A Non-Violent Defense of Your Personal Economy

America needs neither the terrifying tsunami of new programs overwhelming it from the White House nor the violent volcanic eruption of legislative magma and ash under which the Congress is burying us…can you say “DEBT?”

Some Americans voted for “change” during last year’s presidential sweepstakes – clearly a gamble. However, a very small but consequential minority of far left politicians, union bosses at the helm of sinking ships loaded with working American’s gold they claim as their own, and cabinet members turned bureaucrats conspire to takeover the US economy.

There are other contributors to and beneficiaries of these catastrophic changes:

o ACORN, a vile and secretive organization that manipulates good-hearted Americans for the benefit of its intentionally obscure ideology and the financial benefit of its dishonest leaders
o TheAARP – Americas largest insurance seller masquerading as the voice of older citizens while it lobbies for programs that damage seniors but that will enhance its bottom-line and increase the political power it wields in the White House and on Capitol Hill
o Al Gore’s army of uninformed global warming crusaders who would willingly weaken the US economy – and therefore the personal economy of every US citizen – while China, India, the Oil States and other economic powerhouses buy America with money made by ignoring the same unrealistic and unnecessary protocols the Dolts in DC impose on American citizens and businesses
o Other vocal interests in the non-profit and for profit sectors that hope to benefit from the “re-interpretation” if the US Constitution, the restructuring of the US economy, and the re-definition of what it means to be an American.

The question – or perhaps answer – the title to this article addresses is…
“How can you protect yourself and your family from the almost certain economic crises financed by the unimaginable debt these ill-advised and programs incur?”

The answer: Change your mind about money. Americans have been taught to compartmentalize money issues. We’ve been led to believe that we can fix our personal economic problems by focusing on one issue at a time: the mortgage, the 401(k), creating the mythical six months savings account, taxes. As an example, a TV commercial running currently suggests that you can fix your monthly budget by changing from your existing satellite TV company to theirs – a savings of a few dollars per month.

Personal economies don’t work that way.

Personal economic success results from adopting a personal economic model that allows you to address all of the challenges you face during your lifetime; that allows you to flexibly and creatively deal with them as they arise without losing focus on the big picture.

Here’s how: Focus on four – and only four – uses of your money.

1. Ready cash…There is a myth in America that you should have three to six months of expenses set aside to deal with emergencies.

BUNK!
Consider how many American families today are facing foreclosure, repossession of their cars and furniture, bankruptcy…all because they believed in the myth and ran out of money way too soon.

Consider how many of these same folks would have spent the Fourth of July sitting on the patio, drinking a beer, and watching the kids play if they had based their personal economies on cash instead of credit.
American’s need to base their personal economies on cash money and not monthly interest charges that make others wealthy from their repayments for borrowed money.

In addition, they need enough ready cash to deal with life’s surprisingly unsurprising surprises not just emergencies.

There’s another myth that plays into the failure of personal economies…

2. Income you don’t have to work for and you won’t outlive…Most Americans are convinced that retirement is both desirable and achievable.

BUNK!

Most Americans believe that they are saving for retirement by putting money into a tax qualified retirement plan like a 401(k), IRA, or the like.

First of all, chances are better than even that money in a tax qualified plan will not produce the income it was projected to deliver when it was sold to you 20, 30, or 40 years earlier (Yes, it is the purchase of an investment that guarantees only that it guarantees nothing. It is not a savings plan). Moreover, it is equally likely that the taxes on that income will be higher than those shown in the hypothetical illustration from decades earlier.

Everyone dies. People who retire, i.e., dissolve into inactivity, die sooner. Life expectancy has increased dramatically over the past fifty years. If you are reading this, are in decent health, and don’t engage in stupid life-threatening activities, you can expect to live to be 100 years old – or older.

What’s the point? Most retirement income plans – including tax qualified plans – and planners use life expectancy tables to determine how you should allocate your resources from the time you retire until the date of your death at average life expectancy, which is most likely a decade or two less than your actual life span will be. Sounds like bad planning to me.

Better to have a proven model that makes sure you have the income you need whether you work or not but doesn’t strap you with the limitations and probable failures of a hypothetical plan that neither guarantees nor promises specific results.

3. Freedom from debt…There are pundits and advisors who would have you believe that there is such a thing as “good debt.”

BUNK!

It is essential to reduce and eliminate debt to others. This may not be the first item on the “to do” list if you have a mortgage, auto loans, credit card debt, etc. but is equally as important as the others.

The USA Today article referenced above illustrates that America is “in debt up to [its] eyeballs” and has no reasonable chance of escaping the dungeon it’s creating for itself. As Peggy Lee sang a few decades ago, “Is that all there is?…If that’s all there is, my friend, then let’s keep dancing. Let’s bring out the booze and have a ball, if that’s all there is…”

Reliance on debt for the essentials and perks of living in the US is financial nihilism; keep using it until you can’t, embrace failure, and start again. Unfortunately, there are thousands of homeless Americans that discovered that it is nearly impossible to regain what they lost to debt. There are millions more that find themselves in diminished circumstances or relying on public assistance and charitable largess.

None of the above denies that there are occasions when incurring debt can be useful. Our economy permits it and encourages it when there are no other reasonable alternatives; the home mortgage being the prime example. However, relying on debt to build your personal economy is just as silly as relying on a poor diet to assure your health.

4. Your legacy…There is a class of Americans that believe you should die broke and leave no legacy to your heirs or anyone else.

BUNK!

I personally feel that leaving a legacy of wisdom and wealth (if you have it) is one of the main reasons God put us here. The Declaration of Independence and the US Constitution embody the economic wisdom we need to pass on based on their Judeo-Christian value system.

Creating family wealth has allowed America to grow into the most powerful economy in history. The simple truths found in the financial admonitions of Benjamin Franklin, Alexander Hamilton, and other lesser knowns are why Americans have amassed more wealth in 200 years than the rest of the world did in two millennia.

Perhaps those who have received no legacy find it difficult to comprehend these ideas. If that’s you, let me ask you to imagine your life had you received the guidance of wise counsel and the benefit of a financial foundation. If you do so honestly, you will recognize the value of legacy – and do something about it.
These four pillars are essential to every successful personal economy.

Money is the essential foundation for that success. Debt may play a role, but it erodes the foundation and weakens the structure so must be used sparingly and cautiously.

Remember the paradox of frugality: When individuals strengthen their personal economies by following the practices of the Money for Life Model they weaken the hold of The Debt Paradigm on the economy that is being promoted in Washington and on Wall Street .

The “solution” to the thrift paradox may be as elusive as Nessie (the Lock Ness monster) to the Dolts in DC and the Wonks on Wall Street, so I expect the US economy to muddle along until we replace them with representatives that actually understand economics and have a modicum of wisdom.

In the meantime, take care of yourself. Build your personal economy on a solid foundation that supports the Four Pillars.

The Best Free Android Finance Apps

Obviously many people will be skeptical as to how good free apps actually are, with many consumers actually purposefully not downloading free apps due to fears that they will crash or being infected with various ways of stealing your money. However these fears are totally unfounded and without evidence so do not let this put you off. Now to the apps:

PayPal

If you have been on the internet at some point then you will have undoubtedly heard of PayPal. The service facilitates payments between people via a simple email address, avoiding the complexities usually associated with bank transfers and the like. The PayPal Android app allows users to manage their PayPal account just as they would through the official website. The app is totally secure and allows you to make purchases or deposits also amongst other activities on the move, a very useful addition to the marketplace.

Quote Pro

Quote Pro is also an incredibly useful app, used by many on a daily basis it has fast become one of the most downloaded in its range. Not only can you obtain extremely detailed and accurate information about the range of stocks you have an interest in, but you can also keep an eye on your portfolio of stocks and shares.

Tip Calculator by TradeFields

Tip Calculator is perhaps one of the most imaginative apps I have personally seen on the app marketplace. It is incredibly useful for an aspect you will have probably have struggled with every time you’ve been out for a meal, the tip. Not only will the app inform you of the total tip you should be leaving behind, but will also divide the total tip amount between the number of people at the dinner, saving much embarrassment, delays and napkin calculations!

Currency Converter

How many times have you been in a foreign country or at the airport and have been wondering how much you will actually get in return for your dollars? Numerous times in all probability. The currency converter provided by Pocketools will enable you to be provided with an accurate, up to date and independent currency exchange valuation allowing you to shop around to find the best exchange rate. Not only does this app provide you with the current exchange rate, it will also give you data on the currency of your choice over the last 5 year period through the use of many easy to read graphs.

Mileage

This is without doubt one of the best apps I have personally seen. With the rising prices of gas which look set to continue for the foreseeable future it is a great way of ensuring that you are driving as economically as possible and therefore saving as much gas as possible. I haven’t an idea about how it works but it does, the interface is also extremely slick, simple to navigate through and to understand.

Finance

Finance, whilst the name of the app may not excite you or conjure up ideas that this app is going to change the world it certainly fills a gap in the market which needed a simple app. It’s similar to Google search in many aspects, it provides a very basic user interface, but one that is incredibly effective and performs its job excellently. If you already use Google Finance or are considering starting to use it then this app is vital, it synchronizes everything meaning it’s like being on your main PC.

Financisto

Financisto is another great money manager. The ability to create long and short term budgets for holidays, short breaks or just a simple shopping trip is a real plus point for this app and one which has seen it rocket in terms of popularity. In addition to this the app has the capability to check your recurring payments amongst many other essential financial activities; this has left many users of the marketplace wondering why there is no charge.

Getting An Auto Loan With Bankruptcy – A Real Possibility

An auto loan with bankruptcy is a real possibility today depending on your personal circumstances. With today’s economy more people than ever before are filing bankruptcy. And many of those who file a bankruptcy are in need of a new vehicle and have no idea how to go about getting one.

Sure, it is not going to be as easy for you as for someone who has a credit score of 710 but with a little preparation and knowledge an auto loan with bankruptcy can be done. You are marked with the capitol “BK” and any potential lenders will clearly see this. Let’s explore the best possible way to overcome the BK branding and still get you an auto loan.

The first thing I can suggest is to obtain copies of your credit report. Go to the websites for the three credit bureaus Experian, TransUnion and Equifax to request a copy of your records.

Do what you can to examine it for anything that should be removed. After a bankruptcy some debts that should have been removed get overlooked and you want to make sure this isn’t true for you. In addition draft a letter to explain your reasons for filing bankruptcy and ask that this letter be filed with each of your credit reports. This will be seen by future lenders and may make a difference in getting an auto loan with bankruptcy.

Next, do what you can to save some extra cash before visiting a dealership. It is not always required but a down payment speaks to the responsibility of all you are doing to repair your financial status. In addition, a down payment will lessen the amount you have to borrow for an auto loan and this will save you money.

Now it is a good idea to search for dealerships and auto consultants who offer specific financing for an auto loan after bankruptcy. Not everyone offers this type of loan but it has become more readily available than in the past. Because your situation is different than someone with perfect credit you may want to work with an auto consultant.

An auto consultant is a person who cares about you as their client. They have your best interest in mind because they essentially work for you. In addition, the consultant has many resources from which they cab locate vehicles, leaving you with a better selection to choose from. Along with that, the same is true for lenders who offer special financing so they may have the best chance to find you the best terms for your loan.

100 Financing Investment Property

100 financing of investment properties refers to 100% financing from outside for your investment in real estate. Funds that are brought from one’s own savings, on loan from friends or relatives are in a way not much different from capital whereas real debt or Investment property financing comes from financial institutions. These entities – banks, mortgage firms and lending organizations like credit unions — lend funds to the applicant on the trust of a collateral security or based on the income, credit-worthiness and repayment capacity of the individual. Even if these criteria are satisfactory, an investment property financing institution may ask to be shown the business plan of how the applicant means to generate income using the pieces of property he or she means to buy and consequently pay off the loan or conclude the mortgage. The lender has the right to know how the business is going to be conducted because the revenues of this business determine how fast the loan is going to be repaid. With the turn in the economy, 100% financing investment property has almost been done away with.

100 financing investment property

In the United States, there are three credit bureaus, Equifax, Experian and Transunion, that maintain records of the lines of credit extended to each individual and how they are being handled. The credit reports formulated by these bureaus reflect how many credit card accounts a person has, how many times he or she has defaulted in payment or gone over the credit limit; other forms of financing availed by the individual such as home mortgage, auto finance or student loans, are also listed. Lenders and creditors have access to these credit reports and use them to check if an applicant is worth the risk of being given a loan. The exact features that point to an applicant as being risky can be found out after a professional analysis of one’s credit report. A high Debt to Income ratio and loan to value ratio are some of the red-flags. These areas have to be improved so as not be saddled with an exorbitant rate of interest and terms that are not favorable to the borrower. Some unfavorable terms are floating interest rates that send the finance charges through the roof upon a single defaulted payment. To prevent this eventuality, it is better to choose a deal with a fixed (flat) interest rate or a low ceiling rate on the interest rate slab.

Lending fees, high interest rates, discount points (another form of lending fees paid upfront to prevent the interest from racing up) can actually break the bank. In fact, there are many cases in which discount points have been deceptive and one ends up paying more for them, than the actual interest (finance charges) that would have been paid if the interest rates did go up. To prevent such goof ups, it is a good idea to take estimates from two or three lending organizations, compare their offerings and then choose the one that appeals most to one.

The worst pitfall to guard against is when some lender tells you that you are eligible for 100% financing of investment property. Those idyllic days are over. In fact, they are past their sell by date because there were not so idyllic. There may be such plans available on subsidy from the government for the exclusive use of first time homeowners who belong to the low income group. But this does not include investment property dealers. Traditional methods of 100% financing are now called owner financing and are still available but they are not an attractive option. It is not surprising that requests for owner financing are viewed with suspicion of default by lenders and therefore, that avenue is best avoided.

The Best Finance App

The best finance app, in my opinion, is Mint.com’s mobile app. Here is a list of its features and finance app alternatives if you prefer to use an app other than Mint.com.

Mint.com (Free)

I have been using mint for a long time now and believe it is the best finance app. Intuit bought this web site a while back so it is very secure, using bank level encryption.

Mint gives you a quick overview of your finances, which you can put on one of your main screens in the form of a widget. The widget will show your current cash amount and your credit debt. It will also show you the last time your information was updated, so you can be sure that you are looking at the most recent information.

Once you set up a monthly budget, you can access it with the app to make sure you are staying on track for the month. Mint is very good at knowing how to categorize your transactions for budgeting purposes and it will let you know if it does not know how to categorize a transaction.

The app automatically gives you alerts for various things, which include the availability of large deposits, what bills will are due in the next few days, etc.

You can get a very general picture of you investments with this app. By that, I mean if you simply want to know the balance of you accounts, you will be happy with this app. If you want to get more information about the performance of specific investments, you will need to go to the website.

To set up this app, I would suggest you log on to the main website to input all of you account information and set your budget. Once that is completed, you simply download the app, log in, and all your accounts are ready to go.

Adaptu Wallet (Currently Free)

Adaptu Wallet has many unique features like tracking loyal programs and creating spending forecasts. The app also allows you to store photos of insurance and business cards, which will decrease the clutter inside your wallet. The app is currently free, but the word on the street is they will start charging for usage sometime in 2012.

Pageonce (Free or $4.99 for Gold version)

Pageonce arguably has the best interface of all the finance apps. Your key account balances are placed in thumbnails that appear on the home screen. Contrary to popular belief, this app does provide PayPal support even though many claim it doesn’t. Balance updates are not as fast as Mint.com or Adaptu, some transactions take days to update. The Gold version has the useful ability to pay bills directly from the app, and this is the only finance app that can do this. The gold version also removes all the ads from your app.