Benjamin: March 2009

Tuesday, March 31, 2009

Gary Sheffield Released | Dollars and Sense

Nobody’s safe

If the current recession economy has taught us anything, it’s that no matter how strong a position you think you have, no job is completely safe when companies look to downsize. I think there are better ways to handle the situation than putting people who depend upon every penny of their job earnings to be able to put food on the table, but then again I didn’t graduate from executive genius school…

Apparently, even potential Hall of Famers are in danger of recession cutbacks. However, I’m sure Gary Sheffield has something put away and won’t need to depend upon cash advance loans. Tom Gage of The Detroit News reports that the Detroit Tigers are prepared to eat the $14 million salary they owe the power-hitting outfielder/designated hitter for 2009.

That’s a shocker, baseball fans

Reports indicate that Sheffield didn’t see this coming. He had recovered from a shoulder injury and was ready to have a productive season. His first home run of the year would have been his ticket into the elite 500-home run club, an achievement that generally guarantees a player’s induction into the Major League Baseball Hall of Fame. However, in the post-steroids era, that’s no guarantee (as Mark McGwire and Raphael Palmeiro well know). Sheffield hasn’t escaped steroid suspicion, so we’ll see how the sportswriters view him, post-career. ... click here to read the rest of the article titled "Gary Sheffield Released | Dollars and Sense"

Zoominfo Helps with Job Search

Online Profiles Get You Noticed

Maximize your job search with online profiles.

More and more, businesses are using online professional networking through Zoominfo to find job candidates. Headhunters often go to this search engine or LinkedIn first, before they advertise a position. If you’re seeking a job, make sure you have a profile on these networks.

Get in the game

You may have searched for people in your area or people who went to your high school on a social network to find your friends. Job recruiters and others who are hiring use the Zoominfo search engine to locate the skill set they are seeking. Whether you are seeking a job restructuring personal loans or grooming dogs, a Zoominfo profile is a good idea.

“All corporate recruiters and probably 20 percent of the headhunters in America have Zoominfo accounts,” according to financial blog Bukisa.

What is Zoominfo?

Zoominfo is a search engine that scans the web for professional information on both businesses and people. Businesses have used Zoominfo for years. With unemployment and underemployment climbing every day, more people seeking jobs are creating profiles. ... click here to read the rest of the article titled "Zoominfo Helps with Job Search"

Debt Counseling | Loan Modification Part 10

Government requires you to get help

Too many bills? Debt counseling can help.

Believe it or not, there is still one aspect of the federal foreclosure prevention plan that we haven’t discussed. This particular provision should prove useful and helpful even to people who don’t need mortgage aid.

Anyone who takes part in either the Loan Modification or the Refinancing program through the federal government is required to go to debt counseling if their total debt payments each month are more than 55 percent of their income.

Add it all up

Total debt payments include credit cards, car loans and any other personal loans, alimony and any other credit or bills you are paying off. So, if you make $2,000 per month and you spend more than $1,050 on debt each month, you will be required to go to debt counseling.

What is debt counseling?

The government has been requiring people go through debt counseling for many years. Currently people are required to get debt counseling if they want to file for bankruptcy.

Debt counselors look at your total debt and figure out the best way to pay it off. Many people find that they need debt consolidation. Getting your debt consolidated can often reduce your interest rates. ... click here to read the rest of the article titled "Debt Counseling | Loan Modification Part 10"

Monday, March 30, 2009

Cash For Clunkers | Obama's Green Ticket to Car Sales

Squeeze gold from that rust bucket

Cars.com’s “Kicking Tires” blog reports that President Obama has urged the automobile industry to adopt an incentive program called “Cash For Clunkers.” In order to attract more new car buyers, automobile manufacturers would offer greater trade-in value for older, less fuel-efficient vehicles.

Bills introduced in the Senate in January and House in March are in need of funding, according to Obama. They would be the engines to provide prospective new car buyers with vouchers worth up to $7,500. The theory is that what the government will pay is more than what can be obtained via normal trade-in - a real cash advance for those of us who are sitting on a less than desirable old car. Not only would this voucher be good toward the purchase of a new, more fuel-efficient vehicle, but it could also be applied to vouchers that can be used to access public transportation.

Going green

Republican Senator Susan Collins of Maine is a major supporter of this double-fisted package of legislation. She says it “would help reduce dependence on foreign oil.” It would operate for four years and, in a coup for green living and the environment, is projected to remove as many as a million vehicles from the roadways each year. To encourage fuel efficiency, new car buyers who want to use the voucher program would have to purchase a vehicle that exceeds federal guidelines by 25 percent and is 2004 or newer. ... click here to read the rest of the article titled "Cash For Clunkers | Obama's Green Ticket to Car Sales"

Detroit Free Press Launches Digitalfreepress.com

Freep.com delivers Detroit news

Detroit Free Press

As newspapers continue to struggle with the bottom line, some organizations have finally come up with a new business plan. The Detroit Free Press and the Detroit News are changing to a hybrid approach to getting the news out.

Shrinking yet growing

Both newspapers are going to shrink a bit, meaning they will have fewer pages. The Detroit Free Press is heavily marketing freep.com and digitalfreepress.com, which are online sources of the newspaper’s content. Readers will be able to read and see the newspaper online every day instead of getting it delivered to their homes.

Why two sites?

The Detroit Free Press has two web sites because it is sharing news in two different formats. Freep.com is more like a traditional web site that most newspapers have. Digitalfreepress.com is a digital replica of the printed newspaper. Right now the sites are open to the public for free. However, if you don’t have any extra cash you might need to get a payday loan to view it in the future, when the Free Press will start charging for it.

Other changes

Both newspapers are also cut back home delivery to only three days a week. The Detroit News and the Detroit Free Press will only be delivered to homes on Thursday, Friday and Sunday. ... click here to read the rest of the article titled "Detroit Free Press Launches Digitalfreepress.com"

Lance Poulsen Gets 30 Years For $1.9 Billion Fraud Case

All aboard the corporate fraud express

The numbers in bailout and corporate fraud cases lately is staggering. How do people like you and me begin to comprehend what $1.9 billion looks and feels like? I’m far closer to needing a cash advance loan than I am to building an addition on a bungalow in the Caymans…

The Associated Press reports that Lance Poulsen, the founder of National Century Financial Enterprises in Columbus, Ohio, has been sentenced to 30 years in prison for perpetrating a $1.9 billion corporate fraud. According to the prosecution, this is the largest case of fraud ever committed at a privately held company in United States history.

Notably, Judge Algenon Marbley of Federal District Court said Poulsen is “the architect of a fraud of such magnitude that it would make a sophisticated analyst shudder.”

The wolf blaming the hens

This is not the first sign of trouble from National Century. Since an F.B.I. raid in 2002, a minimum of nine executives have been convicted of corporate fraud. In what I consider a satisfying turn of events, Judge Marbley responded to claims that the investors should have seen trouble coming by saying “That’s the wolf blaming the hens for getting out of the hen house.” Thank you for common sense, your Honor.

For the record, Poulsen, 65, was convicted on 12 counts of securities fraud, wire fraud and money laundering. He declined to make a statement following sentencing, yet his defense attorney claimed his client was “disappointed” and would appeal. Awww, that’s horrible. Things must be tough for you, defrauder. ... click here to read the rest of the article titled "Lance Poulsen Gets 30 Years For $1.9 Billion Fraud Case"

Save Money On Housing: Live Well In Less Space

Speaking of internal frugality, I’d say one of the most basic ways to save on rent or mortgage payments is to… live in a smaller place. No, wait, really. Let’s think about it.

Even though it’s easy to make fun of 10,000 square feet McMansions, they are only a side effect of an overall trend towards larger houses. According to this 2006 NPR article, the size of new houses has more than doubled since the 1950s. The average new home sold in 2007 was a whopping 2,629 square feet.

Maybe as a whole we’re getting fatter and need a bit more space to move around, but not by that much! In fact, the average family size has actually been decreasing over time. Here are some stats I pulled from the U.S. Census:

Source: U.S. Census Bureau

From 1970 to 2004, the average household shrunk by 27%, but the average square footage grew by 66%. Using median numbers gave similar results.

There are several theories as to why this is happening. For starters, we may simply want a higher standard of living. (Sharing bathrooms? That’s for people in 3rd-world countries!) Perhaps it’s from us continually one-upping our neighbors. Maybe builders are pushing bigger homes through marketing. Or it may be a result of the breaking up of the American family, and how we don’t like spending time together anymore.

Most importantly, we don’t need the extra space. If a family of four could live well in 1,500 square feet back in 1950, there is no real reason they can’t do so today. It’s just a choice like any other, and we have to examine whether it is really worth the price.

Finally, it doesn’t stop with the bigger sticker price. There’s the higher property taxes and insurance rates. A bigger home costs more to heat, cool, maintain, and repair. More rooms means more furniture, more wall decorations, more room for clothes, and just more stuff in general. More appliances mean more electricity used. The list goes on and on.

In my opinion, many people don’t even notice that they are stretching to buy homes that just keep getting bigger and bigger. They just follow the crowd. This unconscious choice may partially explain why many of us feel so much more stressed financially than our parents.

Obama Wants To Change Federal Student Loans

President Obama’s higher education agenda includes major changes to the federal student loan program and a push to make Pell grants for lower income students an entitlement. Similar proposals were pushed by Presidents Bush and Clinton. But they went nowhere on Capitol Hill. So is this the year they will finally pass?

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Sunday, March 29, 2009

Internal vs. External Frugality: Different Ways of Saving

So I am trying to kick off one of my planned 2009 projects, which is to methodically go through each major expense area and explore ways to save money there. I started out last week with on housing costs (here and here), and still have a few ideas left. But while brainstorming an outline of future posts, I noticed that there seemed to be a divide in the types of strategies out there.

One set of ideas usually has to do with reducing the amount paid for a specific item or service. I call this external frugality, because you aren’t changing anything about yourself, just the price tag. For example, to save on what you pay for your house, you could look for a buyer’s agent rebate to save something like 1.5% of the purchase price, or carefully shop for mortgages with the lowest combination of closing costs and interest rate.

Another set of ideas usually involves either changing the type, amount, or quality of something. I call this internal frugality, because you are changing your consumption habits. An example of this would be realizing that you don’t necessarily need to same house as everyone else. You could look in more “up-and-coming” neighborhoods, or live in an older house with less square footage.

There are plenty of other examples out there:

External: Calling a cable company and asking for a lower rate.
Internal: You cancel cable completely. You could read more, watch episodes on your computer, or use a low-cost Netflix plan.

External: You find a cheaper long-distance plan, or switch to VoIP.
Internal: You get rid of your landline completely.

External: Learn ways to haggle down the price of a car.
Internal: Don’t own a car. Use public transportation.

I don’t think either or worse, but they are different. In general, it would seem like external frugality is at least initially easier to implement, as you don’t have to actually change your habits. However, I can also imagine that in many situations using internal frugality would lead to both greater absolute savings and also more enduring lifelong savings. But changing habits is really tough.

Next time you think you’re being frugal, examine if you’re doing it externally or internally.

Friday, March 27, 2009

Should I Choose a Traditional, Roth, or SEP IRA?

(source: cowbite)

Choosing where to put your personal retirement savings can be a difficult choice. What do Roth and SEP even mean? Hopefully, the summary and comparative visual chart that follows will help to take the stress out of choosing where your retirement funds should be located and reaffirm the decision for those who have already made the choice.

The Traditional IRA

A traditional individual retirement account (IRA), is a retirement investment account that allows you to save up to an IRS set level each year towards your retirement ($5,000 is the maximum in 2009). Any contributions you make to a traditional IRA can be deducted from your taxes, however, you must pay taxes on your distributions when you withdraw money (contrary to a Roth IRA). Distributions can be made without penalty at age 59 and 1/2. Traditional IRA’s differ from Roth IRA’s, which allow you to get distributions tax free in exchange for contributing post-tax funds.

One very nice aspect of traditional IRA’s is that you can contribute for the previous tax year up until the tax filing deadline of the present year (i.e. you can contribute and get a tax deduction for 2008 up until the April, 2009 tax deadline for 2008’s taxes). You cannot do this with a Roth IRA.

The Roth IRA

A Roth IRA is a retirement investment account that allows you to save up to an IRS set level each year towards your retirement. The ‘Roth’ in ‘Roth IRA’ simply comes from its legislative sponsor, William Roth, and has no definitive quality. Any contributions you make to a Roth IRA are after tax, however, you do not have to pay tax on your distributions when you withdraw money in retirement. Distributions can be made without tax and penalty at age 59 and 1/2. Any contributions to a Roth IRA may be withdrawn tax free. It’s money that you’ve already paid taxes on, after all.

Roth IRA’s differ from traditional IRA’s, which allow you to deduct taxes when you contribute funds in exchange for having to pay tax on distributions down the road. It’s also worth noting that you can contribute to both a traditional and Roth within the same calendar year, but the $5,000 max is combined. In other words, you can’t be sneaky and contribute $5,000 in each for a total of $10,000.

The SEP IRA

An SEP (Simplified Employee Pension) IRA is a type of retirement account that an employer or someone who is self-employed can establish. SEP IRA’s have the same contribution limits as Keogh plans and contributions are tax deductible. You may open an SEP IRA if you have self-employment income from freelance or other work. Other than contribution limits, SEP’s pretty much operate in the same way as traditional IRA’s.

The maximum amount that you can contribute to an SEP IRA is capped at 25% of an employee’s compensation. The maximum dollar allocation is $49,000 in 2009, with the maximum considered compensation being $245,000. Because of this, it is a highly desired option for the self-employed who have already maxed out on their traditional and Roth contributions, yet still want additional tax deduction benefits.

A Comparison Between the traditional, Roth, and SEP IRA’s

Conclusion

There’s still time to benefit from contributing to an IRA before the end of tax season. If you contribute within the next 19 days you may qualify for a tax deduction of up to $1500. Mint’s IRA Advisor can walk you through the questions you need to ask yourself in order to know if you qualify and help you determine which IRA is right for you.

For more of GE Miller’s writing, visit 20somethingfinance.

Will Payday Loans Help Families Weather the Recession?

Economists predict the end of the recession is near

If we listen to economists, the end of the recession is close but it is not close enough for many people to look beyond the need for payday loans. There is still the need for people to survive and pay bills with less income than they were making before the onset of the current recession.

How everyone weathers the remainder of this economic downturn remains to be seen, but looking around, we can see the economic damage it has caused with foreclosures and repossessions at a very high rate and several states reporting double digit unemployment figures. Of course we have to see it through until 2010—where does that leave those who are still unemployed or working for less money than they need to pay their bills?

Can people survive until the economy improves again?

Some people may be prepared for the rest of the economic downturn but what about those who came ill-prepared for a recession worse than we weathered in 1981? What are the chances of people pulling out of this and still having their sanity and finances in tact? It's a long road to go yet to 2010, and there are no guarantees. Predictions have been known to be wrong—after all they tried to tell us two years ago we weren't in a recession when all the signs were there in front of us.

Companies that have been in business for over a hundred years are shutting down or filing bankruptcy because they can no longer make a profit. Certainly we can blame some on an increase in online shopping but the majority is because people just can't afford to buy things they don't absolutely need. ... click here to read the rest of the article titled "Will Payday Loans Help Families Weather the Recession?"

Will Payday Loans Help Families Weather the Recession?

Economists predict the end of the recession is near

Can people survive until the economy improves again?

Eri Yoshida - Japan's First Female Pro Baseball Pitcher

A landmark in athletics… and gender equality

Gender equity has been difficult to come by when it comes to how much a woman earns versus how much a man earns. Numerous countries have been more forward thinking, leaving the door open for women to prosper in their careers and ability to access short-term credit like payday loans. On the other hand, some countries hold to antiquated ideas that a woman should not receive equal pay for equal work or have the freedom to climb the career ladder. This inequity has never been acceptable; considering the current state of the world economy, it makes less sense than ever.

But how about this? In Japan, a nation whose history has been largely devoid of male-female equality, a young woman by the name of Eri Yoshida, 17, signed a contract in December 2008 to pitch in professional baseball. She is Japan’s first female pro pitcher, and her recent debut against all-male competition was promising. Could women be on their way into the salary bracket of professional baseball players? I have little doubt that the talent is out there… but is this opportunity knocking?

Yoshida pitched a scoreless debut

Alden Gonzalez reports for MLB.com that the side-arming knuckleballer of the Kobe 9 Cruise struck out a batter in her professional debut. The rookie hurler entered in the ninth inning of the Kansai Independent League season opener in Osaka, Japan. After walking her first batter on four straight pitches and giving up a steal, the 5-foot-, 114 hurler set the next batter down swinging before being taken out. Per Associated Press reports, Yoshida’s club beat the Osaka Gold Villicanes 5-0 before an enthusiastic Osaka Dome crowd of 11,592. ... click here to read the rest of the article titled "Eri Yoshida - Japan's First Female Pro Baseball Pitcher"

Planet Hospital Lures Patients Who Want to Save on Medical Care

Prices drive sick people to other countries

A new type of business has sprung up as uninsured Americans desperately try to find ways to afford the medical care they need. Planet Hospital and other firms like it aid people with medical travel planning.

They are like travel agents, but the purpose of the trip is to get a specific medical procedure at the best price. In another country.

Plight of the uninsured

Sandra Giustina is a good example of how this can help people in need of medical care. She needed surgery for an atrial fibrillation. She lives in Las Vegas, and the going rate for the procedure at U.S. hospitals was about $175,000. She knew she couldn’t come up with that kind of money and would never be able to pay off a personal loan in that amount.

She started looking into how much the procedure would cost in other countries. She was able to get the surgery she needed for less than $10,000, including travel costs, in India.

A growing trend

Experts say 6 million Americans will leave the country for the purpose of medical procedures next year.

“Medical care in countries such as India, Thailand and Singapore can cost as little as 10 percent of the cost of comparable care in the United States,” according to a 2008 Deloitte study. ... click here to read the rest of the article titled "Planet Hospital Lures Patients Who Want to Save on Medical Care"

Tesla Motors Unveils All-Electric Sedan Prototype

No gas. No joke.

After much anticipation, Tesla Motors, announced that it will soon begin production on an all-electric sedan. The prototype was put on display today. Tesla already makes an all-electric Roadster.

Now it just needs a factory.

Golden opportunity

Tesla has decided it will build its new factory in Southern California. Residents and leaders in the Golden State hope it will help the state’s economy. California this year had to write a budget that compensated for a $42 billion shortfall.

Isn’t the auto industry in decline?

While car factories are on the verge of shutting down in Michigan, governors in the West have been wooing Tesla to try to get the company to build its factory in their states. Before Tesla settled on California, New Mexico Gov. Bill Richardson promised the company tax credits and other incentives and gave a commitment to buy 100 vehicles.

Loan shopping

Seems if you have the right product, perhaps you can rise above the flailing economy. No governors have offered Tesla cash advance loans yet, but the company has applied for $400 million in government loans, which it says it needs to get the plant off the ground and the Model S fully developed.

OK, I’ll tell you about the car!

There are two versions of Tesla’s all-electric sedan, called the Model S. A $57,000 version gets about 160 miles between charges. The company says another version will get about 300. The Roadster is priced at $109,000, and I am betting the 300-mile version of the sedan will be closer to that price. ... click here to read the rest of the article titled "Tesla Motors Unveils All-Electric Sedan Prototype"

Blender Magazine Will Stop Printing After April Issue

Magazine catches economic infection

Several newspapers recently have decided to cease print operations and become online-only news operations. It seems this trend is creeping into the magazine industry now, too.

Blender Magazine plans to maintain its web site, Blender.com, but its April issue will be the last to exist in hard copy form.

Yep, it means layoffs

Blender’s owner Alpha Media Group announced the change Thursday, and it says about 30 employees will lose their jobs as a result. With fewer jobs available every day, they might need to live off short term loans for a while.

"We went as far as we could in a difficult environment," said an Alpha Media spokeswoman, Nora Haynes.

Blender’s ad content fell 31 percent in 2008.

Blender history

Blender Magazine hit the shelves in 2001. An entertainment magazine, Blender often focused on music in reviews and features such as “greatest songs ever.”

Other fallen publications

Other magazines have fallen prey to declining ad revenue as well. This year, other big publications including Domino and Country Home have already ceased printing.

More publications’ sad stories

Newspapers seem to be bearing the brunt of advertisers’ decreasing demand for print space. Recently the Seattle Post-Intelligencer decided it would convert to an online-only format. The Rocky Mountain News in Denver shut its doors completely after 150 years in the business. ... click here to read the rest of the article titled "Blender Magazine Will Stop Printing After April Issue"

Great Way to Save on International Calls

From the Frugal Traveler column in the NY Times, a great explanation of how you can make and receive calls cheaply while overseas:

Staying in Touch Internationally, on the Cheap

When I used to travel a lot to Europe, I had an unlocked quad-band phone and bought a SIM card with a UK number. It was very handy for making local calls, but it was a nuisance to have to tell people back home that I had a different cell phone number.
But back then I didn’t have the option of forwarding calls using Skype! And I didn’t yet have Google Voice, whose rates for international calling are about half of the lowest rates I’d ever gotten with calling cards! (It’s not available to the public yet but since I already used Grand Central I was able to upgrade my account.)

I don’t know what I’m more excited by, the “neat-o” technology factor, or the potential for saving money! Unfortunately I don’t travel as much these days, or make as many international calls… but hopefully some of you do! Enjoy.

Thursday, March 26, 2009

Surviving the Recession, Episode 2: Grow Your Own (D)

Produce some savings

You’ve made it! After reading the conclusion of this four-part article (here are parts ONE, TWO and THREE), you will know exactly what to do with your grocery store haul. Moreover, you’ll be armed with some great ideas for growing your own food, even if you live in the city.

Bring a snack and bottle of water when you go out - Cut back on the temptation to grab a soda and fries at the drive through. Basic snacks from home like fruit, nuts, granola or even carrot sticks are cheap and healthy, as is water
Grow your own produce - Home gardening is a great way to save on food. Recent studies indicate that 90 percent or more of those who do this view their food garden as something akin to a savings account. If you tend to it during growing seasons, you’ll have food when you need it. And if you don’t have enough space to grow your own produce, have you considered a square foot garden? Pots on the patio can also work
Freeze, can, dehydrate - This can preserve foods you aren’t going to eat right away. Many foods will last a long while in the freezer; here are some tips from the United States Department of Agriculture. Canning is also useful, as is dehydrating
Use a crock pot or convection oven - They are more energy-efficient (cheaper) than your standard range or microwave oven. Furthermore, they don’t alter the molecular structure of food the way a microwave does. Crock pots are even safe to leave on during the day, so long as they’re set to low. By the time you get home from work, your dinner can be done after a day in the pot

Thanks for reading about ways to survive the recession. Now that your grocery shopping budget and eating habits are (hopefully) in order, stay with us for future installments of “Surviving the Recession,” where I’ll talk about ways to save on gasoline and automobile expenses! ... click here to read the rest of the article titled "Surviving the Recession, Episode 2: Grow Your Own (D)"

The Benefits of Getting a Personal Loan

It’s a financially hard world out there

Many of us might have considered taking a personal loan for different occasions. The economic fluctuations are affecting people from all walks of life. All over the country, and all over the world, people are suffering from this huge impact. Some who own businesses have no choice but to close down, while others who work for companies are laid off.

Get a personal loan

It is nobody's fault. If you check the history of the United States economy, there are always times when funds are low. We are assured that we can move on and start anew, but the question is: when would that be? Right now, we are bombarded with financial difficulties in our household. The home mortgage is on the brink of foreclosure and the household income is not enough to pay all the bills. At a time like this, is there any answer? What is the solution for this situation before it gets any worse? The answer is simple. Get a personal loan.

Online personal loans are quick to obtain

The best thing about getting a personal loan is that it will not take long. Some loans take several weeks or even months to get approved, but personal loans are different. If you apply for a personal loan online, the faster it would be. Money is not the only issue but your time is too; especially if you need to get the money as soon as possible. One of the most reputable online companies through which you can apply for a quick personal loan is personalmoneystore.com. ... click here to read the rest of the article titled "The Benefits of Getting a Personal Loan"

Wednesday, March 25, 2009

Should You Buy a Home Right Now?

(Photo by Chad Jones)

Conventional wisdom says that buying is preferable to renting. Instead of throwing money away on a home, you can invest in your future and have the sense of fulfillment that comes from owning a home. Turns out, conventional wisdom is wrong. Today, many long-term renters are in a much stronger financial position than many recent homebuyers, and the last thing these homeowners are feeling is contentment. But the combination of firesale prices on homes, the drop in mortgage rates, and government assistance in the form of the first time home buyer tax credit, may have you reconsidering the idea of buying your own home. Is now a good time?

The Good

Here are a few of the reasons why now is a better time to buy a home than it has been at any point in the past few years:

Tax Credits

In the stimulus plan signed by President Obama, there is a first-time home buyer tax credit of $8,000, provided that you stay in the home for 36 months. This isn't a tax deduction like your mortgage interest, which reduces your taxable income - a tax credit actually reduces your total income taxes owed. In addition, some states, such as California, are offering tax credits for home buyers that will further reduce your tax liability. Keep in mind that the federal program ends on December 1st of this year, and while it could easily end up being extended, it isn’t a given.

Rates last week dipped to an all-time low when the Fed announced that it would continue buying additional mortgage backed securities. Even though they ticked back up slightly in the past few days, with full income documentation and good credit, you can easily get down to 4.5% on a conventional 30 year fixed if you have 20% down, and if you want to get into an FHA loan, you can more typically get around 5.0% with a down payment of only 3.5%. Be careful when shopping for rates online, and think twice before giving out personal information. It is far better to ask friends and family for a strong personal recommendation, and use the information that you see on sites such as bankrate.com to approximate where your rate should be. Keep in mind that everyone’s scenario is different and there are a lot of new rate adjustments for conventional loans that didn’t exist in prior years, so you can easily end up paying 1 point (or percentage of the loan amount) for a loan t hat might cost your friend zero points for the same rate on the same day with the same lender.

Because You Don’t Absolutely Need to Buy

The best time to shop for a home is when you don’t need to. You can be as aggressive as you want to on your offer, and time is on your side because prices aren’t going to go back up overnight. If you are patient, you can find a home that you love, and just make sure that you can comfortably afford it and have a long-term plan to keep the property.

The Bad

These are factors that should not be driving your motivation to purchase a home right now:

Timing the Market Bottom

The same advice that applies to the stock market applies to the housing market. Don’t try to time it. If you have played around with the stock market in the past year and tried to catch a falling knife in the hopes of maximizing your return, you can probably look at the scars on your financial statements and let it serve as a reminder not to time the bottom. The turnaround in prices is gradual, and you are not going to miss out on an instant, overnight spike in real estate prices, no matter how fast the bank-owned properties are selling locally.

The Illusion of the Discount

Perhaps a new development popped up three years ago and was so shiny and perfect that you would have taken a third job to afford it. Now, the model that you love has popped up for $400,000 and all of the recent sales were at $450,000. In a stable market, that is great, but if you live in a declining market, you have now become the new comparable sale that any listings in the development in the near future will be measured against. So, if you buy this place for $400,000, and your new neighbor decides to move, they now will likely be advised by their real estate agent to price their property at or below your price in order to sell quickly. The same holds true for purchasing bank-owned properties. Bank-owned sales may be somewhat less frequent and given slightly less weight in determining the next sales prices in your neighborhood. However, if you buy in a neighborhood with a relatively high level of short sales and foreclosures, that great deal you just got on the bank-own ed property just set the bar lower for the whole neighborhood.

The Ugly

If you don’t know what you are doing or have enough of a cash reserve to justify the risk, this real estate market can eat you alive, especially if you are short-sighted.

Fix It and Flip It

Unless you are lightning fast, experienced at managing renovation projects and holding plenty of cash that you are comfortable risking, that late night real estate fix-and-flip infomercial that was recorded in 2003 should not be considered your ticket to financial freedom. Of course there are gurus who have been waiting for this opportunity, and you are driving around listening to Robert Kiyosaki on iTunes with your Bluetooth intact looking for the bargain of the century. Just do your research, and don't think that any particular property is the last opportunity you will ever have to get a great deal.

Until you see your local median price leveled off or even slightly increasing for a few months consecutively, you are dependent on sweat equity, which in many cases is wiped out by a few homes in the neighborhood going into foreclosure and further reducing home prices. Again, this market has become hyperlocal, down to the subdivision. In Orange County for example, prices for stronger neighborhoods may be down only 10% in the last year while properties less than a mile away have been cut in half or more in extreme cases.

Are you really ready?

How much are you paying now for rent? You should look at a good principal and interest calculator or talk to your lender to get the whole picture, including monthly amounts for taxes, insurance, any applicable homeowners association dues, and any applicable mortgage insurance. This is important even if you plan on paying taxes and insurance on your own (rather than impounding them and making monthly payments to the lender) because you will want to make sure to budget monthly to set aside for these expenses. So, if you are paying $1,500 currently for rent, and the new home will be $2,500, put your budget to the test and see how well your finances run when you put the amount of the increased housing expense (in this case $1,000) into your savings account. Take it out right when you pay your rent, and don’t touch it. This is a great test of how much you can really comfortably afford, and of course has the nice side effect of padding your savings for a few months b efore you start shopping for a home.

Of course, if you have a long-term plan to be in the home, the fluctuations and potential decrease in value in the near term doesn’t need to get you down, as the only price that matters is the price you are able to sell for when you need or want to move.

Countess Divorce | We Lose Our Minds (Pt. 2)

Battle notes from the Hartford Courant

This concludes my look at the countess divorce of Marie Douglas-David and George David… at least for today on this payday loan blog you know and love. CLICK HERE if you missed my tiff with “sheri.”

Rick Green blogs for the Hartford Courant that the “Grossest Divorce of the Greatest Depression” marches on. I’m sure sheri will call him a sexist jerk for it, too, but Green is “starting to fall for the $300 million man” George David, who is “under siege from Marie Douglas-David.”

As can be expected, Douglas-David’s lawyer is attempting to prove that David’s behavior nullifies the 2005 post-nuptial agreement that grants the Swedish countess around $38 million.

She wants $100 million

Want to know how Douglas-David’s lawyer is attempting to spin the story that David “abandoned” the post-nup?

According to Green, David “forked out $600,000 over the last year, paying Douglas-David’s bills even after they were headed to divorce court. He allowed her to stay at their Park Avenue home. They went out to the ’simple beach house’ together at Sagaponack.” All the while, the couple made champagne toasts on a yacht, summered in a $425,000 rental in the Hamptons and skipped over to the Isle of Capri. ... click here to read the rest of the article titled "Countess Divorce | We Lose Our Minds (Pt. 2)"