How to Use a Reverse Mortgage to Your Advantage

One of the most common fears that people harbor as they near retirement age is that they will not have enough money to maintain their lifestyle after they stop working. With the volatility of the stock market and the uncertainty of other investments, it’s easy to understand why some workers are concerned that they won’t recoup recent losses before they are ready to retire.

If this sounds like you, the best option you have is to step back and review the whole retirement picture. That means going far beyond the performance of a particular mutual fund or other investment instruments and thinking about things from a more philosophical perspective.

The money you live on after retirement is the reversal of all the saving and investing you’ve been doing since you started working. Everyone understands that, but sometimes we get a narrow view of just what defines an investment at that point in our lives.

It’s easy to think that 401(k) accounts, IRA’s, bonds, or other cash investments are the only factor in our post-retirement income. But the fact is that anything we own could potentially represent a source of money for us.

That doesn’t mean that on your 62nd birthday you empty the house and have a massive yard sale, financing your trip to Ireland with heirloom jewelry. But it does mean that a high-dollar item that has held its value can be liquidated when you no longer want or need it, and that money can help cover your retirement.

What’s the single biggest item that most of us purchase? Typically, it’s our home. We pour money into a mortgage for as long as 30 years, then hold on to it in non-liquid form until we pass it on to our heirs.

This doesn’t mean you stick a ‘for sale’ sign in the front yard and move into some tiny cottage. Quite the opposite. You can retrieve some of the money you’ve invested in your home by taking a reverse mortgage.

Before you jump to conclusions about spending your kids’ inheritance or selling yourself out of your home, spend a little time learning more about reverse mortgages.

Reverse mortgages are a great tool to re-capture some of the value of your home instead of leaving it tied up. It allows you to avoid the old conundrum often associated with aging farmers. The agriculture world says that you live poor and die rich because you invest money into hundreds of acres of land, expensive structures and equipment, and the farmhouse itself, but never get any of that money back. After you die, the farm may sell for a shocking amount of money–none of which goes to you.

It’s true for homeowners, too. You build or buy a home that’s suitable to raise several kids, entertain friends, and host grandchildren for long summer weekends. You make repairs, increase energy efficiency, and update styles to keep a modern look. Then one day you’re gone, and the house is sold off to the benefit of your heirs.

That’s not to say we necessarily begrudge our children all the money that we have. Most parents are very happy to know that they can pass along a financial windfall. But it makes no sense to have a tidy sum going to the kids and grandkids someday when you’re struggling to pay the gas bill in that large house you built for family and friends.

Getting a reverse mortgage can help you avoid some potentially unpleasant decisions, too. Some people make bad choices with their retirement dollars. Maybe you have. And now that you’re running out of time to make up for it, it’s tough to swallow that you are going to lag behind on standard of living compared to co-workers who get their gold watch the same day you do.

Of course, one of the worst things you can do in life is to put all your attention into keeping up with the Joneses. What works for them may not be the route you want to go. But if you do find it uncomfortable to think that you haven’t made as much for your retirement as others have, it’s at least a beneficial yardstick to decide what to do next.

You can avoid the discomfort of this situation by looking at a reverse mortgage. It can be more beneficial at tax time, provide less worry for you, and insulate your money from some of the crazy things that can happen to investments.

Downsizing in Style: A Mini-Guide for Restless Retirees

When most people retire, they often think about living on less. In fact, this is the telltale sign that you’re about to leave and retire from work: you transition to a fixed income.

But, how do you do this, exactly? If you’re like most people, you’re scared. You don’t want to live on less, have less, and potentially run out of money. Here’s how to downsize without feeling the pinch.

Make Plans To Travel

You don’t have to sit at home all day. In fact, this is probably not healthy – especially after you retire. You should make plans to get out and travel. Travelling can help you feel like you’re not downsizing at all. In fact, in many ways, you’re not actually downsizing. You’re upsizing your entire life.

Of course, if you spend a lot of time travelling, the one thing you can downsize is your home because you don’t need the space. You can either put things in storage that don’t fit in the new home or flat or you can sell them or give them to family.

But, having yearly travel plans is a great way to expand your horizons and see a world you may never have seen during your working years.

Move To A New Area

Moving to a new area can allow you to keep the same size home without paying the high cost you are right now.

You know what they say, right? Location, location, location. Except, this time around, you’re not looking for something with good appreciation potential. You’re looking for something that didn’t appreciate. That could mean living in an economically depressed area, but it could just as well mean living in a slow-growth area that’s not in the slums.

In some cities and towns, you can travel just a few streets down and end up getting the same sized home for £100,000 less.

How To Stick To Essentials Without Making Sacrifices

You’ve probably been told that, when you retire, you need to make sacrifices. What you really need to do is prioritize what you want out of life. Since you can’t afford to have it all, you need to think carefully about what you want and what you don’t want.

Make decisions based on what’s really important to you. So, if you really want to stay in the house you’re in now, what would you have to get rid of? IF the house isn’t as important as other things you own, then you have your answer – sell the home.

Of course, you have to be realistic about things. You can’t have your cake and eat it, too. So, if you’re faced with the dilemma of affording a new car, a home, and all the creature comforts you’re had for years, versus a declining income, you have to really think about what matters most and then get rid of the things that you can’t afford and don’t want (as much).

It can be a difficult decision to make, but it’s necessary. And, at the end of the day, you’ll be happy because you’re not struggling financially to have things that you can’t afford.

Give Furniture To Family First

Don’t forget to ask your children or grandchildren what furniture they might want. You’ve had it for years, but it might be time to give it up. At the same time, you don’t want to just hand it over to a stranger.

Of course, if none of your family wants your furniture, you can put it on consignment and sell it. Just make sure you’re not disinheriting your family first.

Live With Family

A good way to handle this is to use funds for your home and have an annexe, or a granny flat, built as an extension of your son or daughter’s home. That way, you can live independently, and not interfere with the family but you won’t be far away, either.

You’ll have your own rooms, and the extension doesn’t even have to have a shared entrance or an entrance into the other home. The idea is to have a home that is really close to your children’s so that you can call on them when needed and they can help you if necessary. Otherwise, you live alone.

And, the best part is that it will increase the value of your children’s home – something you may not care about for yourself but it will certainly be much appreciated by your children.

Ben Bailey is a financial consultant who has carved out a niche working with baby-boomers. From pensions to downsizing he often writes on these topics for over fifties and personal finance sites.

Can Good Record Keeping Make You Rich?

What if I told you that managing your finances more efficiently could make you rich? Would you be interested in learning how to effectively manage your finances? Something tells me you would be. You see, the thing is… many would assume that in order to get rich you need to acquire more money. While that is a portion of the equation, the other part of becoming financially successful and staying that way is – financial management.

Accountants and Financial Management

Unless you’ve majored in accounting yourself, to effectively manage your finances it is ideal to work with a certified public accountant. Kansas City CPA firm MarksNelson points out that the right accounting firm will work with you to help safeguard and grow your business.

Consulting with an accountant on a periodic basis to set up accounting systems, make major purchasing or investment decisions, evaluate existing accounting systems for errors, and assistance with business tax filing is an investment worth making. It essentially helps you to keep your finances in order, which can certainly lead to a financial increase.

The Importance of Good Bookkeeping

Do you know what money you have coming in and out on any given day? Do you know how much of that money you’re spending on operational costs, investments, or savings? Whether your business brings in $30,000 a year or $100,000 a year if you’re not tracking your expenses, chances are you’re allowing money to go down the drain.

The mismanagement of funds can quickly start a domino effect. It will hinder your ability to purchase inventory, pay salaries, make investments, and even provide quality customer service. In a nutshell, poor bookkeeping can quickly lead to the demise of your organization.

Benefits of Good Bookkeeping

Let’s take a look at some of the ways effective bookkeeping can increase company profits and bring you closer to being rich.

1.  Better Financial Analysis – You can’t make a decision on purchases, hires, investments, or savings if you don’t have a clear understanding of how much money you have (cash flow). Ideally, with the right accounting system in place, you can clearly see where money is coming in and going out each month.

2.  Fulfill Tax Obligations – As a business owner, you’re responsible for paying a lot more taxes than you would if you worked for someone else. Proper financial records make it easier for you to remain in compliance with tax obligations. Keeping track of cash flow, account balances, profits and losses makes it a lot easier to file your taxes every year. It ensures that you’ve paid the correct amount, which can prevent you from receiving hefty fines from the local and federal government. Good records can also help you in taking advantage of the many tax benefits there are out there for small businesses, which of course saves you money.

3.  Prevents You From Going Into Debt – If you’re blindly making purchasing decisions or taking out lines of credit and loans that you can’t afford to pay back, you’re going to find yourself in debt. Quality financial management, however, can help you stay out of debt (or at the very least manage the debt you have). If you have a clear understanding of what you have and what you can afford you will make more effective decisions as it pertains to purchases and borrowing money. Accurately recording company debt can also ensure that you stay on track with payments so you don’t incur more fees or damage your company credit.

4.  Informed Purchasing Decisions – You have to be willing to spend money to make money in the world of business, but if you’re spending more than you’re making – it’s a waste of time. Bookkeeping ultimately helps you to see the bigger picture as it pertains to your company finances. Having a budget for instance lets you know how much you have to spend on necessary expenditures so that you don’t go overboard.

So… you may have caught on to the fact that bookkeeping won’t make your company rich. HOWEVER, it will help you to utilize your money more wisely and can assist you in saving hundreds if not thousands of dollars every year. Think about it… if you had an accounting system in place that allows you to manage cash flow, make more informed purchasing decisions, maintain your tax obligations, AND helps you to take advantage of deductions and credits… you’ll have more money to invest into your business so that you can ultimately meet your financial goals.

How to Navigate Past Expensive Car Loans

For many commuters a vehicle is essential to get them to and from work. People with larger families may also need a vehicle to get the family places. Public transit often isn’t an option in small cities or towns. A large percentage of the population relies on a vehicle. But despite the best maintenance on a car, they still breakdown and need to be replaced. Often many people simply do not have the cash to buy a new car, yet they are hesitant to buy a used car more than a few years old. A car loan is how they’ll be able to obtain the best vehicle to suit their needs.  Selling your old car at online companies like We Buy Cars is a great way to get the down payment for a new one.

Obtaining a car loan can be a lot like obtaining the best mortgage. It’s going to take time and research to shop around.

There are many sources for car loans, so before you sign on the dotted line, scope them out first. Your first option is going to be directly from the car dealer. You’ll find that they may offer the best financing, after all, they want you to buy their car.

Your second option for a car loan is from your bank. If your credit report is outstanding, you may qualify for a low interest loan. You may also be able to obtain a second mortgage and get it tacked onto a once-a-month lump sum payment.

The third option is to get it from a company that specifically provides loans to individuals. If you go this route, check the interest rate and loan terms carefully. Often these companies are created for people who don’t normally qualify for an auto loan. This means that the interest rates will be exceptionally high.

If you’re considering the purchase of a new car, and you know that you’ll need to obtain a car loan, it can be of benefit to pull your credit report. There are many agencies that provide this service. This will allow you to learn your credit rating, and whether you need to fix any errors. It can be of benefit to you, as a higher credit rating means that you’ll be able to obtain the best interest rate possible.

If you’re a woman, you may also wish to be extra aware before obtaining a car loan. Many people will assume you have not done your research, and may try to take advantage of that. They’re out to make money after all. Sadly it’s still something that you need to be aware of before you begin your negotiations. It’s important to brush up on car and loan terminology. If you don’t understand something in a contract, be sure to ask.

You may also ask for what you want. Is it possible that they can drop the interest rate a half a percentage point? It can certainly help you out over time, but be of little risk to the lender.

By the time you’re ready to sign on the dotted line you’ll have found the best interest rate for your car loan. Soon you’ll be driving home in your new car!

Will Rises in Inflation Boost the Forex Market?

Doom for the Dollar?

Earlier this week, Richmond Fed President Jeffrey Lacker made an announcement signalling that U.S inflation is likely to ‘accelerate’ over coming years, following a sluggish period after the 2007-2009 recession.

Speaking at the Global Interdependence Center’s Central Banking Series conference in Paris this week, Lacker forecast that inflation would be close to 2 percent by 2017, “despite low recent inflation readings, FOMC (Federal Open Market Committee) participants generally expect that inflation will rise back toward 2 percent over the medium term”.

He continued to speculate that this would mean that interest rate hikes were likely to occur in two or three small increments, over a similar period of time. The dovish announcements from Lacker and other Fed members fuelled speculation that the dollar would suffer; be softer, less volatile and that Forex investors may seek to trade currencies that offered higher yields.

In addition to this, more downward pressure has recently been exerted on the dollar by the recovery of the AUD, CAD and NZD, who have been bolstered by the surge in the price of oil and by unexpected appreciations in the price of the EUR.

So How Does All This Work?

If interest rates rise, then this would be likely to attract foreign investment and, in turn, this inflates the value of the dollar. If interest rates remain low, however, then foreign investment is less likely and the value of the dollar would likely fall.

Other factors also feed into this equation and in particular inflation rates. Higher interest rates can mean that the rate of inflation rises also and this generally leads to a decrease in the value of the dollar. Striking a good balance between the rate of inflation and interest rates is key to ensuring that the dollar remains strong and can hold its own on the Forex markets.

It is important to consider that these rules only apply verbatim, if all other factors are equal, that is to say, if all countries are participating on a level playing field and of course this is not the case and world economics and politics all serve to make the overall picture less clear.

What Can Small, Independent Investors Do?

For small, independent investors who wish to trade on the Forex markets, the sheer pace at which the economical climate can change and the array of factors that need to be taken into account, can be a little bewildering and make it difficult to pinpoint trades that will result in profit.  Traders who are most successful, will achieve that success by investigating a number of avenues. A reliable trading platform, such as, ETX Capital is a good place to start, this will allow the trader to access many trading instruments, including Forex, but it doesn’t end there. Users will also be privy to a host of advice and information that will help them trade with confidence.

Further to this, traders need to have their eye on the world economic window, setting up news feeds that are fast and reliable. Social media can play a vital role in this, as can regular visits to websites such as The New York Times. Research is paramount, as is an in depth understanding of how Forex markets react to breaking news and events.

Another way to optimise the chances of success is for Forex traders to develop a disciplined trading strategy and to hone their technical skills. Accurate chart reading is an essential ingredient in any traders recipe for profit, as is using a strategy that includes things like stop loss orders.

So is it Really Doom for the Dollar?

In short the answer is no. The dollar did suffer a 1 percent loss against some major currencies after the announcements from Lacker, however it picked up again after only a two day sell off. Joseph Trevisani, chief market strategist at Worldwide Markets in Woodcliff Lake, New Jersey, was quoted as saying: “It looks to me like we have dissipated the dollar weakness from the Fed”. This is perhaps, in part, because the U.S is currently enjoying low unemployment and because improving domestic household finances are fuelling family spending, facts echoed by Atlanta Fed President Dennis Lockhart, who said: “Short of some big shock that turns consumer psychology on its head, I see no reason why consumer spending growth should not continue. I think the conditions supporting this engine of economic momentum are likely to hold steady”.

World Economic Stage

It is not only domestic economic conditions in the U.S that are supporting the dollar, uncertainty regarding global economics; concerns over conflicts in the British Conservative Party and the upcoming referendum on leaving the European Union (Britex) have triggered a slide in the strength of sterling. The on going slowdown of the Chinese economy, the pressure being felt throughout Europe in the face of the conflict in Syria and the humanitarian problems that are being caused as a result are just some of the factors that are worth bearing in mind. Germany has Europe’s strongest economy, but even it has strained under the weight of the influx of refugees fleeing to seek asylum in Europe. The world stage is far from stable and it is possible that in terms of Forex, Europe in particular may see some of its players exit stage left.

Forex Outlook

With the dollar currently looking only a little bullish in the medium term, Forex investors would be advised to take a cautious approach to investing in it. The Fed’s policy outlook is still far from set in stone and there is market scepticism regarding whether interest rate hikes will actually materialise. It is possible that inflation will rise without the accompanying interest rate rises needed to balance this. Furthermore there is still a risk that the domestic economy will slow down and recession will, once again, rear its ugly head. But let us not forget that ‘there is more than one way to skin a cat’ and traders are not obliged to adopt a bullish approach to Forex investing. One man’s loss, can be, another man’s gain and if the tables turn bearish, going short, may be a profitable consolation.

A Quick Introduction To Online CFD Trading

Contract for Difference trading requires a contract between a broker and an investor in which profits can be made when the asset moves in the same direction as the position that is taken. The asset itself is never owned. However, these contracts are tradable instruments and there are many benefits in online CFD trading.

How Contract For Difference Trading Works

CFDs allow speculation on the direction that the price of an asset is expected to go. It is the difference in the price of the asset when the contract is purchased and the actual price of the asset at the end of the contract that holds the potential for profit. The contracts can be completed on currency, commodity shares, or an index.

Online CFD Trading – The Long And The Short

Online CFD trading allows you to go either long or short. When you go long, you are betting that the price of the underlying share will increase over the term of the contract. In order to close your position at a profit, you must enter a sell order.

On the other hand, going on the short side means that your CFD trade opened with a sell order. The idea is that you plan to profit when the price of the underlying share drops in the larger market. To close your position, you will buy when the price falls to a lower level and you expect that it will soon increase again. Contracts for difference are one of the few ways that investors can profit when the price of an asset drops.

What To Expect When You Trade CFDs

Leverage is used to properly conduct online CFD trading. This means that you will only pay a percentage of the total cost. There is a considerable magnification of the total available profits as well as losses. Expect to pay 1% on indices trades and from 5-10% on shares.

There is no expiration date on CFDs. Until there is enough margin to support closing the trade, they can be moved forward indefinitely. Of course, at the end of each day, the broker will charge or credit your account to reflect any dividends or the daily cost of financing the trade.

The only way to close your Contract for Difference trade is to go in the reverse position. For example, if you started your trade by going short, you must then go long. At any point during regular market hours, you can close your position.

Contract for Difference trades have been rapidly rising in popularity, in large part because they can be traded online in real time. Each day, the cash flows will be calculated and you will immediately know where you stand. In addition, they can be traded on almost every asset in the market including currencies, indices, shares, commodities, and sectors.

Many investors are using brokerage firms that are located online and are engaged in online CFD trading from the comfort of their own homes. While you never actually own any of the underlying assets, there is considerable potential for profit.

Thank You Ninja & The Future of Punch Debt in the Face

Like many of you I have been reading Punch Debt in the Face for the better part of a decade, so when I saw his post about being done with Punch Debt in the Face I was completely bummed.  I actually found my first comment on the way back in 2010 in a post about optimism and stupidity.  So who am I? and why did I buy the site?

My name is Evan and I own and run MyJourneytoMillions an 8 year personal finance blog.  While I never gained the popularity or notoriety that Ninja did, I have always enjoyed blogging and couldn’t bear the thought of this becoming a landing page when the domain expired.

While I won’t be writing here that often I hope to share some other fantastic voices!  If you have a story to tell please contact me!