Annuity 101

If a person has a lot of money and decides not to spend it, there are ways of making this grow. One option is keeping it in the bank and letting it grow interest. The other is investing it in the stock market with the help of a financial consultant. This professional will be able to know what stock is worth buying and when is the best time to sell. Another way of making the money grow especially if the person does not have medical insurance will be in the form of an annuity. An annuity is a deal made between the insurance firm and the person. This arrangement allows the insurance company to invest the money of an individual in various business ventures with a percentage of growth to be returned in a number of years. This money can also earn interest on it’s own which will be given back over a period of time. The disadvantages of this deal may make the person wait longer than expected to be able to get the money back due to surrender periods. Rules set by the IRS may reduce how much the person can get back due to taxes. In the event of the untimely death of the individual, the beneficiaries will also not be able to get the entire payment because of tax deductions. It is advisable for the person to pick a strong and stable insurance company. If this money was invested in a firm that suddenly goes bankrupt, the individual will not be able to get anything. To be sure that the insurance company is in good standing with the industry, one should only go for a firm that has been given a good rating from agencies such as Standard & Poors, Moody’s Investor Services, Duff & Phelps or AM Best. Should the person still want to person an annuity, there are some things that have to be decided upon to make it work. The name of the person, the insurance company and who are the beneficiaries in the event something happens. Since a selling agent will probably be the one who will approach the individual and present this proposition, the individual should consult and be accompanied by the family attorney and a financial consultant to make sure the deal is perfectly safe. The person should be aware of the pro’s and cons of an annuity. When this is done, the individual should carefully read the contents of the document before signing it. The person should then be ready to make the first deposit in the form of a check addressed to the insurance company. At the same time, this document should be stored in a safe place together with other papers that the person may need to bring out in the future. Changes in the document may happen at any time which makes it important to have this document stored in a safe place. An annuity is something that people who are either rich or poor can invest on. Since this works like an insurance plan, the individual may choose to give the payment in one lump sum or do it on a monthly basis. Since it is probably not wise to invest the money in one place, one should keep some money elsewhere that is easily accessible in case of emergencies.

The magic of compounding part ii

Copyright 2006 Richard Stoyeck The New Slant Really understanding compounding will make all the difference in investing. I believe that Warren Buffett, the world's greatest investor, is hardwired to think geometrically. He is rich beyond dreams because he totally gets the magic of compounding, and he executes on the concept. I am going to get these numbers wrong because I'm doing them from memory but it doesn't matter. You'll get the concept. Buffett started a partnership way back when. He had a number of limited partners invest with him, and he took 20% of the gains. In the late 1960s he terminated the partnership with his famous letter, "When you no longer understand the way the game is played, it's time to leave the game." I'm paraphrasing, even though it's in quotes. Buffet took about $100 million out of that first partnership for himself, so he was working with $100 million, keep that in mind. In 1974 when the bear market bottomed, it might have been early 1975, he started another rise...he took over Berkshire Hathaway. Buffet, since the 1970's, has been getting a compounded (remember that means exponential) growth rate of about 22 to 24%. This is where I introduce you to the cousin of the Magic of Compounding, which is called the Rule of 72. With the Rule of 72 you can calculate how long it will take you to double your money at any given rate of return. OK? Let’s take an example. If you're earning 12% on your money and you want to know how long it will take to double it (we're compounding, remember?) divide 72 by 12, and your answer is 6. It will take 6 years to double your money. Let’s do another one. If you're getting 6% on your money, divide 72 by 6 and you'll see that it will take 12 years to double. If you're getting 9%, it's 72 divided by 9, or 8 years to double up. As for Warren Buffett, he's getting 22% on his money. This means you divide 72 by 22 and gee, in only 3.27 years, or every 3 years and 4 months, he doubles his money. Since he's been at it about 35 years with that $100 million he had to play with, he's doubled his original $100 million almost nine times. You get that by taking 35 years and dividing by a double every 3 years and 4 months. It equals 10.70, or let's go with nine doubles to adjust for a rate of compounding that is varying. The key point is he's not making 9 times his money with the $100 million, that would be an arithmetic progression that would give him $900 million. He's making nine doubles, a geometric or compounded progression. Let's see how that works. Warren Buffet's Geometric Progression Starting Dollar Amount: $100 million Time Periods Involved: Nine 3 year and 4 month periods Period Time Taken Compounded Gain 0 Starting Point $100,000,000 1 3 years, 4 months later $200,000,000 2 6 years, 8 months later $400,000,000 3 10 years later $800,000,000 4 13 years, 4 months later $1,600,000,000 5 16 years, 8 months later $3,200,000,000 6 20 years later $6,400,000,000 7 23 years, 4 months later $12,800,000,000 8 26 years, 8 months later $25,600,000,000 9 30 years later $51,200,000,000 I believe Buffet is worth about $47 billion. It doesn't matter, he is somewhere in his ninth double. This is the magic of compounding! Also, he never sells. This means his money is doubling every three years and four months with no tax consequences. He gets taxed only when he sells. Under normal conditions, the money compounds until he dies, then it's taxed at a capital gains rate in the far distant future. In Buffett’s case, he’s giving most of his wealth to the Gates’ foundation to benefit society. Teach your children to live a balanced life, and also help them master this concept and you will have very happy and very rich children. In stocks I show you how to make money at the bottom by buying depressed securities that are going to come right back, making you a fortune as they rocket off the bottom. In the future I will also show you how to make money with the Warren Buffet concept, or classical Graham and Dodd analysis. In the mean time, good luck with understanding the magic of compounding. Start thinking exponentially, Make Money Now

Visa business credit cards

The Visa Business Credit Card is one of the most popular business credit cards serving the business market today. Recognizing that businesses appreciate the need for good cash management, Visa offers business credit cards designed to provide business people with purchasing convenience, cost savings, instant access to credit when they need it and complete, detailed reporting of all business expenses charged to their Visa business credit cards. Visa business credit cards can be obtained from any one of the many issuers that are affiliated to Visa. The credit card packages are likely to vary from one issuer to the next, but there are certain features that are universally applicable to any business credit card issued under the Visa brand. These universal features, privileges and benefits, will typically include the following: Auto Rental Collision Damage Waiver All Visa business credit card holders are covered for damages due to collision or theft, at no added cost. This benefit reimburses you for the costs incurred to repair or replace covered losses on a hired vehicle that you paid for with your business credit card. The only condition is that the vehicle should have been exclusively used for business purposes. When you rent the vehicle on your eligible Visa business credit card, remember to decline if the rental company offers its own collision damage waiver. This will activate your Visa coverage. If the rental company is adamant and insists that you buy their policy, call your benefits administrator. In the case of theft or damage to the rented vehicle, you will first call the Visa benefits administrator before speaking to anybody else. He or she will then advise you how to proceed. Purchase Security and Extended Protection The purchase security benefit entitles the business credit card holder to replacement, repair or reimbursement for eligible personal property that you completely paid for with your Visa business credit card (up to $10,000 per claim and up to a total of $50,000 per business credit card holder). Extended protection doubles the original manufacturer’s warranty period. This period is capped at 12 months. Gifts purchased for others on your business credit card are covered by this benefit. The only challenge is that you will be requested to file a claim, and that the intended recipient will be required to provide documents in substantiation of the claim. You must develop the habit of keeping your copies of the Visa business credit card receipts as well as the store receipts, since these will be required as supporting documents to any claim you may file. There is a host of exclusions on the items or situations that are not covered by the Visa purchase security and extended protection business credit card benefits, so you should review these with care. Travel Emergency Assistance Visa business credit card holders are assured of 24-hour assistance from appropriate emergency services when these are required. The benefit covers you, your immediate family members and your business associates. This special service for business credit card holders provides contact assistance and referral. You will still be responsible for all costs and expenses incurred with the suppliers of these emergency services, which could include ambulances, doctors, hospitals and towing. The upside is that you can pay for these with your card as the vast majority of emergency services know and accept the Visa brand.

Forex profits by buying and selling at the same time

This article is one of a series which looks at the advantages and weaknesses of trading using the hedged, grid trading system to trade volatile markets. We will look at how money can be made by breaking a number of trading truths or principles; * cut your losses and let your profit run and * there is nothing to gained by entering into buy and sell deals at the same time. The hedged grid trading system uses the principle that one should be able to cash in at a gain no matter which way the market moves. No stops are therefore required at all. The only way this is logically possible is that one would have a buy and sell active at the same time. Most traders will say that that is trading suicide but let’s take some to look at this more closely. Let’s say that a trader enters the market with a buy and sell active when a currency is at a level of say 100. The price then moves to 200. The buy will then be positive by 100 and the sell will be negative by 100. At this point we start breaking trading rules. We cash in our positive buy and the gain of 100 goes to our account. The sell is now carrying a loss of -100. The grid system requires one to make sure that cash in on any movement in the market. To do this one would again enter into a buy and a sell transaction. Now, for convenience, let’s assume that the price moves back to level 100. The second sell has now gone positive by 100 and the second buy is carrying a loss of -100. According to the rules one would cash the sell in and another 100 will be added to your account. That brings the total cashed in at this point to 200. Now the first sell that remained active has moved from level 200 where it was -100 to level 100 where it is now breaking even. The 4 transactions added together now magically show a gain:- 1st buy cashed in +100, 2nd sell cashed in +100, 1st sell now breaking even and the 2nd buy is -100. This gives an overall a gain of 100 in total. We can liquidate all the transactions and have some champagne. There are many, many other market movements that turn this strange “buy and sell at the same time” activity into gains. These will be covered in future articles and are covered in a free grid trading course which is available at the expert-4x website for those traders whose curiosity has been aroused. There will be more on the hedged grid trading articles to be issued regularly. Please watch this site.

Quick cash loans the real cost

So many numbers are thrown around when talking about cash advances, also called payday loans, that it can be hard to know what the real cost is. What you actually pay for your payday loan is usually a financing fee rather than an interest rate. APR is used to compare the yearly cost of such a loan, even though payday loans are usually repaid in less than 17 days. Financing Fees Most cash advance companies charge finance fees rather than interest in order to get around some state laws. Finance fees are usually charged on a pay period schedule of two weeks, although some companies have a shorter or longer repayment periods. For a cash advance of $100, you can expect to pay around $15 in finance fees. Some lenders charge more or less, so it pays to compare rates. Online lenders usually post their rates or APR, so you can research lenders in minutes. If you don’t repay your loan when it is due, you can roll it over. You add on finance fees for the additional time. You have to be careful with this option. If you put off repayment too many times, you can end up owing more in finance fees than principal. Understanding APR APR is the yearly rate of the loan, even though cash advances are intended to be short term loans. It is figured the same way as credit cards, multiplying the rate over the year and including any fees. While the APR does not equal your real cost, it is a nice comparison tool. An APR compares the same number, regardless of lender. If you go online, most cash advance companies will list the APR on their website. You can also request the number from them before you apply. Comparing Costs When you are trying to decided whether to get a cash advance or not, you should compare the other costs associated with your decision. For example, will you pay more in late fees or interest charges by missing a payment? Will NSF fees amount to more than a payday loan fee? What will it cost you if the car doesn’t get fixed? If the finance fee is smaller than other costs, then you are saving yourself money in the long run.

How to have a great time gambling without losing your money

Gambling in a casino or online casino is supposed to be for fun, but for many people the casino is the place where some machine eats all their money, and they are broke after the first hour and have to go to the ATM to get more money. If you are not an experienced gambler it may be best to stick to the slot machines, but the fact is that the casinos make most of their money from those one armed bandits. The easiest game in the casino is Roulette. The object of roulette is to guess what number the little ball will land on, which is not easy but there are other bets to make. In roulette you can bet on the color of the number the ball will land on, and since there are only 2 colors on the board it is a much safer bet. You can also bet on whether the ball will land on an even or odd number. If you are not an expert gambler and just want to have a good time you can also play keno. Keno is much like the lottery. You have a card marked with numbers 1 to 100, and depending on the amount you want to spend and the game you play determines on how many of the number you get to pick. A computer picks the numbers and if you have at least 5 correct numbers you will win some of your money back. I would recommend staying away from the poker rooms, but there is one poker game that is mostly newbie friendly, Red Dog Poker. The game is very simple to play. the dealer gives out 2 cards, and the player has to bet if the next card will fall in between the first 2, an example of this is you are dealt a 5 and a queen, so you have to bet on if the next card will be a 6 to a jack, the smaller the distance between the cards the more money you will win if you are right. If your cards are a 5 and a 9 and you win you will win less then if your cards were a 5 and a 7 and the next card is a 6. You may never become a millionaire from playing Red Dog Poker, but it is lots of fun and you can sit at the table for hours without spending much money, and it can be lots of fun. One of my favorite things to do in the casinos or online sportsbooks is to play the horses. You do not need to be a genius or have been going to the track for years to pick a winner, all the information on the horse and jockey is displayed in an easy to understand way so you can have all the information you need to pick a winner, and for a few 2 dollar bets you can spend an entire evening in a casino or sportsbook for less then 50 dollars.