Andersen Financial Products Review Guide

I wish everybody a happy, healthy and prosperous new year.

I wanted to talk about some tips to save money for the New Year.

1) Document all your monthly expenses use Excel or a Google Spreadsheet to do so. You will find yourself asking do you really need this or can it wait. It will help

2) Cut your incidentals- try to save extra monthly fees, don’t play lottery, cancel subscriptions you don’t use

3) Pay yourself first

4) Decide where to stock away your money. For save investing I recommend opening an online savings account at www.ingdirect.com if you are looking to invest in the market checkout Vanguard, Fidelity, and Bridgeway funds

5) Shed Credit Card Debt

6) Cut out those late fees

7) Quit smoking and buy stock in the old Philip Morris now called Altria Group

Here are some tax savings tips as well

1) Keep all business related receipts

2) Look into Tax Free Investing through Municipals Bonds. They are starting to come out with Muni Bonds ETFS more on that in a later post

3) Tax any tax losses that you have through your business or sell stocks at  a loss at the end of the year

4) Max out your IRA or Contribution for your retirement plans especially if your company matches

5) Give away to Charity (clothes, money whatever you can afford

6) Double check your work

Cheers
John

The holiday season can be difficult times for many. There are many external pressures to deal with during the holiday season.

 Some of us get  family pressures, work pressure, and lots of general life pressure. We all to tend to reflect more as the New Year comes to pass. Many people are susceptible to falling into traps during the holidays. Such common traps are: depression, heavy alcohol/drug use, and debt. I am going to talk mostly about debt as we tend to focus on money and being fiscially responsible here at Anderson Review Guide. I want to briefly touch on the other two issues. Holiday season is tough especially if you don’t have love ones to share it with, so I would say keep everything in perspective. Realize all the things that you are blessed with and keep in mind those they are less fortunate that you. When you go to your holiday parties don’t drink; it is much more important mingle and get to know your co workers and bosses on a more personal level. It always helps especially for those of you interested in climbing the corporate ladder.

So, let’s talk debt. It is crucial NOT  to increase your debt during the holidays. The first thing you must do is to make a list of the people that you need to get presents/gifs for. Then budget out how much you must spend on each gift. With that said, don’t give gifts that are above your means. And more importantly don’t use credit card debt or cash advances to get money for gifts. If times are tough for you this year during the holiday season, send off hand written cards. Your recipient will know you put time and effort into personalizing a message to them. People will appreciate that you time out of yourlife to write them a personal message.

Tip- If you are purchasing things on the internet be sure to look for the various coupon codes that are out there. Type in the search engines, the name of the merchant then coupon code and see what comes up. You will be surprised.

Happy Times!

John

First to define “hard money lenders” please see http://en.wikipedia.org/wiki/Hard_money_lender
 
With the subprime crisis and the increasing difficulty of raising cash from traditional banks, mortgage brokers, etc, many homeowners, potential home owners are turning to various hard money lenders. Hard Money Lenders used to be thought of lenders of last resort or for entrepreneurs using hard money to buy, flip and fix houses. Hard Money Loans are also called private mortgages. They have different lending standards than traditional mortgages and also charge a different set of fee structures. In today’s environment hard money lenders typically charge interest rates of 12-15% and 2-3% better known as points.

From what I am hearing inquiries to private money lenders are up 50% in the last year. This industry is highly fragmented, it sort of the cash advance industry for houses. For information on cash advance websites please see www.hasslefreecashadvance.com and www.applyforsecuredloans.co.uk   for great info for info in the UK.

Hard money lenders range from individuals, to syndicates to a few larger players. You can find the big players on the internet or by talking to mortgage brokers. Hard Money is often used as a bridge until customers can find more stable long term cheaper loans.

Till next time!
John

With baby boomers retiring which is a theme we like to talk about here, they need to be smart about their money. Wall Street always seeing opportunity is starting to tailor new products to the baby boomers to that supposedly help you retire in comfort and ease your mind. Always be wary of Wall Street next hot thing!

Lately we have seen a lot of pitches for “payout” mutual funds that provide people who are for a lack of a better word retirees (not sure anyone can be one of those these days with the real inflation that is going on….That is another matter) These funds compete with: immediate-variable annuities, tax-deferred variable annuities. With annuities there are always the high fees upfront which scare most people. This the opportunity Wall Street sees with these payout mutual funds.

A payout mutual fund is a good option if you don’t mind fluctuating income and still want access to your principal. The funds charge relatively low fees like less than .75% of assets. These funds give you access to income while still allowing you access to the principal and some growth as well.

Till next time
John

As more and more adjustable rate mortgages get reset it is important to pay attention and to make the important financial decision when choosing your new mortgage. Many there year ARM’s (adjustable rate mortgages) are due to reset higher rates over the next 18 months, from talking to people and reading forums, and blogs many people are not prepared.

Adjustable Rate Mortgages are mortgage loans with payments based on indexes that adjust periodically. The amount due each month may go up several times over the life of the loan.

It is important tot go through your paperwork to determine when the rates reset, what are the pre-payment penalties and what your new rates will be. It is extremely important to pull out your mortgage documents to understand your loan. Feel free to submit your documents to me and I will help you evaluate the terms. You have to look at the timetable for resets and think hard if you can afford the new rates. Don’t wait until your loan resets think it through now. Ask for help and decide a budget that you can work with.

It may be a good move to convert your Adjustable Rate Mortgage to a fixed mortgage. Fixed mortgage payments give the peace of mind that the payment is fixed for the life of the loan. You may pay more to lock in the fixed rate but for some borrows it is worth it for the financial piece of mind. The difference between ARMS and fixed mortgages isn’t always that big so compare all the options. Adjustable Rate Mortgages are still good options for people who don’t plan to stay in a home long.

After talking to many of my mortgage broker friends they are saying if you plan to refinance in the next 3 to 7 months do it now as lending will continue to get more stringent because of the subprime mess.

If you are enrolled in one of the popular investment advisory services offered by www.smithbarney.com; www.schwab.com or another popular program your brokerage firm will make a special request of you. You will be asked in writing to have the brokerage house to engage in principal trading with your account. This means instead of buying the securities for your account in the open market they have the right to sell you securities from their own inventory.

To me this stinks of conflict of interest. I may not be a financial genius, but what I do know is that banks never do anything that is not in there best interest. I guess there margins are moving lower from the sub prime mess and they need another way to keep the spigot full. From my sources I a hearing the advocates warn that brokerage firms will have incentives to push securities that are in their inventories, the writing is on the wall it will mean worse pricing for the us. I would definitely be keeping an eye on this situation.

Lets start talking about this, anybody have any other feedback?
John

Subprime mortgages have grown as a proportion of all mortgages in the US economy over the first part of this decade. About 21

percent of all mortgage originations from 2004 through 2006 were subprime, up from 9 percent from 1996 through 2004. Subprime

mortgages totaled $600 billion in 2006, accounting for about one-fifth of the U.S. home loan market, as evidence by the rate

of default and the credit crunch currently in financial markets you are seeing the unwinding of easy credit, which is making

it really hard for people to get loans with bad credit.

A few good sites in the UK have popped up to help meet the demand, and I am sure there will be more good sites in the US to

serve these needs. For more information on the UK Sites check out

www.cashadvanceloansuk.co.uk
www.applyforsecuredloans.co.uk
www.ukunsecuredloans.me.uk

Two alternatives pop into my mind for to serve a need. The first are affiliate peer to peer lending sites such as

www.propser.com and the other ones are pay day loan sites which I will cover in another post in detail.

A conventional loan is the best-case scenario. If taking out a personal loan isn’t a realistic possibility, asking your

employer for a pay advance or going to online lending communities like www.prosper.com can be a better way. If you can resort

to borrowing my friends and family that is a great alternative
Stay tuned for more on the subprime mortgage crisis, payday loans and alternative sources of financing.

John

I hope everybody had a good weekend. This past weekend as I watching football I started really paying attention to the type of advertisements that were on TV and what they are were pitching to the NFL audience. Lets start off as defining the NFL viewing audience as largely male and that has above average disposable income. I noticed the disproportionate amount of commercials geared towards saving for your retirement or how to invest your money. It makes sense as the financial companies make the most money and can therefore spend the most money in marketing.

I think it is important to understand how to find the right investment advisor.

Investment advisors are registered with and regulated by the SEC (Securities and Exchange Commission or their state securities regulator. Registered investment advisors have a fiduciary duty to act in the best interest of their clients.

You need to get advice based on what is best you for your unique situation.

If depending on your situation (whether you are doing retirement planning, taxes, estate planning or deciding asset allocation, it is fundamentally important that your advisor truly understand your goals and your situation. An independent advisor is in position to do that. You need to find an investment advisors that believes in their independence is key to offering sound investment advice.

You need to understand exactly what you are paying for.

Independent advisors typically charge a fee based on a percentage of total assets managed. This has two advantages. First: Thee fee structure is simple and easy to understand, heeling to avoid surprises. Two: since this fee structure does not give your advisor an inventive to recommend on product over another. , You can feel confident that your advisor is making recommendations based on what’s best for your situation and your portfolio.

It is important that you enjoy a one-one=one relationship with your investment advisors. They should and will share with you in your success. Their goals are to fit you with solutions that account for you personal needs and objectives. There should be regular ongoing interactions.

The last thing that is very important is to make sure your money is with a secure institution. Bigger is usually better, especially in today’s turbulent times with the sub prime mortgage mess. There will many more posts on this in the future. Independent advisors use institutional custodians which generally are large brokerage firms or banks to hold and safeguard their clients stocks, mutual funds and other assets. These custodians also provide important infrastructure services such as executing trades and preparing brokerage statements for clients. We recommend using investment advisors who use the following custodians. I will detail a list at some other point.

www.schwab.cm
www.fidelity.com

Using these custodians it helps advisors understand and dcous on you needs and providing he best advice possible.

Talk soon and have a great week.

I have been talking a lot with my friends lately about financial options for retirement and how to monetize some of our assets in order for us to spend money now without having to sell our houses. One option I want to introduce and continue to talk about it in my blog is life settlements.

I stumbled onto the life settlement industry after talking with my account and his partner. They are usually very innovative and cutting edge in presenting new financial products to their clients. It totally helps that he is a sports fan so he can use sports analogies when explaining complicated products. My goal is to take a complicated product and break it down into something simple so you can understand the topics I want to discuss. I want this blog to be a source of information to everybody on financial topics and other relevant reviews.

A life settlement is financial transaction which a policy owner possessing an unneeded or unwanted life insurance policy sells it a third party of more than the cash value offered by the life insurance company. The purchaser becomes the new beneficiary and takes on the responsibility for making the subsequent premium payments.

* When a life settlement should be considered

 * Policy no longer needed
 * Investment projections have not materialized
 * Premiums too expensive
 * Medical/long term care required
 * Charitable/family gifting desired
 * Employment status changes
 * Business Uses - Key man, split-dollar, or buy-sell
agreements
 * Irrevocable life insurance trusts (ILIT)
 * Bankruptcy

In future posts I am going to examine who the players are in the market and how it can be beneficial to sell your life insurance policy. A great research which I found on this subject is

www.mylifesettlementbroker.com
This site has lots of information on the topic and is immensely helpful.

I want to say that life settlements are a very complicated investment and transaction and that it is important to really understand the transaction and trust the person and party that you are doing business with.

 http://www.lifesettlementinstitute.org/ is the Life Settlement Institute which is nonprofit organization of the Life Settlement Industry.

 If anybody out there has any good information on they want to share, as always I would encourage one to do so.

 Till Next Time

John

We have all been in a cash crunch and we all know how that feels. I just want to put out there a few tips that can really help people in a cash crunch.

1) Make a spreadsheet of your monthly expenses that you need for living (rent, food, car, insurance, gas, utilties, etc

2) Make a list of all your outstanding credit card balance and payments

3) Make a list of all your credit cards that you have and how much credit you hav

4) Make a list of expenses that you can cut. Think about eating lots of PB &J that is what I do when I want to save money

Make those lists and than make a list of  what money you need and than email me and I will take everybody posts and write a post and review of 5 peoples options.

Be financially safe

John