First lets think about what smoking does your life. It raises the cost of your health insurance and life insurance. Your quality of life is less than if you did not smoke. Walking from one place to another will make you out of breath. You can develop Asthma, Emphysema, Lung Cancer, and Throat Cancer. Smoking will lead to a slow agonizing death. You will live for years gasping for each breath and will probably have to carry around an oxygen tank.
If your home has white walls they will turn yellow because smokers usually smoke inside. All of the items in your house smell like an ashtray, your breath stinks, it makes your teeth yellow, and kissing you is like licking an ashtray. Even when you brush your teeth and use Listerine the smell and taste is still trying to escape your lungs.
Smokers are never courteous of other peoples’ lawns. Have you ever driven up to a stop light and looked on the road or median next to you? The next time you pull up to an intersection, take a look around. Cigarette butts litter the area. Cigarette smokers have caused fires throwing butts out the car window.
Statistics show that the majority of smokers are uneducated. http://tobaccodocuments.org reports, “Philip Morris' internal findings of higher smoking rates among lower socioeconomic classes, as well as its findings that this group also has a higher incidence of both poor mental and physical health, it continued to promote its deadly and addictive products heavily among these groups.”
In the state of Florida you can no longer smoke in restaurants, some parks, even near some public buildings.
Everyone makes small purchases and think it is only $3.00 dollars or $4.00 dollars and that isn’t going to make a difference in anything.
If you invested the money that you would have bought a pack of Camel non-filters (studies show that the lower socioeconomic population buy non filter cigarettes) everyday from the age of 16 to the age of 76 in a decent growth stock mutual fund with the average yearly return of 12%, you would have $18 million dollars to retire with. Not only will you have your health, money, a longer happier life, but you would retire with dignity and not have rely on social security to make ends meet every month. Small purchases add up and cost you literally a fortune in the long run.
Getting Your Debt Priorities Right
One of the most difficult financial juggling acts is that of an ordinary family trying to juggle its weekly or monthly finances to keep all those competing creditors at bay. One of the principal reasons people fall into major debt problems is trying to satisfy lots of different creditors at the same time when there has been a significant fall in family income – unemployment; a new baby or a relationship split to name but a few. The so called “debt spiral” of borrowing from one creditor to satisfy others can quickly become a significant debt problems running to more than £20,000.
If you should find yourself in a position where you cannot meet all of your financial commitments then there are certain golden rules which you need to take account of immediately when putting together your financial budgets.
Firstly you will need to identify the difference between the Priority Debts and the Non Priority debts within your family. A Priority debt is one which will directly impact upon the health and personal wellbeing of you and your family if not maintained.
Key priority debts which must be paid are as follows;
Mortgage or rent - This may seem obvious but I lose count of the number of times we talk to people who are in arrears with the mortgage or rent and yet up to date on unsecured loan repayments. Keeping the family roof over your head is number one priority. A mortgage company can and will commence repossession proceedings in the event of significant arrears and 2006 saw the highest number of property repossessions ever in the UK.
Secured Loans - Homeowners often take out a “secured loan” or “second charge” against their property. Please do not confuse these loans with other “personal” loans. These are secured against your property as a second mortgage and must be maintained in exactly the same way as your main mortgage. The consequences of failure to keep up repayments on this type of debt - ultimately repossession of your home – should be spelt out to you in very clear language before you commit to such a loan. If you are in any doubt as to which type of loan you have signed then please seek professional advice as a matter of urgency.
Council Tax - This is a priority debt because it is actually a criminal offence to owe council tax; the continued wilful non payment of which could mean time in prison! Likewise any Police or Court fines need to be paid as well as it is also a criminal offence not to pay these.
Utilities - Gas water and electricity payments should be maintained where possible as a priority over unsecured loans and credit cards. The Utility companies are willing to help as much as possible those with debt problems to reschedule their utility debts to a more manageable level.
Food and Clothing - A recent survey by Barclays and children’s charity NCH has found that some 10% of British families have gone without food and medicine at some point because they were too poor to purchase it either due to general poverty of due to other competing debt problems. We cannot stress highly enough that the provision of basic food, clothing and family hygiene always comes before the repayment of any non priority debts which you may have.
Car Hire Purchase (HP) - Vehicle finance, to the ordinary consumer, is either a form of HP or a Personal Loan (other so called leases and contract hire are usually reserved for the self employed). There is a major legal distinction between these two ways of funding a vehicle purchase. A HP agreement means you do not actually own the vehicle until all payments are made and therefore you must maintain payments or the vehicle will be repossessed (this type of arrangement is effectively a mortgage on a car). If the car is on a personal loan type agreement then you automatically own the vehicle and the payments can be varied as an unsecured debt. Again if you are in any doubt as to which type of agreement you may have and your rights and liabilities e.g. to terminate the agreement then please obtain some independent professional financial advice.
Non priority debts are basically every other type of debt you may have. Personal loans; credit cards; store cards; bank overdrafts; “door step” credit like Provident; catalogues; credit unions etc. In the event of a financial crisis within the family these non priority debts should only be paid when the priority debts have firstly been maintained. As you sit down to work out the family budgets you must put all the priorities at the top of your list together with basic insurances and travel costs these must be paid first. Quite often there will be a shortfall in the remaining funds available to pay the unsecured or non priority debts in the short term and this is where professional financial advice can really make a difference to the quality of your family life.
If you should find yourself in a position where you cannot meet all of your financial commitments then there are certain golden rules which you need to take account of immediately when putting together your financial budgets.
Firstly you will need to identify the difference between the Priority Debts and the Non Priority debts within your family. A Priority debt is one which will directly impact upon the health and personal wellbeing of you and your family if not maintained.
Key priority debts which must be paid are as follows;
Mortgage or rent - This may seem obvious but I lose count of the number of times we talk to people who are in arrears with the mortgage or rent and yet up to date on unsecured loan repayments. Keeping the family roof over your head is number one priority. A mortgage company can and will commence repossession proceedings in the event of significant arrears and 2006 saw the highest number of property repossessions ever in the UK.
Secured Loans - Homeowners often take out a “secured loan” or “second charge” against their property. Please do not confuse these loans with other “personal” loans. These are secured against your property as a second mortgage and must be maintained in exactly the same way as your main mortgage. The consequences of failure to keep up repayments on this type of debt - ultimately repossession of your home – should be spelt out to you in very clear language before you commit to such a loan. If you are in any doubt as to which type of loan you have signed then please seek professional advice as a matter of urgency.
Council Tax - This is a priority debt because it is actually a criminal offence to owe council tax; the continued wilful non payment of which could mean time in prison! Likewise any Police or Court fines need to be paid as well as it is also a criminal offence not to pay these.
Utilities - Gas water and electricity payments should be maintained where possible as a priority over unsecured loans and credit cards. The Utility companies are willing to help as much as possible those with debt problems to reschedule their utility debts to a more manageable level.
Food and Clothing - A recent survey by Barclays and children’s charity NCH has found that some 10% of British families have gone without food and medicine at some point because they were too poor to purchase it either due to general poverty of due to other competing debt problems. We cannot stress highly enough that the provision of basic food, clothing and family hygiene always comes before the repayment of any non priority debts which you may have.
Car Hire Purchase (HP) - Vehicle finance, to the ordinary consumer, is either a form of HP or a Personal Loan (other so called leases and contract hire are usually reserved for the self employed). There is a major legal distinction between these two ways of funding a vehicle purchase. A HP agreement means you do not actually own the vehicle until all payments are made and therefore you must maintain payments or the vehicle will be repossessed (this type of arrangement is effectively a mortgage on a car). If the car is on a personal loan type agreement then you automatically own the vehicle and the payments can be varied as an unsecured debt. Again if you are in any doubt as to which type of agreement you may have and your rights and liabilities e.g. to terminate the agreement then please obtain some independent professional financial advice.
Non priority debts are basically every other type of debt you may have. Personal loans; credit cards; store cards; bank overdrafts; “door step” credit like Provident; catalogues; credit unions etc. In the event of a financial crisis within the family these non priority debts should only be paid when the priority debts have firstly been maintained. As you sit down to work out the family budgets you must put all the priorities at the top of your list together with basic insurances and travel costs these must be paid first. Quite often there will be a shortfall in the remaining funds available to pay the unsecured or non priority debts in the short term and this is where professional financial advice can really make a difference to the quality of your family life.
Abundance, Prosperity and Money Creation
Having problems in the money department? Struggling to look after yourself properly? Lacking a sense of abundance and prosperity? Thanks to a conference I graphically recorded years ago, I have a very vivid image of the word ‘abundance’. If you break the word into parts, you get A-Bun-Dance --- ‘buns’ as in butt or rear end, dancing. Abundance is literally about moving, shaking and having a good time. Moving to the beat of life in a happy way. Getting your mojo on. Contrast that with the word scarcity --- or Scar-City --- living in a scarred or scary place. Choosing to focus on scars. Such a contrast between the two words and funny how their meanings can be communicated in such a succinct way!
Are You Vibrating Scarcity or Abundance? So, what locale are you primarily living in – abundance or scarcity? Chances are if you are having repetitive money, prosperity or abundance issues, you spend more time in the scarcity or lack region. The majority of your focus is on the things you don’t have (the scar) as opposed to on the things that you do (abundance) --- and as a result you are vibrating a scarcity harmonic rather than a prosperity chord. Your energy or vibration is out of whack. Money and other forms of prosperity and abundance can’t easily make their way to you --- cause you are vibrating lack rather than have and like attracts like.
How to Get Out of Scar City: Different people have their abundance and prosperity issues wired up in different ways. One of the common keys to getting out of Scar City is to develop an appreciative focus --- to focus on what you do have and to develop a sense of empowerment (with a healthy dose of deserving).
There are so many different ways you can choose to view life, yourself and other people. You can choose to focus on the things that you don’t like, or you can choose to focus on the things that you do. The two have very different flavors or feels to them – and are connected to radically different outcomes.
Empowerment and Ability to Create: Abundant people are empowered people. They believe in their ability to create and look after themselves. Somewhere along the line they have developed a can do attitude. They aren’t victims. They are creators. And they have pretty positive beliefs about life, their abilities and their future.
Contrast that with scarcity folks: for different reasons they have less-than-helpful beliefs about themselves and their ability to create and look after themselves. They are disempowered. Feeling like they don’t have what it takes, that things are done onto them, that life is difficult, or the future is unfriendly. Outlooks like these hamper creative energies. Snuff them. Squash them. Keep creativity and sharing energy down and covered. In short, there are some scars to heal and overcome. Some healing work is required.
Share, Give and Help: Want to increase your prosperity? Think about what you can share, give and help others with. Lots of money creation involves reciprocal arrangements. Give something of value and assistance in order to receive. If you are in a salary environment, how can you be more helpful and resourceful --- how can you increase the value of what you do, by adding to your responsibilities or by seeking out more (either in the job you are in or through another position)? If you are entrepreneurial, what can you share, give or help others with --- the more people you can help the larger abundance you can attract.
Be Open to Unusual Forms: Abundance doesn’t just come in the form of direct income. Be open to receiving abundance in forms other than the usual ones.
Refunds, rewards, winnings, prizes, discounts, gifts and trades are just some of the other ways that abundance can make its way to you. Think of abundance in wider terms. It gives the ‘universe’ more ways to give to you. When they come to you, recognize them for what they are --- abundance and a reflection of your ability to create!
Get Over Your Receiving Issues: When you give, it is OK to receive (in fact, if you want to go even further, it really is ok to receive without even giving - but I’ll leave that one for another time). Sometimes people have money issues because they have a hard time receiving.
Somehow they got it wired up that it is bad, wrong, or selfish (or some such thing) to get or receive. Perhaps they are oldest children who were told to ‘be big boy or girl’ which was interpreted as it’s not ok to look after oneself. Or they have faith beliefs that complicate their ability to receive. Or have self-esteem or self- valuing issues that keep them feeling less than or seemingly in need of punishment or containment.
Whatever is going on, it’s necessary to identify and work through these limiting beliefs to develop a healthy ability to receive. You do count. You do matter. It is ok for you to receive too. It is ok for you to live a decent life. To have decent things. To live a life of comfort and joy. There is more than enough to go around. Your having does not take away from someone else. Your success helps many people, while your failure or discomfort really helps no one, most of all yourself.
Put Your Financial House in Order: Money is attracted to a person who likes it and knows how to look after it. If you want to increase your financial abundance, then start by looking after the money you do have. Appreciate it. Treat it properly. Look after it. This means provide a proper home and place for it. Little things go a LONG way. Our minds are symbol making machines. Give your mind good symbols about money. If you are in debt, appreciate and be grateful for what you purchased. Organize your bills. Know what you have and what you owe. Make consistent payments (even if they are small). Take responsibility. Seek out financial advice. Tie up other outstanding loose ends like overdue taxes, filing, IOUs, etc. Get your books in order. As a financially savvy client of mine says ‘money likes to have fun’ --- make yourself a fun and enjoyable place for money to reside. When you demonstrate you can look after it you lay the groundwork for more to come.
Envision a Positive Outcome: No matter what your present economic circumstances may be, begin now to envision a more positive outcome. As written about in other SHIFT-IT articles, one of your greatest assets is your imagination ability --- and it’s free. Use your mind’s eye to imagine yourself in a more fiscally pleasant future. Feel what that more positive reality feels like. Soak up that resonance. Meet your Future Self that has it going on where money is concerned. Feel the relief of this position. The warmth. The calm. Whatever it is that being in a prosperity position does for you.
Merchant Accounts and Other Payment Solutions
There are several online businessmen who think that they don’t need a merchant account and can easily carry out financial transaction using other payment processing option like Paypal, Authorize Net, WorldPay, No Chex, FastPay, Website Payment Pro, Barclaycard e PDQ and others. But do any of these options match up to the service quality and security offered by merchant account service providers.
The first argument favoring Merchant accounts is that it offers international transactions. Most other alternative payment options are restricted to inbound transactions. For example FastPay, No Chex and Barclaycard e PDQ can be used by British customers while Authorize Net and Website Payment Pro can only be used by people living in the United States. Then there are international processing options like Paypal and WorldPay that allow a businessman carry out international transactions. But the word international needs to be used in a limited sense, since even PayPal is not is available in not available in number of counties.
• Moreover if currency conversion is involved, PayPal has its own conversion rate which it keeps changing depending on market conditions. This usually works out to about 5% more than the international bank rate.
• Moreover PayPal has a notorious reputation of withholding money over due to fickle reasons causing both parties a lot of undue stress.
• Customers find it very hard to get in touch with PayPal representatives as they don’t give their contact numbers to their customers. But technical support staff of merchant services can be reached at all hours of the day, usually though toll free numbers.
• But the most important difference that tilts the balance firmly in favor of merchant accounts is that the customers are not required to have a merchant account. This is not the case with PayPal where both the parties – the buyer and the seller are required to have PayPal accounts. This is a huge inconvenience for most people.
So it’s obvious that merchant accounts offer the best services at convenient prices. Now by logging on to Advanced Merchant Services you can find out about the number of other unique advantages offered by AMS. Advanced Merchant Services not only authorize your merchant account with 24 hours but will also provide you with a free credit card terminal with each new account. AMS also offers a rebate of $200 dollars to anyone who processes $10,000 in any of the first three months of the service.
The first argument favoring Merchant accounts is that it offers international transactions. Most other alternative payment options are restricted to inbound transactions. For example FastPay, No Chex and Barclaycard e PDQ can be used by British customers while Authorize Net and Website Payment Pro can only be used by people living in the United States. Then there are international processing options like Paypal and WorldPay that allow a businessman carry out international transactions. But the word international needs to be used in a limited sense, since even PayPal is not is available in not available in number of counties.
• Moreover if currency conversion is involved, PayPal has its own conversion rate which it keeps changing depending on market conditions. This usually works out to about 5% more than the international bank rate.
• Moreover PayPal has a notorious reputation of withholding money over due to fickle reasons causing both parties a lot of undue stress.
• Customers find it very hard to get in touch with PayPal representatives as they don’t give their contact numbers to their customers. But technical support staff of merchant services can be reached at all hours of the day, usually though toll free numbers.
• But the most important difference that tilts the balance firmly in favor of merchant accounts is that the customers are not required to have a merchant account. This is not the case with PayPal where both the parties – the buyer and the seller are required to have PayPal accounts. This is a huge inconvenience for most people.
So it’s obvious that merchant accounts offer the best services at convenient prices. Now by logging on to Advanced Merchant Services you can find out about the number of other unique advantages offered by AMS. Advanced Merchant Services not only authorize your merchant account with 24 hours but will also provide you with a free credit card terminal with each new account. AMS also offers a rebate of $200 dollars to anyone who processes $10,000 in any of the first three months of the service.
Consider the Cost When Choosing a Merchant Account
A merchant account can be described as a relationship between a businessmen and a merchant bank that allows them to accept payments through credit cards from their customers. All businessmen accepting credit card payments have a merchant account into which the service provider deposits the money from all transactions made through credit cards.
Advanced Merchant Services is an undisputed leader of the merchant accounts industry. With over nine of years of experience AMS has been providing unparalleled merchant account services to its clients, ever since credit cards became the buzzword for financial transactions. Advanced Merchant Services offers a variety of secure, all-inclusive, highly cost-efficient, financial processing solutions. With Advanced Merchant Services, businessmen can start accepting payments in credit cards within a day or two of completing the online application. AMS has a record of getting most of its merchant account application approved in less than 24 hours. Moreover AMS offers the most cost effective solutions in the market today. With Advanced Merchant Services you will never have the fear of getting entrapped into a manipulative merchant account riddled with hidden fees and bogus charges. Hidden fees are basically of two types:
• The kinds that are overtly mentioned in the contract, but you have no way of knowing that you are actually being overcharged till you compare the rates.
• The kinds that are not charged immediately but get deducted once the honeymoon period is over.
There is also a third kind. These are indiscernible non titled fees that can only be ascertained after carefully deducting the fees and charges and from deposits. The money inexplicably siphoned off is the hidden fees. Some of the bogus fees charged by most Merchant Account Services include Chargeback fees, Retrieval fees, Termination fees, Gateway fees, Gateway per Item fees, Minimum fees, Over limit fees, Voice AVS fees Annual fees, Statement Fees, Customer Support fees, Technical Support fees. There are a number of other fees that are covertly charged by merchant service provider and credit card processing units.
Advanced Merchant Accounts on the other hand provides you with the best deal in market. You will not be charged unfairly and if you ever come across another merchant service provider offering cheaper rates, than AMS will immediately beat it by 5%.
Advanced Merchant Services is an undisputed leader of the merchant accounts industry. With over nine of years of experience AMS has been providing unparalleled merchant account services to its clients, ever since credit cards became the buzzword for financial transactions. Advanced Merchant Services offers a variety of secure, all-inclusive, highly cost-efficient, financial processing solutions. With Advanced Merchant Services, businessmen can start accepting payments in credit cards within a day or two of completing the online application. AMS has a record of getting most of its merchant account application approved in less than 24 hours. Moreover AMS offers the most cost effective solutions in the market today. With Advanced Merchant Services you will never have the fear of getting entrapped into a manipulative merchant account riddled with hidden fees and bogus charges. Hidden fees are basically of two types:
• The kinds that are overtly mentioned in the contract, but you have no way of knowing that you are actually being overcharged till you compare the rates.
• The kinds that are not charged immediately but get deducted once the honeymoon period is over.
There is also a third kind. These are indiscernible non titled fees that can only be ascertained after carefully deducting the fees and charges and from deposits. The money inexplicably siphoned off is the hidden fees. Some of the bogus fees charged by most Merchant Account Services include Chargeback fees, Retrieval fees, Termination fees, Gateway fees, Gateway per Item fees, Minimum fees, Over limit fees, Voice AVS fees Annual fees, Statement Fees, Customer Support fees, Technical Support fees. There are a number of other fees that are covertly charged by merchant service provider and credit card processing units.
Advanced Merchant Accounts on the other hand provides you with the best deal in market. You will not be charged unfairly and if you ever come across another merchant service provider offering cheaper rates, than AMS will immediately beat it by 5%.
How to Maintain Your Merchant Account
As most of you would agree, choosing the right merchant account can be a tough task. Having toiled long and hard to find the right merchant service provider, you must now make sure you keep a careful tab on your merchant account. Most businessmen make the fatal error of not paying enough attention to their merchant account. As rules change and as the rates and fees are slowly increased, the monthly expense of maintaining the account rises beyond their initial expectation. Eternal vigilance is the price of not being taken for a ride. It has often been the case that by the time the businessman wakes up to the inflated bills and starts calculating and comparing the rates and fees, he has already been duped of thousands of dollars.
When rates are increased without notification or proper justification and when new regulations are introduced by credit card associations without informing the businessmen, your merchant account gets affected, and consequently, becomes more expensive. This process is known as merchant account degradation. The key to self preservation is not letting your merchant account degrade in the first place. Here are a few things that you can do to maintain an optimum merchant account.
• You should carefully read through your monthly merchant account statement and get all ambiguities clarified from the customer support executives.
• Merchant service providers are required by the law to inform their clients of any changes before introducing them in their accounts. These notifications should be prominently mentioned in the front page. Always make sure that you go through these information.
• As you must know, there are as many as three different discount rates that you may be charged to process your transactions. Keep a careful tab on these discount rates to make sure that your transactions are running through the lowest qualified rates.
By logging on to the online webpage of Advanced Merchant Services at www.merchant-accounts.com, you can easily and immediately lower your current rates, if they are bothering you. Advanced Merchant Services (AMS) can save you hundreds, perhaps even thousands, of dollars that you pour into processing costs. Fill up the AMS form and you will soon be contacted by an AMS representative with a proposal that will beat your current rates. With AMS, you are always assured of complete satisfaction. AMS is a well established player and is backed by the largest processing banks in the United States of America. So whether you need to process a thousand dollars a month or a million, your funds are absolutely safe with the merchant accounts at AMS.
When rates are increased without notification or proper justification and when new regulations are introduced by credit card associations without informing the businessmen, your merchant account gets affected, and consequently, becomes more expensive. This process is known as merchant account degradation. The key to self preservation is not letting your merchant account degrade in the first place. Here are a few things that you can do to maintain an optimum merchant account.
• You should carefully read through your monthly merchant account statement and get all ambiguities clarified from the customer support executives.
• Merchant service providers are required by the law to inform their clients of any changes before introducing them in their accounts. These notifications should be prominently mentioned in the front page. Always make sure that you go through these information.
• As you must know, there are as many as three different discount rates that you may be charged to process your transactions. Keep a careful tab on these discount rates to make sure that your transactions are running through the lowest qualified rates.
By logging on to the online webpage of Advanced Merchant Services at www.merchant-accounts.com, you can easily and immediately lower your current rates, if they are bothering you. Advanced Merchant Services (AMS) can save you hundreds, perhaps even thousands, of dollars that you pour into processing costs. Fill up the AMS form and you will soon be contacted by an AMS representative with a proposal that will beat your current rates. With AMS, you are always assured of complete satisfaction. AMS is a well established player and is backed by the largest processing banks in the United States of America. So whether you need to process a thousand dollars a month or a million, your funds are absolutely safe with the merchant accounts at AMS.
Are Equity-Indexed Annuities Right for You?
What is an equity-indexed annuity?
An equity-indexed annuity is a type of contract between you and an insurance carrier. This annuity earns interest by linking to a given index. One of the most commonly used indices is the Standard & Poor's 500 Composite Stock Price Index (the S&P 500).
Competitive interest rate guarantees on principle:
Some equity indexed annuities are able to offer as much as a 10% interest bonus the first year. In addition, the insurance carrier typically guarantees a minimum return on your principle contribution amount over the life of the contract. This rate is guaranteed even if the index-linked rate is lower. Guaranteed minimum return rates vary from carrier to carrier, but they’re typically in the range of 1-3%.
Here's how you can earn 13-14% in year 1:
At the time of transfer, some insurance carriers will issue an immediate 10% upfront bonus. The remaining 3-4 comes from your money usually being placed in a “fixed bucket” (like a money market) the remaining 12 months, thereby giving you a total for year 1 of 13.00-14.40%.
In addition, the insurance carrier typically guarantees protection on your principle contribution amount. This means that your investment may never dip below your principle contribution. Some insurance companies even guarantee a protection of your principle balance each anniversary year of your investment. This allows your investment to potentially grow to higher balances each year allowing those new balances to become protected as well. (All the guarantees are based on the premise that you leave the money in the contract for the duration of the term).- see next section
Can you lose money buying an equity-indexed annuity?
With all the equity indexed annuity guarantees, you may be wondering if you can loose money investing in these types of investments. You can lose money buying an equity-indexed annuity, especially if you need to cancel your annuity early (before the term expires). There are early withdrawal penalties that apply.
Even with a guarantee, you can still lose money if your guarantee is based on an amount that’s less than the full amount of your purchase payments. If your equity-indexed annuity only earned its minimum guarantee, it would take several years for it to “break even.”
Who are equity-indexed annuities more appropriate for?
Equity-indexed annuities tend to be more appropriate for long-term retirement monies, where you will not access your contributions and interest credits on a regular basis. These types of investors are not concerned with the early withdrawal penalties and are more interested in the guarantees and protection offered.
What are some of the contract features of equity-indexed annuities?
Equity-indexed annuities are complicated products that may contain several features that can affect your return. Bass Financial Solutions, Inc. makes it a point to help you fully understand how an equity-indexed annuity computes its index-linked interest rate before you buy. An insurance carrier may credit you with a lower return than the actual index’s gain. So there’s a “trade-off” in kind, for the principle protection they provide. Some common features used to compute an equity-indexed annuity’s interest rate include:
* Participation Rates. The participation rate determines how much of the index’s increase will be used to compute the index-linked interest rate. For example, if the participation rate is 80% and the index increases 9%, the return credited to your annuity would be 7.2% (9% x 80% = 7.2%).
* Interest Rate Caps. Some equity-indexed annuities set a maximum rate of interest that the equity-indexed annuity can earn. If a contract has an upper limit, or cap, of 10% and the index linked to the annuity gained 10.2%, only 10% would be credited to the annuity.
* Margin/Spread/Administrative Fee. The index-linked interest for some annuities is determined by subtracting a percentage from any gain in the index. This fee is sometimes called the “margin,” “spread,” or “administrative fee.” In the case of an annuity with a “spread” of 3%, if the index gained 10%, the return credited to the annuity would be 7% (10% - 3% = 7%).
Another feature that can have an impact on an equity-indexed annuity’s return is its indexing method (or how the amount of change in the relevant index is determined). Some common indexing methods include:
* Annual Reset (or Ratchet). This method credits index-linked interest based on any increase in index value from the beginning to the end of the year.
* Point-to-Point. This method credits index-linked interest based on any increase in index value from the beginning to the end of the contract’s term.
* High Water Mark. This method credits index-linked interest based on any increase in index value from the index level at the beginning of the contract’s term to the highest index value at various points during the contract’s term, often annual anniversaries of when you purchased the annuity.
These and other features may be included in an equity-indexed annuity you are considering. Before you decide to buy an equity-indexed annuity, let Bass Financial Solutions, Inc. help you understand how each feature works and what impact, together with other features, it may have on the annuity’s potential return.
As we say to all of our clients: Like any other investment or contract that you enter into, Equity Indexed Annuities are not appropriate for everyone. They are most appropriate for those investors that have a solid understanding of the contract features and benefits. Additionally, these features and benefits must match your stated objectives and goals for your money, in order to be a suitable and viable alternative for your money. At that time, and only then, is an Equity-Indexed Annuity the right investment option for you.
An equity-indexed annuity is a type of contract between you and an insurance carrier. This annuity earns interest by linking to a given index. One of the most commonly used indices is the Standard & Poor's 500 Composite Stock Price Index (the S&P 500).
Competitive interest rate guarantees on principle:
Some equity indexed annuities are able to offer as much as a 10% interest bonus the first year. In addition, the insurance carrier typically guarantees a minimum return on your principle contribution amount over the life of the contract. This rate is guaranteed even if the index-linked rate is lower. Guaranteed minimum return rates vary from carrier to carrier, but they’re typically in the range of 1-3%.
Here's how you can earn 13-14% in year 1:
At the time of transfer, some insurance carriers will issue an immediate 10% upfront bonus. The remaining 3-4 comes from your money usually being placed in a “fixed bucket” (like a money market) the remaining 12 months, thereby giving you a total for year 1 of 13.00-14.40%.
In addition, the insurance carrier typically guarantees protection on your principle contribution amount. This means that your investment may never dip below your principle contribution. Some insurance companies even guarantee a protection of your principle balance each anniversary year of your investment. This allows your investment to potentially grow to higher balances each year allowing those new balances to become protected as well. (All the guarantees are based on the premise that you leave the money in the contract for the duration of the term).- see next section
Can you lose money buying an equity-indexed annuity?
With all the equity indexed annuity guarantees, you may be wondering if you can loose money investing in these types of investments. You can lose money buying an equity-indexed annuity, especially if you need to cancel your annuity early (before the term expires). There are early withdrawal penalties that apply.
Even with a guarantee, you can still lose money if your guarantee is based on an amount that’s less than the full amount of your purchase payments. If your equity-indexed annuity only earned its minimum guarantee, it would take several years for it to “break even.”
Who are equity-indexed annuities more appropriate for?
Equity-indexed annuities tend to be more appropriate for long-term retirement monies, where you will not access your contributions and interest credits on a regular basis. These types of investors are not concerned with the early withdrawal penalties and are more interested in the guarantees and protection offered.
What are some of the contract features of equity-indexed annuities?
Equity-indexed annuities are complicated products that may contain several features that can affect your return. Bass Financial Solutions, Inc. makes it a point to help you fully understand how an equity-indexed annuity computes its index-linked interest rate before you buy. An insurance carrier may credit you with a lower return than the actual index’s gain. So there’s a “trade-off” in kind, for the principle protection they provide. Some common features used to compute an equity-indexed annuity’s interest rate include:
* Participation Rates. The participation rate determines how much of the index’s increase will be used to compute the index-linked interest rate. For example, if the participation rate is 80% and the index increases 9%, the return credited to your annuity would be 7.2% (9% x 80% = 7.2%).
* Interest Rate Caps. Some equity-indexed annuities set a maximum rate of interest that the equity-indexed annuity can earn. If a contract has an upper limit, or cap, of 10% and the index linked to the annuity gained 10.2%, only 10% would be credited to the annuity.
* Margin/Spread/Administrative Fee. The index-linked interest for some annuities is determined by subtracting a percentage from any gain in the index. This fee is sometimes called the “margin,” “spread,” or “administrative fee.” In the case of an annuity with a “spread” of 3%, if the index gained 10%, the return credited to the annuity would be 7% (10% - 3% = 7%).
Another feature that can have an impact on an equity-indexed annuity’s return is its indexing method (or how the amount of change in the relevant index is determined). Some common indexing methods include:
* Annual Reset (or Ratchet). This method credits index-linked interest based on any increase in index value from the beginning to the end of the year.
* Point-to-Point. This method credits index-linked interest based on any increase in index value from the beginning to the end of the contract’s term.
* High Water Mark. This method credits index-linked interest based on any increase in index value from the index level at the beginning of the contract’s term to the highest index value at various points during the contract’s term, often annual anniversaries of when you purchased the annuity.
These and other features may be included in an equity-indexed annuity you are considering. Before you decide to buy an equity-indexed annuity, let Bass Financial Solutions, Inc. help you understand how each feature works and what impact, together with other features, it may have on the annuity’s potential return.
As we say to all of our clients: Like any other investment or contract that you enter into, Equity Indexed Annuities are not appropriate for everyone. They are most appropriate for those investors that have a solid understanding of the contract features and benefits. Additionally, these features and benefits must match your stated objectives and goals for your money, in order to be a suitable and viable alternative for your money. At that time, and only then, is an Equity-Indexed Annuity the right investment option for you.
Get A Budget And Manage Your Money
Typically, when we think about college life we think freedom and fun. However, frequently stressing over finances is definitely not "fun" and being chained to an ever-growing heap of debt is not my idea of "freedom". Managing your money is a necessary part of a stress-free college life. You're going to have to start sometime in your life and the sooner the better.
What students should know about managing their money:
In order to manage your money properly you must create a budget. The purpose of a budget is to outline a practical plan for spending the limited money that most college students have. Due to the fact that your income and expenses are constantly fluctuating, whichever budget you choose must allow for flexibility.
First, write down where all your income comes from. This can include income from a job, grants, scholarships, allowance from home, etc. The next step is to outline your expenses. Split them into two catagories: fixed and flexible.
Fixed expenses are exact amounts that are due on specific dates. Flexible expenses are ever changing amounts of money that you spend on your wants and needs.
Example Fixed Expenses:
* Housing
* Car payment (including insurance)
* Health insurance
* College Tuition
* Cell phone
Example Flexible Expenses:
* Books
* Gasoline and maintenance for your car
* Going over on your cell phone minutes or long distance telephone calls
* Social expenses (movies, dates, football games, etc)
* Personal expenses (clothes, groceries, doctor and/or dentist bills, domestic supplies, haircuts, etc.)
Add up the amount of income and expenses you have. Look at your paper. Do you have more expenses than your income can cover? If this is the case, think about what you can do to increase your income or decrease your expenses. This may seem elementary, but it's essential if you wish to stay out of debt while you are attending school.
Lowering your expenses will probably require some sacrifice. Many college students are used to spending their money impulsively. This sort of poor money management leads to financial bondage. If you are ready to lower your expenses try some of these tips:
- Pay your bills on time
- Watch out for peer pressure
- Purchase used text books
- Avoid impulse buying
- Look for sales
- Don't eat out and stop buying junk food
- Go to matinees instead of evening shows
Everybody is going to need a different type of budget to fit his or her individual needs. However, you can find basic budgets online, in financial books or just ask your parents to give you some ideas. Don't let debt to enslave you. Find a budget, use it, and be willing to sacrifice to stay out of debt.
What students should know about managing their money:
In order to manage your money properly you must create a budget. The purpose of a budget is to outline a practical plan for spending the limited money that most college students have. Due to the fact that your income and expenses are constantly fluctuating, whichever budget you choose must allow for flexibility.
First, write down where all your income comes from. This can include income from a job, grants, scholarships, allowance from home, etc. The next step is to outline your expenses. Split them into two catagories: fixed and flexible.
Fixed expenses are exact amounts that are due on specific dates. Flexible expenses are ever changing amounts of money that you spend on your wants and needs.
Example Fixed Expenses:
* Housing
* Car payment (including insurance)
* Health insurance
* College Tuition
* Cell phone
Example Flexible Expenses:
* Books
* Gasoline and maintenance for your car
* Going over on your cell phone minutes or long distance telephone calls
* Social expenses (movies, dates, football games, etc)
* Personal expenses (clothes, groceries, doctor and/or dentist bills, domestic supplies, haircuts, etc.)
Add up the amount of income and expenses you have. Look at your paper. Do you have more expenses than your income can cover? If this is the case, think about what you can do to increase your income or decrease your expenses. This may seem elementary, but it's essential if you wish to stay out of debt while you are attending school.
Lowering your expenses will probably require some sacrifice. Many college students are used to spending their money impulsively. This sort of poor money management leads to financial bondage. If you are ready to lower your expenses try some of these tips:
- Pay your bills on time
- Watch out for peer pressure
- Purchase used text books
- Avoid impulse buying
- Look for sales
- Don't eat out and stop buying junk food
- Go to matinees instead of evening shows
Everybody is going to need a different type of budget to fit his or her individual needs. However, you can find basic budgets online, in financial books or just ask your parents to give you some ideas. Don't let debt to enslave you. Find a budget, use it, and be willing to sacrifice to stay out of debt.
Low Minimum Credit Card Payments Lead To Debt Sentence
Consumers have been warned by one price comparison website that only paying the minimum amount on a credit card balance each month could lead to an increased “debt sentence”.
According to uSwitch, those borrowers who choose credit cards over cheap loans - and opt to only pay off the minimum amount each month - risk extending the time it takes to repay debt by up to 30 years. The warning follows news that both Barclaycard and M&S Money have dropped their minimum payment amounts to less than 2.5 per cent.
Barclays is currently asking customers for a monthly installment of 2.25 per cent, down from 2.5 per cent, while borrowers with M&S Money credit cards can pay as little as 2.5 per cent a month, down from three per cent. Incidentally, the price comparison service suggests that to help negate debt management problems, the credit card industry should introduce a minimum repayment limit of three per cent.
“There is little justification for setting minimum repayments at just two per cent and we believe that it is time that the industry agreed a standard minimum repayment amount of at least three per cent on all credit cards,” said uSwitch personal finance expert Mike Naylor.
He added that despite moves to put ‘health warnings’ on credit card statements and to make literature easier to understand, the majority of borrowers still do not comprehend the problems associated with only paying the minimum amount each month. Mr Naylor suggested that by only paying off credit card debt in small amounts consumers could end up paying off mortgages and secured loans before clearing card balances.
“In an environment of rising interest rates where personal debt in the UK has reached a staggering £1,325 billion, of which credit card debt accounts for £54 billion, consumers could now finish repaying their mortgage before their credit card, despite the huge disparity in sums borrowed,” he elaborated.
uSwitch.com's research found that 3.5 million Britons could spend 30 years struggling with debt management if choosing to only make minimum repayments. However paying a little more each month could see borrowers cut their “debt sentence” by 15 years and generate collective interest savings of £5.5 billion.
Figures released today by the British Bankers Association (BBA) suggest that borrowers are slowly beginning to turn away from credit cards and seek out cheap loans for their financial needs instead. Lending on plastic fell by £0.1 billion over the course of June, the association revealed, while personal loans remained popular. Borrowing on loans and overdrafts was up by £0.1 billion last month and secured loan lending grew by an underlying £5.1 billion.
Meanwhile, Toby Clark, senior finance analyst at Mintel, recently said that Britons are “wildly underestimating” how much money they owe on credit cards and personal loans. The expert was speaking after research from the firm revealed that 21 million consumers owe £100 billion more than they estimate.
According to uSwitch, those borrowers who choose credit cards over cheap loans - and opt to only pay off the minimum amount each month - risk extending the time it takes to repay debt by up to 30 years. The warning follows news that both Barclaycard and M&S Money have dropped their minimum payment amounts to less than 2.5 per cent.
Barclays is currently asking customers for a monthly installment of 2.25 per cent, down from 2.5 per cent, while borrowers with M&S Money credit cards can pay as little as 2.5 per cent a month, down from three per cent. Incidentally, the price comparison service suggests that to help negate debt management problems, the credit card industry should introduce a minimum repayment limit of three per cent.
“There is little justification for setting minimum repayments at just two per cent and we believe that it is time that the industry agreed a standard minimum repayment amount of at least three per cent on all credit cards,” said uSwitch personal finance expert Mike Naylor.
He added that despite moves to put ‘health warnings’ on credit card statements and to make literature easier to understand, the majority of borrowers still do not comprehend the problems associated with only paying the minimum amount each month. Mr Naylor suggested that by only paying off credit card debt in small amounts consumers could end up paying off mortgages and secured loans before clearing card balances.
“In an environment of rising interest rates where personal debt in the UK has reached a staggering £1,325 billion, of which credit card debt accounts for £54 billion, consumers could now finish repaying their mortgage before their credit card, despite the huge disparity in sums borrowed,” he elaborated.
uSwitch.com's research found that 3.5 million Britons could spend 30 years struggling with debt management if choosing to only make minimum repayments. However paying a little more each month could see borrowers cut their “debt sentence” by 15 years and generate collective interest savings of £5.5 billion.
Figures released today by the British Bankers Association (BBA) suggest that borrowers are slowly beginning to turn away from credit cards and seek out cheap loans for their financial needs instead. Lending on plastic fell by £0.1 billion over the course of June, the association revealed, while personal loans remained popular. Borrowing on loans and overdrafts was up by £0.1 billion last month and secured loan lending grew by an underlying £5.1 billion.
Meanwhile, Toby Clark, senior finance analyst at Mintel, recently said that Britons are “wildly underestimating” how much money they owe on credit cards and personal loans. The expert was speaking after research from the firm revealed that 21 million consumers owe £100 billion more than they estimate.
Career Development Loan Applications Still Credit Checked
Britons looking to take out a loan for the purpose of career development will find themselves judged in the same way as applying for a personal loan at a bank, a spokesperson for the Co-operative Bank has said.
Career development loans can be used to help people acquire new job skills, training, qualifications or experience integral to them getting a new job or even launching a new career, according to the Directgov website, yet Andy Hammerton from Co-operative Bank has ruled out any suspicion that it is easier to get a career development loan than a personal loan when it comes down to the matter of credit history.
“If they [an applicant] had a very, very poor credit history then we wouldn’t accept them just because it’s a career development loan, they still have to be credit scored. We have to be a responsible lender,” Mr Hammerton said. “A credit score in the past is usually a good indication of what’s going to happen in the future, so if somebody’s been a poor credit risk previously, just because they’re taking a course doesn’t necessarily mean they’re going to be a sound credit risk in the future. They need to have a reasonable credit record.”
The Co-operative Bank is just one of the lenders offering career development loans, according to the government website, with the Royal Bank of Scotland (RBS) and Barclays also providing these specialist credit options. Such loans range anywhere from £300 to £8,000 and cover a maximum of three years of learning.
Also highlighted by Mr Hammerton was that a career development loan was not the route to take for consumers looking for the cheapest loans on the market, with personal loans providing a much more likely route to cheap credit for British borrowers. He said that due to the personal loans sector being “a very competitive market at the moment”, there were “cheaper” loans available than the career development-specific ones.
However, if competition is the driving force behind loan costs, it is unlikely that the cost of career development loans is going to fall in the near future. As the spokesperson noted, there are only three “players” in the market, with RBS, Barclays and the Co-operative Bank having not been joined by any newer entrants. “There’s nowhere near the competition that you see in the [personal] loan market,” Mr Hammerton added, although he did suggest that loans could be found “for six per cent, seven per cent” if you were looking to pay the loan back quickly.
In May this year, Moneysupermarket.com said that loans were at their cheapest rate for four years, with the company’s head of loans, Tim Moss, going further by saying that loans had “never been so cheap”. This was calculated on the difference between the base rate of interest, set by the Bank of England’s monetary policy committee, and the interest rate on the cheapest loan. Mr Moss added that profit margins for the providers of such financial products were “narrower than ever”.
Career development loans can be used to help people acquire new job skills, training, qualifications or experience integral to them getting a new job or even launching a new career, according to the Directgov website, yet Andy Hammerton from Co-operative Bank has ruled out any suspicion that it is easier to get a career development loan than a personal loan when it comes down to the matter of credit history.
“If they [an applicant] had a very, very poor credit history then we wouldn’t accept them just because it’s a career development loan, they still have to be credit scored. We have to be a responsible lender,” Mr Hammerton said. “A credit score in the past is usually a good indication of what’s going to happen in the future, so if somebody’s been a poor credit risk previously, just because they’re taking a course doesn’t necessarily mean they’re going to be a sound credit risk in the future. They need to have a reasonable credit record.”
The Co-operative Bank is just one of the lenders offering career development loans, according to the government website, with the Royal Bank of Scotland (RBS) and Barclays also providing these specialist credit options. Such loans range anywhere from £300 to £8,000 and cover a maximum of three years of learning.
Also highlighted by Mr Hammerton was that a career development loan was not the route to take for consumers looking for the cheapest loans on the market, with personal loans providing a much more likely route to cheap credit for British borrowers. He said that due to the personal loans sector being “a very competitive market at the moment”, there were “cheaper” loans available than the career development-specific ones.
However, if competition is the driving force behind loan costs, it is unlikely that the cost of career development loans is going to fall in the near future. As the spokesperson noted, there are only three “players” in the market, with RBS, Barclays and the Co-operative Bank having not been joined by any newer entrants. “There’s nowhere near the competition that you see in the [personal] loan market,” Mr Hammerton added, although he did suggest that loans could be found “for six per cent, seven per cent” if you were looking to pay the loan back quickly.
In May this year, Moneysupermarket.com said that loans were at their cheapest rate for four years, with the company’s head of loans, Tim Moss, going further by saying that loans had “never been so cheap”. This was calculated on the difference between the base rate of interest, set by the Bank of England’s monetary policy committee, and the interest rate on the cheapest loan. Mr Moss added that profit margins for the providers of such financial products were “narrower than ever”.
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