Routine Order

Dave Ramsey of the Lampo group is a nationally syndicated radio talk show host. He says he was worth a quarter of a million when he was 26, then lost it all in a couple of years due to bad financial decisions and due to paying too much “stupid” tax. He has since got back on his feet and his radio show features nuggets of wisdom for us - those without an MBA in Finance. You can see his free videos at YouTube and read of him from time to time on consumer-oriented blogs. Needless to say, his radio show is very interesting, and he has a cheerful, optimistic voice. The other day, on his show, he was answering a question about long term care insurance agent issues.

Dave Ramsey suggests long term care insurance for people who expect to live beyond the age of 65, and expect to need long term care - which can turn very expensive very fast. Specifically, Dave suggested that if rates where under $1,200 it would be a good investment. Now to find something good, you will need to go shopping for quotes for long term care insurance policies. The site I mentioned above seems to enable just that, and hey, they know of Dave Ramsey I was surprised to find that article I linked to when I searched for Dave’s advice.

Ben Bernanke took out his wallet and lowered the key interest rate by a full half point. When the Fed lowers prime rate, market become uppity. Think of it as everyone getting their loans cheaper from the government. Banks can now borrow money from the Federal Reserve at 4.75% interest. This discount will make its way through all the financial markets. Big firms, and investors in the stock market and other financial indices will borrow money, expecting their investments to appreciate in value, thereby generating profits. The whole idea behind the Fed controlling interest rates has been that the unemployment has to be kept low, as also the inflation. For the first time in many years, the US market was showing a downward trend in employment rates; also, the sub-prime mortgage crisis has meant that borrowers have had to live in a very cautious market.

If less money is available on the market, economic growth will stumble. These are the reasons why Ben Bernanke pushed for lowering the interest rate. Ben is quite accomplished, with his being an expert in the study of the Great Depression. In fact, two rates have been lowered, the Federal Funds Rate and the Discount Rate. The former is the rate at which banks lend each other money. With a lowering of the fed rate, low rate mortgages are possible, and so this would be a good time to try and refinance your mortgage. A direct result of the fed lowering the rates should be a decrease in the Prime Lending Rates of various banks. Of course, they need not be the same across all banks, but overall, there should be a decrease in the rates of loans offered by lenders. If the rate falls too low, however, you will soon have “too much money chasing too few goods”, and everyone will realize they can charge more for their products and services - leading to inflation. So that’s why a half-percent fall in the interest rate is significant. Everyone was expecting the cut to be a quarter-percent. Let’s hope Ben got it just right, and that this cut should get the markets on track, and everyone employed

If you are a small business owner in a crunch situation, then your options with regard to raising short term funds need not be limited to Unsecured (or secured) business loans. A Business Cash Advance can let you get back on track much sooner with much less hassle. If the terms confuse you, it ain’t your fault. What essentially defines a business cash advance is that the loan is against your future credit card invoices(income). So if you accept credit cards at your business and generate over $1000 per month via credit card charges to your customers, you can qualify for a business cash advance.

You can read more about how this compares to unsecured business loans. The big differences are that business cash advances are not available for start-up firms, and that the cash advance option is available with variable pay-back rates - depending on how much credit-card-sales you generate each month - so you can pay these back according to how well your business picks up down the line. Business cash advances are great for businesses with lower credit scores (below 650). Bad Credit Business Loans might not solve your problem in such situations, since if you need money to grow, there might be other factors in the past that adversely affect your borrowing power.

Check out the business cash advance FAQs for more info and a toll-free line you can call to have your questions answered. All these non-traditional ways to raise money are fascinating to me - some like Business Cash Advances and reverse mortgages can be made to work if you play your cards right, but others, like debt-consolidation loans can dig your hole for you.

For those with terrible credit having trouble paying off their debts, there are a variety of credit management programs to choose from. I decided to try out how these programs work, and wanted to put some real numbers to the test. So I was looking for a site that does not require too much personal information to play around with. This debt management program that allows users to evaluate their options seemed perfect, so I took the dive. The Consumer Alliance Processing Corporation Debt Management program seems to be good - it has a BBB affiliation, and seems to be honest.

They have a free debt management quote tool, which is we are most interested in. I filled out the form and the end results looks like the following:


I had plugged in some numbers that I thought to be typical for someone with 30% APR credit cards, choosing a sum below $10,000 for the total debt. I entered a total of 4 cards, with APRs from 20% to 30%, with the outstanding balance on the higher APR cards being about 75% of the total outstanding debt. The free quote tools gives estimates for how much money can be saved. It shows a monthly fee of $35 for the debt management program, but even after this, the total monthly payments are reduced by almost a hundred dollars. The tool also shows that the person can save a total of $18,476 (!!!) by enrolling in the debt management program. I expect this figure is calculated by comparing the total payments made over the lifetime of the debt if one were to pay only the minimum outstanding, to the amounts paid using the debt management program. What’s also interesting is that the monthly APRs are almost halved. If one were to continue making the same payments as before starting on the debt management program, then I suspect the debts will be paid off much sooner.

Debt management programs are not for everyone - of course, if you earn $1000 a month and your financial expenditure is $1200, you won’t find someone to manage your debt. These programs are not for those with less than $3000 in debt, neither are they for those with low APRs on their cards. One of the conditions of the program is that the credit accounts will be cancelled as they are paid off. Once you pay off all the debt, I bet your credit score will improve drastically - enough to get you another card, if you want to play the game all over again!

Reverse Mortgages are mortgages in reverse. A financial institution will pay you money against your equity on a house or property owned by you. In a mortgage, as time goes by, your equity in a house goes up and the loan amount goes down. In a reverse mortgage, your equity decreases with time, and your loan (or debt) increases. So you buy a house, pay off the mortgage, and then slowly sell your house. Who’d do that? How about people nearing retirement, who want a regular inflow of cash? Yes, the older you are, the more valuable your house is, the more money you get every month out of a reverse mortgage. More details below:

Reverse Mortgage Information is an excellent site for you to bring yourself up to date with the terms involved and all the associated facts. Their reverse mortgage FAQ is pretty extensive and should answer most all questions related to reverse mortgages. You can also find an extensive state-by-state listing of reverse mortgage lenders in case you decide to opt for one. In case you can’t make up your mind whether you should try a reverse mortgage, try the retirement calculator - it has 11 input variables, varying from expected percentage decrease in spending, to expected inflation, to expected social security benefit. Once you think you know the facts about reverse mortgages, take the reverse mortgage quiz to make sure you got it right. All in all, the site is a prime destination for reverse mortgage information and leads.

Despite the recent downturn in the lending market due to the low-rate mortgage hassle, business is still on at many mortgage lenders. The key to finding low rate mortgages is to have a good credit score. If your credit score is great, then you probably will get the same low rates from a multitude of players. But what if your credit is not so good? Here’s where you get some help.
Try to save up a little before hand, so you have more of a percentage of the price of the house to put down as initial payment. Then try to get as many mortgage quotes as possible within a week. Getting multiple quotes within a week wouldn’t adversely affect your credit score, as all those lookups by prospective lenders will just show up as one credit application.

To make this process easier, you might want to use a mortgage rate comparison website. These sites are not lenders themselves, but they scour the market for lenders and give you a variety of quotes from firms big and small, national and local. Since it is free, think of it as a free secretary who looks up all the national and local firms that lend money to home buyers, and requests quotes from all of them. Once you have the quotes, you might be in a better position to decide whether to get the loan or not. If you decide not to, remember to wait at least 6 months (more, preferably) before trying for a loan again. In the interlude, try saving some hard cash - set yourself a goal and attain it - if nothing else, it will improve your own financial self-confidence.

Here’s a site promising to deliver Mortgage Rate Calculators. It looks like it is a pretty new site, and very much in the works, but the idea is neat - have a set of calculators for things like mortgage rates, amortization payments and the kind. For those not in the know, amortization is the concept that lends to the fact that more of the initial money payments you make towards your mortgage counts towards the interest on the loan. This means that you’re not so much paying off the loan, as paying off the compounded interest. The amortization schedule defines the proportion between the amounts paid towards interest and the principal loan amount respectively.

After the recent sub-prime mortgage debacle, if one thing is clear, it is that gullible investors make for good prey for the sharks on wall street, and the river runs much deeper than one would have thought. Knowing your calculation and the terms involved in mortgages could just save you from ruin and bankruptcy. I hope MortgageCalculators.org keeps growing and provides what the website’s name promises. It will be really successful, of that I am sure.

There’s no comparison of the rates for gas cards in the UK, but otherwise, UK Financial Options is an excellent resource to compare credit card rates. Surely, they must have Gas cards in the UK. Or are they “petrol” cards? I could find neither at UK Financial options, but I did find a good table comparing credit cards. The credit card comparison page lists the top 5 cards for the various categories, such as the best cards for balance transfer, the best cards for those with bad credit, etc.

The site also has a list of pages, each dealing with a particular kind of credit card. Here’s the page comparing the football credit cards, for example. Football as in the game played almost entirely using one’s feet, as opposed to the game where the foot-long ball is thrown around.

Here’s a great website for financial information: Bankaholic. The site has a section devoted to the best credit card offers. In addition to a very good coverage of the best credit card deals, it also offers tips on how to use the cards, and how to improve your score. There’s an example of how the author started with a $500 limit AmEx student card. After a few years, the credit limit is now $30 K!

There is also a separate section that provides the best rates for money market accounts. This is similar to the credit card offers section and has the low-down on money market accounts, which I briefly mentioned here previously. The list of money market accounts and the rates makes it easy to compare the deals and the deals are also star-rated. Money market accounts can be tricky, since unlike CDs the deposits are not FDIC insured. However, due to the higher returns and the increased liquidity, they are quite popular among investors. They are just like a savings account in that you can withdraw the money at any time. However, it bears repeating that unlike savings accounts, these are not FDIC insured - meaning, if the bank goes belly-up, your money does too. Then again, what are the chances of that happening, really? When you are at Bankaholic, do check out the finance section for good budgeting tips. I am pretty much sporadic when it comes to writing at this blog, but the bankaholic site seems to be more regularly, and more frequently updated.

Continuing the results of my research on credit cards here. So I got turned down for the AmEx Business Card too. I thought I should be saving some money at the gas pump. BP had an ad at the pump promising some discounts for the first few months I use their card, and I made a mental note to check if there are other cards with better deals. I wanted to save the trouble of getting the BP card, using it till I get some benefits, and then canceling it to get a new card, and so on, ad infinitum.

Best Gas Credit Cards is a site dedicated to only gas credit cards. They have a cool table to compare gas credit cards. Of all the cards, the Wawa Visa Card looks really good. The APR is kinda high, but the rebates are the highest at 10% for purchases at Wawa, and rebates for purchases elsewhere too. The Chase BP card looks good too, but like I said before the rebates are top-heavy, so as time goes by, I might forget to cancel the card, and get less rebates. The Discover Gas Rebate card is good, too bad Discover doesn’t get accepted everywhere, like VISA or MasterCards.

Go to FreeAnnualReport.com to get your credit report from the three major credit monitoring companies.

This new year, I have resolved to get a tighter grip on my finances. The credit report will (hopefully) help me in bargaining with my credit card companies for lower rates.

I also anticiapte having to pitch for a home loan/mortgage later this year - all the more reason why I should see myself as I am seen by lenders.

Everyone is entitled to one free credit report a year, so go get it, and get a grip.