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How much does Al consume? At just one of his homes, all larger than the average home most of us reside in, he averages 18,414 kWh per month in electricity alone. You and I average 10,656 KWH annually, according to the U.S. DOE. If you're thinking “Wow, those hot tub parties must really be hot.” he heats those with gas, as you can discern from his equally outrageous natural gas bills, averaging over $1,000 each and every month. I'm not exactly a model of conservation when it comes to gas use. I enjoy long, hot showers that I'm sure consume more than my fair share (Who the hell determines what that is, anyway??) of the stinky, invisible fuel, but I can assure you that my natural gas bills never approach that esteemed figure. That says nothing of the carbon emissions produced by the transportation he takes advantage of while jetting and limoing to the various events and recreational opportunities he regularly attends.

Now, I could give a rat's a** how much energy Mr. Gore consumes, how many large homes he owns, or how resource intensive they are to build and operate. I actually applaud him for achieving that station in life where he can avail himself of those trappings of the good life. What riles me up is that he does this while preaching to all who would listen, and a fair number who would rather not, that we are in a crisis of the first order and should curtail our consumption of natural resources before it spells doom for us all. It got me wondering how many others there are in our midst who would rather witness to the flock the dangers we present to civilization and “The Planet” from our activities, while they live like Czars and Pharaohs.

You've Leo, out there in the hills outside of LA in his 10,000+ square foot house. At least he's got plenty of parking for his Prius. He and the rest of the carbon sasquatchs out there, such as Mr. Gore are actually doing laudable work in an attempt to wean us off fossil fuels, curtail emissions and yank us away from our foreign oil addiction. I applaud them for actually trying to help. What I object to is the hypocrisy associated with it. Living in a home that burns that much energy while railing at me to keep the thermostat dialed back in my 1,400 square foot estate? Why can't he just live in a 5,500 square foot house on the golf course if would like to live a little better? After all, that should be enough space for one couple. As for the entertaining excuse, please, there are innumerable private clubs and fine hotels throughout this land where the enlightened among us could hold fund raisers and soirees.

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You're eligible of you paid any long distance telephone bills during the period after Feb. 28, 2003, and before Aug. 1, 2006. If, like many American taxpayers, you've already filed your taxes and are awaiting your refund, don't file an amend return. It'll only confuse the issue and delay your refund. Instead, after you've received your refund, file IRS Form 1040X, and the IRS will respond with a nice check for you. If you've yet to file (slackers!), I can call your attention to the following lines on your tax forms

• Form 1040, Line 71;

• Form 1040A, Line 42;

• Form 1040EZ, Line 9;

• Form 1040NR, Line 69; or

• Form 1040NR-EZ, Line 21

If you feel the refund is not enough, and you're sure you paid far more than the standard the IORS is allowing, you can wade through all your phone bills and actually add up what you paid, and the IRS will refund it. Unless you are a long distance talker extraordinaire, the time it will take to accomplish this will probably not net enough additional money to make it worth your while. Although the refund's not much, and it would be nice if it went back farther, tax refunds are like pizza and sex, even bad, they're still pretty darn good.

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The good doctor uses consumer satisfaction surveys that show American consumers are generally very satisfied with their purchases of goods and services. Well, that’s all fine and dandy, but how are people supposed to continue their spending spree if the economy slows down and they have less disposable income? It’s sort of a chicken and egg predicament in a way. Consumer spending drives the economy, which continues to grow, providing more jobs, more income for consumers to spend, and so on. Somewhere there has to be a base upon which to rest this house of cards.

If, as seemed to be the case today, it only takes a few words from the esteemed Mr. Greenspan (Chinese markets notwithstanding) to bring the whole gravy train to a screeching halt, how secure are we anyway?  Are investors and consumers really so worried and unsure of what the future holds they’ll sell like mad on the word of a single economist and a soft housing market? Apparently so. The market, according to many experts, is overdue for a correction, with stock prices outpacing economic reality. Well, consider us corrected, I suppose; unless we can expect more of the same tomorrow.

Professor Fornell expects our love of consumer goods and they elation they bring us to continue fueling the prosperity we’ve been enjoying. He also claims our good feelings toward retailers help to fuel our growing consumer spending. The professor cited retail giant Costco as one of the standouts on the consumer satisfaction chart, with an 81 rating (out of a possible 100). Ironically, this comes only days before Costco changes it’s return policy for consumer electronics products.

I think a look at statistics will shed even more light on the subject. It seems it is the American consumer’s attitude toward debt that is really giving the spending boom a kick in the rear. Americans are definitely not afraid to deficit spend their way to a new plasma TV, Viking stainless steel barbeque, or even a Gauge Mecha 1 BMF watch. If we feel entitled, by God, we better bolster our collection of whatever we want, right this instant. Internet shopping only facilitates the whole thing. By the way, Internet retailers have some of the highest satisfaction indices in the Professors Data, with Amazon.com scoring an 87.

We are even more in debt than ever before. With regard to the aforementioned statistics, American consumer credit grew 4.5% in 2006 to the highest seasonally adjusted level in history, $2.4 Trillion! That’s a lot of Visa cards. Americans financed a record $26 billion worth of motor vehicles at auto finance companies alone. The average term on an auto loan is now about 62 months. We’re going deeper in debt to finance our autos, and taking longer to get out of debt too.

Are we really just plunging ourselves into debt because we like to feel satisfied? That satisfaction overrides the reality of being in debt for many people. Consumer debt has lost it's stigma for many American consumers, and they expect to exist in a state of indebitedness. Many now look at saving with a bit of disdain, a far cry from our views in the not too distant past. Satisfaction with consumer products may be driving our nation’s consumer spending, but ever increasing levels of debt are fueling it. Are we able to stop the debt merry go round without derailing our economy in the process?
 

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Costco has been lauded for having one of the most liberal return policies in all of retail (How could it have been any better?). So, unless you live in California, where it’s already too late, bring in your stuff now if you are planning on getting a cash refund. The store will still offer a free, 2 year warrantee on the affected products.

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Once in a lifetime they not only find a way to mitigate the risks, but turn the product development itself into a profitable business, one that generates millions of dollars, and, in so doing, generates a groundswell of consumer demand for the product being developed. The demand generated is so great that when the product is released, it generates huge sales figures right out of the gate. When that occurs, you have the phenomenon that is American Idol.

It's just plain brilliant marketing. Why pay armies of A&R guys to hang out in dank clubs throughout the nation, hoping to discover the next big thing, when you can create it? Not only that, but create it in such a way that will be immensely profitable and guarantee tremendous popularity from the get go. It's normally a tremendous risk for the major manufacturer (record label) to develop a new product (artist). Typically a new artist must sell about 500,000 copies of their debut album before they turn a profit for the label (This is for the major labels. Small, indy labels can do it with fewer sales). Sure, some will sell without requiring the mountains of marketing and promotion dollars, or endless hours of expensive studio time that normally precede such success in the marketplace, but those successes are few and far between.

Where American Idol really exhibits it's genius is not only the way Simon Fuller has managed to eliminate the inherent risk from the new product development cycle, but to do it in such a way that creates tremendous demand for the product. In addition, the show has a myriad of revenue streams that are actually created by this very process. Pure genius. Take the voting system, for instance. Each night, the viewing public (future customers) call in to choose the winner, or rather determine the loser of the evening. They actually pay $.99 for the privilege of doing so. I don't know the exact revenue sharing arrangement that Idol's producers have with the telephone companies, but at 25 to 35 million votes per show, their take amounts to a pile of cash. See, have your future customers choose what product you should concentrate on in the development cycle, and make them pay you to do so! Amazing.

Due to the show's immense popularity, they are able to charge top dollar to advertisers as well. According to Advertising Age, 30 seconds on American Idol costs advertisers about $600,000 so far this season This is about 50% more than the number 2 in cost per 30 second spot, ABC's Desperate Housewives. There are quite a few of those slots available on a 1 or 2 hour show. Ca-Ching! There's another revenue stream for Fuller and company. Then you have the sponsorships and product placement revenue. If you've ever seen Idol, you've no doubt noticed that the judges have Coca-Cola cups prominently featured on the tables in front of them. No accident, that. Notice too how the label is always turned so as to be visible to the cameras. Who knows what beverage is actually in those cups, but at least the label generates a solid hour of exposure for Coca-Cola.

To top it off, the show does create good product that sells well, generating even more money for the show's producers. Reportedly the contestants contracts guarantee that even non-winners will be contractually bound to the Fuller & company for an unspecified period. Previous show contestants have turned out 42 singles that have spent time on Billboard Magazine's Top 100 singles chart, with 6 reaching the top 10. Six of the contestants are also multi-platinum album sellers, with season 1 winner Kelly Clarkson selling, to date, about 8.5 million albums. Two of the contestants, season 1 winner Clarkson and season 4 winner Carrie Underwood, have won industry leading awards, the Grammy and CMA, with Underwood winning both awards. The show airs in about 30 countries, ensuring that the demand for the show generated stars will be truly international.

In another bit of marketing savy that generates ever more money for the producer's coffers, and bolsters contestants visibility, the top 12 contestants embark on nationwide tour to typically sold out arenas. Backed by major sponsors, the tour generates additional millions of dollars, both directly and through the additional record sales produced by the performances. This is to say nothing of the dollars created by that traditional concert revenue stream, product merchandising. Sales of promotional items bring in more cash, and the marketing machine rolls on.

Pure marketing genius!

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1 – Positive Mental Attitude - I posted before about how a budget is like a diet. That’s a key to viewing the budget a positive change, rather than a set of restrictive financial rules you must abide by. It’s all part of the mindset you must adopt in order to achieve success in this, and most, endeavors.

2 – Realistic expense and income assessment – You need to create a budget based only on the income you are 100% positive (see, positive thinking) you are going to realize, while using expenses you are only fairly sure you’ll incur. If you are pretty sure you’re going to get that big bonus, leave it out of your budgeting equation. If you actually do receive it, that’ll be a true bonus, won’t it? If you’re thinking there’s a better than even chance the old water heater will finally give up the ghost and need replacement, incorporate that expense in your budget.

3 –Goal Setting – Where do you want to be in the future, both financially and materially? Do you want the kid’s to attend Yale? How about that vacation property you’ve always wanted? Maybe you feel like retiring at 55, instead of 65. Those goals are all things you must incorporate into your budget. You’ll need to make budgetary considerations now in order to attain those goals you strive for in the future.

Not only is a budget one of the key components in a business plan, a budget is one of the most important parts of your personal business plan too. Personal business plan? Your personal business plan should lay out what you aim to achieve, and how you aim to achieve it, just as in a traditional business plan. As with the traditional plan, you’ll have a budget that has sources of funds and expenditures.

So, start writing, and work out a budget. It’s important you actually work out specifics on paper, rather than keep it all bottled up inside.

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This is a review of www.creditme.com, a credit card oriented site. Right up front, yes, I did get paid for writing this review through the ReviewMe service. www.creditme.com is informational, but it’s really a credit card affiliate marketing site where you can get a new credit card There are a large variety of options for those looking to get a new card. They are even categorized so you can browse by the card issuer or the type of card you’re looking for.

So, how was creditme.com? Well, not bad for someone who’s fairly new to the credit card game. There is really a wealth of information in the resources section. The site is basically a large repository of articles. They appear to be written by the site creators, not sourced from somewhere like ezinearticles.com. or goarticles. None are terribly in depth, but taken as a whole, it does add up to a large amount of information, especially for someone who’s not very experienced in matters of credit. It’s pretty well organized and follows a good structure.

They’ve got a section called Credit Guide101, with information on not only how to improve your credit, but articles regarding your credit score & its components, why credit scoring matters, how your credit affects you long term, bad advice about improving your credit score, and ways to optimize your credit (33 of them!), and bankruptcy. In addition to the Credit Guide 101 section, there is also a glossary, and a credit FAQ. There’s a comment section where readers can write about their credit experiences, although to date, it’s pretty barren. You’d expect that it would grow over time.

All in all it’s a good resource to go for those in need of credit information, although not the most complete I’ve seen, it would be worth a stop if you needed some credit related information.

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1 - Health Care Savings – Nothing can blindside you like health care costs. Having just contributed aver $3,000 (after insurance) to our local Children's Hospital, I can vouch for the fact that medical costs are heading for the roof like a meth-head during a bust. Many employers are reducing or eliminating health coverage for employees. Others are finding creative ways to economize, almost always at the expense of coverage. It's not really their fault in many cases. Your employer has to make a profit, or you'll have no job at all.

Given that your health insurance deductible may have increased, you should take stock of your family's health. If it looks like you have a better than even chance of ending up in need of some medical care in the not too distant future, you should consider a health savings plan. If you are covered under a qualifying High Deductible Health Plan (HDHP), you can open a tax preferred health savings account at your bank or credit union. In order to qualify as a HDHP, the plan must meet the following qualifications, as set forth by the beloved Internal Revenue Service:

1 -Deductible >/= $1,050 for individuals or $2,100 for families

2 - Annual out-of-pocket expenses < $5,250 for an individual or $10,500 for a family, including the deductible and co-payments (but not premiums).

You can possible get a HDHP through work, or you can get a private plan. For 2007, the maximum you can contribute to your health savings plan, under the IRS guidelines are: Individuals - $2,850 and Families - $5,650. Furthermore, the IRS will now allow you to make the maximum contribution to your HSA no matter when during the year you put your HDHP into effect. New this year, the IRS will allow a one-time IRA rollover into an HSA.

If you are young, and in comparatively good health, it may make more sense to take the same approach advocated by many experts for auto insurance; keep the deductible high to cut annual expenses. The bonus with health insurance is that you can have the HSA as a backup to avoid having to pull money from your traditional savings, or worse, taking a giant tax hit by liquidating a portion of your IRA.

2 – Cut Your Taxes – Sure, you want to pay as little tax as legally possible. Some of you out there want to pay even less than that. Here's a little hint that can save you a few bucks on major purchases. If you live in an area with sales taxes, know that they often vary considerably between municipalities. If, for example, you're purchasing a car, boat, or other motor vehicle, just a few tenths of a percent can add up to a nice IRA contribution, or, if you've already maxed out this year, dinner with the missus. Say you're buying a $25,000 car, sadly not much of an extravagance these days.

If the sales tax in your town is 8.5%, but in a city 20 miles away it's 8.1%. The sales tax you'd pay if you buy the car at the dealer around the corner is $2,125. Hop in your old car and head down the road 20 miles. Not only will you get to take in some scenery with the family, you'll only pay $2,025. You just saved $100. Maybe not much compared to the price of the car, but hey, a hundred bucks is a hundred bucks! Even accounting for the gas and mileage on your car accrued in the extra 35 or 40 miles you drove, you came out on ahead.

3 Cost Benefit Analyze Everything – Many of us do this in our heads almost every time we make a purchase. For larger purchases, it makes sense to formalize the process a little bit. Put down on paper the costs associated with the purchase and what you expect to receive from it. Don't forget the hidden costs, either. Buying as hybrid vehicle? Good, it'll help reduce our dependence on that bastard Chavez down in Venezuela. Look at all the costs associated with it, though, it may not make as much financial sense as you first thought. Think about such things as the costs of replacing and recycling the battery pack in addition to the added cost of the vehicle over it's traditionally powered brethren. What price will fuel have to be, and what will your annual mileage have to be to make it pay off in a purely financial sense?

Even if a purchase doesn't pay off in a purely financial sense, You may have other reasons for making it. In the case of the hybrid vehicle, it may be worth it to you to cut your emissions and help the nation wean itself off foreign oil. There too, you'll have hidden costs. How ecologically costly is it to manufacture and dispose of the Ni-MH or LI battery pack that helps give you that spectacular mileage? That's the subject for another post and minds more scientifically inclined than mine.

Another example would be in your diet. Sure, 23% fat hamburger is cheap, but what does that saturated fat do to your arterial system? What hidden health costs are incurred by the consumption of excessively fatty foods? Are you saving money now at the expense of massive medical bills later? Better revisit that HSA idea.

If you're out to get debt free, you may be almost there, or you may need all the help you can get. Hopefully these money saving tips can be another group of broad heads in your quiver.

As for me, I'm celebrating paying off my last really high interest (24%, shows what one late payment and an over the limit charge can do for you!) credit card. The last $854 was paid in full this week, and that thing is out of my life for good. (and no, I didn't just move the balance to another credit card) Citi can have it back, thank you!

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Your credit score is important even if you never again get another credit card or buy another vehicle on credit because so many other organizations use your credit score as a way of measuring risk and personal reliability. While it may not be fair in all cases, that's the way it is these days, so get used to it. It's not going to change any time soon. As with anything else, you can whine and cry about it, or use the system as best you can to your advantage.

So, how can your credit score cost you money, even if you're not using any credit? Here are some common examples of how having a low credit score can cost you money in everyday life:

1 – Renting a house or apartment – Nearly all landlords will run a credit check on potential tenants. If you find some that don't, start a website entitled “nocreditchecklandlords.com” It'll be inundated with bad credit renters looking for a new pad. For the rest of you looking for a new place to call home, be prepared to give up your credit information, and thus your FICO score. Too high and you'll not be accepted as a tenant. As it is illegal to discriminate against potential renters on the basis of such things as source of income, the credit score and report is one of the last ways a landlord can use to legally separate the wheat from the chaff.

2 – Auto Insurance Rates – Here's a biggie. Most insurance providers now incorporate your credit score into their risk assessment formula that's used to calculate your insurance rates. The insurance rates you pay will be, in some way, directly proportional to your credit score, all else being equal. Someone with a FICO score of 755 will pay less than someone driving the same car, with an equivalent driving record, and a FICO score of 600. Unfair, you say. Perhaps, but unless you own State Farm or GIECO, you're unlikely to get it changed in your lifetime, so recognize it and move on.

3 - Life Insurance Rates – Some actuary, somewhere, found a correlation between your credit score and your propensity to file a life insurance claim. Interesting, only the bad credit die young, I guess. Be that as it may, life insurers are now using your FICO much as auto insurers are doing, to asses risk. They'll charge you a higher rate, or deem you uninsurable, based in part on your credit score.

4 – Existing Credit – You may not take on any new debts, but a change in your credit score for the worse can prompt existing creditors to ratchet up interest rates you're paying now. Don't let that happen to you. It will raise the minimum monthly payment you're paying and put a crimp in your monthly budget. In addition, it'll be that much longer before you're debt free.

5 – Getting a New Job – Obviously, one of the best ways to get debt free is to earn more money. It's one of the legs of the financial triangle. Obviously, one of the primary ways you can accomplish an increase in income is to land a new job. Here's another area where a low credit score can work against you. The Society for Human Resource Management conducted a study of employers in 2004 and found that 20% pulled a credit report on 100% of their job applicants, not only applying for financially sensitive jobs, as was common in the past. Some state legislators are introducing bills to ban the practice of using a job applicants credit score as a screening technique. That's sure to be vigorously opposed by employer groups. On the other side of the coin, you'll have worker advocate groups and labor unions fighting to ensure such bans are enacted. How it'll end up is anyone's guess. One wonders how a credit freeze would affect a job application. Since many states allow you to freeze your credit report so no one can access it, would a potential employer deny you employment in such an instance?

These are some of the ways your low credit score can cost you money and slow your progress toward debt freedom.

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According to the U.S. Government's Energy Information Administration (they have administrations for everything) 2005 report “Emissions of Greenhouse Gases in the United States 2004”, the transportation sector in the U.S. produced 2,000 million metric tons CO2 equivalent (MMTCO2e) of greenhouse gas emissions. According to a new report Food and Agriculture Organization of the United Nations, agriculture is responsible for 18% of worldwide greenhouse gas emissions. However, in the U.S. agricultural emissions of methane and nitrous oxide, the two main greenhouse gas components of agriculture, amounted to only about 232 MMTCO2e in 2004. That's only 11.6% of the transportation total, and 3.2% of total emissions. Do we just have cleaner cows than the rest of the world?

Sadly, no, our cows are just as stinky as everyone else's. More likely is that we have more cars than cows, a situation not found in much of the rest of the world. As the rest of the world struggles to emulate our economic success, and pull it's people from the poverty that's enslaved them since the dawn of time, two things occur. One, they want to ride, rather than walk. Second, they want a nice burger. You guessed it, that makes for Chevy dealerships and McDonald's restaurants springing up around the world like 'shrooms after a spring rain.

When people are prosperous, much to the chagrin of the PITA crowd, they acquire a taste for beef. When they're poor, they eat more chicken, a foodstuff that's less greenhouse gas intensive to breed, raise and keep than cattle. According to the FAO report, per capita meat consumption in developing countries has tripled in the last 30 years, although it's still barely a third of that in developed nations. Developed nations however, are increasing their meat consumption at a vastly slower rate. The increase in the same time period only amounted to 18%.

Increasing prosperity is moving the world to increase greenhouse gas emissions. This is occurring at a greater rate in the developing world. Although the U.S. still leads the world in total greenhouse gas emissions, our output of gases as a percentage of our GDP is actually falling as we switch from a manufacturing to an information economy. As manufacturing capacity is increasingly moved from developed nations, such as the U.S., to third world and Asian countries, green house gas emissions move with them. Concurrently, citizens of developing nations have found the joys of zipping down the road in air conditioned comfort and are increasingly able to afford it.

This must be stopped at once! If the poor people in these other nations get a taste of the prosperity we've enjoyed for years, who knows where it will all lead. They too will be driving to Burger King with their A/C on “MAX” to combat the sweltering heat and humidity. We can't allow that to happen, can we, lest their prosperity and subsequent greenhouse gas emissions spell the end for us all. Unless we want a taste of the sweltering heat and humidity they struggle with on a daily basis, we've got to clam down on world wide economic growth. Do we want citizens of other nations to drive Escalades and live in McMansions? I say “NO!”

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Given there is a direct correlation between industry and prosperity, you may be thinking, “Great, I'll just go out there and work even harder than I do already. Then I'll find the success I've been looking for.” That would be great if that's all it took. However, with any endeavor, your reward is not always directly proportional to the effort expended. Sure, you've got to work hard, but it's even more important to work smart. There are thousands of day laborers out there that work damn hard every day, toiling away in the hot sun or freezing cold, but many of them are still deep in debt and/or living paycheck to paycheck.

The father of a good friend once responded to the statement “ Gee dad, I wish I had your money.” with “Son, if you had my money, you wouldn't have my money.” In addition to working smart, you've got to be smart with at least some of the money you're pulling in every day. The amount of money you've got to be smart with is directly proportional to your income. If your income is comparatively low, you need to be smart with every last dime in order to get ahead. If you've climbed the income ladder a few rungs, you have a bit of discretionary income to play with.

Here are some question you can ask yourself to make sure you're working smarter, not just harder.

1 – Am I leveraging any assets? Leverage is the key to wealth. One way to work smart is to multiply your efforts so your results are far in excess of what you'd expect. If you're not leveraging any assets with the effort you're expending, how can you incorporate leverage in what you're doing now to increase your productivity and profitability? If you are in sales or run your own business, how can you use your existing accounts to bring in new ones? If you're in production or construction, how can you multiply your effort in order to do more without expending any more effort. Can you capitalize on the efforts of others?

2 - Am I getting paid what I'm worth, or the top dollar in my field? If you're aren't maximizing your income for the time you're expending, why not? Do you need a raise? What's keeping you from getting one? Seriously think about that question for a few minutes. Actually make a list of what you feel it would take to achieve a raise. How can you maximize your perceived value to your employer? What must you do in order to get a raise. Like any other endeavor, you need to set goals and objectives, map out a plan, and focus on achieving it. Weather you shop your talent to other employers, or maximize you income with your current one, make sure you are getting paid all you're capable of.

3 – Is it smart to be in my field? Face it, there are some endeavors where the return is limited. No matter the skill, dexterity and intellect with which you attack them, you'll never see much return for your efforts. In that case, it's time for a change. You don't want to be personally limited by inherent limits of the job or business so that you'll never bring in the income you desire, no matter the level you may attain. You can be the best damn buggy whip manufacturer the world's ever seen, and business just ain't going to be that grand, right?

You may be unable to achieve a level of income in your field that will provide income satisfaction (although studies have shown that income and job satisfaction are not directly related). A study of German workers found that on an income satisfaction scale of 1 – 10, with 10 being completely satisfied, just over 50% of workers reported income satisfaction rankings of 7 or lower. Given that, you may want to expand your options.

If you work smart, not just like a dog on a treadmill, you'll stand a much better chance of ending up happy and debt free.

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Given that you’ll find it difficult getting along in the world without credit, even if you’re loaded (rich, not wasted), here are some credit precautions you shouldn’t leave home without. Actually they have nothing to do with travel, but are at more of a macro level.

1 – Relying Strictly on Joint Credit - First of all, if you’re a married woman, and, like many, you have joint credit with your husband, look out. If he leaves, so will your credit. You actually have no credit on your own, as sad as it may seem. It doesn’t matter how long you’ve been paying bills on time if your credit is joint with your husband. As far as the husband goes, it’s not just a problem if he’s no longer around. You should have independent credit even if you have a fantastic relationship and will probably stay married until your 90. Why? Think what would happen if something untoward were to befall the husband, such as job loss, gambling addiction, or disability. If his credit were to suffer as a result, the family would have to rely on the wife’s credit.

2 – Adding Your New Beau to All Your Credit – Hey, it happens, you meet that special guy, fall in love, and get married or move in together. Congratulations! But wait! Not so fast. If your credit is spotless, do you really want to compromise that by letting your new man in on the fun? Actually no, you don’t. It’s much safer to keep as much of your excellent credit yours as possible, lest a mistake on Mikey’s part affect your credit too. Before he runs out and picks up that new Rough Country suspension for his Jeep, or hangs that new 50” plasma on the wall using your Visa card, nip it in the bud. He keeps his cards in his name, you keep your cards in your name. If something bad happens in the future, you’ll be glad you did.

3 – Not Taking Advantage of Your Husband’s Credit - Think about the flip side for a minute. You have little credit, but your husband’s has fantastic credit. Use it! I’ve written many times about the principle of leverage. Here’s another place where it can be used very effectively. Leverage your husband’s golden credit to build up yours. Again, it’s better to have both partners in a marriage have excellent credit. Here’s a way you can facilitate it. Using credit leverage in this way can get you good credit faster than you can get there on your own.

Hopefully, these little credit pointers can help some women out there avoid credit mistakes of others, lest you end up deep in debt, sadled with bad credit to boot.

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What the hell is this new financial vehicle that offers so many important benefits? Well, it's not new at all, only little used. In addition, it's not for everybody, although it's probably a good financial solution for many people that are currently unaware of it. The more you finance consumer goods, and the more consumer debt you carry, the better a proposition it is for you. What the heck is it? It's the substantially over funded whole life insurance policy.

This is not an investment, it's also not a substitute for a retirement plan, although it's been sold as such by some. For that you should max out the matching of your company's 401K and probably have a Roth IRA. That too is not the best retirement funding solution for everyone. I digress, so back to the topic at hand. Correctly set up, however, such insurance plans offer some important advantages that are unobtainable to the common person virtually anywhere else. The key is the phrase “correctly set up”. That's very important. First, some of the benefits.

1 – Dividend Payments – While not guaranteed, historically these plans virtually always pay out dividends that are added to the cash value of the policy. They tend to pay out even in years when the stock market as a whole does poorly. Even better, these dividends are paid on the benefit of the policy, not the cash value, so no matter the funding state of the policy, you'll get the maximum dividend at all times. Your policy is contractually bound to increase a certain amount each year. Dividend paying whole life companies pay dividends if their investments outperform the contractual growth rate. As stated above this is not a certainty, but is very close to one. Once the dividends are paid, they are permanently added to your asset base and cannot be taken away.

2 – Tax deferred growth and other tax advantages – This is powerful stuff. Until you withdraw more money than you've paid into the plan, you pay no taxes! Once dividends and interest on the dividends accumulate, you'll be able to do this. The dividends left in the policy to purchase more insurance are not liable for taxes. If you take out the money as a loan, and you've set up your policy correctly, you'll pay no taxes on the money, either. You do however, have to repay the money. Remember you're paying the money back to yourself, not some bank or credit card company. Unlike liquidating part of a brokerage account to make a major purchase, you'll not get hit with capital gains taxes when taking a loan against your policy to use for the same reason. You owe no taxes on the money you withdraw from your policy until you exceed the amount you've paid in. Once you reach that point, you can begin taking loans against the policy, also without taxation.

3 – Your money stays your money. You get back the money that's paid in to the policy. Unlike paying principal and interest to a financial institution when you finance a purchase, this money stays with you. You now have a financial asset base you can leverage for additional wealth generation, tax free. If you have a brokerage account and you're buying on margin, your account can be called and you must pay everything back immediately. That can't happen here.

4 – Guaranteed asset growth – Your asset base is contractually guaranteed to grow. Remember, this is not an investment, and the rate of growth should not be compared to traditional investment. You're not using this as a substitute for your retirement account (you should still regularly contribute to your IRAs, 401Ks and other retirement instruments), it's for accumulating a financial asset to be used in making purchases you would have otherwise financed with credit cards and consumer loans. In addition one of the most powerful uses of the money is leveraging it for investment growth.

5 - Receive Dividends on the Full Amount – This is so important, I mentioned it twice. When dividends are paid, you receive dividends on the full amount of the policy, even if you've borrowed a substantial amount to use for investments or other purposes.

6 – Consistent Growth at Very Low Risk- Unlike the market, you'll receive consistent growth of your asset. That's important if the primary reason you're creating it is to use as a private bank or credit reserve. With your money in the market, you may need it during a down period. That's the wrong time to withdraw your funds, no matter how badly you may need them. With the market, the high return funds tend to have higher associated risks.

7 – No Age Limitations – Maybe you'd like to retire before you reach 59-1/2. If so, you'll not be able to touch your IRA, unless you want to take a major tax penalty. You can also begin withdrawing it after 70, if you'd like to, and are in a financial position to wait.

8 – High Liquidity – The assets in the policy are easy to get to. You can tap them virtually at will when you need them.

9 – Reliability and Solidity – A correctly chosen company will provide you with incredibly reliability and solidity. They will have provided unwavering growth for many decades, in some cases more than a century. This is obviously of the utmost importance in a banking and personal financial reserve system.

It all sounds pretty damn good so far, but read on. There are some powerful arguments for using these policies as one of the financial instruments in your arsenal. You also avoid all the problems associated with borrowing against your 401K, something you should think long and hard about before you try. To effectively use an insurance policy as a financial vehicle, you must make sure the policy is correctly set up in order to maximize the advantages. Now, I'm sure there are many out there who know more than I when it comes to setting up such policies, but here are some of the key points.

1 – Use Only ”Non-Direct Recognition” Insurance Companies – Failure to do so can result in your being penalized by the insurance company for taking loans against the cash value on your policy. That goes against the reason for perusing this strategy in the first place.

2 - The death benefit is secondary. That's important. You're still here, hopefully. You're want to be using this money for purposes here and now, so you need to structure this policy so it's what's known as substantially over funded. You pay in to maximize the cash value while minimizing the death benefit.

3 – Maximize the Cash Value With a Paid Up Additions Rider This also known as a PUP or OPP, depending upon the insurance firm. What such a rider does is to give you the option to pay into the policy in order to increase the death benefit and cash value. The money paid in not only increases the cash value, but also the dividends paid to you. As with the other monies, the cash value accumulates tax deferred.

4 – Don't Surrender the Policy, or You Will Owe Taxes – You want to borrow against the policy, not cash it out. If you do so, you will owe the government their fair share (no jokes please).

5 – The Policy Must Pay Dividends – That's vital to using this type of vehicle successfully. If you're not using a dividend paying whole life insurance company, this money system won't really work. Dividend paying policies are also known as “participating”. This indicates you are participating in the overall earnings of the company and are thus entitled to dividends based in some way upon the profit. The dividend payments that come in, weather you've borrowed against the policy or not, are one of the keys to success when using this type of financial vehicle.

6 – Use an Insurance Agent With Experience in This Specific Type of Policy – Remember, this is a bit unconventional and many agents may not be all that familiar with correctly setting it up so you maximize the financial benefits.

There are, as with everything in life, some disadvantages to the system. If you do decide to go this route, the key is to minimize them and maximize the advantages. For the purposes of using the system as your own, private banking system, the disadvantages are outweighed by the advantages for most people.

1 – It's Not Completely Free – Ah, but what is in life? In most cases, you'll pay a load or fee on some of the contributions, such as the PUA. These fees vary with the policy and insurance company, so shop around.

2 – You've Got to Pay Extra - To really make the system work you've got to accelerate the cash buildup, and thus the dividend payments you'll receive. The difference between the size of your asset will be huge by adding the PUA. Not a huge disadvantage, really, you just need to make sure you include the extra cash payments in your evaluation.

3 – In the Beginning You'll Pay in But Be Able to Take Nothing Out. - It takes a few years to build enough cash value in the system to get everything off the ground. If you need the money now, or in a few years, you may find this is not the proper system for you. The advantages after the first five or six years will more than make up the difference for most people, however. Typically the program will be funded to such an extent after the initial phase that you'll be ready to completely use the system.

4 – No Guarantees of Dividends – One of the key components that make this system so effective are the dividends paid to participants. These are not a sure thing, although historically they are very, very close. Just know they are not guaranteed.

5 – Lower Return Than You'll Get In Many Investment Plans – True, in many cases far lower. However, you also get a contractually guaranteed return, so you have lower risk. Remember, you're not using this a long term retirement vehicle.

6 – Not a Universally Approved Solution – If you find one of those, be sure and let us all know about it. As with everything, some people have had great luck and swear by it, while others pan it. Much of the “luck” is due to the care which was taken setting up the plan to be sure it matched your needs. Not all insurance agents are up on the finer points of correctly setting this up. As with everything, some are more qualified for setting up this specific type of policy than others.

I'm no expert on such things, so you can get more information on this at the following places:

Here is an excellent website set up by a computer engineer who has one of these policies.

This is someone who has a great report on the subject, although they are definitely selling something, somewhere.

Here is a lively discussion in the comments to a related post over at Blueprint for Financial Prosperity.

Here is a white paper on the subjectfor you to peruse.

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Posted by debtblog at 01:53 PM | Permalink | Comments (0) | TrackBacks (0)

The reality is that they wanted to retire, but couldn’t quite put away the required nest egg. So, after leaving that position they’d held for the last 35 years (that was then, that scenario would be a little different these days), they found that the social security and meager pension just couldn’t keep them in the style to which they’d become accustomed, so back to work it was.

So, how to avoid a similar fate? Well, funny you asked. First of all, don’t plan on the Social Security system providing any. Security, that is. If we’re lucky, it will only pay out half of what it pays now, after they reduce benefits to stay solvent. It could conceivably be much worse. They’ll probably have to enact a hefty tax hike too, so it’ll be even harder to save the larger nest egg you’ll need. You could be one of those workers that get caught between the current system and the new, semi-privatized system we may see that actually pays a decent rate of return. You’ll be in sort of a government retirement plan purgatory.

The thing is, people in their 20’s and 30’s are going to need a larger retirement nest egg, on average, than those today. Why? Because health care costs are going up like coke into Miss Hilton’s nose, and although health care is expensive, it’s also very effective, and getting more so. That effectiveness is making everyone live longer, and so their retirement funds need to stay around longer to support them. In addition, you chances of meeting a person who actually has one of the old, defined-benefit style pension plans is about are right up there with  smacking a hole in one on that course you won’t be able to afford to play. Lacking a “traditional” pension, most of us will need to make up the difference on our own.

What are the 5 most important things you must do in preparation for your “Years of Paradise”

1 - Start Saving Early – It’s never too early, but it sure as hell can be too late, can’t it? Here’s a little illustration that’s been dredged up again and again, but it’s true. Two people graduate from college at 23 years old. Suzy gets out of NYU, and Mikey snags his degree from UCLA. Suzy’s dad was an accountant, and taught her well. She instantly starts stashing away a nice sized chunk, $200/month, for her retirement. Assuming she sees a 7% investment return, she’ll have $35,481 after the first 10 years. She tires of saving, marries a great investment banker, and stays home to raise the kids (Yeah, I know it’s not politically correct, but that’s what she wanted to do). It matters little, however. That $22,224 will balloon into $309,226 when she’s 65 years old.

Mikey, on the other hand, leaves UCLA with his degree, gets a great job, but wants to travel and party. He neglects saving for retirement, figuring it’s a long way off, so what the hell. After the same 10 years, he decides to get on the stick and puts in the same $200 a month (a bit light for a 32 year old with a great job, but stick with me). We’ll leave aside the whole IRA contribution limits and tax consequences for a second. After 32 years, he turns 65 and takes a peek into his retirement account to discover he’s amassed only $283,040.

2 – Be Consistent – It’s got to be automatic, those retirement contributions. If they’re not, it’s too easy for those little things in life, like sickness and this or that emergency to arise and derail your scheduled donations (to yourself).

3 - Max Out Your Matching – If your employer is kind enough to offer matching, for Christ’s sake, max it out. That’s free money they’re throwing your way! You don’t see that too often. If you do an analysis, you might find that the matching is the only think that makes the 401K a good choice of retirement vehicle (I’d prefer a new 997).

4 – Set Your Retirement Goals – You have to know where you’re going in order to determine the best road to take. It seems common sense, but you’ll have to determine what you’ll need, for how long, and what you’ll feel comfortable with as a reserve. If watching WCW in your Barcalounger is your idea of paradise, you’ll obviously need less than someone who wants to spend a January in Aspen every winter skiing, and March in the Virgin Islands sailing and scuba diving.

5 – Stay Out of Debt – A massive consumer debt load you must service is a sure way to kill a joyous retirement. Try to be debt free upon retirement. In a perfect world, you’ll be completely debt free long before retirement takes hold, but if not, try to reach that plateau before you take the road to retirement paradise.

These five rules for a financially successful retirement are not the only things you need to do in order to prepare for your years in retirement paradise, but they are  keys to retirement success.

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Posted by debtblog at 07:07 AM | Permalink | Comments (0) | TrackBacks (0)

Seriously though, it means that, although you may work for a large, supposedly stable company, you can be touched by job cuts at any time as companies struggle to compete in the global economy. There are jobs aplenty available, however. The employment figures for 2006 are very robust. 1.84 million jobs were added to U.S. payrolls in 2006, far beyond expectations. To make it even better, average hourly pay climbed more than expected too, up .8% in December.

One sure way to find yourself deep in debt is to lose your job. To stay debt free, there are a few ways you can mitigate the risk of losing your job.

1-      Have an emergency fund – This time tested bit of advice is sound financial information. Be advised that an emergency fund sitting in a low interest savings account comes with its own opportunity cost. The money in a savings account is earning very little interest in return for its liquidity and comparative lack of risk. So, balance how much you keep parked in your emergency fund against how much you keep in other investments that may give you better return, but retain high liquidity.

2-      Start Your Own Business – You don’t have to begin a fledgling multi-national, or other huge company. If you just start something small it will give you some income diversity. Diversification of income is a fantastic way to mitigate risk in your income, just as in your investments. You can start a business that has minimal barriers to entry, but still offers income opportunity on a part time basis. You want something that offers flexibility and scalability, so you can grow it or keep it small, depending upon your needs. Internet businesses, writing, consulting, and real estate investing are some of these businesses. Running a business is definitely not the choice for everyone, and some haven’t the entrepreneurial vein to pursue that path.

3-      Always Stay Informed as to Other Employment Opportunities – You should be aware of the employment picture in your industry and area. If your job goes away, or looks to be gone in the near future, you should know where you can go for a (comparatively) soft landing. After you lose you job is the too late to start investigating these other opportunities.

4-      Know the State of Your Employer – You should know how your employer is doing so you’ll have a reduced chance of getting blindsided by a pink slip. Keep up, to the extent it’s possible, on how the business is going from many perspectives. You want to be aware of any planned strategic changes, how sales are going, the company’s debts, and very importantly, AP aging. Knowing if the company is having any cash flow problems can be an important harbinger of bad tidings to come. The are many business, large and small, that are profitable on paper, but due to various problems such as poor billing and collections, or credit issues, cannot generate enough positive cash flow to remain viable. In a large percentage of businesses, labor is the single biggest cost component, and one of the easiest to trim. If your company is doing poorly, jobs are one of the first areas you employer will look to cut.

5-      Make Yourself Indispensable to Your Employer – If you are the only person in your company to have certain skills, or consistently generate new business ideas, bring in the largest accounts, or keep your department running in tip top shape, they’ll usually find a way to keep you. In some companies, cuts are done strictly on a seniority basis. In those cases, avoid making choices that will adversely impact your seniority, such as passing on a job change so you can stay closer to your house and cut your commute. Don’t laugh, I’ve seen that happen.

These 5 rules can help you avoid a job loss, or if it hits you, land on your feet as smoothly as possible. Who knows, you could not only avoid the debt problems created by job loss, you could end up with a profitable business you really enjoy. Now that would be a nice change.

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Oh, wait! They can't. At this time, other banks require a social security number in order to get some plastic satisfaction. Obviously that will change in a heartbeat if other lenders and financial services firms see that BofA does well with this little venture. Will they allow just anyone to walk into a bank branch, and open an account without giving an SSN? Who knows? If they will, you can just open a new checking account without an associated SSN. The next step is to avoid boingoing a check for 90 days. That seems like a fairly lenient requirement for giving a credit card to someone whom you should suspect has a reasonable probability of being a lawbreaker. That makes me suspicious that the interest rates associated with these new credit cards will be, shall we say, extreme.

They may try the strategy pioneered by such credit card issuers as Capital One as well. Give out a card with a very low credit limit, say $1,000. When the creditor reaches the limit, rather than simply raise it, a new card is issued. This make sit much easier for the bank to generate a nice revenue stream of fees. After all, they can charge twice the total fees for two $1,000 limit cards as they do for a single, $2,000 card. As the initial provider of credit cards to the under-the-radar market they'll achieve great market penetration and build a substantial customer base, even if competition arrives fairly soon. You know that's just what the execs at BofA are counting on.

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Posted by debtblog at 01:48 PM | Permalink | Comments (0) | TrackBacks (0)

So what is this other bit of financial razzle-dazzle so many are partaking of these days? They’re the loans that many folks are taking out in order to spend their income tax refund today, rather than next month. Known as tax anticipation loans, they are offered by many income tax preparation services, such Jackson Hewitt (who just agreed to pay $5 million in fines and restitution for incorrectly marketing such loans to Californians) and H&R Block. Around 10 - 12 million American taxpayers every year take preparers and finance companies up their offers of tax anticipation loans. If J-H paid $5 million in California alone, it makes you wonder how much cash they really should be paying nationwide.

Refunds are available quite rapidly these days due to the option offered by the IRS of e-filing your tax return. Even that’s not fast enough for some. In many cases it’s because of the same mentality that causes so many people to run up mountains of credit card debt. They want to spend the money now. That’s it, plain and simple. In some cases there are financial emergencies to deal with, but more often than not, it’s a pure lack of financial restraint coupled with poor fiscal discipline.

Those traits combine to make many Americans just throw money away just so they can get their money a little faster. That’s what’s so discouraging. So many people are paying extra to get what is, after all, their money. Think long and hard before you take this financial road. The money you’re throwing away is your own.

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Posted by debtblog at 03:33 AM | Permalink | Comments (0) | TrackBacks (0)

The range issue is obviously a load of total crap. If range was the only issue, Princess Pelosi could wing around the nation, and even back to her home district in total comfort. She could accomplish this while ensconced in the luxury provided by an Air Force C-37A, the military version of that executive uberjet, the Gulfstream G500. Donald Trump swears by those things, you know. If it's luxurious enough for him, you'd think it would be for her. The C-37A has enough range, 6,000 miles, to fly her highness from Washington DC to San Francisco and back without stopping to refuel. So don't try and tell me the larger aircraft request had only to do with the added range offered by a Boeing 757.

The average fuel consumption for a Boeing 757-200 cruising at 37,000 feet is around 1,100 gallons per hour. Pelosi's jet may even consume less because, instead of flying 200 passengers as the commercial version does, she'll be conferring flying privileges on only 20 to 30 people. The spot price of jet fuel is about $1.80 per gallon, so figure about $2,000 per hour for fuel. In 2003 the maintenance costs of a 757-200 ran about $875 / hr. Her highnesses also has a crew of, get this, 15. If they are paid, including benefits, an average of $30/hr, you're looking at another $3,600 a day for aircraft crew costs.

The flight from DC to San Fran is about 2,100 nautical miles. At the 500 knot cruise of a 757, that's about 4 hours, plus a half hour of ground time. So, not including actually purchasing the aircraft, depreciation, or financing charges, Pelosi One costs the American taxpayer about $30,000 for the round trip to San Francisco from DC. That's if the plane sits around waiting for her return. If it has to journey back to DC, then wing its way back to San Francisco to fetch her and her entourage, figure about 60 grand.

What the C-32 does offer, however, is the ability for Pelosi to ferry around a larger planeload of servants, friends, contributors, and supporters than the C-37A. In addition, they'll be enjoying a much more spacious interior, more lavish bar and nicer entertainment system than those poor plebs in the C-37s must make due with. Nothing but the best for those champions of the common man I suppose. Oh, well, it's only your money.

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1 - Plan For Success – You’ve got to at least have a plan. It doesn’t have to be the best plan. It doesn’t even have to consider every eventuality. But you’ve got to at least have one. It should also be written down somewhere. If it’s just rattling around in the old noggin’, sorry, it doesn’t count. Having a plan, however rudimentary it may be, will force you to see things you might otherwise miss, and to pick up problems early, before they become insurmountable. It will also make you look at different alternatives to achieve your objective.

2 – Initiate the plan – You’ve got to actually get off your fat butt and set the plan into motion. The world is full of people who come up with great ideas, even ideas that could change the world for the better, or make them wealthy. Many of those people are still living in a van, down by the river, because that idea in their heads remained just that;an idea in their heads.

3 – Focus on your objective – It’s easy in this crazy world in which we live to let the multitude of distractions get in the way. You can’t let yourself get distracted. I’ve said it in other posts; treat every task like a military operation. Focus on the objective until it’s accomplished.

4 – Don’t whimp out. You can’t quit. Ever. You may have to refine what you’re doing. You may even have to rethink things completely, but you can’t quit. There are millions of dejected quitters that stopped before they reached their goal. Many were oh, so close. If you fail once, get back on the frickin’ horse, Tex! The world is also full of extremely successful people with multiple failures in their background. Even Donald Trump, the most successful real estate investor in the world, has had his down periods. One of his companies even declared bankruptcy. He didn’t, however, stick his head in a noose and give up. The key is to treat failures as a learning experience and not to repeat them. Find a way to succeed

These 4 keys to success will serve you well in anything you’re attempting. Just attempt something, please.

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Given that you may not be one of those successfully using debt to their advantage, what are the signs that you can look to as early warning markers? These will tell you in advance when debt is about to become a real financial problem for you. They are the “Red Flags of Debt”. Pay heed, so you can spot debt trouble before it's too late.

1 – Debt accumulation rate – Are you adding to your debt every month or paying down your debt? If you're adding to your debt, at what rate are your debts mounting? If you just took advantage of a 0% financing deal to festoon your wall with a new 42” plasma TV so you could enjoy watching Rex Grossman give up the ball (again and again), that may be okay. Watch those kind of deals though. Typically they'll include a provision that will charge you a ridiculous amount of interest if you either make a late payment or miss the payoff date. Many have been stung by failing to pay off the balance in the alloted time and getting stuck with the entire interest amount. If buying that plasma TV was really just an aberration, you're probably not in trouble, but look at weather you're steadily accumulating debt on a consistent basis. If it's a trend, that's a red flag of debt.

2 – Minimum monthly payments are excessive. If the total of those payments exceed more than 10% of your net income, watch out. You're setting yourself up for trouble. That's another red flag of debt. As you may be aware, the minimum monthly payment is a wonderful little device used by creditors to keep you in financial indentured servitude for decades. Yeah, decades. It will take most people between 20 and 100 years to pay off their debts by using the minimum monthly payment method. Here's a thought, sucker; put all your credit cards on autopay for the minimum monthly payment only. That way you'll not be late or miss a payment. Oh, they love that! It's a convenient excuse for the creditor to jack up your interest rate and charge profitable fees. After setting up autopay, pay whatever you can afford, but preferably at least an additional $100 on the card with the most offensive interest rate. That's a little secret for automatically getting debt free.

3 – Negative Savings Rate – Look at your savings rate. Are your savings or retirement accounts growing? If so are the growing by more or less every month? If it's less, and it's consistently heading that way every month, you guessed it. No savings, or a consistently shrinking savings rate is another red flag of debt. If you are using more of your income every month to service debt, and saving or investing less, it's a warning sign there's a storm coming.

4 – Frivolous Spending – Just had to get the new dub dubs for that '95 Camry your drivin'? Come on! What the hell are you thinkin'? If you do things like get rims for your car that cost what the car's worth, that's a prime example of frivolous spending. Ditto for Carribean cruises or anything else where you're spending money on nonessentials when you have substantial credit card debt. Buckle down, ace! The little things add up too. Try switching from Grey Goose to whatever's on the gun. You're friends won't care, really.

Watch these debt warning signs. You can use them to spot and avoid a debt nightmare before you living it.

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Posted by debtblog at 02:38 PM | Permalink | Comments (0) | TrackBacks (0)

Over 6 million homes will be sold in the U.S. this year. If you're a real estate investor, how the hell are you supposed to sift through that monumental number to select those that are worth your time to pursue as investment properties? After all, time is precious. You don't want to waste your time looking at properties that may not be suited to your needs. While you're doing so, your next great deal may get scooped up by another investor. So, how do you select those great investment properties anyway?

Real estate investing can be a fantastic vehicle to build long term wealth, but you've got to select the right properties first. There are a large number of factors that can be used to describe every property. Age, location, condition, architecture, lot size, time for sale, seller flexibility, listed or private sale, square feet, number of bedrooms, number of bathrooms, amenities, etc. You need to be able to select those that are the most pertinent to obtaining properties as a real estate investment rather than one for some other purpose, such as as a personal residence.

What are those property descriptors are most effective when looking at properties as an investment? Take a look at these:

1 – Location – There's a good reason the old real estate adage exists; Location, Location, Location. It's because it's so very important. Location says a lot about the current and future worth of every property. Very often, the dirt is worth much more than the structure that sits on it, and yes, the location of that dirt is the deciding factor on it's ultimate value. Take two identical pieces of property; 1,100 square foot, 3 bedroom, 2 bath homes on 7,000 square foot lots. Such a home in San Francisco, 50 years old, not the best condition, with virtually zero amenities, goes for around $700,000. An identical home in East Memphis, TN, on a much larger lot, and in better condition, goes for less than $150,000.

Going at it from another angle, for half what you get the little shack in San Francisco for, you can live in a very nice 2 year old, 3,000 square foot home on a 10,000 square foot lot in Thomson's Station TN. You'll also get slab granite counter tops, an island kitchen, vaulted ceilings, crown molding, wainscoting, stainless steel appliances, and a three car garage. Oh, and you get 4 bedrooms and 4 bathrooms as well. See what a difference location makes. You can get fairly large value variations within the same area as well, but not those extremes.

2 – Seller Flexibility – One of the keys to getting a great deal on anything is seller flexibility. Real estate is no different. If the seller is motivated and needs to get rid of the property in a hurry, you'll typically be in a much better position to secure more advantageous terms, a better price, or both. If the seller doesn't have all that much motivation to sell, it will be that much harder to secure that deal you're looking for. The seller can be flexibility for a variety of reasons; they may be in a financial bind, have to relocate in a hurry, or not have the time or ability to manage a rental property. It's your job as an investor to determine why the seller is flexible, and incorporate this knowledge into your negotiation strategy. The better you get and use this knowledge, the greater your chances of making a great deal on the property. Factors such as time on the market and the seller's reason for selling can help you gage the motivation of the seller.

3 – Price – Ultimately, what you pay for the property will determine how great a value the purchase it is. It can be the best combination of factors, but if the price isn't right, you'll take a long time to turn a profit on your investment and your R.O.I. will suffer. One way you can cut through the crap is to come right out and ask what the seller's lowest cash price for the property is. Listen to what they tell you, and how they say it. You'll get even more clues to the real price they'll take for the property. Always listen. It's old knowledge that a good salesman or negotiator often gets more by listening than by talking. Seller flexibility, as noted in number 3 above, can be a large factor in setting the final price on the property.

4 – Condition - If the property is a total dump, you'll have to pour a ton of cash into it to make it useful. If the condition is factored into the price, fine. If not, walk away or use it as a bargaining tool. You may, in fact, be looking for properties that are in a poor state of repair. These are ripe for “sweat equity”, where you can increase the value of the property by investing some hard work. In addition, if you have the ability to get the work done for less than market value, it's a great way to increase the value of the property. Another point; the condition of the property is another indication of the seller's motivation. A property needing basic repairs, such as a leaking roof or bad water heater, can be a great indication of a seller that's in a financial bind.

These are four of the most important factors you can use when deciding which rental or investment  property to add to your portfolio. If you're just starting out, they'll give you a starting point from which to begin your investment property search.

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Ten years ago, the Federal government sued 62 of the 70 hospitals in Oregon for over billing Medicare, and fined them $900,000. Since that only amounted to a little over $14,500 per hospital, I don’t think it had too much of a deterrent effect. At least it sure didn’t seem to scare any other medical facilities around the country. In 2001, Harlem Hospital in New York agreed to pay $2.3 million in fines resulting from double billing Medicare over a 4 year period.  Last year, the New Jersey Hospital Company had to pay a wowie, zowie $265 million in fines for over billing Medicare and Medicaid. Lest you think that hospital only screw the feds, think again. If they’ll try that kind of crap on the federal government, who has a pile of resources, why do you think they’d think twice about pulling the wool over your eyes?

Currently, hospitals throughout South Carolina are being investigated for over charging uninsured patients, basically charging that uninsured patients were billed substantially more for the same services than those with insurance. Baystate Medical Center in Boston was sued in 2004. Many hospitals have a sort of multi-tiered billing system, with a myriad of fees and charges. The uninsured get none of the negotiated discounts that insured patients enjoy, and are charged, in some cases, 2 or 3 times higher rates for the same products and services than insured patients.

In addition, many (both insured and uninsured) have found that they were either billed multiple times for a medication or procedure, charged for an incorrect number of days in their room, or were charged for medications or procedures they didn’t receive. Fighting against such practices can be a time consuming and complex undertaking, which is one reason so few people choose to do it. If you are uninsured or well past your insurance benefit however, a few mistakes on your hospital bill is all it takes to plunge you deep into debt.

If you don’t mind being in debt for products and/or services you never received well hey, we should do some business together, I need a new yacht. For the rest of us, such things make us mad enough to spit quarters. How can you counteract the problem so you don’t end with undeserved debt? There are 3 main things you must do to avoid getting stuck with an inaccurate hospital bill.

1. Take your bill home where you can wade through the pages of complicated billing codes, medical terms, and abbreviations. If you were in for a while, figure it’ll take you twice the length of your stay to actually decipher your bill. Pay only a portion of your bill when you leave the hospital. Most hospitals will let you work out a payment plan with their financial office. That will give you the necessary time to wade through the statement.
2. Go over your bill with a fine toothed comb. Unless you work at a law office or other medical facility, you’ve probably never been confronted with such a baffling array of terms and language before.

1. Check the dates so you’re not billed for days you weren’t even in the hospital.
2. Look at each procedure and medication to ensure you actually received everything you’re being charged for. Just because it was ordered doesn’t mean you actually got it. Many times procedures and medications are ordered, only to be replaced by another procedure, or eliminated entirely. In such cases, it’s not uncommon for the patient to be billed for both. Conversely, make sure you’re not being billed more than once for any of the procedures, unless you actually had multiple instances of the product or service in question. That kind of over charging happens all time.
3. Make sure you are not charged for doctors or other specialists on your hospital and from the specialist’s office or group. These guys and gals are expensive enough once, you sure as hell don’t want to pay them twice.
4. If there is a section titled miscellaneous or other similar term, get everything in it itemized. Those kind of lumped together charges are ripe for abuse.
5. Look out for the $10 Tylenol. If you’re being charged way, way more than seems correct, look into it further.

3.   Contact the medical facility’s financial services office or patient accounts department to rectify any errors you have uncovered. Do this as soon as possible, like within 30 seconds of discovering all the errors. This is where not paying your entire bill on discharge comes in handy. If you’ve already paid, you’ll have to try and get a refund check. Good f’in luck! If you can’t get them to assist you, craft a very nice letter, including copies of all the bills containing accuracies, to your state Attorney General’s office. That usually makes people stand up and take notice.

Hopefully you or a family member never ends up in the hospital. If you do, maybe your bills will be correct. Hopefully these steps will keep you from getting undeserved debt. Good Luck!

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