market, and avoid the high fees and costs associated  with mutual funds and constant trading.

In his sixth and latest book, The Power of Passive Investing, Ferri shows how over time a disciplined approach to understanding risk, asset allocation, and regular portfolio re-balancing achieves better results than trying to chase the market.

What is passive investing?

Passive investing is about achieving the returns you need in the markets by using low cost index funds and exchange-traded funds. Passive investing is all about earning your fair share of financial market returns whether the market is US stocks, international stocks, bonds, or any combination of those investments.

Opposite to passive investing is active investing. This is the act of trying to beat the markets by using an infinite number of higher-cost strategies that probably won’t work. Nobel Laureates in Economics have been telling us for decades that passive investing is a better investment strategy than active investing. The Power of Passive Investing brings many of those studies together in one book.

How is this book different from your previous ones, such as The ETF Book, All About Asset Allocation, and All About Index Funds?

My previous books explain how to select low-cost index funds and ETFs, and how to create a portfolio using these funds. The Power of Passive Investing provides the proof about why this is a superior strategy to trying to beat the markets. The evidence in the book is irrefutable.

Who should read your new book?

The Power of Passive Investing is written for any investor who wants to understand more about the mutual funds they are investing in, including people  who have a 401(k) or similar work savings plan. It’s also an important book for brokers and consultants who make a living recommending mutual funds and ETF, as well as banks, trust departments and investment advisors who manage other people’s money. Finally, it’s a particularly important book for people who oversee endowments, foundations, and pension funds.

An observation you make is that while it’s possible to beat the market, it’s not probable.  What are the odds a mutual fund will beat the market?

Mutual fund companies that try to beat the market argue that it’s possible to do so. They are right. It is possible; it’s just not probable, and the payout stinks.

Active managers often point to Warren Buffett, the famous CEO of Berkshire Hathaway as an example. They imply that since Warren beat the markets that we should believe that they, too, will win. That’s nonsense. Here are three reasons why it can’t be true:

• About one-third of mutual funds go out of business every 10 years and about 50 percent are defunct after 20 years.
• Only about 1 in 3 of the surviving funds outperform index funds. Surviving funds are the ones that don’t close, and it assumes you know which ones those will be, which is not possible.
• The excess return from the winning surviving funds doesn’t come close to the shortfall from the losing funds, and this is before accounting for the losses in the defunct funds before they closed.

The Power of Passive Investing explains the near certainty that a portfolio of index funds will beat a portfolio of active funds over time. Tell me about this conclusion?

We’ve addressed one mutual fund versus one index and the low probability for active fund success. But that’s doesn’t define the whole problem because people don’t own just one mutual fund. They own several funds across diversified asset classes such as US stock, international stock, bonds, real estate, and so forth.

Having several active funds in a portfolio exponentially lowers the probability that the portfolio will beat a comparable index fund portfolio. As more active funds are added, and the longer their held, the probability that a portfolio of index funds will outperform the active fund portfolio increases dramatically to the point where the index funds have a 99 percent probability of outperforming a comparable portfolio of active funds. Now THAT’S something that all investors should consider!

Why do active investing strategies fail to beat the market for the vast majority of investors?

There are several reasons that active funds fail to deliver, not the least is the cost of trying to beat the markets. Hundreds of thousands of investment managers, investment advisors, brokers, mutual funds manager, pension funds managers, banks, trust departments, individual investors, traders, etc., are attempting to out-fox the markets. They spend hundreds of billions of dollars each year trading securities, paying managers and consultants, buying research, etc. The cost of trying to beat the market makes doing so impossible for most people.

A second reason investors fail to beat the market is due to poor behavior. They seek high returns by looking in the wrong places for outperformance. Active investors chase after past performance, they chase star ratings, and they chase the news. They’re putting money in places today where they should have already had money. This tail chasing game costs investors dearly.

You make the case for low-cost index funds. But mutual fund fees aren’t the only cost. What other costs do investors bear?

There are trading costs, commissions, advisor fees, taxes, 12b-1 fees, administrative costs, research costs and the list goes on. Much of these costs are hidden from investors. For example, most investors in 401(k) plans don’t provide investors good transparency on the costs they’re paying.

Another bastion of gluttony is high advisor fees. This issue is just starting to come out n the media. The typical investment advisor charges one percent per year to manage a portfolio of mutual funds for clients. That’s crazy-high given the huge advances in portfolio management software and other technology that have occurred over the years. Advisors today should be able to handle five times the amount of clients with half the amount of staff than they did in the 1990s. These productivity gains have not been passed on to clients in the form of lower fees.

What should investment advisers charge their clients?

Well, it’s NOT one percent, which is the ‘standard fee’ you’ll hear in the marketplace. I believe Investors shouldn’t pay more than 0.5 percent per year to an advisor, and probably less. My firm, Portfolio Solutions, charges only 0.25 percent in annual fees. We’ve been charging this low fee for more than a decade and it has saved our clients millions of dollars over the years. That’s real money in their pockets.

Why do so many people try to beat the market if the proof that passive investing outperforms active investing is irrefutable?

There’s big advertising dollars promoting active management – much more than passive managers can afford.  Remember, actively managed funds charge 5 to 10 times the fee of a comparable index fund. Much of this huge revenue stream is spent bombarding the public with nonsense about how active managers can beat the market, and it basically ensures that the truth about passive investing gets lost in the noise.

Did you know that for every new book published on passive investing there are at least a dozen books published on how you can beat the market? Did you know that for every media interview with a passive investing advocate like myself there are at least 100 interviews with people who claim they can beat the market?

It’s actually amazing to me that any information about passive investing gets to the public, and it’s a credit to investors who have looked beyond the smoke and mirrors.

How can someone adopt a passive investment strategy? What’s the first step?

The answer is to start learning the real facts about the markets and investing. You can start with The Power of Passive Investing if you’re already knowledgeable about mutual fund investing.  I’ve also written several how-to books on low-cost index fund investing, exchange-traded funds, asset allocation and planning for retirement. These books can be viewed on my website at www.RickFerri.com. I include a free book on my site titled Serious Money, Straight Talk About Investing for Retirement.

There are also other sites to visit, and learn such as www.Bogleheads.org, which is a community site for like-minded low-cost investors, and www.Vanguard.com for information on specific index funds and ETFs.

How Index Funds and ETF Funds Can Improve Your Portfolio is a post from: RateNerd - unadvertised deals from banks.

                          

Life insurance FYI for ‘Generation Y’.

If you were born between 1979 and 1994, you may have heard yourself described as part of “Generation Y.” So if you’re under 40, do you really need life insurance?

Those younger than 40 often give little thought to life insurance products early on, as they are more inclined to wait until they reach specific life stages.  What you may not know, is that the best time to buy any type of life insurance is when you are young and healthy, since the cost increases as you age. Life insurance premiums are also based on your health at the time of application, so waiting until mid-life maladies kick in may not make good financial sense.

“Starting research early for any major life purchase is key, especially life insurance,” says Joan Cleveland, senior vice president of Business Development for Prudential’s Individual Life Insurance business. “And when analyzing products, speaking with a qualified financial professional is a great way to end up with a smart and informed decision.”

Selecting the right life insurance product and coverage

According to the study, millennials are known to do a lot of comparison shopping online – financial services are no exception. Figuring out what products and services fit your needs is always the first step to purchasing life insurance. Before you get started, a basic understanding of the differences between types of life insurance is helpful:

Term life insurance: Like its name implies, term life insurance provides coverage for a specified “term” or period of time. It is usually less expensive than “permanent” insurance, especially in the early years of the policy. It typically does not offer potential for cash value accumulation. Rather, it typically provides a death benefit for a limited amount of time.

Advantages of term life insurance:

• Term insurance generally provides more death benefit for the same dollar than permanent insurance.
• It is a good choice if you want or need to maximize the amount of coverage you can purchase for a lower premium outlay.
• It is also appropriate to cover needs that exist for a limited period of time, such as college tuition or a mortgage.

Disadvantages of term life insurance:

• At the end of the specified period, your death benefit either expires or the premium increases dramatically.
• If you want to keep coverage without paying the higher premiums, you’ll likely have to purchase a new policy at your current age and health status, which will result in higher costs.

Permanent life insurance: Permanent life insurance is designed to provide coverage for your entire life. Premiums are typically due for the life of the policy. In addition to providing a death benefit, permanent policies are usually designed to accumulate cash value.

Advantages of Permanent life insurance:

• As long as premiums are paid when due and other contractual conditions are met, permanent life insurance remains in effect over the course of your life, even if your health declines.
• Since age and medical condition are two of the major factors used in underwriting life insurance, purchasing permanent life insurance when you are younger and healthy will provide you with lower premiums.
• Buying permanent insurance now ensures you have coverage later, even if a future medical condition makes you ineligible to buy life insurance.
• Cash value that may accumulate in the policy can be accessed later, usually on a tax-favored basis, through withdrawals and/or loans to fund various needs.

Disadvantages of Permanent life insurance:

• Because you have coverage for life, the premiums are higher compared to the initial premium for term insurance.
• Loans and withdrawals will reduce policy cash values and the death benefit and may have tax consequences.

Enjoying the best of both worlds

“In many cases, having a combination of term and permanent coverage is the right choice and the best way to help meet your financial protection needs,” says Cleveland. “But, ultimately, you should educate yourself and then make a list of questions or concerns you have so you come to the table prepared to learn how life insurance can help secure your financial future.”

All guarantees are based on the claims paying ability of the issuer. Policies may contain exclusions, limitations, reductions of benefits and terms for keeping them in force. A financial professional can provide you with costs and complete details.

– Article Courtesy of ARAcontent

Life Insurance Under 40? is a post from: RateNerd - unadvertised deals from banks.

                          

Trade stocks for just $2.95, options for just $1 at OptionsHouse.

When you trade at OptionsHouse, you not only get one of the lowest, most competitive rates available, you also get the flexibility to pick the rate that works best for you – you can change your rate when your trading behavior changes.

OptionHouse’s rates are designed to work around the way you trade. So you not only get competitive rates that are lower than almost any other online broker, you also get the flexibility to pick the price that works best for your trading style and strategy. Trade less than 10 contracts? Then trade up to 5 contracts for only $5 with their “Up To 5 for $5″ rate. Trade more than 10 contracts? Then maximize your trading with the $8.50 +.15/contract rate. And best of all, you can change your rate as your trading changes.

Option House Pricing:

• STOCKS - $ 2.95 Flat Rate
• OPTIONS - Up To 5 for $5 ($1/contract over 5)  OR $8.50 +.15/contract
• SPREADS - Up To 10 for $10 ($1/contract over 10) OR $12.50 +.15/contract

There are no hidden fees, maintenance costs, balance minimums or trading minimums at OptionsHouse. However, they do pass on some fees to help offset the cost of certain transactions.  Check website for full list of potential fees.

About OptionsHouse

OptionsHouse, LLC was founded by PEAK6 Investments, LP in 2005. Developed and powered with PEAK6 technology, OptionsHouse makes it possible for retail and institutional options traders and investors to graduate from basic trading to a more professional level. OptionsHouse utilizes tools and methods derived from PEAK6’s extensive trading platforms; the same state-of-the-art technology used to trade large-scale positions on every U.S. exchange, every single trading day.

PEAK6 Investments, LP was founded in 1997 and is headquartered on the original Chicago Board of Trade trading floor. PEAK6 Capital Management LLC, an affiliated market making and proprietary trading firm, is a provider of liquidity to the options market.

$2.95 Stock Trades – Flat Rate – Daily Deal is a post from: RateNerd - unadvertised deals from banks.

                          

Get up to $300 in commission free trades from TradeStation.

Commission Free Trades applies to clients who open and fund a new equities, futures or forex account by 6/30/10.

TradeStation is an electronic trading platform that offers state-of-the-art electronic order execution and enables clients to design, test, optimize, monitor and automate their own custom Equities, Options, Futures and Forex trading strategies.

TradeStation Offer Details

Maximum commission rebate amount cannot exceed $300. To receive the rebate, a minimum of 50% of the initial funding balance must be maintained for the duration of the promotional period (60 days for a maximum of $300 in rebates). Rebates will be processed monthly and automatically applied to account holder’s balance until the maximum rebate amount is achieved or the promotional period ends. Limit one commission rebate per TradeStation network ID regardless of the number of accounts held. Commission rebates shall be limited to commissions for trades of equities shares, futures or options contracts or forex lots that are executed through the TradeStation platform and cannot be applied towards mutual funds, futures options, foreign contracts, bonds or private placements, or trades of any kind called into the TradeStation trading desk. Commission rebates exclude platform fees (including premium features like RadarScreen®), exchange fees, regulatory fees and all other account fees and charges, including margin interest, if any. This offer cannot be combined with any other offers.

Commission pricing shown in advertising reflects flat-fee equities commissions, which under certain circumstances may be lower and more advantageous to larger-share-per-order traders, are primarily designed for use by individual traders who value execution quality and speed, and desire the highest level of flexibility with their execution costs. As such, the intelligent-routing algorithm may favor less expensive execution destinations including market makers.

Flat-fee and per-share commissions shown are based on intelligent order routing. Direct routing of flat-fee orders is available at no additional charge for orders of up to 5000 shares; direct-routed flat-fee orders of over 5000 shares will be charged an additional $.005 per share in excess of 5000 shares. Flat-fee commission rate for the first calendar month will be $6.99 per trade for all equities trades. In subsequent calendar months, the flat-fee commission rate will be based on the equities trading activity in your account from the prior month. For example, if the total number of equities trades in all your TradeStation flat-fee accounts under the same customer ID is 20 in July, then all equities trades placed in your commission accounts in August will be $7.99 per trade.

About TradeStation:

TradeStation Securities, Inc. (Member NYSE, FINRA, SIPC, NSCC, DTC, OCC & NFA) is a licensed securities broker-dealer and a registered futures commission merchant, and also a member of the Boston Options Exchange, Chicago Board Options Exchange, Chicago Stock Exchange, International Securities Exchange and NASDAQ OMX. The company’s technology subsidiary, TradeStation Technologies, Inc., develops and offers strategy trading software tools and subscription services. Its London-based subsidiary, TradeStation Europe Limited, an FSA-authorized brokerage firm, introduces UK and other European accounts to TradeStation Securities.

https://www.tradestation.com/newaccount/preaccount.aspx?ref=ratenerd

$300 In Commission Free Stock Trades From TradeStation – Daily Deal is a post from: RateNerd - unadvertised deals from banks.

                          

Get 500 free online stock trades for 30 days plus $100 from TD Ameritrade.

Begin your pursuit of financial independence with 30 days of commission-free Internet equity trades. Simply open your account before June 30, 2010 to take advantage of this special offer.  As an added bonus, when you fund any non-IRA account with $25,000, you’ll also get $100 cash.

Offer valid for one new individual or Joint TD AMERITRADE account opened by 06/30/2010 and funded within 30 days of account opening with $2,000 or more. To receive $100 bonus, account must be funded with $25,000 or more within 30 days of initial minimum funding. IRA and other tax-exempt accounts are not eligible to receive the $100 cash bonus.

Commission-free Internet equity trades will be limited to a maximum of 500 Internet equity trades. Qualified commission-free Internet equity orders must execute within 30 days of account funding. Limit one offer per client. Account must remain open with minimum funding required for participating in the offer for 9 months, or TD AMERITRADE may charge the account for the cost of the cash awarded to the account.

To learn more about this free stock trade offer, visit TD Ameritrade.

500 Free Stock Trades Plus $100 – Daily Deal is a post from: RateNerd - unadvertised deals from banks.

                          

E*Trade is offering free trades for the first 60 days when you open a new brokerage account.

From now until December 31st, 2010, you get up to 500 free  trades during the first 60 days of your new brokerage account with E*Trade.

In order to qualify for this E*Trade promotion, you must:

• Open a new account (if you currently have an account with E*Trade, you’re out of luck).
• Make an initial deposit of at least $2,000.

You’re 60 day free trade period begins the day you open your account, not the day you fund your account. If you take your time in making a deposit, you will lose valuable trading time.

Free trades are not unlimited. This promotion allows for 500 free trades to be executed. Any unused trades will disappear after 60 days.

Even though trades are considered “free” you will have to pay for them first. All trades on options and stocks will be deducted from your account and then credited back within 8 weeks.

Finally, new funds or securities must remain in your account for at least a six month period (minus any losses), or you could forfeit the money saved from trades. Simply put, you shouldn’t make a withdrawal from your E*Trade account to your bank account for the first six months.

E*TRADE Complete Investment Account Features

Every account comes with 24/7 customer service and the industry-leading E*TRADE Complete Protection Guarantee.

• Investment Choices
  • Trade stocks, options, and every ETF sold
  • 7,600+ mutual funds (1,100 no-load, no-transaction-fee funds)
  • Exclusive All-Star Funds list & target date funds
  • Bonds & fixed income
• Investing & Trading Tools
  • Complete View of all your E*TRADE accounts
  • Easy-to-use stock, mutual fund, and ETF screeners
  • FREE unlimited streaming real-time quotes & charts
  • Portfolio and Risk Analyzers, plus more easy-to-use tools
  • Trade anytime, anywhere with E*TRADE Mobile Pro
  • 2-second execution guarantee
• Advice & Guidance
  • FREE independent research
  • FREE market commentary & insights from E*TRADE Capital Management6
  • FREE investing & trading education
  • Personalized investment advice & guidance
• Cash Management
  • FREE Quick Transfer to and from any financial institution9
  • Five ATM fee refunds per month from any bank’s ATM

500 Free E*Trade Trades For 60 Days – Daily Deal is a post from: RateNerd - unadvertised deals from banks.

                          

You mean I have to repay my student loan?  Can I get a bailout?

Sorry, no bailout for you!  Student loans cannot be discharged even with bankruptcy. Continued default can mean damaged credit, additional collection fees of up to 25%, loss of tax refund, 10% loss of pay check, and even law suits filed against you.

Sounds pretty bleak, doesn’t it?  But according to legal eagles, Nolo Press:  ”There is much you can do to take control of your own loan situation if you have the right information, a little perseverance and a large amount of patience…. Ignoring your loans will not make them go away.  Eventually, you will have to deal with them.  Further delay just increases the amount you owe, as interest and fees and costs for collection mount up.”

STUDENT LOAN REPAYMENT BASICS

To understand student loan repayment, it is first necessary to understand student loans overall.

Besides “work-study programs”, there are grants and loans. Grants do not have to be paid back, loans do. Federal loans can be “subsidized”, which means the government pays for the interest while you are in school. Otherwise, the loan is “un-subsidized”, meaning you pay the interest yourself. Subsidized loans are generally given to students with “greater demonstrated need”.

All federally guaranteed student loans fall under three main categories: Ford Direct Lending Program (FDLP), Campus Loans, and Federal Family Education Loan Program (FFELP).

1. FDLP- These are loans directly from the federal government and paid back to the federal government.

2. Campus Loans- A small amount of federal funding is given annually to institutions which can be loaned out to students, paid back to the institution, and re-loaned to other needy students. They are often called Perkins Loans or National Direct/Defense Student Loans (NDSL).

3. FFELP- Department of Education issues through your school a list containing an approved network of commercial lenders who provide loans to students. These loans are most often labeled direct loans, Stafford Loans, Guaranteed Student Loan (GSL), Federal Insured Student Loan (FISL), Plus Loan (for parents only), SLS Loan, and consolidation loan.

There are also multiple potential repayment schedules. Therefore, if you find yourself unable to deal with your current repayment plan, do not assume you are locked into that plan. Four of the most common options are:

1. Standard- fixed repayment above $50 for 3-10 years.

2. Graduated- repayment begins low and increases over the years.

3. Extended- repayment from 12-30 years depending on the amount.

4. Income Contingent- each year’s repayment amount is based upon your income from the previous year.

DEFAULTING ON STUDENT LOANS

Your loan is considered in default when there has been no payment nor attempt to arrange for payment for 180 days.  To get out of default, the student must request a “reasonable” repayment schedule from the lender.  The lender will consider the request based upon information supplied by the student and if the request is approved, the lender will suggest a new amount.

There is no amount set by the term “reasonable” but if accepted by the student, the new plan must not reach default a second time.  Accordingly, if the amount is not acceptable, re-contact the lender before agreeing to the schedule.  WARNING!  You do not get a second chance to get your loan out of default.  Therefore, agreeing to the terms is essential.  Also be aware that though repayment amounts are rarely set below $50, theoretically a “reasonable” amount could be as low as $5.

When you have completed six on time payments, you can apply for a new federal loan.  However, to be completely out of default, you must make 12 consecutive on time payments.  But once your loan is out of default, you have other options available to you such as deferment, forbearance, consolidation, and even cancellation.

Special Note: Perkins Loan borrowers who are in default have recently been offered another option called “Rehabilitation”.  A borrower can make arrangements to make 12 “on time” monthly payments after which his/her loan default record is removed from credit bureau files and he/she is back in repayment status.  Rehabilitation can be attempted any number of times (if the borrower does not meet the 12 on time payments) but it can only be accomplished once.  If borrower goes into default again after completing Rehab, there is no second chance.  This is only available on Perkins loans in default.

If your loan is not in default and you are having difficulty making ends meet, you may be eligible to postpone payment.  A forbearance is an approved general delay from making payments for a set period of time but not for any particular reason.  Forbearance is generally requested only when deferment is not or cannot be used.  With a forbearance, interest continues to accrue.  A deferment is similar but does not accrue any interest.  But the major difference between the two is that a deferment includes a very specific reason for the delay.

The most commonly approved reasons for deferment include:

• Economic Hardship, Unemployment
• In-School at least Half-Time, Graduate Fellowship Program, Rehabilitation Training
• Parental Leave, Working Mother
• Public Service Deferment for Armed Forces, Action Program, Tax Exempt Volunteer Program, Public Health Service Program, Peace Corp, NOAA
• Education Related Deferment for Intern ship/Residency Program, Teacher Shortage Area, PLUS Loan student In-School, Fellowship, or Rehabilitation
• Temporary Total Disability Deferment Request

CANCELING YOUR STUDENT LOAN

Obviously, there must be extended circumstances to have a loan cancellation approved.

However, cancellation over deferment or forbearance sometimes is needed and is not unusual.  Qualification is done via application from your lender or through the Department of Education’s Debt Collection Services Office (phone: 800-621-3115).  Be certain to return all needed support documentation.

Reasons for cancellation are more intense though somewhat similar to reasons for deferment:

• Total disability
• Death of the member
• Member of armed services
• Certain full time teachers, nurse, medical tech, law enforcement, correction officer
• Certain professions working with disabled, or low-income high-risk children and their families
• Certain staff and volunteers for Head Start VISTA, or Peace Corp

STUDENT LOAN DEBT CONSOLIDATION

Transferring credit balances to the wrong lower interest loan is tantamount to accepting a life preserver from a shark.  Similarly, choosing the wrong consolidation loan savagely threatens the point of consolidating at all.

The article, however, goes on to say that if you know what you are doing, consolidating can offer one more option that can lower your payment by combining loans. Most consolidation lenders, however, will not consolidate less than $7500 total in student loans.  To get more detail on student loan debt consolidation check out StudentLoanHome.info or order the Ultimate Student Loan Consolidation Guide.

The repayment period of most of these loans is usually 12-30 years and can be a fixed monthly payment or graduated over time.  Obviously the longer the extended repayment period, the more costly the loan.  The obvious solution to consolidation loan is to accelerate the payoff as soon as possible and not drag out the loan for the full period.  As can be seen in the reference article, the interest saved can often be in the thousands of dollars. Other options are outlined here in our post on student loan debt consolidation.

Collegiate Funding Service (CFS) at www.cfsloans.com offers the following sound advice:

“… experts caution that not all student loan consolidation products are alike. By doing some research and asking a few questions, borrowers can save themselves significant headaches, time, hassle, and money.” Some of the questions CFS suggests you ask of a potential lender include:

• Does the lender offer an interest rate reduction for on-time payment?
• Will your lender tailor your repayment plan to meet your financial needs should you want to pay off the loan more quickly?
• Are you able to get instant information on whether you qualify or if your loan’s been approved? Can your loan be processed over the Internet? What kind of turnaround time can you expect?
• Are your customer service calls immediately answered by a live human being?
• Does the lender offer a range of plans to meet your specific income and financial needs?

CFS argues and I fully agree that picking a student loan consolidator without research is like buying a used car without test-driving it, or purchasing a house without an inspection.  DO YOUR HOMEWORK FIRST!

Repaying Student Loans is a post from: RateNerd - unadvertised deals from banks.

                          

Student loan consolidation is a smart option for students, parents, graduates and alumni that are now seeking to consolidate federal student loans debt.

Federal student loan consolidation will lower interest rates and save money. Student loan debt consolidation has become popular and many college student loan consolidation centers and services are out there to consolidate all types of loans; be them federal, direct, medical, law, Stafford, PLUS, government and private student loans. Today’s Interest rates are the lowest they have been in decades. Consolidating federal student loans allows you to lock into a federal consolidation loan at a low FIXED rate.

Consolidating College Student Loan Debt

A study from the National Center for Education Statistics tells that roughly half of college alumni have an average student loan debt of $10,000 US. The average cost of a college education increases at two times the rate that inflation does. Public Universities are currently estimated to cost $13,000 a year, while private colleges and universities are estimated to cost $28,000 annually. These increasing costs of education leave both parents and students with increasing student loan debt.

How does student loan debt consolidation help save money?  By lowering your monthly payment and lowering your interest rate, which ultimately decreases the total loan principal and interest amount you pay over time.  Debt consolidation also helps you to manage your cash flow, and stay on top of your budget.

How does college student loan consolidation actually work?  When your student loans are consolidated,all of the outstanding balances of your existing student loans are paid off, with the total balance rolling over into one consolidated student loan.  When you refinance and consolidate your student loans, the end result is that you have only one FIXED RATE student loan to pay on.

What types of student loans are eligible for Federal student loan consolidation?

• Federal and Federal Direct Stafford Loan (subsidized and unsubsidized)
• Federal and Federal Direct PLUSXX
• Perkins Loans
• Federal Perkins (formerly known as National Direct Student Loan or NDSL)
• Nursing School Loan (NSL)
• Health Professional Student Loan (HPSL)
• SLS (Supplemental Loan for Students)
• Loans for Disadvantaged Students (LDS)
• Federal Insured Student Loan (FISL)
• Federal Consolidation Loan
• Federal Direct Consolidation Loan

In addition to the student loans mentioned above, all undergraduate, graduate, law medical and private student loans are also available for student loan debt consolidation.

How Student Loan Consolidation works

A student consolidation loan combines several federal student or parent loans into a single larger loan.  Most federal loans can be consolidated: Stafford, PLUS (Parent Loans to Undergraduate Students), Supplemental, Direct, Perkins and others. Some lenders will consolidate private college loans as well. The U.S. Department of Education offers Direct Consolidation Loans (www.ed.gov/directloan/ or 800-557-7392), as do many private lenders (www.finaid.org links to several private lenders).

A consolidation loan reduces the size of the monthly payments, usually by extending the terms of the loan beyond the normal 10 years, to 20 or even 30 years.  That makes it more manageable for borrowers to make payments, especially younger people lower on the pay scale. Sometimes consolidation is necessary for people to qualify for a home mortgage.

Consolidation may especially be warranted if you’re not making payments and risk default on your loans. This will hurt your credit rating. Furthermore, the federal government can divert your tax refunds toward the loans or garnish your wages, even on very old student loans. Consolidation also can help you put the saved dollars toward higher-interest debt such as credit cards. Credit-card debt isn’t tax deductible, while you may be able to deduct up to $1,000 in student loan interest.   To get more detail on student loan debt consolidation check out StudentLoanHome.info or order the Ultimate Student Loan Consolidation Guide.

Will a consolidation loan reduce the interest rates on loans?

Not necessarily. The interest rate on the consolidation loan would be the weighted average of the interest rates of the loans you’re consolidating, rounded up to the nearest 1/8 of a percent. Depending on weighting, you actually could end up paying a higher interest rate, though more likely the rate will be lower. Federal law requires variable-rate direct subsidized and unsubsidized consolidation loans to be capped at 8.25 percent, while PLUS consolidation loans are capped at 9 percent. That’s when the government annually readjusts interest rates for the year for student loans, and those rates will likely reflect the recent climb in other types of interest rates.

Downsides to Student Loan Debt Consolidation

The most obvious downside is that even though your payments are smaller, you are extending them over a longer time.  That means you’ll pay out more total interest.  Also, as with any kind of student debt consolidation loan, the borrower may be tempted to spend more or even borrow more because of the smaller loan payments.  Then you’re just piling up more debt than if you hadn’t consolidated.

Alternatives to Debt Consolidation to Consider

Try first to tighten up your budget to free up more dollars to meet your loan payments, or take on a second or better-paying job.

If you’ve managed to pay your nonconsolidated loans on time for close to 48 months, try to hang in there a little longer.  Lenders commonly drop the interest rates significantly, say two percent, for borrowers who have paid on time for 48 months (sometimes for only 24 months).

Also check out two options offered by the federal loan program. The income-sensitive repayment option bases monthly payments on your total gross monthly income. Under the graduated payment option, payments start out smaller and increase gradually on the assumption that your earnings will increase. Increased payments cannot exceed three times the amount of the initial payment. Although the total interest you pay will increase under these options versus sticking to the original loan schedule, the increase will be less than that of a consolidation loan.

You may be able to defer, or even outright cancel, a student loan if you teach in a low-income area or you teach full-time in a subject area that’s short of teachers. You also may defer federal student loans if you’re unemployed, return to school, go into the military or become disabled.

The important point is that while consolidation of an education loan may be the right choice for you, there are downsides and alternatives to consider before making a final decision.

How To Consolidate Student Loans is a post from: RateNerd - unadvertised deals from banks.

                          

Unless you’ve been under a rock lately, you know that Forex trading is one of the hottest investment strategies out there right now.

But few of us mere mortals really understand what Forex trading is, and if it’s right for our investment strategy. What the heck is Forex, anyway?

“Forex” stands for foreign exchange; it’s also known as FX. In a forex trade, you buy one currency while simultaneously selling another – that is, you’re exchanging the sold currency for the one you’re buying. The foreign exchange market is an over-the-counter market.  Currencies trade in pairs, like the US Dollar / Japanese Yen (USD/JPY) or Euro-US Dollar (EUR/USD).   Unlike stocks or futures, there’s no centralized exchange for forex. All transactions happen via phone or electronic network.  You’ll use a broker to facilitate the trade.

Who trades these currencies, and why?

Daily turnover in the world’s currencies comes from two sources:

• Foreign trade (5%).  Companies buy and sell products in foreign countries, plus convert profits from foreign sales into domestic currency.
• Speculation for profit (95%).  Most traders focus on the biggest, most liquid currency pairs. “The Majors” include US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. In fact, more than 85% of daily forex trading happens in the major currency pairs.

As a result, Forex is the world’s most traded market, trading 24 hours a day, with an average daily turnover of US$3.2 trillion.  Forex is a true 24-hour market running from Sunday 5 PM ET to Friday 5 PM ET.   Forex trading begins in Sydney, and moves around the globe as the business day begins, first to Tokyo, London, and New York.   Unlike other financial markets, investors can respond immediately to currency fluctuations, whenever they occur – day or night.

Understanding Forex Quotes

Reading a Forex foreign exchange quote is simple if you remember two things:

• The first currency listed is the base currency.
• The value of the base currency is always 1.

As the centerpiece of the forex market, the US dollar is usually considered the base currency for quotes. When the base currency is USD, think of the quote as telling you what a US dollar is worth in that other currency. When USD is the base currency and the quote goes up, that means USD has strengthened in value and the other currency has weakened. Rising quotes mean a US dollar can now buy more of the other currency than before.

The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). For these pairs, where USD is not the base currency, a rising quote means the US dollar is weakening and buys less of the other currency than before.  In other words, if a currency quote goes higher, the base currency is getting stronger. A lower quote means the base currency is weakening.

Forex Lingo

Like any market, Forex has its own language – here’s some of the terms you will hear which you may not be used to:

Cross currencies - Currency pairs that don’t involve USD at all are called cross currencies, but the premise is the same.

Bids, asks and the spread - Just like other markets, forex quotes consist of two sides, the bid and the ask:

• The BID is the price at which you can SELL base currency.
• The ASK is the price at which you can BUY base currency.

PIP’s - Forex prices are often so liquid, they’re quoted in tiny increments called pips, or “percentage in point”. A pip refers to the fourth decimal point out, or 1/100th of 1%.  For Japanese yen, pips refer to the second decimal point. This is the only exception among the major currencies.

Play money to get started in Forex trading

Several Forex brokers offer free “learning” accounts to help new investors get started.  Zecco offers a free Forex Practice Account  that lets you play with $50,000 as you learn the ins and outs of Forex trading.  With this account you get:

• Easy-to-use, practice version of the Zecco Forex trading platform
• $50,000 in virtual funds – trade risk-free
• 200:1 leverage
• Real-time quotes in 37 currency pairs
• Powerful charting
• 24-hour news headlines
• Daily and weekly forex research
• 24/6 support by phone and live chat

How, and Why, To Start Forex Trading is a post from: RateNerd - unadvertised deals from banks.