The current environment is for traders only. We are starting to see indications things might be picking up. Sometimes, the "short term" bounce tus into the "long term" move. Sometimes it doesn't. So stay tuned. And check the hotline for updates, as it's updated every few days. It's a toll free call and available 24-7. Remember that the market is currently on defense, so the name of the game right now is... Principal Preservation! What's on my list of "things to do" right now is to have a shopping list ready to go. When we go back on offense, it's no time for dawdling. I'm finalizing this shopping list right now. In a retirement account, like a 401k, a deferred comp plan or 403b account, the current order is safety-safety-safety. That will change as soon as the light changes to green. Outside of a retirement account, there is an easy way to "dip a toe in the pool," which is about all we SHOULD do now. Buying the deep in-the-money calls is a way to get the big toe wet. What's a deep in-the-money call? As an example XYZ stock is trading at $63. A deep in-the-money call would be calls with a strike price of $50, or say $55. The $55 calls should be priced around $8, plus a premium for the amount of time left until expiration. By getting in with $8 instead of $63, we keep more money on the sidelines, which is exactly what we want to do in defensive times. And you can get a lot of mileage by only investing small amounts in this approach and keeping the bulk of your assets in cash, out of harms way. But it HAS to be deep in-the-money calls. Speculators will buy calls at (or sometimes, even above!) where the stock is trading. For example, if XYZ stock is trading at $65, they'd buy the 65 calls. This is because they're usually the cheapest priced options. This is NOT what we want! Deep "in-the-money" calls can often move in tandem with the underlying stock. Sometimes they will match, point for point, the move in the stock. Let me explain why this really matters. Subconsciously, when many folks buy a stock, they think they'll own that stock for a long time. But we're on defense. So we may need to exit an idea quickly. If this happens, and we are holding a stock, we might hesitate about selling. Our subconscious may be telling us to "hang in there." Bad! In bull markets, you can "hang in there." In a bear market (like now), there is no TIME for us to "hang in there." It's either working, or it's not. Now, if we own a call option (and not a stock) we may be less inclined to "hang in there" like we could with a stock. Because if the stock drops to (or below) the strike price of the calls, the calls will be worthless. This is essentially the same result we'd get if we were stopped out on a stock. We need to take this kind of protective approach today because we don't know when the market will be going back on offense. Yes, "calls" are options. Options can destroy accounts when they are used improperly. 100 shares buyers should buy only 1 call. 200 shares, 2 calls. Problems come along when someone who normally buys 100 shares decides to buy 35 calls (which is the equivalent of buying 3500 shares of stock). So they're not for everyone. And, like driving a car (or most other things in life), if you don't know what you are doing... You Can Get REALLY Hurt! But using deep in-the-money calls can create a scenario where you can invest in several different ideas, all at the same time, with far less dollars than buying the actual stocks. Regards, PS Now you know why I'm busy preparing my shopping list! That's my job. Now, your job is to keep coming up with these great questions I continue to get. So continue to email and call. And check the hotline. Back in a few days with another update.
Investment Properties an Alernative to RSPs
Over the last few years, relatively weak stock markets (compared to the late 90's) along with continued global economic uncertainty have changed the way many Canadians are investing their hard eaed dollars. More and more Canadians are venturing into the rental property market, some swayed by the real estate appreciation that we've seen over the last few years. Others want to add real estate to their investment mix to better diversify their investment portfolios. Approximately 25 per cent of the condominium units built in Canada will be used as rental apartments. Additional investment is occurring in multi-unit residential properties such as duplexes, triplexes, and fourplexes, as well as single-family detached housing. Canadians are looking to have the rent from these investments at least cover their costs and, over the long term, gain a reasonable retu on their investment. Consider Your Mortgage and Financing Needs Carefully Investors who consider adding real estate assets are often confused about their mortgage financing options. Since the Bank Act allows only up to 75 per cent of the value of a property to be in uninsured financing, many investors who put 15 per cent down use an insured mortgage for the difference. The cost of the insurance premium can be as high as 4.5 per cent, which can translate into a $10,000 cost on a $225,000 mortgage. Even so, not all investors can meet the strict requirements that go along with an insured mortgage on rental property. These requirements include having a relatively high net worth and demonstrating that you can carry the mortgage payments in addition to your other debts without factoring in all of the rental income you will receive. This certainly doesn't leave room for many Canadians who want an investment property. Another option if you have a good amount of equity in your principal residence is to take some of that equity out, typically through a line of credit, to get a big enough downpayment that then may qualify you for a regular first mortgage. Financing Made Easy To simplify the process, you can also now consider those lenders who have mortgage products specifically designed for small investors who own or are purchasing a residential investment property. Canadian investors can now access up to $500,000 without costly mortgage insurance premiums, or leveraging the equity in their principal home. Up to 85 per cent financing inclusive of applicable fees is available for single family units or up to a fourplex located in major urban centres. Properties on well and septic systems located in a town or subdivision can also qualify. Typically, 75 per cent financing is available for condominium units and all properties must generate a positive cash flow. Perhaps now more Canadians can heed the wisdom offered by many financial professionals and diversify, diversify, diversify by including real estate in their investment portfolios.
Is the New Millennium Method Really 1 204 000 Better then a Bi Weekly Mortgage
This Article will compare and Contrast the Old-School Bi-Weekly Mortgage Method with the New Millennium Invest the Difference Method. Can The New Millennium Method really result in over $1,200,000 more money in your Retirement Account.
A Bi-Weekly Mortgage is a Craze that has been Sweeping the Mortgage Trade since those 18% and Higher Mortgage Rates of the late 70's and early 80's. The basic premise behind a Bi-Weekly Mortgage is that instead of making 12 Monthly Payments a year you make 26 Bi-Weekly Payments a year. Each Bi_Weekly Payment is 1/2 of the Monthly Payment. You pay off your Mortgage Faster and Save Lot's and Lot's of money because you are making 13 Payments a Year instead of 12. That Extra Monthly payment has the effect of Dramatically reducing your Payoff schedule.
Here are the results of a calculation done recently using an Online Calculator from a Popular Bi-Weekly Mortgage Program. The Example used a 30 year Fixed rate loan with a 5.5% Interest rate and an $$1,135.58 Monthly payment or a 567.79 Bi-Weekly Payment.
- Current Balance: $200,000.00
- Interest Remaining (Current): $208,806.90
- Interest Remaining on Bi-Weekly: $168,980.52
- Estimated Interest Savings on Bi-Weekly:39,826.38
- Term Remaining (Current): 360 Months
- Term Remaining on Bi-Weekly: 301 Months
- Estimated Term Saved if on Bi-Weekly:59 Months
With the New millennium comes a new and better almost $600,000 More Money in your pocket over the initial 30 Year Loan Schedule. (Over $1,200,000 if the $600,000 is allowed to grow for your retirement nest egg.) Here is the plan in a Nutshell. You get a 30 Year loan with a Payments for the first 5 Years Fixed at an Interest rate of 1.95%. You then take the Money you save and Invest it in an Annuity with an Assumed 8% retu.
Your Payments on a 30 Year Mortgage at 1.95% = 734.25 You Invest $495.96 a Month for 30 Years at an 8% Retu
- At the end of 5 Years you have Over $34,900
- At the end of 15 Years you have over $161,500
- At the end of 25 Years you have Over $435,000
- At the end of 30 Years you have Over $674,000
With The Above Bi_weekly Mortgage all your money $1230 on average monthly is going to pay your mortgage so
- At the end of 5 Years you have $0
- At the end of 15 Years you have over $0
- At the end of 25 Years you have Over $0
- At the end of 30 Years you have Over $86,500 (Since your Mortgae is Payed off 5 Years Early you now save 1230 a Month invested at a Retu of 8% for 5 Years)
Going one Step Further, Let's assume each home-Owner is 25 when they get the initial Loan and they let the Money sit in the Investment Account for 10 More Years (until they are 65) at an 8% retu.
- 674,000 at 8% will grow to $1,400,000 in 10 Years
- 86,500 at 8% will grow to $ 186,900 in 10 Years
About the Author
Mike Makler is a Financial Consultant in the St Louis Missouri Area Specializing in Real Estate Loans and Annuities. To Lea More Call Mike at 314 398-5547 or Visit Mike's Web Page: http://ewguru.com/finance
Get Mike's Newsletter Here http://ewguru.com/fin-news
Copyright � 2005-2006 Mike Makler
Inking a Financial Deal
In today's world of e-commerce with its fast financial deals and virtual business transactions, people are lured to get into businesses that they are not entirely sure of. Online scams and deceit in financial deals done over the Inteet are quite common nowadays. And it pervades every kind of industry, from selling, manufacturing to pyramid. In fact, there have been a lot of elderly Americans who were cheated of their retirement money when they decided to invest in get-rich-quick schemes over the Inteet. Yet despite the many waings of these scams, the examples being portrayed in media and the exposes on these deceitful financial deals, more and more people still get victimized. And you can't really blame them. Who would not want to suddenly have a bank account so huge you don't have to work a single day of your life? And in a way, therein lie the problem and the charm of these dubious virtual financial deals, they promise instant riches to people without them giving so much effort. Avoiding dubious financial deals Though these kinds of financial deals can be hugely attractive especially for people who cannot work because of old age, physical ailment or just plain laziness, there are still ways to disce the good deals from the bad ones. Here are some tips that will teach you to be smart enough and avoid dubious financial deals. Too good to get into The general rule that people advise is that if the business transaction or the package being offered is too good to be true, then it probably is. Avoid financial deals that promise a relatively fast retu of investments especially those that require huge sum of money. Somewhere in the terms of the contract, there is a catch that may cause you a lot, not only in terms of money but also in reputation. Never believe the testimonials Often, websites of these dubious virtual financial deals will contain testimonials from people who have supposedly tried out the service or scheme that they are offering. Many believe these testimonials are legitimate especially if they are accompanied by photos and email addresses where the endorsers can be reached. Do not believe these testimonials. Read the contract It is also important that you read every word written in the contract of the financial deal, whether it is in hard copy or in electronic copy before you make the decision of getting into one. This is especially true if you will make a huge investment in the financial deal. Reading the contract word for word can be time-consuming and really tiring but what is a few hours of to your time to your life's savings? Ask others If the financial deal is already something that you have heard of, it is better to ask people's opinion about it. Chances are, there are some who will be able to tell you if the financial deal is legitimate or not. If everyone you know do not have an idea on what it is all about, there are forums and chat rooms over the inteet that you can join. Post a topic about the financial deal or ask a direct question. You'll find that people are glad to help out. You'll even find some who have actually come across the same financial deal. Of course, in listening and reading their opinions, you also have to remember that this is virtual, so not everything is true. Be disceing and try to get as many opinions on the subject as you can.
How to Get Student Loans for College
Student loans are a helpful accessory when you need to cover costs when deciding to further your education, including housing and tuition. Student loans are there to be financial lifesavers when grants or scholarships leave your school funding a little short. There are federal loans available as well as private student loans that will help with the financial overload. Loan consolidation is another helpful tool when borrowed loans are at the repayment period and you are feeling overwhelmed. Federally funded student loans can be applied for online. FAFSA is an online free application for federal student aid. This program is available for both students and parents looking to apply for financial help. The application has seven steps that will ask you questions regarding your personal information, your school and plans, and financial information. The Federal Parent Loan for Undergraduate Students, or PLUS, is a loan program that relies on a good credit rating in exchange for helping with the financial needs of your student. This low interest rate program will help cover not only tuition costs, but also housing, books, and supplies. This student loan can be applied for online or through the mail. Private student loans are loans that are not offered through the federal govement. They are available through banks or other financial institutions. This type of loan is offered to both undergraduates and graduates and it helps to cover school expenses when federal student aid does not cover your those leftover expenses. Private student loan applications can be found online and you are subject to a credit review by the potential lender. Your own credit or your parent's credit is open for review and a co-signer may be needed if either credit rating is not approved for the loan. Obtain an application for your private student loan through your lender of choice or their online website, if applicable. Student loan consolidation becomes your best friend when the repayment period of your student loans becomes overwhelming. Loan consolidation will give you a break and put your various loans into one low monthly payment instead of various repayment dates with different amounts to pay for each loan. The Sallie Mae foundation is an excellent example of a loan consolidation program. All you have to do is visit their website and you have the option of downloading the application and sending it through the mail or filling it out online and applying for it right that second. It is a simple way to achieve student loan consolidation and it will give you the well-deserved sigh of relief and peace of mind.
Insider Secrets About Homeloans and Credit
Whether you have excellent credit, good credit or poor credit; make a great income, middle income or low income; have too much debt - are self-employed - have a loan with a pre-payment penalty - or need to rebuild or renew your credit...YOU MUST TAKE A LOOK AT: "Answers To The Most Frequently Asked Questions About Home Loans (And the Top Ten Most Common Mistakes That Can Cost You Big Money)" You, as a homeowner or homebuyer, are about to make a decision that will effect you immediately and into the future (sometimes for years to come). By financing a new home or by refinacing an existing home, you will be joining literally thousands of others homeowner or homebuyers. You will be faced with one of the most important financial commitments you will ever undertake. Even the veteran homeowner faces challenges everytime he or she looks for a new mortgage. It is amazing how much the mortgage industry changes even monthly (not to mention yearly). During the application process, you'll be exposed to perhaps hundreds of mortgage options (from reputable and not so reputable mortgage companies). Who do you trust? Who understands your particular credit, whether it may be excellent, good or poor? Who would possibly know how to solve your particular problems..one-on-one? Who is offering you the best mortgage options? Who has your best interest at heart? These are critical decisions that thousands of borrowers, both homeowners and homebuyers have to make each and every day. This can make finding the perfect mortgage loan for you and your family (or even an investment property) very difficult. With each wrong decision you make, you're literally risking the chance of loosing thousands of dollars (like throwing it right into the trash) AND making taking a BIG hit on your personal credit! This may leave you with a financial burden that can drain you for many months or years to come. Fortunately, we have the solution you need. We have put together an absolutely must-have ONLINE REPORT for all borrowers from excellent, good or poor credit. Homeowners and homebuyers looking to get the perfect loan or an investor wishing to make his or her first, second or third investment purchase or investment refinance. This FREE ONLINE REPORT is NOT limited to just those who have credit issues, but also will help homeowners and homebuyers who have too much debt, who are self-employed, and who have pre-payment penalty loans or who need to renew or rebuild their credit. This information will give you the knowledge you need to make educated decisions throughout your entire loan process. It will allow you to find and decide on the perfect loan for you and your family. So, get yourself a copy of this must-have FREE ONLINE REPORT now! Use the information to educate and protect yourself. Visit our website and download your FREE REPORT TODAY! http://www.mortgagebooksonline.com/
Introductory Rate Credit Cards Some Popular Features
Using introductory rate credit cards has become a popular way for UK borrowers to manage credit card debt. Introductory rate credit cards offer borrowers a preferential interest rate when they first sign up for a new card. There are three main ways in which this can happen. All of the ways offer significant advantages for credit card borrowers.
0% Balance Transfers
The one that is most appealing to consumers is the 0% balance transfer offer. This offers a nil rate of interest on balances transferred to a particular credit card. There is usually a limit to how long this offer applies, but this can vary from three to 12 months, so most people will be able to find an offer that suits them.
The trick to using 0% balance transfers effectively is to move balances from card to card before the expiry of the offer period. This is known as rate surfing. Credit card companies don't like it, because it loses them hundreds of thousands in interest. For consumers, however, rate surfing offers the chance to clear some or all of an outstanding debt. This is because payments to 0% cards reduce the debt each month instead of being applied to interest.
Fixed Low Balance Transfer Rate
Another typical introductory credit card incentive is a fixed low interest rate for the lifetime of a balance transfer. That means that the lower interest rate will apply for as long as the debt remains on the credit card. For example, if the standard variable interest rate is 13.9%, a credit card issuer might offer a reduced rate of 4.9%.
This is a good option for borrowers who have a loan or debt on which they are paying a higher interest rate. Transferring to this kind of deal can save consumers hundreds of pounds and can help them to repay debt more quickly. With this kind of deal, there is little advantage to rate surfing unless another card issuer is offering a better preferential rate.
Permanent Low Rate
A third type of credit card incentive offers a low rate on spending on the card. This is usually a few percentage points below the standard variable rate. This type of offer can be a good option for consumers who spend regularly on their credit cards. This is because most balance transfer offers have higher rates for other types of transactions such as purchases, cash withdrawals and credit card cheques.
Other Features Of Introductory Rate Credit Cards
As if low rates were not enough, many credit card issuers offer other incentives to new customers. These include:
- the ability to contribute to charity by using a particular credit card
- discounts off purchases from particular manufacturers
- cash back on purchases
- additional insurance on purchases or travel
Many credit card companies have got wise to rate surfing and now apply a one-off charge for balance transfers. It is worth shopping around to get the best combination of interest rates and other incentives.
Joe Kenny writes for the Card Guide, a UK based credit cards site, visit today for introductory balance transfers and start clearing credit card debt today. Article Source: http://EzineArticles.com/?expert=Joseph_Kenny |
