One of the issues I address when writing a financial plan is that of diversification. And by this I mean diversification across asset classes. Of late I have had numerous conversations with worried “property” investors. Without exception diversification has not been considered at all. The narrow investment schemes (not financial plans) all share the same features;

1) All of their money is tied up in property.
2) All their property is residential.
3) All their residential properties are in the same city (and sometimes even on the same section or street!)

But wait: there is more, they have used the equity in their own home to buy these properties. This puts their own home at risk. Property is cyclical, just as other asset classes are cyclical. Why borrow money, secured against your home, to make a risky investment. Depending on who you listen to the property market will cool by 10-30%. I see mortgagee sales on the horizon that’s for sure.

Source:http://moneyaintitfunny.blogspot.com/2008/05/finance-and-investment.html

The other day I got a an email from my buddy Wes who wanted to show me some great finance resources. Below you will find links to some of the top resources out there on the net.

If you are into improving your personal finance these links will be very handy.

Top 50 Credit Card and Finance Resources

A very comprehensive of the best authority sites on personal finance.  Unbelievable resource.
http://www.creditcardassist.com/top-50-most-useful-credit-card-sites.html

Strapped The Book: Credit Card Facts

Pretty scary facts about college students getting weighed down with tremendous debt.
http://www.strappedthebook.com/facts.php

Top 20 Most Outrageous Credit Card Overspending Stories

This one is hilarious but a little depressing!
http://www.apply4-credit.com/blog/top-20-most-outrageous-credit-card-overspending-stories/

If you have any links you want me to add please let me know.

Source:http://www.flipsideinvest.com/some-finance-resources-and-links/

A reverse mortgage is a loan against a home’s equity that doesn’t need to be paid back until the homeowner dies, sells the home, or moves out. Available to homeowners age 62 and older, it can be paid in a lump sum or in monthly installments. There are benefits to using a reverse mortgage, but there are downsides as well. Many homeowners, particularly those with good credit, can often find less expensive alternatives.

The main reason people use a reverse mortgage is that they get to stay in their home for as long as they wish. As stated above, no payments are required while you remain in your home, though the balance due does rise as more payouts are made and interest accrues. If home prices rise at a significantly higher rate than interest on the loan, then reverse mortgages can be affordable. Of course, as the recent housing downturn has shown, prices don’t always rise. Another reason people use reverse mortgages is that you can usually get one if you have equity in your home, regardless of your credit. This may be a reason for people with poor credit to use them, but it doesn’t mean they are the best option for everyone.

The main downside of a reverse mortgage is the high upfront costs. Wikipedia reports that

For the most popular type of reverse mortgage in the U.S., there is an insurance premium of 2% of the loan and a 2% origination fee in addition to normal closing costs.

Interest rates tend to be adjustable, as the duration of the loan is unknown. Rates are reset on a regular basis, as often as every month.

As mentioned above, reverse mortgages are available to homeowners aged 62 or older. As such, the senior citizen advocacy group American Association of Retired Persons (AARP) has covered the topic at length. To get you started, see their brief discussion of 5 questions to ask before considering a reverse mortgage, listed below.

1. Do you really need a reverse mortgage?
2. Can you afford a reverse mortgage?
3. Can you afford to start using up your home equity now?
4. Do you have less costly options?
5. Do you fully understand how these loans work?

This is just an overview of reverse mortgages. In addition to answering the above questions from the AARP, I urge anyone thinking of using a reverse mortgage to thoroughly research them, and other options, before making a decision. Reverse mortgages are one option, but for many people there may be more affordable alternatives.

Source:http://blog.lendingclub.com/2008/04/11/reverse-mortgages-are-just-one-option-available/

They work fast in Texas!Clear Channel scored a temporary restraining order overnight with the judge saying the banks must not “interfere with or thwart consummation of the Merger Agreement.” (A WSJ.com report, and in turn a first version of this post as well as its headline, earlier said in error the judge compelled the banks to issue financing.) The ruling far from resolves the situation. Still, shares of Clear Channel soared at the open.

According to CC press releases that started hitting the wires around 3 in the morning, Judge John D. Gabriel ordered that the banks:

among other things, must not “interfere with or thwart consummation of the Merger
Agreement” by 1) refusing to fund the Merger transaction, 2) insisting
on terms that are inconsistent with the Commitment Letter, or 3)
refusing to act in good faith in the drafting of definitive loan
documents.

Lots of Texas law firms listed on the petition, including Beck, Redden & Secrest: Davis, Cedillo & Mendoza and Gibbs & Bruns.

More soon. And yes, we’ll try to get the order!

http://blogs.wsj.com/law/2008/03/27/clear-channel-texas-judge-orders-banks-to-finance-buyout/?mod=WSJBlog/trackba

Posted by Jamie Heller

Defaultrisk.com is a visually frenetic site whose author, a risk professional, has enthusiastically collected 1,327 academic and industry articles, and counting, on credit risk management. The majority of these articles are available for free download.  (I tried a couple of them myself, and it seems to work quite satisfactorily).  The site is a juicy gold mine  — so rich that I’m not ashamed to mix metaphors over it — and potentially useful for anyone in SSF working up a literature review of Basel II, credit markets, structured debt securities, credit risk metrics, swaps… and so on.  If you’d like to join the gang of contributors check out the submissions page.  Or, if you just want to peek to see if you recognize anyone who has work housed on the site, check out the photo gallery of featured researchers.  

Calculatedrisk.blogspot.com is highly ranked on Google and pops up frequently in my searches on consumer credit risk.  It must be very successful because since the last time I looked at it, it’s become peppered with ads.  The anonymous authors are a retired senior executive, and a former bank officer and mortgage lending specialist.  They tend to have some pretty sensible, to-the-point, and up-to-date (if not earth shattering) commentary on the events of the day.  They also provide extensive links to the main stream press on the economic news and regulatory updates, with special coverage of the domestic real estate issues and mortgages. 

Here’s one of no direct relevance to finance which I’ll include just for fun.  Its concept is a thrill to any fan of historian Susan Strasser who might be working on a topic related to the history of consumerism and consumer culture.  BrandlandUSA™ is a blogspot dedicated to the preservation of America’s best-loved brand names.  (I came across it looking for a good price on a Penguin Munsingwear sweater, where I was informed that the company was recently taken over by Perry Ellis.  Which made me wonder: With so many brands, but such huge conglomerates supporting them all, what does this say about the role of finance in the dynamics of contemporary fashion?  A thought to pursue on another day…)

Mayor David Cohen and his team presented a finance plan for Newton North High School tonight that clearly laid out how the city will pay for the new high school.

By increasing the debt service to 4.5 percent of the annual operating budget (it’s currently at 3 percent), and by offsetting outcomes to the operating budget by plugging in capital stabilization money, Cohen showed how the city will swallow a $187 bill. According to Cohen, his detailed finance plan will be available on the city’s website tomorrow.

Despite showing that the city could afford the school, there were still some aldermen who weren’t satisfied.

“The finance plan is frightening,” said Alderman Ken Parker. “We will be consuming nearly 5 percent of our operating budget to pay for one building. Our debt service should be able to cover more of our 85 buildings, not just one.”

Subprime Auto Financing LetsRideNow.com - The nation’s leading subprime car loan & refinancing service for anybody with bad credit, special circumstances, no credit score or bankruptcy has closed over 1 billion dollars in special finance auto loans.

Subprime auto finance is all about how to get a Loan for a vehicle with poor credit. People that happen to have a poor credit profile or other serious credit issues can get the answer to their problem by getting themselves a bad credit auto loan. The best advantage of these types of loans is that they will allow potential borrowers to repair their own credit history in the process. A poor credit car loan is generally used to get you a used vehicle. Since a bad credit auto loan is a short term loan, they help potential borrowers pay them back easily and in a timely manner which in turn helps to reestablish a good credit rating.

Apply for Auto Financing from Subprime Auto Lenders in USA at Low Rates

A poor credit car loan usually tends to have a higher then normal interest rate, and the payment periods extend from two to five years in length. Some things should always be taken into consideration before you get yourself a bad credit auto loan. You need to always be fully aware of the prices of used cars in your area for the make and model that you are looking for since some dishonest car dealerships may try to take advantage of you and charge high prices from those buyers that go for a bad credit auto loan in order to buy a car.

Typically, there are four steps involved in the process of trying to apply for a bad credit car loan. The first step is to contact a credit agency such as Equifax in order to check to see whether or not your credit report is completely error free. The next step would be to find out the FICO score which is a credit point system that many credit companies use to help determine someone’s credit profile.

There are services provided by credit bureaus and online credit monitoring companies that are available to estimate your credit rating. A credit rating of six hundred and fifty below is typically seen as poor credit. After checking out your credit score, search out for a trusting consultant company that deals specifically with these types of bad credit auto loans. The last step is to check out the interest rates that will be offered by different companies. It is always said that you should compare car loans quotes from many several different lending institutions before you choose the absolute best deal for you.

Keywords : Subprime auto finance, Subprime Auto Lenders in USA, bad credit auto loans

First know how much you owe (other than student loan). What are the interest rates on those debts (credit card, auto loan, personal loan, computer loan, and etc.? and find out what is your credit score? More than 700? If so, there would be better way (quicker) for you to get out of debt along with good budgeting skills. If you do have more than 700 credit score than I will expand my answer.

After you gather all those info, make a list of monthly required payments from the highest interest rates as top priorty. Now list your rent, ultities, phone bills, internet and cable, and estimate your gasoline and grocery expenses (Be realistic and keep it minimum). Also don’t forget those auto insurance that is due every 6 months or a year. Break down the monthly cost and add it to the monthly living expenses total. Now add a little fun money (try 2% of your after tax income) to the MONTHLY total. I suggest only 2 percent, because you are trying to get out of debts, so don’t set the fun money too high. We need to focus on PAYING OFF DEBTS, and STOP CHARGING on credit cards.

So now take your after tax monthly income minus all debt payments (minimum required), minus monthly living expenses, and fun money. Now do you still have any more money left? If so, apply to the highest INTEREST RATE loan. Repeat the step untill you pay off the FIRST highest interest rate loan, then move on to the next highest interest rate loan.

If your amount comes out negative after the subtractions of all payments and living expenses. You have to review your spending habits and see what you spend the most. Dining out? Beers? Now is time to cut your expenses and try to bring this number up to a positive number, so you can pay off your debt.

As for me keeping myself spending money is, after the direct deposit of my pay check went into my accounts, I already subtract all the payments (plus the additional payment to the highest loan), living expenses, and the fun money. Because after that I already know those money are already committed. As the due dates of each payments and rents come up, I just write the checks (now I am pretty sure I have money to pay them as I already mentally subtracted them when I got pay). Well, I hope this little trick would help you too. You can even list the check numbers for each payments in the order of the due dates, it can also remind you that your payment is due. For example, if one of my credit card is due on the 8th, and the rent is due on the 15th, I would write down on the check registry that due amount for credit card and the date as 1st (need to mail it early before due date), and the rent can just be the 13th or the 14th (depends on how you pay your rent, if is a walk to the rental office, then the 14th should be fine). Always have a habit of paying a little earlier. Good Luck!!!

Dave Ramsey has a good site for getting started. You don’t have to join (you can’t post, but you can read) and you can learn a lot even if you don’t buy his book.

If I can learn anyone can.

to avoid credit cards and debt with them, don’t have one. that’s easy enough.

get on a written budget, a spending plan… you need to plan and tell your money what to do every month… the goal is to increase your income and saving as you reduce spending (bills)… get rid of stupid stuff like cell phones… things you can live without.

save first… before doing anything else…

visit daveramsey (dot com) and search for budgeting forms and baby steps

There is a great book titled “Personal Finance For Dummies.” Written with humor and easy to read - it covers the basics of money management, budgets and investing.

You don’t need to pay anyone to help you. You just need to make a common sense plan that works for, and then commit to sticking to it for, say, six weeks…if after six weeks you can’t stand it, then change it…but if you find you suddenly have more money in the bank than you thought, that’s usually enough to get you to go for another six weeks…and so on!

Take the amount of cash you typically have available each “pay period”, and “pre-spend” it, ie decide where it’s going to go… include about 10-20% that’s going to “savings”, and DON’T spend it on anything else.

Good instincts - avoid anyone that offers big money for little to no work. Nothing in life is that easy, so think twice about any offer that seems too good to be true.

Yes, you CAN take control of your finances. A little dedication and self-control can transform your financial situation, if you’re willing to stick to it.

You might not be able to avoid some expense to get your finances under control, but investing in a few simple computer programs or books can pay for themselves in the long run. Borrowing from the library or hinting friends/family for gifts are effective ways to get the tools you need for free.

First of all, get a computer with a simple finance program, like Quicken or Money. These programs can do so much for you, if you put your information in.

Get down to your local library tonight and start checking out personal finance books - they can be wonderfully empowering and inspiring, and most are written in simple, easy-to-understand terms.
Some good, easy reads:
-The Complete Idiot’s Guide to Personal Finance in your 20s and 30s
-The Complete Idiot’s Guide to Managing Your Money
-鈥淪mart Women Finish Rich鈥?or 鈥淭he Automatic Millionaire鈥? by David Bach
-any Suze Orman books

Look at your expenses from the past year and create a budget that realistically reflects how you spend. Then see what you can cut out, and focus on long-term goals. Make debt repayment a top priority, since the interest will play havoc with your finances as long as you have the debt. Starting today, never spend more than you make - use your credit card only if you are 100% sure you will pay off the entire amount every month. Track all your spending, in a computer program or even just scribbling down the amount in a handwritten budget list.

You can do it. Just stick to it and remind yourself of the goal.

Theresa pretty much said it all in that long answer bellow. Go to the library and start reading!!

I use MS Money, it works great for me. The only thing I wanted to add on is when you’re at the library start reading about investing as well because saving on it’s own is not enough.