Choosing Diversified Investments for Your Portfolio

Choosing what you should invest your hard-earned dollars in can seem like a daunting task to the beginner. Technical terms and fine print details can make the process of balancing risk with reward a difficult subject. However, there are a few simple rules which even a novice investor may follow to lessen the risk and ensure he is placed correctly in the current market.

No matter whom you are, how much money you have, or how long you have until retirement, your portfolio should always remain well-diversified. Savings accounts, bonds and stocks should all be included in some form, and no one type of investment should allocate more than 30% of your total investment funds.

Investing in commodities is risky business and not for the lighthearted. This type of investing requires close monitoring of the daily market, and the ability to move very quickly. There is a lot of money to be made in commodities, but the practice is best left to professional investors only.

Real Estate Investment Trusts (REITs) provide ample opportunity to invest in actual property that is not as volatile. Mortgage-backed securities will vary in value and risk, but in down markets can be bought at a discounted rate.

Mutual funds which focus on real estate investing may also be a good option. Generally, mutual fund managers will continually diversify the fund’s portfolio, causing your money to always do the same. This reduces some of the guesswork out of investing, but mutual funds should also be chosen wisely.

REITs invest in real estate assets such as strip malls, commercial buildings and residential mortgages. There are three types of REITs, including equity REITs, hybrid REITs and mortgage REITs.

Equity REITs may invest or own real estate that is rented out and turn a profit for investors. Mortgage REITs are in the business of lending funds to developers or owners at a fee, and hybrid REITs are a combination of equity and mortgage types.

Real estate options are also available as an investment vehicle. These options are offered instead of a formal purchase agreement, and include several contingencies. The reason these options are given is to officially take the house off the market to other buyers for a specified time limit. If the financing is not secured by that time, the investor will lose their earnest funds which are usually a percentage of the agreed-upon sale price.

So, how do investors make money with these options? Well, they offer an option on a home, and try to find a new buyer during the interim that will pay more than the original sale price. This is risky business and should not be utilized unless you already have several years of experience in real estate investing and a network of professionals to deal with.

Of course, you can always invest in property as part of your portfolio as well. Although this carries some risk and requires financial obligations, this is something that can be physically watched over for the faint-at-heart.

Student Loans-All about Private Student Loans

A lot of federal student loan programs do not make credit checks and provide ample sums of student loans. Unsubsidized student loans, where interest is accumulated while the student is studying, are those that are most wanted.

However, these student loan programs are based on needs and come with various criteria that might make qualifications a bit difficult. And even when students do qualify; in most cases, the granted student loans will only pay for a small amount of the total education cost. In this case, students should turn to private student loans, in order to make up for the difference.

Private student loans have their share of advantages and disadvantages, too, though. A credit check is strictly required and if a good credit history is found, then there is never a problem. However, ‘good’ is a relative term, and borrowers might find themselves paying for more than ideal interest rates.

Interest rates aside, there are also several other financial implications that come with private student loans. Additional fees are usually asked for with nominal student loan amounts. A simple student loan of $4,000 may get 4% in fees added before it is granted, meaning that the borrower never sees $160 of the total amount, but pays for it anyway.

But, there are certain benefits that come with private student loans, as well; most obviously, that the funds are available. Private lenders are there to gain profit from interest and fees that they ask for. They want to make money available to those who need it. Consequently, they will work hard to make sure that the applicant is qualified. On the other hand, federal lenders have inflexible criteria and there is no point in trying again once you have been rejected.

With private student loans, you will also not have to deal with such illogical and impersonal bureaucracy. Private lenders have customer service departments that are there to answer any questions asked. Usually, federal student loan programs also have contacts available for help, too. Unfortunately, the answers cannot always be relied upon.

There are other convenient considerations apply that make private student loans more desirable.

Private student loans are much simpler, making the entire process much easier. For instance, there is no need to fill out the Free Application for Student Aid (FAFSA) forms and no need to supply additional documents. Interest rates and fees could be lower or higher, depending on the student loan program.

The most wanted private student loans simple have no interest rates or fees that are 1%. Make sure you check for any fees since they could add a lot of money to the student loan.

To get a great student loan, it would be ideal to have an impeccable credit history or to get a student loan with a co-signer who does. To find out what is available for you, this website is great place to start: http://www.finaid.org/loans/privatestudentloans.phtml

You can also use a student loan calculator, if you wish to run through your own sample scenarios. You can find one at: http://www.bankrate.com/brm/rate/calc_home.asp
Make sure you include all the actual costs through the entire lifetime of the student loan, in order to get a proper picture of the real cost.

Debt Management Plans Require Consideration of Taxes

You know the old saying: death and taxes are the two sure things you’ll encounter in life, and the same is true when dealing with your debt. Too many try to focus on only paying or getting rid of their debts as quickly and easily as possible, without ever considering the tax implications of any option they may choose.

Some of these tax implications are beneficial, however. For instance, the interest paid on your home loan is tax deductible, which is quite a large percentage of your payment during the first few years of the loan. This deduction results in less tax owed each year, putting more of your money back in your own pocket.

However, this isn’t always the case with interest payments on debt. Usually, you want them to be as low as possible and eliminated sooner rather than later.

A home equity line of credit, or HELOC, is a common second mortgage that is used to finance remodels and improvements, additional purchases, or paying off credit card debt. These can be of great use, and provide the same tax deductions available on your first mortgage.

This can be of great benefit if you’re looking for a way to pay off old debts as well as reduce your taxable income. Interest rates are lower than credit cards or other unsecured loans, reducing your monthly outlay as well.

Loan calculators found on the Internet are also available to provide the tax calculations for you. You need to be aware of every cent your new line of credit will cost you in the long run, so compare these different vehicles before signing on the dotted line.

Large medical bills are another reason to seek additional credit. Using your trusty credit card is an extremely expensive way to pay these off. You may be able to pay the institution you owe directly at a lower interest rate than an additional loan with cost – some medical expenses and medical-related debts may also be tax deductible.

Student loans also carry the added advantage of tax deductions. When considering how you will finance your formal education, you should consult a tax professional to study these different options available. In some cases, you will be able to deduct interest paid on the loans; in others, you may be allowed to deduct the entire payment.

Financing any large purchase – a home, car, medical costs or even your education – should come only with careful consideration. Not only should this added debt be considered in your long-term debt management plan, but you’ll need to consider the regular and real costs to your bank account.

Interest rates and terms will vary between different types of loans and applicants, depending on the type of financing and the applicant’s history. Before taking the plunge, you need to ensure you can afford monthly payments, but should also account for possible tax reductions as a result of taking on the new debt.

Are Rental Properties Right For You?

Any type of action or investment pursued in life requires knowledge of what you’re about to undertake. The same goes for real estate rental properties and managing them. There are a few considerations to be taken into account when determining if you want to hang on to a property and turn it into rental income, or sell it quickly for a fixed profit. Both options entail their own tax implications and legal liabilities, as well as different levels of capital appreciation.

As the owner of a rental property, you will be held responsible for all costs and maintenance associated with it. Mortgage finance payments, homeowner’s and liability insurance, taxes, and so on. Even if damage or negligence on the renter’s behalf contributes to a needed repair, you will also need to be prepared to deal with this situation.

Angry tenants or those that lose a source of income may stop paying rent altogether, forcing you to file eviction charges and official notices with the sheriff’s department. Different state and local laws may require a landlord to allow a certain time period, sometimes months or years, to pass before physically removing a tenant from a property.

Many of these problems can be addressed more efficiently if you’re prepared to deal with them prior to even purchasing a rental property. Sufficient knowledge of the current housing market in the area, interest rates on mortgage loans for investors, and the general direction of housing prices can help you make the best educated guess of whether to rent or not.

Next, consider the difference in tax consequences between renting and flipping a property. Rental properties require higher property tax brackets, but maintenance expenses will be deductible as a business expense. Any income from the property may also involve tax obligations, much like profits from a flip sale.

Legal advice should be sought from a real estate attorney, and general contracts should be drafted. This way, as soon as your property is ready to rent, you’ll be ready, too. Applications for renters should include information that will allow you to perform standard background checks with references and past landlords. Employment should be verified, and a consumer credit report may be ordered to note any late payments or judgments.

Contracts between a landlord and tenant should clearly outline each party’s rights in the relationship, and who is responsible for what. Plain language should be used to prevent any claims in the future that state the tenant did not understand the contract. Also include deposit amounts received, monthly rent, and possible changes to future rents after the end of the current lease.

Accurate records should be kept at all times to be able to create a quick glance at payments received, expenses and any late payments. Include in your contract clear requirements for the frequency of and day of payment, as well as a grace period of at least a day or two and late charges – everyone has a hard month now and again, and it’s best to work with your tenants a little rather than upset them and cause more damage to your money-making machine!

You Need A break, Don’t Scrap The Vacation

In a climate of cost-cutting and soaring prices for household necessities it may seem like a natural step to miss out the family break away. Maybe the cost of sending the entire family on a vacation is too much to even consider, but is it? Everyone should be entitled to one vacation per year, it is a must.

With money in short supply, how can a vacation be possible? A new phenomenon has been established known as the “staycation” and it is pretty much as the word suggests, a vacation but staying at home. Many may balk at this proposition but have not really thought about the opportunities for fun and activities right here on the doorstep.

Most towns and cities are equipped with many facilities to accommodate those travelling from elsewhere such as leisure centres with a swimming pool and slides and indoor games, museums, arcades, bowling among others, why not utilise these activities. Your kids will find it thrilling to be doing fun activities everyday as they would normally associate this with being away from home. Find out the possibilities from your nearest tourist information bureau or online.

For meals, you can save money on restaurants by planning picnics in the park, at the zoo or even in the backyard. Children and adults alike enjoy eating away from home and a picnic hamper never fails to delight.

A great fun and inexpensive way to unite the family and take part in an adventure is to organise a camping trip. Again you will be saving on food and accommodation (maybe a minimal fee for a camping site) with pre-packed food at the campfire or stove. Kids love to camp outdoors feeding their imagination. It is possible to avoid the campsite fee if you look for a unspoilt beauty spot that allows for camping.

If you are just looking for the lowest price to get away, do plenty of research and price comparison to get the best deal possible. There are so many resources to find cheap deals online and even travel agents have reduced prices considerably to compete. There are many deals where you can get one or more of your children for free if you book early enough.

Find accommodation where you are not paying for food and other toiletries etc. Get the bare minimum and bring your own this will see huge savings.

If your destination includes being out and about most of the time, go for one large room for the family. After all it is only for coming back to at the end of a day. This can help you save for other treats during the holiday. If your accommodation includes breakfast, be sure to take full advantage and eat well. The breakfast supplied is often enough to last till dinner with a small snack in- between, this saving every day soon adds up.

If you have a large family, it may be cost-effective to go for an all-inclusive. Many such types of vacation will include food, drinks and entertainment leaving you will no or very little additional expenses. An all-inclusive vacation at off-peak times can be the optimum saving.

If you are not too keen on camping but can’t afford a vacation, a great option is a mobile-home holiday. Many sites are located near family theme parks and other attractions and sometimes right beside the beach. This type of vacation can be acquired at a very reasonable cost and is great fun for all the family. Even if you have a large family there are all sizes to accommodate.

The whole point of time away from your work is to relax, re-charge your batteries and have fun with the family. There are so many options these days for cheap vacations or a “staycation”. A little prior thought and research can unveil a truly original break that will be remembered for years to come.

How Can I turn My Hobby Into An Income?

Are you in a dead end job and are finding it hard to summon up the will everyday, living only for your spare-time when you can enjoy your hobbies and passions? Do you know that millions of people have turned their life around using their knowledge and passions to pave the way to business success? Well if you didn’t, you do now.

These days, with having the internet at your disposal and a world where emphasis is strongly on enhancing our free time you can easily muscle in and be part of the resource base. It really is possible to draw on your expertise in your given subject and create a business venture.

You might be confused as to how you can use your particular expertise in your hobby to a monetary effect. Well, here is where you must do a little research and find out what other’s are doing to get the ideas flowing. Once you realise there are others doing what you could easily do, there will be no stopping you.

To find out what routes are available to you, start with a search on google. Type in your subject area and have a look at the results, you will be looking at the sponsored results on the right hand side of the results page. These adverts are by people who have built a website/business on the foundations of the subject in question.

If you click on the advert you will find out what these people are doing to profit from the subject and what form their business takes. In some cases it may be a physical product that they are selling or a short course on the subject. You will find opportunities that you had never thought possible.

When starting a business you need to know what sells and what people need. An excellent method to discover what people want and are potentially willing to buy which can determine a good premise for your business is an online keyword tool. There are a few free keyword tools available such as the google keyword tool which you can use to find out common words and phrases in your topic.

These words will be somehow related to your hobby and will create a picture of what people are looking for and how there needs can be met.

For other resources to find out what your options are for a business, have a look in your local yellow pages. If you can’t find your exact niche look for something similar and see what is being offered.

Go to your local newsagents and have a scan though the magazine section and see if you can find one in your niche or something very similar. Remember you are just trying to find ideas for forms of selling and how your business will take shape.

Your biggest hurdle will be to find out what your future customers want. The chances are you will already have an idea because you were these people at one time back when you were starting out or when you were in the process of learning your hobby. Take that knowledge and put it to use. Think of your self as a fantastic resource that people can’t afford to ignore.

Two Methods To Make A Huge Saving When Buying Your Home

There is no doubt that purchasing your first property is the most important and exciting business transaction you will ever make. Getting on that first rung of the ladder transports you into a whole new world of ownership and with it brings stark financial responsibility. Your mortgage can span anything up to 30 years depending on how much cash you can spare towards the initial endowment and your credit record must be as good as pristine.

Maybe you are reasonably well off or are struggling a bit, either way you still want to obtain the best deal you can and save money where possible. When buying your house there are two main methods that will increase your chances of saving money and effort, these are, owner financing and an assumable mortgage from the existing owner.

An assumable mortgage is where you have the opportunity to take over the existing mortgage of the previous owner along with the same interest rate they have. In most cases this interest rate will either be equal to or lower than the current rate helping you save. If your lender approves of the assumable mortgage then the mortgage is yours.

However, there can be a case where the entire cost of the house is not covered by the assumable mortgage where the seller is selling the house for a higher price than the mortgage. In this case, you, as the buyer will have to finance the additional sum either by taking a loan or paying in full. The lender may have different terms for the additional loan due to the current market conditions and your credit rating.

Moving on to the second method owner financing is dependent on two factors – that the buyer cannot obtain a mortgage loan and the owner is keen to sell the house as quickly as possible, however, it is probably a shrewd move for the buyer to investigate the reason for the hurried sale of the house.

This agreement includes the buyer paying monthly instalments to the seller of an agreed sum and often at a reduced rate compare to that of a traditional lender. There is no risk of loss to the seller if instalments are not made as the house itself stands as the security and should the buyer default the seller regains ownership of the home.

This method also gives benefits to both parties involved where the seller saves on capital gains tax and the buyer saves money on private mortgage insurance and other expensive lender fees.

When times are hard it is possible to draw upon other resources and methods for buying your house and avoid some of the heavy and costly load it brings. Lenders are happy to help you in your quest to buy your first home but they are also happy to give your wallet a spring clean.

The ABC’s of College Health Insurance

Student health insurance is of the most overlooked part in a college student’s set of priorities. As a student, our academics alone will take almost all of our time. Because of this, student health insurance is often disregarded and its importance undervalued.

But come to think of it, as we go to school, aside from the money for tuition fees, one of the most important investments that we should cater to is our health. When we are healthy, we can focus more on our studies and therefore, perform better in school. Universities nowadays recognize the importance of good health to a student’s life that offering college health insurance to students has become a standard procedure during enrollment. They offer students insurance as part of the over-all tuition fee. For students who already have their own personal health insurance, what they need to do is present legal documentation of the insurance to remove the additional health insurance charge in your school fees.

Universities usually offer health insurance based on the facilities that they have available inside the campus, and some also makes use of other health facilities near the university’s vicinity. One benefit of using your very own health insurance aside from the health facilities offered by the school is that it allows you to make use of health facilities and services outside the campus. Either way, students are ensured that whatever the college health insurance offers, they are able to give the appropriate health services once a student needs it. Student health insurance would usually cover the usual vaccinations, doctor’s consultation and routine check-ups. If ever you wish to purchase your own health insurance instead and forgo the one that was offered by the university, make sure that the requirements offered by the insurance meets the one offered by the school. If not, you will automatically be enrolled in the college’s health insurance and you will end up paying for both. For foreign students who have international student health insurance, universities usually credit insurance that were made inside the country and are owned by a company inside the U.S only.

A student health insurance usually has lower standards and requirements as compared to other types of insurance plans. Usually, student health insurance plans would require students to have a minimum number of credits enrolled in the university for them to take advantage of the benefits. Again, each university would differ form the other so check the rules and policies of the student health insurance first to see if you pass the minimum requirements or not.

So never take health insurance for granted most especially in your student life. Ensure your good performance in school by staying in the best shape as possible. Purchase student health insurance and most importantly, take advantage of it. Some students do purchase one without hassles, but after they start their first day of classes, they totally forget that it was even there! So aside from buying a student health insurance plan, be sure to take advantage of it. Make use of regular check-ups that are covered by the health insurance plan.

Make Your Mortgage Points Carve Your Financial Success

If you are a first time buyer making your first tentative footsteps into the murky world of mortgage loans, it really pays to do your homework and learn about how the process works. This involves finding out what you must do to get the best possible loan rate and how your points can make or break your financial future..

The term “points” in mortgage lender jargon simply means the amount of fees paid to the lender which is interpreted in a points system. The interest is lowered in conjunction with the amount of points you pay for.

The secret of a long-term reasonably low-cost payment plan involves making the highest initial payment that you can afford. If you have the money to pay upfront, you can see it as an investment for your future. Sure, there may be other needs to be met if you are buying your first home, but they can be met slowly and with time. Once you have secured your affordable mortgage plan, you can feel comfortable in the knowledge that you monthly wage will not be eaten up by monthly repayments.

There are varying types of points, some of which are worth more to in terms of lowering interest rates. There is usually a charge of one point for the initial loan fee with more points added for loans which have a smaller interest rate than the market rate at that time. By paying the lender a cash payment up front you will receive a lower interest rate. Look around using newspapers or the internet to find out the current interest rate in conjunction with points.

In simple terms one point equates to one per cent of the loan so if you are borrowing 80,000, one point would equal $800. By paying more points you will reduce the overall interest.

There are other factors involved in the usefulness of you paying the points, such as how long you will be staying in the house. If you intend to live there for many years, you will reap the benefits of your initially paid points. Over five years is usually a good estimate for getting returns on your initial investment. If you do not intend to stay in the property for more than a couple of years, it might not affect you too much if you do not have the money to pay for points at the start.

You can ask your lender for an idea of roughly when the breaking even point would be. If you do have some extra cash at your disposal, putting it into the cost of you loan is a smart move and you will constantly be saving money throughout the term of your contract.

Accepting Responsibility and Learning to Handle Your Debt

Debt can become a very bothersome issue for anyone, and must be dealt with accordingly. Too many in trouble tend to ignore or downplay the fact they are in way over their heads, but it’s important to implement a debt management solution by being honest with yourself about your current situation.

First, you have to calculate or find your current balances owed, as well as monthly payment and interest costs. Unfortunately, too many people focus only on interest rates they are being charged. This is an important piece of information, but doesn’t mean much when compared to dollar costs that are easily put into perspective.

If you’re not sure how to calculate this amount, look at your most recent bill from your creditors. There should be an area showing your last payment, and the amount applied toward the principal and the interest. If you can’t find it, simply call the customer service line and ask them to calculate it for you.

Any debt management company will tell you that you shouldn’t be paying more than a few percentage points of your monthly take-home pay for interest charges. To calculate this number, divide your monthly interest costs by your monthly take-home pay.

For example, if you bring home $5,000 per month and pay $250 per month in interest to your outstanding debts, this accounts for 5% of your income. This means you are essentially throwing away $250 a month that you otherwise wouldn’t if you paid that debt off.

The problem with many debts, especially credit card debt, is that very little of even the minimum monthly payments is applied toward the principal of the balance. This allows the company to continue to make money on a larger principal balance for several years.

When planning your own credit card management plan, ensure you are always paying more than just the minimum amount due each month. This is because even if you only pay an extra $10 or $15, any amount over the minimum will be applied to the principal to pay it down. This drastically reduces your overall cost of the debt and shortens the amount of time needed to pay it back.

Being honest with yourself about your spending and borrowing habits is a huge part of developing your debt management program. Once you’ve decided to get a handle on your current situation and better your future, make the resolution to stop living above your means and learn to pay cash for everything. You’ll appreciate the things you do buy much more – or possibly find that you decide you don’t really want them that badly!

Design a budget that is both realistic and comfortable, but requires you to address your outstanding debt. Cut down on costs wherever possible, then apply these discretionary funds toward either your highest balance or highest interest rate first. This will dramatically reduce your payoff timeline, as well as save you thousands in interest in the long run.

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