Bearish or Bullish? or Bullish on Bears?

Since many more people are tuning in to the ups and downs of the stock market, a lot may be wondering what do the terms "Bull Market" and "Bear Market" mean. It's simple...a "Bull Market" is one that is increasing or going up and a "Bear Market" is one that is in decline. To find out the origin of these terms check out "Hot for Words" on YouTube. If you've never seen her vlog before, give it a shot. She has a lot of interesting bits of knowledge. If you watch Fox News you'll probably recognize her since she pops up there often.

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A Very Simple Financial Planning Lesson...at a big price!

If everyone would heed this advice we wouldn't be in this mess. Everyone includes us, businesses and the big ol' government!

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Tip on Financial Documents To Keep - And What To Toss

Tax time is over so we can all begin spring cleaning a little early and throw some of those papers away, right? Stop...put down the papers...walk away slowly... and read this Keep'em and Toss'em list from the Texas Society of Certified Public Accountants.

I would recommend keeping all backup documents for your tax return. Always ask your self, "could I prepare or justify my tax return without this particular document?" If the answer is no then don't trash it. Most say to keep documents for 7 years and then toss them which is probably safe enough. If you don't like having all those pesky paper files around then scan them and burn them to disk. Keep all your scan disks together and make a backup to keep off site. You can then destroy most documents needed for your tax preparation. Other documents you will need to keep the originals on file but I would still make scans of them and burn to disk for easy accessibility and backup in case of a disaster.

Keepers:

# Your will, living will and durable power of attorney.
# Life insurance policies, including policies with your

# employer.
# Insurance, and any death benefits that are due you as a veteran of the armed services.
# Retirement plan documents from your pension, profit sharing, 401(k), and IRAs, along with annual statements.
# Records of nondeductible contributions made to your employer-sponsored retirement savings plan or IRA.
# Separation and divorce documents.
# Real estate deeds, titles and property surveys.
# Military records.
# Tax returns and supporting data for at least the last seven years after the original return is filed.
# For investments, keep buy/sell trade confirmations to show when each security was bought and sold, the price you paid and commission charged.
# Dividend reinvesting statements (for seven years after you file your tax return showing a gain or loss( Receipts for major purchases like jewelry, furniture, etc.
# Receipts for items under warranty until the warranty expires.
# Pay stubs – until the end of the year when you compare the year end totals with the amounts shown on the W2 form you get from your employer.

Tossers:

# Receipts of bank deposits and ATM transactions – once you receive your bank statement and verify that the transactions were properly posted to your account.
# Canceled checks – save only those needed as support for tax purposes.
# Bills – once you’ve paid them and verified that the checks have been cashed.
# Monthly or quarterly brokerage statements – if your annual yearend statement summarizes all transactions made during the year.
# Credit checks on employees (even housekeepers and nannies) – in accordance with Fair and Accurate Credit Transactions Act.

The accountants' final tip: Always shred financial documents when they’re no longer needed, along with destroying pre-approved credit card offers.

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Tips on Consolidating Credit Card Debt

Here are a few good tips from soundmoneytips.com on what to look out for when consolidating credit card debt. Keep in mind that the point of this article is to lower and keep low your credit card debt. It is not about how to increase your credit score. Tip 5 may actually reduce your credit score. Overall, these are good tips.


Tips on Consolidating Credit Card Debt

From Soundmoneytips.com

Credit card debt is the number one financial problem of Americans today. The average household has a credit card balance of about US$8,000 over multiple credit cards and store cards. This balance is at its highest after the holidays, when most of us have racked up major credit card bills on gifts. If you are carrying one too many big balances, there are some things you can do to lower your debt. Be sure to consult our Sound Money Tips Guide to Credit Cards for answers to all your credit card queries.

Meantime, the most common form of credit card debt consolidation is to transfer the balance of all your credit cards onto one card with the lowest interest rate. This can save you thousands because APRs (Annual Percentage Rates) that are 12%-24% can get reduced to 10%, 8%, 6% or even 0% - and consolidating has the added bonus of combining all your payments into one easy, fixed monthly sum. Still, there are lots of “fine print” traps. Look out for these top tricks of the credit card consolidation trade:

1.Balance-transfer Fees – Some issuers charge transaction fees as high as 4 percent for balance transfers so that the higher the balance, the higher the transaction fee. Other credit card companies cap transfer fees at $25-50. Still other cards only waive fees for "initial balance transfers," then treat every subsequent balance transfer as a cash advance and charge the greater of $2.50 or 2.5% of the transaction amount as a fee.

2. Teaser Rates - Be sure to ask how long the introductory rate lasts, and find out

what the card's annual percentage rate is after that teaser rate expires. If possible, it’s best to focus on paying down the transferred balance before the teaser rate expires. Does the teaser rate apply to transferred balances or new purchases or both? And last but not least, do you qualify for the super low-rate? While an offer may boast a 3.9 percent teaser rate that bumps up to 17 percent after six months, a person may only qualify for a card with 7.9 percent teaser and a regular annual percentage rate of 21 percent.

3. Late Payment Problems – It may only take one slip-up for that super-low rate to disappear. For example, you may start with a 9.99 APR, but one tardy payment bumps the rate up to 21.99. What about late fees and over-the-limit fees? Does that card have an annual fee?

4. Double Check - The new card company may send a notice saying the balance transfer is complete. But be sure to call the old card company to verify this. The old company should send a billing statement with a zero balance. If they don’t, request it.

5. Cancel Old Card(s) - First off, plenty of people out there have trouble avoiding the temptation of an open credit line. Second, too many open lines of credit can affect a person's ability to qualify for a mortgage or a car loan. Lenders view any open credit lines on all unused credit cards sitting in a consumer's wallet as potential outstanding debt.

6. Stick With It - Consumer experts urge people who transfer balances to a low-rate card to stick around for a year or more. If you jump from card to card you can’t build a credit history, and that can really damage your credit.

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25 Rules to Grow Rich by

Another good basic bullet points list to personal finance. These seem so basic and that's just it, they are but most people don't even begin to follow these. If you aren't covering the basics folks don't worry about the more advanced moves. Keep it simple till simple isn't enough for you.

25 rules to grow rich by
Money Magazine


NEW YORK (Money) -- Tough financial questions come your way all the time.How much do I need to save? Should I buy or lease? Should I refinance my mortgage? It would sure be nice to have an easy guide on hand for those moments.Now you do.

Home

1. For return on investment, the best home renovation is to upgrade an old bathroom. Kitchens come in second.

2. It's worth refinancing your mortgage when you can cut your interest rate by at least one point.

3. Spend no more than 21/2 times your income on a home. For a down payment, it's best to come up with at least 20%.

4. Your total housing payments should not exceed 28% of your gross income. Total debt payments should come in under 36%.

5. Never hire a roofer, driveway paver or chimney sweep who is going door to door.

Invest

6. All else being equal, the best place to invest is a 401(k). Once you've earned the full company match, max out a Roth IRA. Still have money to invest? Put more in your 401(k) or a traditional IRA.

7. To figure out what percentage of your money should be in stocks, subtract your age from 120.

8. Invest no more than 10% of your portfolio in your company stock - or any single company's stock, for that matter.

9. The most you should pay in annual fees for a mutual fund is 1% for a large-company stock fund, 1.3% for any other type of stock fund and 0.6% for a U.S. bond fund.

10. Aim to build a retirement nest egg that is 25 times the annual investment income you need. So if you want $40,000 a year to supplement Social Security and a pension, you must save $1 million.

11. If you don't understand how an investment works, don't buy it.

Plan

12. If you're not saving 10% of your salary, you aren't saving enough.

13. Keep three months' worth of living expenses in a bank savings account or a money-market fund for emergencies. If you have kids or rely on one income, make it six months'.

14. Aim to accumulate enough money to pay for a third of your kids' college costs. You can borrow the rest or cover it from your income.

15. You need enough life insurance to replace at least five years of your salary - as much as 10 years if you have several young children or significant debts.

16. When you buy insurance, choose the highest deductible you can afford. It's the easiest way to lower your premium.

17. The best credit card is a no-fee rewards card that you pay in full every month. But if you carry a balance, high interest rates will wipe out the benefits.

18. The best way to improve your credit score is to pay bills on time and to borrow no more than 30% of your available credit.

19. Anyone who calls or e-mails you asking for your Social Security number or information about your bank or credit-card account is a scam artist.

Spend

20. The best way to save money on a car is to buy a late-model used car and drive it until it's junk. A car loses 30% of its value in the first year.

21. Lease a new car or truck only if you plan to replace it within two or three years.

22. Resist the urge to buy the latest computer or other gadget as soon as it comes out. Wait three months and the price will be lower.

23. Buy airline tickets early because the cheapest fares are snapped up first. Most seats go on sale 11months in advance.

24. Don't redeem frequent-flier miles unless you can get more than a dollar's worth of air fare or other stuff for every 100 miles you spend.

25. When you shop for electronics, don't pay for an extended warranty. One exception: It's a laptop and the warranty is from the manufacturer. Top of page

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Basic Financial Planning

Here is a good, very basic financial plan. It's a great starting point and really only needs to be changed if you have specific goals. The only thing that it lacks is some international mix which you can set up in your 401(k), IRA, or stock portfolio. I would have the portfolio's stock and bond mix change based upon how far away from retirement you are but that starts to take away from the goal of being a simple financial plan.

What Holds You Back?

Scott Adams, creator of Dilbert, wrote a book called “The Way of the Weasel.”In it, he lays out a one-page list for how to manage your money. While I recognize that a book consisting largely of cartoon is an unorthodox place to find sound financial advice, I think he is spot on – if you do these things you will be fine:


1. Make a will.
2. Pay off your credit cards.
3. Get term life insurance if you have a family to support.
4. Fund your 401(k) to the maximum.
5. Fund your IRA to the maximum.
6. Buy a house if you want to live in a house and can afford it.
7. Put six months expenses in a money market account.
8. Take whatever money is left over and invest 70% in a stock index fund and 30% in a bond fund through any discount broker and never touch it until retirement.
9. If any of this confuses you, or you have something special going on (retirement, college planning, a tax issue), hire a fee-based financial planner, not one who charges a percentage of your portfolio.

Done. I get it, and if you are here reading this blog you get it also. OK, so how many items on the list have you actually completed? We’ve done four of the first eight, but I believe we can hit all eight by the end of the year – I’m showing the list to my wife and am going to hold us to it.

If you had shown me this list seven years ago I’d have still been working on getting my credit cards paid off – the rest of the list would have seemed a distant dream.

There are really three challenges facing people:

* Knowing what to do (easy, see above)
* Being able to do it, i.e. having money to save, invest or buy a home (hard, a lot of good decision need to be made to get you to this point)
* Making the decision and taking action to fund retirement. You know what to do, you saved the money, and now you just have to do it (should be easy, but it’s not)

Putting money into 401(k)s and funding IRAs is hard. There are always reasons to not do it, but they really boil down to an unwillingness to take action with money. I’ve spoken to friends about why this might be and the reasons vary, but they usually come down to this one thing: we don’t want to make a bad decision, so we don’t make any decisions at all…which is of course a bad decision.

My new goal with money isn’t to get things perfect, and instead get it mostly right, i.e. Get the nine things on the list done. I believe if we do this, over the next 35 years, we’ll be fine when it comes time to retire.

Fear of making a mistake held us back, but I’d be curious to hear from people where they are being held up in their financial goals?

Written by Jason Knight

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