Started Looking at Home Loan Financing


Started looking at home loan financing this week. We are thinking that if we do not aim for that big of a place we shall have enough money for the down payment on a little place. In fact we are wondering about USDA home loans and how they work. I understand the concept, but I do not really know what the department of agriculture wants you to be to qualify. We could easily live in a rural area right now, in fact that would make things pretty easy for us. Annie is working for a school district in a rural part of Eastern North Carolina and I can pretty much live where I want to. It is not like I am really going in to an office right now. The company gives me a leased Ford and a laptop computer. That is my office and I have a territory that covers all of North Carolina, South Carolina and Virginia, along with parts of Georgia, Tennessee and West Virginia.

So it does not even matter much where I live in the exact way. Continue reading

Good Debt Vs Bad Debt

We are conditioned to think of debt as 100% negative. And, it makes sense: all debt, no matter what kind, is a negative figure in your assets, reducing your family’s net worth. But, the full picture is not that simple. Some sorts of debt, over time, can increase your stability, your assets and your ability to make money. A few common types of debt and their effect on your financial well-being.

Without a home loan, it is nearly impossible to buy a house. Mortgages are relatively low-interest loans that allow you to build equity over time. As your equity grows, your financial stability does, too. With regular payments and a generally appreciating housing market, a home can allow you to build a secure place to retire or a nest egg to use toward your retirement destination.

Of course, not every mortgage situation is built alike. If you purchased a home during a time of high real estate prices or got a loan with a variable interest rate, you could wind up with a property that is worth far less than you owe. Always research long term trends and research your mortgage agreements carefully before you commit.

Student Loans
It used to always be assumed that student loans were good debt because they led to a higher paying career. But, increasing education costs and changing job markets mean that student debt needs to be entered into carefully.

Research growing fields to ensure that your degree will lead to the best possible job prospects. In general, college graduates earn more than those who lack degrees. But, majors and the areas where you eventually choose to live will determine how valuable a student loan is as an investment in your future.

Credit Card Debt
Debt for vacations, clothing, jewelry and technical toys is almost always a negative debt. These items are almost never assets that will grow in value. Any time you want to buy something on credit, ask whether you have the money to pay the debt off in full when your credit card statement comes. If the answer is no, carefully consider whether future you would be happy living with less money because you of the present wanted to splurge.

Car Loans
Car loans are another type of debt that, in general, do not help you build your net worth over time. However, there are a few other factors to consider that can make them worth your while. If you live far from your job and need an especially reliable car, a car loan can be worthwhile. It might allow you to buy a newer model, which enhances your job security. Also, if you are in the process of rebuilding your credit, an installment loan can help increase your score. Just ensure that you pick a loan with affordable payments that has no penalties for prepaying and will give you the opportunity to make adjustments as your credit improves and you grow your financial worth.

Five Things That Don’t Affect Your Credit Score

When you start learning about your credit scores, it’s easy to get paranoid about the numbers. But, there are a lot of myths about actions that will affect your credit rating, whether negatively or positively. A few actions that you do not need to be worried about:

Pulling Your Own Credit
When you check your own credit, this is known as a “soft pull.” “Hard pulls” are what occur when a bank or another organization looks at your credit reports with the intent of granting you a new loan. Because each new loan we get can increase the exposure of other creditors, having recent hard pulls will have a short-term, but minor, negative effect. But, looking at your credit yourself does not count against you. In fact, looking at your own records frequently can help you identify errors and problems, leading to a higher credit score overall.

Visiting a Credit Counselor
Many people who are struggling with bad credit are afraid to visit a credit counselor because they fear it may add another ding to their credit. But, the counseling itself is never recorded on your credit record in any way.

Multiple Inquiries
If you are shopping for a mortgage, creditors expect to see several pulls within a short period of time. All this indicates is that you are comparing offers, and it will generally be considered a single inquiry. If you are looking at new and different credit offers every few months, on the other hand, it can look like you are at risk of overextending yourself. Recent credit inquiries only make up about 10% of your score, so, even if an inquiry brings your score down, the effect is minimal and temporary.

Carrying a Balance on Your Cards
Many people believe that they need to carry a small balance month to month on their cards to improve their credit scores. This is not the case at all; carrying a small balance just results in paying interest. Other people feel that any balance at all can hurt your rating. However, a balance between 10 and 30 percent of your available credit is considered in the healthy zone and will not harm your score.

Not Using Your Cards
Many people believe that you need to use all cards regularly for them to count toward your credit score. While a card company may close a credit line that hasn’t been used in a long time, you don’t need to keep a card in constant use. Charging items a few times a year and paying in full is sufficient to keep a card active. We recommend setting up automatic charges and payments on infrequently used cards only to simplify the process of keeping them in use.

Knowing what can and can’t hurt your score gives you a leg up in the credit game. Educate yourself and keep an eye on your records to keep your score high and get access to the best financial opportunities.

Top Tips for Aspiring Independent Brokers

Change is always scary – at least at first. For financial advisors, leaving the safety of the large firms housed in the towering skyscrapers of Wall Street and starting their own consultancy may sound like an overly ambitious and herculean thing to think about. However, many have done it before and there’s no reason for you to not accomplish the same feat. While it’s not a walk in the park, it’s feasible and can be highly rewarding.

The success stories involving breakaway brokers are varied and there’s not one single formula for success. However, financial services recruiters would agree that there are certain tried-and-tested tips, a blueprint or roadmap that brokers can use as a guide en route to independence.

Never Doubt Your Reason for Leaving Your Current Firm

One of the things you need to do is to pinpoint your reason why you want to leave your present wirehouse or brokerage and establish your own advisory practice. The key is to never second guess the reason behind your decision. Many times, consultants decide to leave the nest of their advisory firms and when things go awry, they feel devastated and regret their decision altogether. If and when you decide to be an independent advisor, be 100% resolved on your choice and never question your reason for leaving.

According to the findings of the research group Aite, the most successful independent consultants left their work because of discontent. More than half said they “broke away” because they want to have the control to choose the crème de la crème third party products and 42% said they want more freedom on how to advise their clients. You can tap the expertise of financial advisor recruiters to help you with money matters with your transition from an in-house consultant to running your own practice.

Financial Considerations

According to surveys, the startup cost for an independent brokerage practice is somewhere between $50,000 and $100,000. The final amount will depend on a number of things such as office space, technology and infrastructure, staffing and branding materials. However, you should not see this as an irrecoverable expense, but rather a capital expenditure.

You should also consider how much revenue you’re going to bring in – short-term, mid-term and long-term. According to the Aite Group research mentioned in the previous section, most breakaway brokers retain more than 75% of their clients. This is your short-term income. You also have to decide on a business model – usually a choice between fee-based or commission-based. The good thing is, you don’t necessarily have to choose one over the other. A number of independent advisors employ a hybrid business model wherein they dually perform the roles of a standalone consultant earning a retainer fee and as a representative of an independent brokerage firm earning a commission.

Lifestyle Implications

Lastly, being an independent financial advisor has its implication on your lifestyle. Actually, it’s more on your personal business ethic. As an independent financial consultant, the way you run your practice is 100% up to you. This involves constantly updating your business practices based on new regulations and policies. Likewise, adhering to impartial fiduciary standards is a non-negotiable.

Proven Stock Market Tips That Anyone Can Implement

Do you ever wish you could own a piece of a company? If you have, then investing in the stock market could be right up your street. However, there’s a lot of pertinent information you should learn before you begin investing. This article has that information.

Before you spend money on an investment broker, you need to do exhaustive research to ensure they’re trustworthy and reliable. You can be more confident of avoiding fraud by gathering important information about their track record and background.

Do not forget that stocks that you purchase and sell amount to more than mere pieces of paper. When you own stocks, you may also get voting rights and other benefits. This gives you a claim to assets and earnings. Sometimes you may even be allowed to vote in elections within the corporation.

Prior to using a brokerage firm or using a trader, figure out exactly what fees they will charge. You need to find out about exit fees, as well as entry fees. You’d be surprised how quickly these fees can add up.

Think of stocks as you owning part of a company. Determine the value of each stock through analysis of financial statements. By delving into the nuts and bolts of a company, you get a closer look at where your money is going.

Use a stock broker that will let you use all of their services in addition to online choices. You can manage half your portfolio by yourself while the other half is professionally managed. This will give you professional assistance without giving up total control of your investments.

When you first begin to invest in the stock market, it is a good idea to remind yourself frequently that overnight success is extremely rare. Oftentimes, it can take awhile before a particular company’s stock becomes successful, and many people give up, thinking they are not going to make money. In order to become a successful investor, you need to have patience.

A simple investment plan is the best bet for a beginner. It can certainly become tempting to try every new strategy you read about, and there are tons of “huge profit potential” plans out there, but new investors do best by choosing a basic strategy and sticking with it. In the grand scheme of things, you can save a lot of money.

Just because you invest in stocks, do not turn your back on other investment opportunities that could earn you a lot of money. There are many other options, such as bonds or real estate, which are equally as fun and lucrative. Considering all your options is a good idea when you think about where you want to see your money grow. What’s great is that the more you make, the more you can invest into different areas.

Cash isn’t always profit. Cash flow is essential to any financial operation, and that includes your life and investment portfolio. Although it’s fun to spend your money or reinvest it, you should make sure you have enough money available in order to pay off your bills. It is advisable you set aside a half year’s worth of living expenses, just in case something happens.

A cash account is an important tool for new investors, as opposed to a marginal account. These cash accounts offer less risk by controlling potential losses and are much more suitable for learning the nuances and fundamentals of the markets.

Since you have read this, does investing in stocks seem more appealing? If the answer is yes, then let’s get started! Keep the advice of this article in mind and before you know it, you’ll be trading stocks like a pro, knowing all the while how to protect your investments and make sound, profitable decisions.

Capital Raising

Capital raising has many pitfalls. To avoid some mistakes that others have made in the past, here are our top three, most costly capital raising mistakes:

Capital Raising Mistake #1: Having a 2-4 month capital raising goal.

It is important in the capital raising game to set concrete goals and timeframes for meeting those capital raising goals. Otherwise, you may drift along without any real sense of whether or not your efforts are paying off and if you are on track to meet your ultimate goal of closing the fund. Moreover, setting a goal of just 2-4 months is unrealistic and the wrong mindset to go out of the gates with.

You need to plan, build relationships, educate potential clients, and design high quality marketing strategies and materials for the long term. Make plans for 12-24 months and beyond, and make sure that you are maintaining those relationships even after your current campaign ends so that you can be ready to start the next one. While it is important to set goals for a reasonable timeframe, I prefer to view capital raising as a constant cultivation and nurturing of relationships. In a relationship, either business or personal, you typically do not impose an expiration date on that relationship. Why would you do so when raising capital?

Capital Raising Mistake #2: Counting on building a track record and then simply hoping to outsource all marketing to a great third party marketing firm or placement agent down the road.

This puts all of your eggs into the one third-party-marketing-basket. Third party marketers have hundreds of potential clients approach them each year. It is risky to assume that one will not only take you on as a client but actually raise a sustainable level of capital for you.

The second hidden danger of this strategy is that you maintain an infant-level of capital raising experience and knowledge until you start actively raising capital. You need to start moving up the capital raising learn curve immediately. Even if you rely primarily on third party marketers, investors require near-constant affirmation that they have invested their money with the right manager. This demand of regular attention is often at odds with the other demand that investors have, which include full-time attention to managing their capital. This can often frustrate a busy fund management team who prefer to simply focus on investing assuming investors will be satisfied as long as the returns are strong.

Instead of simply ignoring the problem in favor of focusing wholly on investing, the management team can instill greater confidence in their investors and cut down on the investors’ questions, concerns, and requests for updates by proactively communicating and interacting with investors on the GP’s schedule. I have known many managers who are brilliant traders and money managers but put little effort into developing as communicators and marketers. This makes the capital raising process more difficult when introductions are made and may even hurt current client relationships. By improving your own marketing and communication skills, you can more easily assuage investor fears and doubts, instill confidence in new and existing clients, and reduce the amount of time spent answering questions that you could address proactively.

Capital Raising Mistake #3: Under-estimating the value of a first name basis relationship with your top investor prospects.

Some professionals, especially those with technical backgrounds, think that marketing is a numbers game: you simply contact thousands of investors and you’re bound to come up with a few interested LP’s. This is only partially true. At times, you might have to reach out to many to develop relationships with a few investors, but relationships are at the core of everything that gets done. Most private equity firms we’ve worked with have found that by maintaining a strong, active relationship with a core group of limited partners. This way, the capital raising process is much easier when it comes to your next round as it doesn’t feel like a call for money. It is an investment opportunity from a close contact with an existing relationship. You can then use a database of new investors to supplement your existing network and start fresh relationships with less pressure to close immediately.

I’ve found that it’s best to upload my database of investors into a CRM system that allows me to keep real-time notes on my investor contacts and set reminders to stay in contact-that way I know I’m always keeping up with my best relationships and can better strengthen that relationship going forward. Investors like to place capital with people they know and trust, the more investor friends you have the better.

By following this approach and avoiding the mistakes highlighted here, capital raising becomes a much more effective process and hopefully more lucrative for all involved.

Current Trends in Bitcoin

Bitcoin is built on the notion that money is any object, or any sort of record, accepted as payment for goods and services and repayment of debts in a given country or socio-economic grouping. Bitcoin uses cryptography, or mathematical equations, to control the creation and transfer of money, rather than relying on governments and central banking authorities. Transfers for loans, sales, purchases or any other methods of payment can be processed by anybody, using a desktop, smart phone, tablet, or laptop. This is all possible without the need for a financial institution to act as an intermediary or recording agent.

Created in 2009, Bitcoin is a digital currency introduced as open source software by an MIT student named Satoshi Nakamoto. There is much speculation as to whether Satoshi is an actual person, or a collection of individuals using a pseudonym. Bitcoin are minted by a process termed mining, in which specialized computer hardware complete complex mathematic equations and are rewarded with a block of bitcoins. This process takes about 10 minutes and the current block rewards 25 bitcoins. The block reward will be halved to 12.5 bitcoins in 2017 and again approximately every four years thereafter. By 2140 there will be roughly 21 million bitcoins in existence.

This week has shown a whirlwind of activity with business owners of all stripes getting on track with Bitcoin. From small businesses in New Orleans, to the Sacramento Kings of the NBA accepting Bitcoin for ticket sales and team paraphernalia, to casinos in Las Vegas, Bitcoin is popping up everywhere. Venture Capitalist Chris Dixon believes Bitcoin may reach $100,000 if it becomes the primary means of ecommerce ( Wired ). The CEO of a major online retailer was quoted as saying “Other retailers will not want to miss out, Bitcoin market is growing by 30% per month.” This same retailer saw a 5% increase in sales the first day it accepted Bitcoin. Zynga Games, one of the largest online gaming companies, responsible for Farmville, Castleville, and a host of others also began accepting Bitcoin for in game financial transactions. After the five Big Banks said no to money from marijuana dispensaries and growers, Colorado’s legal marijuana dispensary industry turned to Bitcoin ( ZeroHedge ). The IRS has also recently launched a campaign that allows taxes to be paid with Bitcoin. There has been Bitcoin ATM’s popping up in cities such as Vancouver, Ottawa, and a Bratislava Slovakia shopping mall. Recently, the New York City Bitcoin ATM was put on hold until a public hearing under the jurisdiction of the New York State Department of Financial Services can be held.

After flirting with the $1,000 value just after the New Year, Bitcoin has been steadily trading at around $950 on the Mt. Gox exchange over the last fortnight and is being nicely supported by the 50 day moving average indicating Bitcoin is still decidedly bullish. This was surprising to most analysts who believed the regulatory news coming out of China, India, and Russia would burst Bitcoins bubble. However, Michael Robinson, with over 30 years of experience in market analysis, believes most analysts are wrong. He suggests that the strong correction we saw in early December, coupled with the consistent support of the 50 day moving average, indicates Bitcoin is an extremely healthy market, and should only continue to increase in value.

Three Questions To Ask When Buying A Business

Question 1: When an investor considers whether or not to buy a business, one of his or her first questions is “should I start my own business or buy an existing one?” The answer really depends on the goals of the potential buyer.

Time is money. Buying a business will take more money. If you estimate the cost to buy equipment, rent space, pay staff and yourself, and cover miscellaneous other start-up business expenses, you can see this point. Starting a business will take more time, especially up front, as you research ideas and try various ways to reach operational success. Weigh those costs with the cost of buying a business, keeping in mind the level of uncertainty and length of time when your start-up business is not making any profits. Which is more important to you?

Government surveys indicate that over 80 percent of new businesses fail for various reasons within three years. When you buy a business, you immediately have income and proven cash flow, as long as the business is not in distress when you buy it. Most likely, you will also buy a trained staff and have established relationships with customers, suppliers and other partners. Going in, you should already know that the business is, or can be, a success. Buying a business removes a lot of the risk that comes along with starting your own business.

Question 2: Once the investor decides to buy a business, he or she will have additional questions, including “how long does it take?”

The time required for someone to sell a business can range from six to eighteen months. From the buyer’s perspective, it will take longer to buy a business than buying a house or piece of commercial real estate. There are other considerations are well. For example, the sale of a business is confidential, so there is limited marketing by nature, so it could take some time to find the right business to purchase. Some sellers might sell their companies within a month, but it could take much longer if they are looking for the right buyer. In these situations, it is best to work with an experienced business broker with lots of connections.

Question 3: Another common question investors ask when buying a business is “what are the tax benefits?”

There are ways to garner tax benefits when buying a business. Consult a tax expert to verify what is possible. In many cases, depreciation of fair market value on furniture, fixtures, and equipment happens at a faster rate than real estate. Non-compete clauses and the value of training are tax deductible. Finally, most businesses have deductible expenses that add to the owner’s cash flow. Again, always seek the opinion of a qualified tax professional on these issues.

Buying a business is not a simple task. There are lots of variables to consider. It is best to work with an experienced business broker to walk you through the process from deciding to buy a business through the actual purchase.

Interesting Ways to Spend Less Money

Looking for ways to spend less money with everyday items? Here are a few great suggestions that will help you spend less money every day and the bonus is some of these ways are really painless. There are many ways that you can spend less money each day, what may work for you is to challenge yourself to go a day or two a week and not spend any money. It can be done, it’s not easy though. But it is a great challenge.

Cancel memberships you don’t use

Are you still paying for memberships that you never use? Do you maybe belong to a gym that you haven’t been there in a few months? These memberships can be cancelled and you probably won’t even miss it.

Use the unused gift cards

Do you have gift cards laying around that you haven’t used? It may be time to use them instead of paying cash or putting items on a credit card. It’s probably time to dig out the cards and use them.

Shop for holidays all year

This is one great tip that will really save you money. Buy the items when they are on sale during the year. By the time that the holidays get here you will already have what you need. The discounts that you can get for items will be worth you packing the item away for a few months till you need them. This is also a great way to relieve stress around the holidays worrying about spending so much money on the presents for everyone.

Magazine subscriptions

If you are still getting magazines and you’re not reading them you may want to consider cancelling them. The subscriptions may not be much per magazine, but it will add up to quite a bit if you have more than one magazine subscription.

Vacation closer to home

Day trips are great and you probably live near someplace exciting. Pack a lunch and pack everyone in the car and go for a day trip. Not only will you save money, but you will be able to take more trips during the year.

Go through your bills and look for errors

Go over the bills, looking for errors and services that you no longer use. Companies make errors all the time and if you don’t catch it you will end up paying for it in the long run. Look over the cable bill; do you have channels on there that you never watch? Do you pay for extra boxes that you don’t use, or don’t have? Look over the bills monthly.

Finding ways to spend less money will take you a little bit of time, but after all you will be saving money and having the extra cash to do something that you want to do is going to be your reward.

The 10 Best Personal Finance Experts

Over the years, many people have positioned themselves as experts in personal finance. Some of the ones who have taught people the most about taking control of their finances:

1. JD Roth

Roth started his site Get Rich Slowly to document his journey from tens of thousands of consumer debt toward financial stability. He not only eliminated his debt, he eventually was able to retire on the income from his work as a finance writer.

2. Dave Ramsey

Dave Ramsey’s famous snowball method has helped millions of couples escape from crushing debt. He’s the author of several books and the host of a popular radio talk show.

3. Suze Orman

Suze Orman has built a career by addressing women, young people and groups who traditionally have lagged in the area of financial literacy.

4. Joe Dominguez and Vicki Robin

You may not wish to sell off all your creature comforts so that you can retire and dedicate your life to volunteer work. But, the ideas raised in Your Money or Your Life are a good starting place for examining how much consumer spending affects your quality of life.

5. Amy Dacyczyn

Her newsletter The Tightwad Gazette made frugality hip. By pursuing a low-cost lifestyle, she and many others have gained financial freedom and achieved goals that include travel, debt-free living and home ownership.

6. Trent Hamm

Hamm is another blogger who inspired others with his personal journey to financial stability. On The Simple Dollar, he tells his story of going from a state of complete financial breakdown and severe debt to being debt-free with an emergency account and investments for his future. His site now features the work of a number of individuals who have repaired their credit, eliminated debt and accomplished goals like buying their dream homes.

7. Liz Weston

Weston excels and explaining technical financial concepts to average readers. Her first book, Your Credit Score, taught people the basics of how to manage credit. Many experts consider her 10 Commandments of Money essential reading for financial stability.

8. Clark Howard

On his nationally syndicated talk show, Clark Howard educates consumers on how to get the most for their money, how to avoid debt and, perhaps most importantly, how to spot and avoid a rip-off.

9. Mary Hunt

She started Debt-Proof Living as a print newsletter in 1992. With the rise of the internet, she brought her venture online, creating a supportive community where members can help one another overcome past debts and plan for secure futures.

10. Tom and David Gardner

Many people consider investing too complicated. The Gardner brothers disagree. On their website The Motley Fool they make the case that everyone should learn at least the basics and invest for their future prosperity.

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