Using Credit Cards to Pay Mortgages

February 23, 2010 by  
Filed under Retirement-Planning

A recent announcement by the Homeless Charity Shelter has government officials in alarm. The shelter announced that 6 percent of respondents to a recent survey stated they are using their credit cards to keep on top of their mortgages or rents.

It is mainly the working class who has been paying off their credit card debts using plastic. The poll also discovered about four percent of the middle and upper classes are also incurring more debt in order to pay it off. The charity is concerned that eventually the credit limits will be reached and these individuals will be suffering even more.

If one cannot pay off their credit card or they no longer have enough of a limit, not only will the credit card cut them off but home repossession will be a possibility. For those who are using credit cards its more about keeping a roof over their head as long as possible until nothing else can be done but to foreclose.

Unfortunately, increasing the credit card debt is the wrong way to go about this. Still, if you must use credit cards it is imperative to find the right one through credit card comparison to avoid further detriment.

Private Placement Memorandum – Find Out How to Become an Investor Magnet – Fast!

December 1, 2009 by  
Filed under Retirement-Planning

If you’re trying to raise capital there are regulations set forth by the SEC to make sure everyone is conducting business ethically and in a way that can keep one accountable for their actions if fraud takes place. Regulation D Rule exemptions 504, 505 and 506 offer solid fund-raising capabilities that can handle most investment needs. Companies typically hire a consulting firm to author these documents and within 30 days you’re off and running and talking to investors; that is, of course talking to investors while staying within the boundaries of Rule 502c which dictates the guidelines for solicitation which means no active promotion of the issuance of your securities.

This basically means that unless you have a bunch of millionaire friends, you’re no better off now than you were before the PPM was created. So, how does one raise capital in an environment which limits the promotion of your offering with such limitations? Easy, corporate publicity! You must have your timing right in order for this to work but here is basically what we do with our clients as we are writing their PPM and what you should do if you already have an Offering Memorandum written. First we make sure that they have a solid presence online, within their industry genre by getting them massive exposure virally using video, social and news bookmarks, press releases, unique article submission, image/photo marketing etc. This exposure is just for basic branding purposes and not advertising the investment opportunity.

This process will draw massive amounts of attention to their company while we use specifically researched tags that will cater to the internet user who is researching their industry and/or looking for this specific company’s position in the marketplace. The next thing that you’ll want to do is promote your company using traditional means such as radio, TV and articles written about your company and executives within the company. Now, these promotions are not ads, instead they are interviews and/or expert conversations where you’re being brought in to talk about your industry as a whole. This passive promotional technique will allow for multiple ‘plugs’ during the conversation that lead potential clients and investors to your doorstep.

If you don’t have a publicist you will need one and during your initial ramp up you’ll want to have a targeted, localized and national audience using a minimum of 5 promotional combinations, this is crucial! Lastly, you are going to want to start blogging like a maniac. Blog and respond to any and every industry specific blog you can find. It is crucial that you carve out your position as an authority in the marketplace to tower like a beacon to future customers and investors.

Now you are ready to start talking to investors. The publicity used above will usually deliver a powerful enough promotion that will yield a steady flow of clients and potential investors and once word gets out that you’re company is solid and that you are offering equity investment opportunities…well the fund-raising trail get’s easier and easier. You may also want to consider using an ‘investor finder’ at this point. An ‘investor finder’ is an individual or company that has substantial accredited investor contacts and will introduce you to those contacts for a flat fee. They are not a market maker nor are they a broker dealer. They are typically a broker of sorts that holds minimal securities licenses yet packs a punch with their ability to set you up with active investing contacts.

Raising capital is actually extremely easy if you set your company up in a way that is conducive to investment.

QROPS and Annuities – A Matter of Life and Death

December 1, 2009 by  
Filed under Retirement-Planning

Annuities are more than just a retirement investment – they are a matter of life and death

Once you have bought an annuity, that’s that – you cannot switch to a better paying product or a different provider.

Your annuity may have to fund your retirement for 20 years or more, so making an informed decision so far in advance while taking in to account inflation, recession and other economic factors is difficult.

A few miles can make an awful lot of difference to paying for your retirement – if you live in Dover; you have no choice about buying an annuity before your 75th birthday because if you don’t, you may face a massive tax penalty.

When you die, your annuity dies with you and your family and loved ones cannot benefit from your lifetime of saving.

How a QROPS benefits your family and loved ones

Now catch the ferry and 90 minutes later move in to your new home just a few miles away in Calais. After a while you will qualify as non-UK resident but you still retain your UK pension rights.

Instead of having a UK pension plan, you transfer your fund in to an offshore pension called a QROPS (Qualifying Recognised Offshore Pension Scheme) in a low-tax financial jurisdiction like Guernsey or the Isle of Man – although many more places are available to choose from.

Now, you have no obligation to buy an annuity when you retire and can continue to draw money to make your retirement more comfortable from your QROPS investments.

More importantly, when you die your pension fund carries on living to benefit your family and loved ones who can inherit the fund through your will and estate.

What is an annuity?

It’s an investment that pays an income for the rest of your life, no matter how long – or short – you live.

You buy the annuity from an insurance company with your pension fund and the scheme pays out based on an interest rate that generates the annuity payment from your cash fund.

Different types of annuity products are available, including a joint life annuity, but the payments are reduced in comparison with a single life product because the risk is doubled. You can elect how much income your partner will receive after you die.

For example, a 50% joint life annuity means that when you die, your partner will receive 50% of your pension until he or she dies. Then, the fund dies with your partner.

Insurance companies love annuities

The drawback of an annuity is that if you die soon after retirement, no one benefits from your pension cash except the insurance company providing the annuity that keeps it.

So, if you have a single life annuity based on a fund of £100,000 and you die two or three years after the purchase, all that cash just disappears as far as your family is concerned.

Beating the annuity trap

If you have UK pension rights and intend to live or retire permanently overseas, then talk to an independent financial advisor about a Qualifying Recognised Overseas Pension Scheme. The fact that you do not have to buy an annuity is one huge financial benefit to your family – and just one of many tax advantages and flexible investment options that come with the scheme.

For instance, you do not have to live in the same country as your QROPS is based, so you can park your QROPS in a place with a low pension fund tax environment and live wherever you wish or even move from country to country, as long as you stay outside of the UK.

Estate planning and your QROPS

Making a will and planning succession is a vital part of tax and financial planning, and even more so with a Qualifying Recognised Overseas Pension Scheme because of the substantial amounts of money generally in the funds.

Cross-border inheritance tax planning is a complicated sector, so make sure you take advice from an independent, regulated advisor to protect your interests and those of your family.

Financial Planning Fees and Expenses – What You Don’t Know Can Hurt You

December 1, 2009 by  
Filed under Retirement-Planning

The last few years have shown us there is little the individual investor can control in the financial world. The economy and financial markets swoon and sway with little predictability. And yet, the one part of the financial world that is in complete control of the individual investor, fees and expenses, garners little attention.

The cost of investments and guidance represent a huge opportunity for consumers. Disregarding the issue can be hazardous to your bottom line. For example, a difference of.25% (yes, that’s one quarter of one percent) in annual expenses on a portfolio can mean the difference between over $100,000 staying in your pocket or ending up in the pocket of someone else. (Based on a $100,000 initial investment and an 8% average annual return over 30 years). Even for the very wealthy that kind of money demands attention.

The fact that these costs are anything but transparent only exacerbates the problem. Most investors are surprised to find that the money they are losing doesn’t even show up on their statements. While most everyone will drive further down the road to save a couple of cents per gallon of gas most aren’t even aware of the money leaking from their future. So, the decision to take control of this part of your portfolio certainly appears to be an easy one. Identifying opportunities and implementing changes can be a little more difficult.

Investors should begin by asking themselves how much they know about what they are currently being charged. Most likely charges are not going to appear in one convenient place. Fees and expenses are usually layered and it is important to remember that nothing is free and everyone will need to get their fair share of compensation. The key word is fair. What is fair? If you are paying more than 1.25% of your net worth per year you are paying too much. The professional you choose to work with should certainly be compensated for their time and expertise. The firm they work for will take a portion of this compensation for the services they offer. Finally, any kind of managed or packaged investment will likely be compensated for time, management and administrative expenses. Mutual funds and annuities are excellent examples of these types of investments.

How do you find out what these costs are? The easiest way is to ask your financial advisor. It should be noted that any advisor that provides anything but a simple, straightforward answer to this question is throwing you a huge red flag. Either they don’t know or they don’t want you to know. In either case you need to start shopping for a new relationship. Focusing on the cost of guidance often overshadows a very important part of the discussion. What are you getting for the money? It is often lost on consumers that their financial life involves much more than simply their investment accounts.

A quality advisor is going to be able to help with issues such as taxes, healthcare choices, employer benefits, estate planning and even household budgeting. The one thing you should not get for your money is conflict of interest. Over 90% of all financial advisors pay is strictly incidental to the implementation of advice or purchase of an investment. Even more concerning are the recommendation of proprietary investments by such advisors. Should you encounter a scenario such as this again, it is probably time to start looking for a new relationship.

So the next time you look at your statement, watch the news or read the paper and feel powerless remember the one area of the financial world you can control. What you pay for investments and guidance is, indeed, the elephant in the room.

Will Retirement Soon Be Obsolete?

December 1, 2009 by  
Filed under Retirement-Planning

This latest market downturn may be the final death knell for the concept of retirement. Even before it hit, many companies were scaling back or even eliminating their pension plans. That is, those which were among the handful of employers that still offered them. Most of them had long since abandoned pension plans in favor of employee-directed (and employee-funded) 401(k) and other retirement accounts.

Of course, now many of these accounts have been devastated – or at least jolted – by the most recent market drop. Some employees – even those approaching retirement age – have seen their retirement savings wiped almost completely out. Losses of 40-60% have been commonly reported.

So where does this leave people who have been planning on retiring soon or sometime in the near or distant future? Obviously they are going to have to take a serious look at re-thinking their plans. Those who had been planning to retire within the next five years will be impacted the most. The market is not likely to recover quickly enough for these people. Most of them will probably have to postpone retirement for several years or forget about it altogether, even under a best case scenario.

But even most of the rest of us – the younger baby boomers and those who followed – might be forced to give up on our retirement dreams. With Social Security being inadequate – even assuming it won’t eventually go bust – and pensions pretty much a thing of the past, most of us had been depending on that money in our 401(k) and/or IRA accounts to carry us through retirement.

Now that money has become severely depleted and we’re unlikely to put as much of our hard-earned wages into the market as before, even after it bounces back. We are going to be reluctant to invest in stocks, wary of having the next bear market eat up years of gains in a few short months, as it did this time, and sending us back to square one.

Therefore, we are going to put much more, if not all, of our retirement savings into safer vehicles like CDs and money market accounts that grow only at about one to three percent annually, compared to the stock market’s historical average gains of ten percent a year. Those kinds of paltry returns will not be enough to fund a viable retirement for most of us.

As a result, retirement (at least in its truest definition) will soon become obsolete. Most of those who are working now will continue to work, at least part-time, well into their 60’s, 70’s, and 80’s. Only disability or death will ultimately bring their labor to an end. Our parents and grandparents don’t know how lucky they were.

3 Secrets Why Dubai Might Become Biggest Bankrupt City in the World

November 30, 2009 by  
Filed under Retirement-Planning

Dubai is probably one of the most beautiful cities in the world. The city/state has been growing at a tremendous rate over the past couple of years. It was previously a backwater town with an international shipping port. Dubai now has many prestigious buildings like the man made, Palm Island and the world’s tallest building. However, starting this year, the city is now struggling to fund new projects and paying building contractors.

Here are three reasons why Dubai is now struggling and might become one of the biggest bankrupt cities ever:

1. It has no resources.

Dubai’s neighboring cities and countries like Kuwait and Abu Dhabi, it has no oil reserves. The city has no land resources like oil, to fall back to. Since there is no oil, it has depended on other things to finance their debt like tourism and shipping. However, tourism is declining because of the financial crisis. A lot of the rich tourists are busily saving up money and paying their debts.

2. It doesn’t have a transparent business and political system.

The government has a tight grip on the financial system and the media can be fined if you write any bad news about the city. This prevents people from exposing scandals and other issues in the city. If there is any problem, it can be hidden away from the media.

3. Most of the labor force is foreigners.

Approximately 90% of people in Dubai are temporal residents. They are only there for work and therefore they don’t have a full vested interest in the long term viability of the city. As a result, some of the things they build are for the short term only.

A Short Guide on Buying Fixed Annuities

November 29, 2009 by  
Filed under Retirement-Planning

In order to provide for your future income especially for the time you will be retired you have to consider all your options. The financial instruments that come highly recommended for individuals who want to secure a steady income for the times when they will not be able to work are the fixed annuities. Just like with all other securities you have to consider a number of factors and all available options in order to make the most beneficial decision. Here are some essential tips that will aid you in the process of buying fixed annuities.

As a start it is essential to consider the standard features of these financial instruments. You will have to pay a single one-time premium for an annuity. With the standard contract you will incur no other costs whatsoever. The interest rate is fixed and you will be able to calculate your returns. Generally an accurate estimate of the overall return is between 3 and 10%. The main advantage of buying fixed annuities that the financial risk you are undertaking is very low. Also, no management of the funds on your side is required, so you can comfortably rely on a stable and secure income without worrying about the details.

There are two main of types of fixed annuities in terms of distribution models that you can choose from depending on your requirements and financial needs. With the immediate fixed annuities you will be able to receive monthly payments upon the installment of the premium until this sum plus the interest rate are depleted. With the deferred fixed annuities you will be entitled to the payments upon the expiration of the time period of the securities. You will be able to choose from a short, medium and long term instruments.

When buying fixed annuities it is essential to choose a type that best suits your particular requirements. The general rule is that the longer the term of the security, the higher the interest rate. Also, you can expect to get a higher interest rate with deals that offer less flexibility. No one can predict the future with certainty even with the most accurate financial planning. That is why you should take into account the amount of money you want to invest as well as how large your reliable your employment income is. You are highly recommended to allow for diversification when investing your savings. There are other financial instruments that involve different levels of risk, returns and time periods. If you set aside part of your savings for buying fixed annuities and the other for purchasing other securities, you can offset the investment risk substantially.

The interest rate is the most important factor to consider when buying fixed annuities. Since it cannot be changed, it is best to purchase such financial instruments when the percentage is relatively high. At present the interest rates are very low and you might have to wait for a while for the financial markets to recover from the economic blow.

Retirement Investment in China Power

November 28, 2009 by  
Filed under Retirement-Planning

Here is a company that you might want to add to your retirement investments. Keeping with the red hot China sector (no pun intended), this play takes advantage of the huge demand for energy in the emerging economy.

Dongfang Electric is a manufacturer of large equipment used in the production of thermal power. They are one of the three major players in China who produce such equipment. They control about 30 percent of the market.

If China’s estimates are right, the country will need to nearly double their output in the next few years. Many analysts say that this is a low estimate.

To meet this huge demand, China is going to have to develop more nuclear power plants. Dongfang Electric is in a position to benefit as nuclear power equipment is their second largest line of equipment. They also deal in wind power equipment (and as previously mentioned, thermal power).

Currently thermal power-related equipment is what the company is making most of their money on, but the other two areas (especially nuclear) mentioned are poised to take off as well.

Like many China stocks these days, to buy this one from your standard US account, is an over the counter play. A recent price was just under $6. We feel like this is one that you might ride in your portfolio a while and would recommend it as a buy up to $25. It might even be good up to $35. If you are looking at adding China to the mix of your retirement investments, this is a good place to start.

Pull up a chart on it yourself and check it out:


Retirement Investment – Iraqi Dinar

November 28, 2009 by  
Filed under Retirement-Planning

Maybe you have heard about the new Iraqi currency, and are wondering if it could fit into your retirement plans.

When this opportunity first came about, many scoffed at the idea! But, since then even Mad Money’s Jim Crammer has spoken about the possibilities with the currency. You can view video footage of that discussion via the link at the end of the article.

There is no doubt that the financial future for Iraq could be very impressive. It is worth noting that the United States has a vested interest is seeing that Iraq is successful.

At one time the Iraqi dinar was worth well over $3 US per each dinar. The numbers are staggering. Some are thinking this thing is way off in the distant future, but our better judgment tells us it is close. At the time of this writing the Iraqi dinar does not yet have a world value placed on it. Basically it sells on the street for whatever someone feels it is worth. At some point they are going to have to set a new world-wide price point on the currency. That way, everyone in the world could basically exchange it for the same price (minus any fees). This is badly needed if Iraq is truly ever going to get on track to being a world leader in oil production or anything else. The country does have a LOT of possibilities.

About the only downside to this investment is that you may have to wait a while to cash in (just don’t wait to get your dinar). True, the new country could fold, and a new dictator pop up that changes over to a whole other currency. However, there are Billions involved in this plan, and we don’t feel the US, Great Brittan, China, or any of the other countries who have either a political of financial stake in Iraq is going to let that happen.

So, how much could you earn? A few thousand could make you a millionaire!

Is it a sure bet? There is no such thing. However, the upside on this is so HUGE that you might feel like a dunce if you didn’t at least get a quarter million dinar (about $300 US) or so.

Currently you are not able to hold the dinar inside of your retirement account. That could change once it’s valued, but the real opportunity is now – before revaluation.

To get your hands on the dinar, be sure to use a reputable dealer. CNBC did an interview with one, you can view that video here:

Here is the video (mentioned earlier in the article) with Jim Crammer:

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What Are the Benefits of Transferring to a QROPS?

November 28, 2009 by  
Filed under Retirement-Planning

The Qualifying Recognized Overseas Pension Scheme (or QROPS) was launched in April 2006. It provides the opportunity for non-UK tax residents who are not in the United Kingdom, but who currently hold a pension based in the United Kingdom, to transfer pension assets to a QROPS. The currently held UK pension must be registered with Her Majesty’s Revenue and Customs in order for the scheme to work. This scheme can help make retirement as comfortable as possible.

In this article we’ll look at some of the benefits of taking advantage of the QROPS system. A QROPS is structured similarly to a normal United Kingdom pension. That is to say it is an investment vehicle that is owned and managed on your behalf by a trustee – or more specifically a pension administrator. The specific difference is brought about when the pension administrator is located outside the United Kingdom and merely reports back to the HMRC. It is worth mentioning that once that QROPS has been running for five years there is no further obligation to issue reports to the British authorities.

The QROPS has a number of advantages which attract many people to the idea of taking one out. It offers the possibility of receiving payments without any deductions being made from the UK taxation department. It is important to note that persons are responsible for declaring the income in the country they are resident in.

These investments can be domiciled in any major convertible currency.

It is also important to note that it is not compulsory to buy a UK annuity within the QROPS setup. There are no minimum payments and there are no age restrictions as regards entering the plan proper.

It also offers people the advantage of fees that are based on a sliding scale – something that many people will know could save them money in the long term.

For those who are on the look out for asset protection and planning for being tax effective, it is arguably worth considering the QROPS as an option. Before you do anything it is highly advisable to take highly regarded advice, so that you understand all the ins and outs of your pension plans. There are various sources of information you can find in order to help you make the right decision or obtain the right advice. It is very worthwhile ensuring that any conversion you make to a QROPS is handled by professional pension advisors.

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