Gold Is Just a Rock? Fresh prospective from James Altucher
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Homebuyer Tax Credit Extended
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Taxpayers who entered into a contract to purchase a home on or before April 30th now have until September 30th to close on the home. According to the IRS, anyone who is attempting to claim the homebuyer credit will need to comply with special filing and documentation requirements. See what other information you need to know if you plan on benefiting from this extension. Learn More
First time home buyer scores $8,000 tax credit
There’s a nice windfall for some homebuyers in the economic stimulus bill signed into law this week by President Obama.
- Who is eligible? Tax credit for First time home buyers only, no exception. Well, actually there is one exception: Buyers may not have owned a home for the past three years to qualify as “first time” buyer. 1 and 2
- Tax Credit Amount - $8,000 or 10% of home’s value: First-time buyers can claim a credit worth $8,000 - or 10% of the home’s value, whichever is less - on their 2008 or 2009 taxes.
- Cool factor: The tax credit does not have to be repaid. Credit is refundable, meaning tax filers see a refund of the full $8,000 even if their total tax bill - the amount of witholding they paid during the year plus anything extra they had to pony up when they filed their returns - was less than that amount.
- Time frame of home purchase: The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
- Income Limits: Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. However tax filers can receive a proportional tax credit if income is up to $95,000 for an individual ($170,000 for joint filers), in other word credit will phase out if income is above $75000 for single tax payer (or above $150,000 is married and filing jointly)
- Okay, enough good stuff, tell me some fine prints….
- What if I sell my house after purchase? - No penalty if sold beyond 3 years. If sold within 3 years, ENTIRE credit will be owed back to the IRS for the tax year the home was sold.
- You have to be primary resident of your new home purchase. It should not be investment or rental property.
Via: 1. Real estate Yahoo.com 2. federalhousingtaxcredit.com 3. More FAQs about - $8000 Housing Stimulus Tax Credit 4. $8000 Home Tax Credit
What is there for me in Stimulus Bill?
As we all know, today President Obama signed $787 billion stimulus package and converted in law. How to explain in simple words? If you ask Obama, he will say Jobs, Jobs and Jobs! If you ask economist, he will explain in simple word to his son/daughter, government stole his/her kids’ savings from piggy bank. It increases level of country’s debt at unprecedented level. The national debt - the sum of all annual budget deficits - stands at $10.7 trillion. Or about $36,000 for every man, woman and child in the U.S. (1) Do you see this- stimulus package already snatched $36,000 from your child too!
Taxes:
- Most people will receive a tax credit of $400 (or $800 for married couples) However, this tax credit will be phase out if your income is more that $75,000 ($150,000 for couples )
- The $1,000 child tax credit would be extended to more low-income families that don’t make enough money to pay income taxes, and poor families with three or more children will get an expanded Earned Income Tax Credit
- First-time home buyers who purchase their homes before Dec. 1 would be eligible for an $8,000 tax credit.
- Add energy-efficient windows, furnaces and air conditioners can get a tax credit to cover 30 percent of the costs, up to a total of $1,500
- Those who are already receiving unemployment benefits wouldn’t pay any federal income taxes on the first $2,400
- Auto Sale Tax as a deduction: If you’ve an eye on new car, now might be the time to pull the trigger. The stimulus bill lets you count the sales tax as a tax deduction on auto purchases up to $49,500. Again, high income earner would not be able to take full advantage. It phases out for anyone earning more than $125,000 or couples earning over $250,000.)
Health Insurance:
- Most people who lost the job is able to keep their coverage for 18 months under the COBRA program when they lose their job. However, premium will shoot up high, sometime over $1000 per month. Under Stimulus bill, the government will pick up 65 percent of the total cost of that premium for the first nine months.
Don’t Miss:
Eager for your tax money rebate? Make sure you get it without delay
If you are expecting a refund on your federal taxes, ou probably want your money as soon as possible. Why even leave your money with uncle Sam for free? The IRS offers some options for filing your return that can have your refund in bank account as soon as two weeks. Last year, 73 million taxpayers used e-file to speed their tax return processing, almost seven percent more than the year before. This year, the IRS expects a record number of individual returns will be filed electronically.
This MSN Money article says that 62% of Americans pay a professional to do their taxes. Many people event don’t required costly professional help for they tax work if you have just W2s and some interest/miscellaneous income 1099 statements. Using e-file makes sense for all taxpayers who have simply returns with standard deductions or decide to go for itemized deduction. Lots of websites are available for both types of returns, federal and state. And if your income is less than 56,000 that you have verity of options available for FREE filing. In fact, according to Jonathan @mymoneyblog, there are 20 different software companies available from the Free File Alliance at IRS.gov. If you do decide to use speedier option -e-file, for this year tax year, take some steps first to make sure you are filing your return properly.
First, be sure that you are actually getting a refund. Then you will need to get your paperwork in order, you’ll need your all W-2s and any other year-end statement. See comprehensive document checklist on IRS.gov website.
Once you’ve chosen to file using e-file, you can cut down your wait time for your refund by at least a week by choosing direct deposit of your refund. (see Tips from the IRS - Direct Deposit) You can even split your refund between one, two or three bank account. See form 8888. Its worth noting that not all e-file provide such refund splitting. Last year, about 53% of all refunds were directly deposited. The IRS offers the following time frames for receiving your tax refund:
- Mail your paper return and opt for paper check: receive your refund in 4 to 6 weeks
- Mail your paper return and opt for direct deposit: receive your refund in 3 to 4 weeks
- E-file and opt for a paper check: receive your refund in 3 weeks
- E-File and opt for direct deposit: receive your refund in 2 weeks
Don’t Miss:
- 2008 IRS e-file Refund Cycle Chart
- Tips on E-file in Hispanic
- What are the tax changes for this year?
- Where is my refund?
- IRS refund help page on IRS.Gov
- 5 of the Cheapest & Best Ways to E-File your Taxes
True colors: Zecco cancels free trades for small investors
Summary:
- As of March 1st, 2009, to qualify for 10 free stock trades, you must reach a $25,000 minimum balance in your account, or execute 25 trades
- Account balance of $25k or more + 25 or more trades per month = You will get 10 free stock trades per month, $4.50 otherwise
- Account balance of $25k or more + Less than 25 trades per month = You will get 10 free stock trades per month, $4.50 otherwise
- Account balance of less than $25k + 25 or more trades per month = You will get 10 free stock trades per month, $4.50 otherwise
- Account balance of less than $25k + Less than 25 trades per month = $4.50 per trade (No free trade)
Most of investors are falling under forth scenario (having less than $25k in account) as since Zecco’s inception they try to attract students or graduates who wish to start experimenting with investing, small investors show wants to invest something small on monthly basis. This new change is very disappointing. I would say If It’s too good to be true then It’s probably it is- well today, Zecco has shown its TRUE COLORS. As a small investor, there’s no way I can come up with $25,000 for several more years.
New pricing structure really equals the playing field for Zecco and Sharebuilder. $25K account balance includes could be anything including all cash, money market funds, stocks, exchange traded funds (ETFs), mutual funds, and options in your account. However, algorithum to quality for 10 free trades (either by having $25K+ balance or 25 trade qualification) is even more complex and I think new structure made it difficult for small investors to reach/utilize free trades. Based on my first impression, you might have to spend more to get something little for free. You must read below example to understand:
See more FAQs about new Zecco pricing here.
So who to blame for this new structure? Well obviously its economy! Now a days, many CEO is conveniently blame on economy instead of innovative way to cut the cost. And Jeroen Veth (Zecco CEO) is no different. He explained in email: “US and world economies have been hit hard over the past 4 months. As a result, some of the largest corporations in the world have had to cut costs and adjust to new business realities. With reduced retail trading volumes and lower interest rates, we at Zecco Trading simply could no longer provide free trades to as many people as we would like.” Zecco should change its name to “Zero commission with FEE”, sounds weird! Why I am so upset, well they betrayed me.
As a positive note, As of March 1, 2009 the terms of the Zecco Friends Program will be changing. The referral credit will be increased from $65 to $75. If you want to be a Zecco member, please comment this post. I will send you invitation soon.
Save $1,000 in 30 Days Challenge! Are you up for Challenge?
Remit over at iwillteachyoutobereach.com is giving challenge their readers that his tips can save $1000 in month of number. He also promises that none of his tips are nonsense-stupid frugality kinds of tips (like, grow your own vegetable in backyard or go and find cheaper apartment) but they are real money savings tips. Christmas is around the corner so I like to save bunch of money in November to reduce my stress in (gift giving) month of December.
Ramit is going to announce one tip a day, as per CEO model, for first 15 days of November. For rest of the month he is going to accept quality tips from readers. See below video more about his plan and CEO model
What is CEO model? Remit explains…
- C=Cutting Cost (This step revolves around these words: Cut, reduce and stop)
- E=Earn more (This step revolves around creating extra income, like, selling item on eBay that you are not using)
- O=Optimize Spending (This steps revolves around negotiating your rate with insurance, cell phone, cable company etc)
See below video to find out what’s his plan to save your $1000 in one month (in November)
So are you up for the challenge? Subscriber his blog feed and email for special tips (won’t announce on his blog)
30 Days Challence
Don’t Miss: via (iwillteachyoutoberich.com) How I’m saving $25,000+ in 2009
High yield CD Rate and Savings account Rate - Link Roundup
If you have money just sitting in your low rate Checking account, try one of high yield saving account or CDs and let it grow in zero-risk savings accounts or money market account. If you are afraid interest rates may fall, it might be a good time to lock down with a CD.
Don’t forget that all banks listed here are FDIC insured and cover up to $250,000 until December 2009. After December 2009 FDIC insurance limit is revert back to $100,000. See more information here about FDIC Limits and strategy for more coverage.
Also, be sure to check bank rating and Bauer Financial rating of bank or Credit union before you invest money with those banks or credit unions.
Savings Accounts (Can Withdraw Anytime)
- OneUnited - 3.75% APY (min of $1000)
- FNBO Direct - 3.25% (no minimum)
- WT Direct - 3.31% (min of $10000)
- HSBC - 3.00% APY (no minimum)
- Savings Square - 3.05% (no minimum)
- Emigrant Direct - 3.00% APY (no minimum)
- Citibank e-Savings - 3.00% APY (no minimum)
- E-Loan - 2.76%+ APY (no minimum)
- Dollar Savings Direct 4.00% ($1000 minimum)
Certificate of Deposit CD - (Can’t Withdraw Anytime)
If you don’t mind keeping your money in the bank for a fix time period, CD (Certificate of Deposit) would give you a slightly better rate and rates will not change for that time period. However, upon maturity you will get a chance to extend the term at current rate.
- 3 Months - Virtual Bank 3.51% APY (min of $10000)
- 3 Months - Eloan 3.41% APY (min of $10000 )
- 6 Months - Imperial Bank 4.35% APY (min of $1000)
- 6 Months - Corus 4.25% APY (min of $10000)
- 6 Months - HSBC 4.00% APY (min of $1000)
- 9 Months - AmTrust 4.35% (min of $1000 )
- 9 Months - Imperial 4.15% APY (min of $2000)
- 1 Year - Guaranty bank 4.25% APY (Min of $1000)
- 1 Year - Patelco 7.00% (max of $1000)
- 1 Year - Corus 4.60% APY (min of $10000)
- 1 Year - Flagstar 4.50% APY
- 1 Year - TN commerce bank 4.27% (min of $5000)
- 1 Year - Eloan 4.27% APY (min of $10000)
- 1 Year - State Bank of India- NYC branch 4.58% (min of 5000)
- 1.5 Year - Advanta 4.50% APY (min of $10000)
- 1.5 Years - Capital One 4.46% APY (min of $5000)
- 2 Years - National City 4.75% APY (min of $10000)
- 2 Years - Discover 4.5% APY (min of $2500)
- 3 Years - Pentagon 5.0% APY (min $1000)
- 3 Years - National City 5.00% APY (Min 10000)
- 4 Years - National 5.25% APY (min of $10000)
- 5 Years - Advanta 5.25% APY (min $2500)
- 5 Years - Discover 5.21% APY (min of $2500)
- 5 Years - Navy Federal Credit Union 5.25% (Min of 20,000)
Foreign Currency CDs
With the government printing a lot of money lately, fear of inflation is roaming around. You can put money in foreign currency CDs to protect yourself
- EverBank.com Foreign CDs (min $10000, protected by FDIC)
Don’t Miss:-Resources to search for the best rates:
- BankAround.com
- Money-rates.com (short term CD Rates)
- Money-rates.com CD Rates (long term CD Rates)
- BanxCorp - http://www.banxquote.com
- bankdeals.blogspot.com
- Bankrate.com
- BestCashCow.com
- eMoneyCentral
- credituniondeals.com
- rateAPY.com
- bankCD.com
- GOtalkmoney.com
- bankdeals.blogspot.com
Free Web based Banking, Budgeting & Planning software - New Quicken Online Is Free for All
Starting today Quicken online (web-based financial software) will be free for all customers. Early this year, Quicken online was introduced by Intuit as a money management tools for monthly fee. However growing trend of offering free tools pushes more pressure Intuit. Today they announced Quicken online for free for all customers and in future they will push more ads-on services to their customers, like tax services during tax season. Quicken online is the web-based financial software that replaces many of the features of the desktop versions of Quicken and competes with Wesabe, Mint, JustThrive, Geezeo, Yodlee money center, GnuCash, quizzle and several more seasoned and emerging online banking & personal Finance web applications.
What Quicken Online offers
Registration to Quicken online is simple. If you are member of TurboTax.com, Quicken.com, or QuickBooks; you just have to use your existing user name and password to unlock Quicken online. Like other online personal finance software, user needs to supply user name and password of your bank and credit card websites that you want to track. Quicken online is going to connect your all online accounts and aggregate all of your financial information—income and spending at one place and updates every night to keep things up-to-date. Quicken Online allows you to view transaction details, account balances, and more anywhere you can get online, including mobile devices. You can create charts and graphs that quickly analyze spending habits. Program also encourages you to live within your means by showing clear picture of your income, spending and debt by asking simple and daunting question– “Am I living within my means?” on your quicken online home page. New and improved quicken online shows slick interface and super cool speed to setup/add my bank and credit card account.
What Quicken online doesn’t offer
Quicken Online is not a complete money management tool. This one is major disappointing compare to other online financial software; it doesn’t support investment tracking, nor export data to/from Quicken Desktop or integrate with TurboTax. But I am sure they will integrate it in future to push more add-on services to users, like offering to fill tax filing service in tax season or offer low cost service of your cell based on your cell phone bill pattern and much more. Quicken online is not ready yet to offer the management and tracking of my auto/home insurance account, frequent flier miles and hotel rewards points accounts etc.
The Bottom line
I appreciate any (quality) software where I don’t have to pay and use it with minimal or non-destructive limited ads around web contents. Up-till now, Quicken Online was paid software application so there was no advertisement but now it’s free so in return I am ready to see some reasonable advertisements on quicken online web pages. However, if you already use JustThrive or GnuCash or Wesabe or Mint or Yodlee money center or Geezeo or quizzle, I don’t think that you need any change. But if you are new to personal finance management tool and don’t yet track your finances on a regular basis, I would recommend giving a shot to any of web-based financial management tools to see which best fits your life-style. Personally I used Yodlee money center and Mint both but I like and use Yodlee money center more than Mint on regular basis because it’s all-in-one plate arrangment of my all types of account.
Don’t Miss:
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Recently Mason Currey @Slate.com ranked quicken online on top. See Mason’s review about Quicken, Microsoft Money, Wesabe, Mint and Quicken Online here- http://www.slate.com/id/2201631
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Read– why Jonathan @Mymoneyblog.com believes Yodlee Account Aggregation is cool for him.
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Read Liz @Gigaom.com about Wesabe personal finance management tool.
Word of Caution:
- Many financial institutions explicitly warn their users in the Terms and Conditions, by asking you to press ‘I agree’ button during sign-up, that they should not, under any circumstances, reveal their user names and passwords to third parties. Doing so absolves the bank of any liability.
So, what do you use for your financial planning, Budgeting and Monitoring? and Why?
Do you feel heat from financial meltdown? Let’s make the downfall in your favor.
As our stock-broker account is getting down everyday. What do you thing that we could have done to minimize the downfall? This is very tricky situation and let me tell you; it all depends on individual circumstances.
What is my thinking process? I would not bailout at this point; it’s too late to do so because it’s already gone and there in no magic to get back. However, if I have a plan to buy a high-ticket item, for example, buying a house or college fees for kids in next 1-2 years or so then I would definitively move some chunk of money from stocks to high-yield savings.
However, its very painful situation for those who are planning to retire in 2-3-5 years as it’s not easy to see big red dent in monthly statement. With all due respect, at the same time, don’t you think it’s a mistake on your part to have big chunk of your portfolio in high-risk stock market instead of high-yield savings/MM account when you are close to retire age? The blame actually goes towards poor asset allocation in 401(k)/IRA/Roth IRA account.
== So what’s the lesson that you (younger people) can learn? ==
1 - Asset allocation:
We all know that diversification is the key but at the same time we are forgetting the risk tolerance. If you are young (in 30s) it’s okay for now to have major portion of your portfolio in high-risk stocks (aggressive approach.) and should phase out as age progresses. Older you are less aggressive (more conservative) approach you should take verses younger you are more aggressive (less conservative) approach you should take. Bottom line: Diversify across and within the different asset classes and frequently (one or twice in a year) assess your risk tolerance relative to your time horizon and align the plan to personal situation in near future. See interesting article: The Benefits of Diversification
Click the image to see bigger.
Now a days many brokers are offering Target Retirement fund (also known as life cycle funds). Target retirement funds are designed to make savings for retirement easier by offering a one-shot, premixed diversified portfolio that grows aggressive to conservative as the year passes. Simply choose the fund/plan that is close to your retirement date. See the benefits-of target retirement funds.
2 - Take a long-term approach:
If you see the stock market history of last 10-20 years, you will find uptrend in longer term. Few years where market goes down and some years it went up but net effect is up-trend for sure. So take a long-term approach (at least 5 years) rather then panicking in immediate down-fall.
3 - Add more to your investment:
Yes as market goes down every day, its difficult to swim up-stream and be bold and different. I know it’s against general emotions but if you are younger why not take the situation as an opportunity and add a bit to your investment as stock market goes lower. I guess its most efficient way to invest. If you have employer sponsored 401K plan or any other retire plan then now might be a great time to INCREASE your 401k contribution. (Reference: thinkyourwaytowealth.com) I am planning to top-off my IRA account for year 2008 contribution and advising my wife to contribute more towards her 401K plan. See this related post written by Jeremy @genxfinance.com: Don’t Compound Your Investment Losses by Investing Less in Down Markets and More in Up Markets
According to Ben Stein; he mentioned in his recent article: Recession-Proof Your Investment Strategy — To put this as plainly as possible, this is a good time to buy stocks. The evidence is overwhelming and consistent that if you buy when stocks’ P/E is below its 15-year moving average, you’ll make far more money than you would if you bought at the economic peak, when P/E’s are high. So, unless you’re out of money to buy with during the recession, you buy. You don’t go on margin to buy, and you don’t re-mortgage your home to buy. But if you’re employed and have money to invest, you buy.
4 - Save something for emergency cash/fund:
It’s a cash works as a safety net just in case something expensive (unexpected – job loss, injury, illness) happens. Read this excellent article “How to Prepare With an Emergency Cash Fund” and
“How and why to start an Emergency fund” from JD at getrichslowly.org
5 - Start Early – it’s never too late to start.
Start investing early — as I mentioned earlier, long-term market trends are up and (magic of ) compounding can work in your favor. Compounding interest means interest on an investment’s interest, plus previous interest.
Albert Einstein put it very simply: “There is no greater power known to man than compounding interest.” Compounding is more powerful than nuclear energy.
See below example of power of compounding interest: Three investors, each of whom invests $1,000 a year until age 65 However, one begins at age 25, investing a total of 40,000; one at age 35, investing a total of 30,000; and one at age 45, investing a total of 20,000. Each earns 7 percent per year. Now see below graph, what they have earned at age of 65.
Start investment early
You might have heard that best time to plant a tree is 20 years ago and second best time in now. Same things applies for investment. Even if you think you are late, you still have time to accomplish your retirement (reasonable) goal. Use this calculator to find out how much you have to save today in order to finish goal line.
“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
– Warren Buffett
So what do you think? What is your thought? Are you fearful? Or are you eager to invest more with wisdom and knowledge? Please comment and share your thoughts.
Stock market crash, Feeling red?