_What Happens to a Savings Account if a Bank Collapses?
By Mark Kennan, eHow Contributor

When a bank fails, most of the money in the savings accounts will be recovered by the account holders as long as the bank was covered by Federal Deposit Insurance Corp. (FDIC) insurance.
Related Searches:

    Bank Credit Union
    Bank Money Transfer

    Definition

        FDIC insurance is a government-run program that protects consumers' bank accounts including savings accounts, checking accounts, money market deposit accounts and certificates of deposit in case a bank collapsing.
    Mergers

        In many cases, a failing bank gets bought buy another bank. If this occurs, your account will simply transfer to the acquiring bank.
    Limits

        In the event that a bank fails, the first $250,000 of your savings account will be reimbursed by the FDIC. The limit is set to return to $100,000 at the start of 2014.
    Time Frame

        According to Investopedia.com, you should receive your funds within a few days of the failed bank's closing.
    History

        No account holder has every lost funds insured by the FDIC since the FDIC was started in 1933.

SOURCE

_How to Fight Your Financial Demons
Posted 8 hours ago by Libby Kane

We all have our demons.

Some just lurk under the bed, but others bare their teeth as we go about our day—say, every time we pull out our wallet.

Financial demons are particularly vicious because their effects aren’t confined to the pages of our journal or emails to our best friend. Our finances permeate just about every aspect of our lives, from where we live to the job and lifestyle we choose.

And for that reason, our financial demons can be particularly invasive–and toxic.

But the good news is that demons can definitely be vanquished (or subdued, at the very least). As with anything, they can be worn down with the right tools and the right mindset. Fortunately, we have both.

First, identify your demon … or demon(s). Then we’ll show you exactly how to send them packing.
If You Have Shopping Demons …

The Tools: As you know, “just stop shopping” isn’t helpful advice. Instead, look at your habit from the other end: Your closet. Your makeup bag. Or your gadget collection, depending on the spending that’s most problematic for you. Use our process from Priceless Style Bootcamp to evaluate your ten most recent purchases. If lots of your recent buys are rated “not worth it,” it’s time to reevaluate your spending patterns. The first step is to avoid letting one bad spending choice drag you into a downward spiral. If you suspect you’re currently in such a phase, you can use this tool to spiral back up. If your purchases are all rated “worth it,” but you know you’re shopping too much, take a close look at your last month of spending and ask yourself whether you’re truly happy with everything you bought, or if that same amount of money could have been applied to a different financial goal, whether bulking up your emergency fund, or beginning to invest.

The Mindset: Instead of being just a shopper, be a smart shopper. A purchase should never make you feel guilty or regretful. The same sweater can be worthwhile or unnecessary, depending on the circumstances surrounding its arrival in your home. So, before buying something, imagine yourself in a month: Will you still be glad you bought what you did? If you decide you want that item later, it (or one just like it) will still be there when the time is right.
If You Have Debt Demons …

The Tools: First off, not all debt is the kind with fangs. Student loan debt, for instance, can actually help your credit score. In Get Out of Debt Bootcamp, we break down which debt is harmful and which is just annoying, then show you a way out. If you’re facing credit card debt, we recommend that you immediately stop using your card for non-essential purchases. To make the commitment to your finances more permanent, take the LV Pledge and then print out our money wraparound to remind yourself of that commitment every time you go to use it. You’ll never climb out of that hole if you’re still digging. Sign up for the 15-day Get Out of Debt Bootcamp here.

The Mindset: Debt does not make you a bad person. It does not make you irresponsible or unintelligent. Debt is frequently a result of unforeseen circumstances like hospital bills or the recession, and the aspect that reflects on you the very most is the fact that you’re trying to eliminate it. Approach paying off your debt as you would any other project, with planning, small steps and genuine excitement at the thought of seeing it completed.
If You Have ‘Friends and Family’ Demons …

The Tools: Peer pressure demons include that friend who keeps inviting you to $100 dinners, the significant other who thinks your year-end bonus should go to a weekend in Vail rather than to max out your IRA (or who tends to overspend for the both of you, or parents (or in-laws) who pressure you to keep up with their lavish lifestyles. You know they love you, but that only makes it harder to say no. For your detailed strategy when it comes to dealing with money-toxic friends and relatives, read this. Meanwhile, significant others come with different needs and issues, especially in a shared household. Here are the top eight reasons couples fight about money, and how you and your significant other can stop.

The Mindset: It may feel like a me-versus-them situation, but it doesn’t have to be squabbly. By advocating for yourself, you’re being both practical and mature. Not only will this help you avoid spending money when you’re uncomfortable, but it’ll also set important boundaries for your relationships and show that your (very reasonable) opinion matters.

    Are You Paying Student Loans?

    College was great, but the debt … not so much. Share your tips for effective debt management and learn from others in LV Discussions.

    SHARE

If You Have Credit Score Demons …

The Tools: Your credit score is simply a tool to help lenders evaluate how trustworthy you are. Since they can’t spend a week on your couch asking you questions about your ideals, they base their judgment on a three-digit number between 300 and 850. A low credit score–below about 650–can sabotage your ability to make large purchases such as a home or car—or affect the rates on loans you’ll get to do so. Start by checking your credit report for errors (you can get a free report at AnnualCreditReport.com). Then, check out our detailed breakdown of the factors impacting your score, which includes advice on how to raise it back up. Going forward, check your score for free on CreditKarma.com as often as you’d like, so you can monitor your progress as it happens.

The Mindset: Think of your credit score like a puzzle. Which are the biggest pieces and how can you fill them in? You can’t undo the past, but from now on, every action you take can help complete the puzzle. Rather than letting a low number get you down, embrace the excitement of watching that number go up and up as you make small changes in the way you use your credit.
If You Have Competitive Demons …

The Tools: Keeping up with the Joneses is hard enough, but practicing the ancient art of financial one-upmanship will really create problems for your bottom line. Shiny new toys and dollar-sucking experiences aside, constantly competing with and comparing yourself to those around you is exhausting, not to mention debt-inducing. We’ve created an anti-comparisonitis game plan, here.

The Mindset: You should be able to recognize that someone will always be “er” than you. Richer, smarter, prettier, better at any number of things. And you can’t control them. The sole person you can control is yourself. Instead of fighting to be “er,” celebrate what’s already great about you, and work on doing the best you can to improve all aspects of your life: work, family, friendships, finances.
Remember:

Financial demons are undoubtedly rough, but once you know why they’re so troublesome, they’re much less threatening. With a cool head and little information, you’ll have them hiding under the bed.
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_
4 Important Words: How Should I Invest?

Posted on February 21, 2011 by Manisha Thakor

If you were getting ready to go out for the evening, would you ask yourself what you planned to wear without thinking of where you were heading? Of course not, because the clothes you’d wear to shovel snow would be very different from those you’d wear to a wedding.

The answer to the question, “How should I invest?” is often given a one-size-fits-all response when it’s anything but. To protect yourself, here are 5 things to think about to make sure your hard-earned money is invested appropriately.

1. When Do You Need To Spend That Money?If you’ll need to access this money again within the next five years, you’ll typically want to protect that money against inflation by putting it in savings accounts, money market funds or accounts, or CDs, rather than taking on market risk that stocks or bonds.

2. Do You Have Any Outstanding High-Interest Debt?If so, paying off that debt may be the best investment you can make, as it gives a “guaranteed” return—especially when interest rates on savings vehicles are so low.

3. How Steady Is Your Income?A professor with tenure may feel more comfortable taking higher short-term risk than an entrepreneur with variable cash flow.

4. How Old Are You?The older you are, the less time you have on your side to bounce back from volatile markets, so the more conservative you’ll want your portfolio to be. For women, a rough rule of thumb is to take 110 minus your age to arrive at the ideal maximum percentage of your portfolio in stocks. For example, if you’re a 40-year-old woman, 110 minus 40 equals 70. So, up to 70% of your portfolio could be in stocks and 30% in bonds (for men, use John Bogle’s oft-quoted 100 minus your age…because men generally have shorter life spans).

5. Are You Actually Interested In Investing?Unless you are inherently passionate about picking individual stocks or studying active money managers, I love target-date retirement funds or low-cost index funds and ETFs. My favorite basic “portfolio recipe” comes from Boglehead Mel Lindauer. His recommendation: For the percentage of your portfolio devoted to stocks, put half in a total U.S. stock market index and half in a total international index. For the portion that goes into bonds, put half in a total U.S. bond market index and half into Treasury Inflation Protected Securities (“TIPs”) via funds, ETFs, or direct purchases. From there, you can add some additional investment spice in the form of REITS or commodities, but for most people, this core recipe will do just fine.

Bottom line: Always remember that before anyone can give you meaningful investment guidance, they need to understand where it is that you specifically want to go.


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_IRS Releases Guidance on Foreign Financial Asset Reporting
Form 8938
December 15, 2011

Issue Number: IR-2011-117
Inside This Issue

IRS Releases Guidance on Foreign Financial Asset Reporting

WASHINGTON—The Internal Revenue Service in coming days will release a new information reporting form that taxpayers will use starting this coming tax filing season to report specified foreign financial assets for tax year 2011.

Form 8938 (Statement of Specified Foreign Financial Assets) will be filed by taxpayers with specific types and amounts of foreign financial assets or foreign accounts. It is important for taxpayers to determine whether they are subject to this new requirement because the law imposes significant penalties for failing to comply.

The Form 8938 filing requirement was enacted in 2010 to improve tax compliance by U.S. taxpayers with offshore financial accounts. Individuals who may have to file Form 8938 are U.S. citizens and residents, nonresidents who elect to file a joint income tax return and certain nonresidents who live in a U.S. territory.

Form 8938 is required when the total value of specified foreign assets exceeds certain thresholds. For example, a married couple living in the U.S. and filing a joint tax return would not file Form 8938 unless their total specified foreign assets exceed $100,000 on the last day of the tax year or more than $150,000 at any time during the tax year.

The thresholds for taxpayers who reside abroad are higher. For example in this case, a married couple residing abroad and filing a joint return would not file Form 8938 unless the value of specified foreign assets exceeds $400,000 on the last day of the tax year or more than $600,000 at any time during the year.

Instructions for Form 8938 explain the thresholds for reporting, what constitutes a specified foreign financial asset, how to determine the total value of relevant assets, what assets are exempted, and what information must be provided.

Form 8938 is not required of individuals who do not have an income tax return filing requirement.

The new Form 8938 filing requirement does not replace or otherwise affect a taxpayer’s obligation to file an FBAR (Report of Foreign Bank and Financial Accounts). For more go to the FBAR page on this website.

Failing to file Form 8938 when required could result in a $10,000 penalty, with an additional penalty up to $50,000 for continued failure to file after IRS notification. A 40 percent penalty on any understatement of tax attributable to non-disclosed assets can also be imposed. Special statute of limitation rules apply to Form 8938, which are also explained in the instructions.

Form 8938, the form’s instructions, regulations implementing this new foreign asset reporting, and other information to help taxpayers determine if they are required to file Form 8938 can be found on the FATCA page of irs.gov.

http://www.irs.gov/newsroom/content/0,,id=104345,00.html

__Yearly Average Currency Exchange Rates   Translating foreign currency into U.S. dollars You must translate foreign currency into U.S. dollars if you receive income or pay expenses in a foreign currency. The only exception relates to some qualified business units (QBUs) which are generally allowed to use the currency of a foreign country.

Currency exchange rates The Internal Revenue Service has no official exchange rate. Generally, it accepts any posted exchange rate that is used consistently.

When valuing currency of a foreign country that uses multiple exchange rates, use the rate that applies to your specific facts and circumstances. For example, if you have a single transaction such as the sale of a business that occurred on a single day, use the exchange rate for that day. However, if you receive income evenly throughout the tax year, you may translate the foreign currency to U.S. dollars using the yearly average currency exchange rate for the tax year.

Yearly average currency exchange rates The table below includes yearly average exchange rates for prior years. It was revised on November 1, 2011, to reflect the typical cash exchange rates for the listed countries and years. For additional exchange rates, refer to Foreign Currency and Currency Exchange Rates.

To convert from foreign currency to U.S. dollars, divide the foreign currency amount by the applicable yearly average exchange rate in the table below. To convert from U.S. dollars to foreign currency, multiply the U.S. dollar amount by the applicable yearly average exchange rate in the table below.

LINK

_7 banks that are still awesome

While other banks are busy hiking fees, these financial institutions are bucking the trend by offering free checking and other perks.

Alliant Credit Union

Alliant is one of the largest credit unions in the United States. And while it's located in Illinois, residents in any state can join if they meet certain requirements.

To become a member, you need to either work for one of more than 175 qualifying companies and organizations, including Google, JetBlue and 1-800-Flowers, or simply make a one-time donation of $10 or more to Foster Care to Success.

The credit union offers a checking account with no monthly service fee and no minimum balance requirement.

While the basic free checking account doesn't pay interest automatically, you can easily earn a competitively high annual percentage yield, or APY, of 1.10% on your checking account if you opt out of paper statements and make at least one online deposit per month.

Customers can also access a nationwide network of more than 80,000 ATMs for use without charge.

Ally

Bank of Internet USA

Connexus Credit Union

The Incredible Bank

ING Direct

Perk Street

LINK

_Black Friday predictions: What should you buy?

From toys to tablet computers, which items will be steals on Black Friday and which ones are worth waiting for until the holidays are over.

1 of 5

After demand for a limited-edition Missoni line brought Target to its knees in September, it's clear that shoppers are showing a preference for inexpensive and accessible fashion.

On Black Friday, that could mean a virtual stampede over discounts for items like $50 cashmere sweaters or $10 jeans at department stores and discount retailers alike.

"Expect an explosion of sales," said Candace Corlett, president of WSL Strategic Retail, a retail consultancy. "Department stores are not only competing with each other but with discount retailers," she explained.

And for consumers, that means there will be significant markdowns across the board -- making Black Friday a good time to stock up on their favorites.

Since there has yet to be a "must-have" item to emerge this year, retailers may have to mark down their stock even further after Black Friday to keep consumers shopping, said Tom Julian, president of Tom Julian Group, a retail consultancy in New York. "Every mall store will be 30% off, but they will be 40% to 60% off later in the season."

But if there is an item you are particularly yearning for, don't hold off too long. In anticipation of slower sales, retailers have been limiting their inventory and may sell out of some items well before the holiday arrives. "They will run out of colors and sizes and on some things," Corlett added. So if it's that purple sweater you want, be prepared to head out on the day after Thanksgiving.

LINK

_Holiday Money

Black Friday shopping: Why it pays to stay home
By Jessica Dickler @CNNMoney November 18, 2011: 4:12 PM ET

NEW YORK (CNNMoney) -- Thanks to earlier-than-ever store openings, Black Friday has eaten into Thanksgiving Day, but that doesn't mean you need to sacrifice the holiday to get in on the best deals.

Instead of standing on line outside of a big-box store on Thanksgiving eve or in the wee hours of Black Friday, you can watch football -- or spend time with family -- and nab many of the same doorbuster deals from the comfort of your couch.

Stores like Best Buy (BBY, Fortune 500) are offering up to 95% of their Black Friday ad items online for the same price, according to Brad Olson, founder of Gottadeal.com, a site that markets itself as one of many "official" Black Friday deal sites.

Shoppers who "like" Best Buy on Facebook can get a sneak peak at upcoming sales or exclusive offers and coupon codes like $5 off a $50 purchase or 15% off can even bring prices below those coveted doorbuster deals, Olson said.

Those kinds of codes are frequently posted on deal-sharing sites like Gottadeal, RetailMeNot and FatWallet or shoppers can Google a specific store's name and "coupons." Olson recommends checking the coupon code a day or two before Black Friday to make sure it is valid before checking out.

Brent Shelton, a spokesman for FatWallet, advises shoppers to jump on those early online deals rather than wait for Cyber Monday, when most online deals are announced.

"If you see a good deal, pull the trigger," he said, since there will likely be less availability and selection as the weekend progresses.
Black Friday sales expected to draw bigger crowds

Just like in stores, inventories are extremely limited this year, so be ready to act fast, said Brad Wilson, founder of BradsDeals.com, a site that showcases the best daily deals on the web. If there's one item you really want or that is especially popular, then heading to a store may be the only way to guarantee getting it, he said. "With such limited inventory, not only do you need to go early but you have to be near the front of the line."

For that must-have gift, Dan de Grandpre, CEO of dealnews.com recommends setting up an email alert to monitor price changes on a specific product and be ready to pounce when the sale starts.

But don't get too caught up in the hype, he cautioned. There are plenty of sales on other days besides Black Friday that could be nearly as good, and don't require you to take time off, lose sleep or ruin your Thanksgiving holiday.

"You might not find the 42-inch TV for $200 but you'll probably find a similar one for $230 or $250 and you're not burning a day off from work," he said.

Just be sure the shipping is free or else hefty delivery costs could gobble up all of the savings.

Here are a few of those worthwhile deals, along with free shipping offers, that have already been announced:

Clamoring for Ultimate Optimus Prime? At Toys R Us the same deals and discounts, including 40% off the popular transformer figure, will also be available on Toysrus.com starting at 9 p.m. on Thanksgiving night. The toy giant is also offering free shipping on everything except furniture, video game consoles and gift cards.

At Sears (SHLD, Fortune 500), all of the same Sears Black Friday deals -- like 50% off Kenmore washer and dryers -- will be available online and in-store with free shipping until Dec. 19 on orders over $99.

Even though not all of Best Buy's doorbusters are online, the electronics retailer is offering a slew of online-only deals starting on Thursday Nov. 24 like discounts on Gateway's 15-inch laptop or Tritton headphones and there's free shipping on everything at BestBuy.com until Dec. 27.

Wal-Mart (WMT, Fortune 500) and Target (TGT, Fortune 500) have some of the longest Black Friday lines because the deepest discount are often only in stores. But don't overlook the online sales at these stores either, there are some extensive markdowns like 46-inch HDTVs for less than $400 on Walmart.com on Thanksgiving Day.

Wal-Mart is also offering free shipping on electronics and some other Walmart.com products when shoppers spend more than $45. At Target, shipping is free when you spend $50 -- those who use Target's REDcard save an additional 5% on orders, just be sure to pay the balance off right away or you'll have a hefty interest payment tacked on that purchase.
Black Friday predictions: What should you buy?

Macy's (M, Fortune 500) is sticking with in-store only deals on Black Friday, but some notable discounts, including 20% off dresses and 40% off coffeemakers and tea kettles are on the department store's site starting at midnight on Nov. 24. Plus, the shipping is free on all purchases over $99.

Even if the doorbuster deal you've been waiting for isn't available online, Amazon (AMZN, Fortune 500) aims to match prices for the products they have in stock, plus there's free Super Saver shipping on orders over $25. The e-tailer is also offering its own doorbuster deals on Black Friday like a Canon PowerShot 12 megapixel digital camera for $199, marked down from $349.

Are you an extreme Black Friday shopper? Tell us your game plan -- and all-time best deal. Email your response to [email protected] and you could be part of an upcoming article. To top of page
First Published: November 17, 2011: 2:22 PM ET

LINK

_Dumping your bank? How to choose a new one

By James O'Toole November 11, 2011: 3:45 PM ET

Thousands of Americans have been ditching large banks like Bank of America in favor of credit unions and other smaller institutions.

NEW YORK (CNNMoney) -- So you've had it with the hidden fees, the monthly minimums and the sky-high interest rates. Like thousands of other Americans in the past few weeks, you want to ditch your bank.

Now what?

The decision to drop a big commercial bank might be an easy one for many frustrated consumers, but the next step may not be so obvious.

For some people, the convenience of a big national institution like Chase (JPM, Fortune 500) or Bank of America (BAC, Fortune 500) may ultimately outweigh any ill will they've built up. For others, there are plenty of credit unions, online banks and smaller banks out there ready to embrace them with open arms.

Whether you decide to stick it out with a big national bank or switch to a smaller institution, there are a number of pros and cons to be weighed. Here are a few things to consider before you decide where to park your money:

Fees: "A credit union is going to smoke a commercial bank every day of the week and twice on Sundays in the fee column," said John Ulzheimer, president of consumer education at SmartCredit.com. That's because, in contrast to commercial banks, credit unions operate as non-profits.

"Earnings... that the credit union makes devolve to the members in the form of lower loan rates, higher deposit rates and lower fees," said Tony Cherin, a professor emeritus of finance at San Diego State University.

Smaller banks and online banks too, often offer free checking accounts and lower fees. As with many credit unions, they may also provide reimbursements for fees from ATMs outside their networks.
40,000 join credit unions in protest

Part of the reason the big banks ding customers with so many fees is that they need to appease shareholders and maintain a strong bottom line. And running those nationwide networks of branches and ATMs makes it more expensive to maintain customer checking accounts.

They're also already "swimming in deposits," and therefore don't need to be as aggressive in attracting new customers with lower (or no) fees, said Greg McBride, senior financial analyst at Bankrate.com.

That's not to say that some big banks aren't offering customer-friendly deals. Charles Schwab is advertising a free checking account with unlimited rebates on ATM fees worldwide and a minimum balance of just one cent for customers who also open a brokerage account with no minimum requirement.

Convenience: This is one area where the big banks have historically held the advantage, although smaller banks and credit unions are closing the gap.

With more branches and ATMs nationwide, leading banks like Citi (C, Fortune 500) and Chase have advantages based on scale that simply aren't available to smaller banks and credit unions, said Ulzheimer. They've also usually got customer service lines open 24/7, in contrast to the Monday through Friday, 9-to-5 schedule that is typical of most credit unions and community banks.
'I dumped my bank!'

As credit union membership has grown though, the industry has made strides on the accessibility front. The CO-OP Network, an alliance of credit unions across the country, offers surcharge-free ATM access at 28,000 ATMs in the U.S. That's only a shade behind the 29,000 ATMs nationwide offered by Citi.

Community banks and online banks also often belong to ATM networks. The Allpoint network, for example, includes both small banks and credit unions and offers access to 43,000 free ATMs nationwide. For people without an affiliated ATM nearby, there's also the option of getting cash back when you make debit card purchases, for example at the grocery store.

People who make frequent cash deposits -- like waitresses or bartenders -- or those who enjoy the face-to-face service that a teller provides should probably steer clear of online banks. But for people comfortable with a no-frills experience, online banks offer the ability to deposit checks by mail or to scan them at home via the Internet.

Rates on loans, credit cards and deposits: Because of their non-profit structure, credit unions usually offer more competitive rates than big banks on things like credit cards and CDs. For example, Citi's Platinum Select Mastercard has a variable APR of between 12% and 22% (after an introductory APR of 0% for the first 21 months) compared with the 10% purchase APR offered by the Pentagon Federal Credit Union, according to Bankrate.com.

For bigger loans, though, like mortgages or new business loans, the megabanks often have the advantage because they can better absorb the cost if the borrower defaults.

"Think about it this way -- is defaulting on a million-dollar loan going to hurt a smaller credit union more or a commercial bank?" Ulzheimer said.

For money market and savings accounts in particular, online banks offer some of the industry's best deals. Bank of Internet USA, for example, offers a savings account that pays 0.8% interest, compared with the 0.2% offered by USAA, according to Bankrate.com.

Will my money be safe? While smaller banks in particular have failed in larger numbers during the economic downturn, this shouldn't be a major concern. As long as your bank is backed by the Federal Deposit Insurance Corporation, your money is covered up to $250,000.

In the case that your bank fails, loan rates are locked in and checking services should be transferred seamlessly to a new institution, said Bankrate's McBride. The biggest threat when it comes to a bank failure is simply inconvenience.
7 banks that are still awesome

To make sure your bank is covered by the FDIC, and to see what kinds of accounts are protected, visit the FDIC website. If you want to check out the relative safety of an FDIC-insured bank, visit Bankrate.com, which provides safety ratings of up to five stars based on an institution's capitalization, asset quality, earnings and liquidity.

As for credit unions, most accounts are insured up to $250,000 by the National Credit Union Administration. Check to make sure your credit union is part of this group before opening an account.

There's a lot to keep in mind when switching banks, but experts say what's most important is to do your research and be open to new possibilities.

"Rather than focusing on just one type of institution, cast a wide net and make sure that you're finding the best deal for your financial needs," McBride said.

First Published: November 11, 2011: 2:08 PM ET

LINK

 

_You're suddenly rich? Bummer

An avalanche of unexpected wealth can be traumatic, but don't expect anyone except other instant millionaires to sympathize.

Here are 5 rules to guide your noble struggle.

By MP Dunleavey

Who doesn't dream of landing a windfall someday -- of winning the lottery, inheriting $3 million from a long-lost aunt, finding a suitcase full of unmarked bills on the bus -- or a genie in a bottle? Me, I'm not terribly picky about where the millions come from, because the cash alone will solve all my problems.

At least that's the fantasy. The reality of life after a windfall isn't nearly as rosy. In fact, being flooded with a sudden fortune, whether earned or inherited, can be highly stressful and sometimes even traumatizing, say a new breed of financial experts who call themselves "wealth counselors."

I know. You look a little dubious. Skeptical, even. And who can blame you (or me) for raising an eyebrow (or snorting) at the idea that an enormous truckload of cash would be hard to handle? Sure, I'd give my left arm for it, and that would be a little painful. Of course. But I'd adapt.

But sudden money has a dark side. Most of us idealize what life would be like with Big Money. It's easy to forget that, like any drug, money can have a strangely distorting affect on our lives -- especially when taken in large quantities.

A windfall "changes all the parameters of how you live," says Dennis Pearne, Ed.D., author of "The Challenges of Wealth" and a pioneer in this odd little corner of financial management (see link at left under "Related Sites"). "It changes what you can do, what you no longer have to do, where you can live, how much you can travel. So much changes so fast that it can be terribly overwhelming, and some people go into money shock."
We should all have such problems
I desperately want a taste of that money shock. Which is part of the reason I am ridiculously fascinated by the phenomenon.

I mean, observing wealth and those who have it is has always been one of the most compelling spectator sports. Why do the British still keep that stuffy monarchy around -- except to watch them live their impossibly affluent lives? Why are Americans addicted to the most brainless publication on earth, "InStyle"?

It's not enough to envy those who are wealthy. We want to press our noses up against their rich-and-famous lifestyles to better tally all the things They Have, and all the things We Don't Have, because we think what They Have is better.

In fact, we think we'd just love to be afflicted with Sudden Money Syndrome . . . although Susan Bradley, a financial planner and founder of The Sudden Money Institute in Palm Beach Gardens, Fla. would tell you to be careful what you wish for.

Bradley focuses on strategies to help people cope with the swirl of confusing emotions and impulses that come with sudden money. In fact, she wrote a book about it, "Sudden Money: Managing a Financial Windfall." But after her book was published in 2000, she says, "I started hearing more about Sudden Loss."

Here's what she found: Sudden loss and sudden wealth have quite a bit in common. Bradley found that the techniques she used with clients suffering from sudden wealth were just as useful for those plummeting toward a dot-com bottom. "That's when I realized that it's not about the sudden increase in income, it's about the sudden shift," Bradley said.
Abrupt changes, emotional bombshells
All this may be more relevant to your own life than you think. PowerBall or no, any of us could experience a sudden financial shift. That's painfully true for the many Americans who have lost their jobs in the past few years.

Meanwhile, thousands of workers who were on the verge of retirement saw their retirement money shrivel with the stock market, or simply stop growing. They've had to swerve back into the job market, a very sudden shift in their life plans.

On the plus side, some of us may indeed get to experience some sort of windfall in our lifetimes. The Social Welfare Resource Institute at Boston College estimates that as the older generation dies, some $41 trillion will be passed on to following generations.

With all those lives in flux, it is emotional bombshells that people are ill-equipped to handle, experts say. If you are going through a sudden financial change, it's critical to navigate through the emotional maze to avoid making unwise decisions and destabilizing your financial situation even further.
What? No sympathy?
Dennis Pearne tells the story of one client, a software developer, who had a wildly successful IPO and netted about $24 million overnight. Within a matter of months, his life was a mess and he had lost every dime in risky, overseas investments. Was the anxiety of wealth so great he needed to blow it? Did he feel on some level he didn't deserve it?

Pearne says that this software developer experienced a number of emotional factors in his life that reached a crescendo -- insecurity, shame, a bit of paranoia -- which is what many people experience after a sudden money shift. As his inner compass went spinning, he made faulty decisions. You might not think that fear and shame and guilt and anger and anxiety would be your first response to a major cash infusion, but it's very common.

Another problem: Who can possibly understand your woes? "Isolation can be a big factor," says Thayer Willis, author of the book, "Navigating the Dark Side of Wealth."

"People who are dealing with these challenges of wealth know that most people won't sympathize or empathize. Their attitude is: I should have your problems," Willis says.

And that's just one way that sudden money, or lack of it, can skew personal relationships. More than Money, a nonprofit based in Arlington, Mass., offers peer counseling for the recently rich that it says is free of "sales, fees, solicitations, scorn or envy."

There can be other emotional fallout. If the wealth arrives due to someone's death, recipients can feel tremendous amounts of anger and resentment. "Maybe the money comes from someone you didn't have a good relationship with," Willis adds. "Or maybe the fortune was created in a way the recipient doesn't like or disapproves of. Some people feel, 'I don't want anything to do with this money!' "

Then there's the shock factor. "Quite often, families keep trusts and inheritances a secret from their children," Pearne says. "We have clients who arrived at their 21st birthdays and had millions handed to them, and they have no way, emotionally or technically, to cope with it. That is traumatizing."
5 strategies for coping with a money shift
These practical measures can be helpful whether you've suddenly hit the jackpot or lost it all.

Take a timeout. "The first rule is to park the money," says Pearne. Don't do anything with it, and don't make any major decisions about your finances for at least three months, he advises. That allows time to get one's bearings and make plans.

Get organized. While it's not a time to make decisions, you need to figure out what the decisions will be, says Susan Bradley, and that requires getting organized. Go through your assets and debts; pay any taxes and high-interest debt. Review your insurance coverage. Think about how you're going to live while you're in this planning stage.

Figure out your bottom line. Pearne asks people to research their situation until they know the answers to these five questions:

    What is your net worth?

    What is your income?

    What are your fixed expenses?

    What is your tax obligation?

    How much is left over?

Know your priorities. The money moratorium is an opportunity to engage in what Bradley calls "a touchstone exercise." Basically, you keep asking yourself questions about what you want to do, how you want to live, and what is important to you. Do you want to live in a cabin in Montana? Do you want to pay for all your children's educations? Do you want to engage in more philanthropy? Wait it out, get your bearings, pin down your priorities.

Assemble a financial team. When the emotions have subsided and you've given yourself some time to fully grasp your new financial situation, then it's time to enlist the help of an adviser. For the suddenly wealthy, that can mean an accountant, a financial planner, an investment adviser and an estate attorney. "On the soft side," says Pearne, "you may want a counselor or wealth psychologist."

LINK

_Family's Fall from Affluence Is Swift and Hard

by Geraldine Fabrikant
Monday, November 29, 2010
 
Nick Martin at the Highland Community College vineyard in Wamego, Kan., where he has taught winemaking since losing a fortune he got from the sale of the business his father founded. (Steve Hebert for The New York Times)
 
Grateful to have found work in this tough economy, Nick Martin teaches grape growing and winemaking each Saturday to a class of seven students in a simple metal building here at a satellite campus of Highland Community College. Then he drives 14 miles in an 11-year-old Ford Explorer to a sparsely furnished tract house that he rents for $900 a month on a dead-end street in McFarland, a smaller town. Just across the backyard is a shed that a neighbor uses to make cartridges for shooting the prairie dogs that infest the adjacent fields.
 
It is a far cry from the life that Mr. Martin and his family enjoyed until recently at their Adirondacks waterfront camp at Tupper Lake, N.Y. Their garage held three stylish cars, including a yellow Aston Martin; they owned three horses, one that cost $173,000; and Mr. Martin treated his wife, Kate, to a birthday weekend at the Waldorf-Astoria, with dinner at the "21" Club and a $7,000 mink coat.

That luxurious world was fueled by a check Mr. Martin received in 1998 for $14 million, his share of the $600 million sale of Martin Media, an outdoor advertising business begun by his father in California in the 1950s. After taxes, he kept about $10 million.
 
But as so often happens to those lucky enough to realize the American dream of sudden riches, the money slipped through the Martins' fingers faster than they ever imagined. They faced temptations to indulge, with the complexities and pressures of new wealth. And a pounding recession pummeled the value of their real estate and new financial investments, rendering their properties unaffordable. The fortune evaporated in little more than a decade.
 
While many millions of Americans have suffered through this recession with only unemployment benefits to sustain them, Mr. Martin has reason to give thanks — he has landed a job at 59, however far away. He also had assets to sell to help tide his family over. Still, Mr. Martin, a strapping man with a disarming bluntness, seemed dazed by it all. "We are basically broke," he said. Though he faulted the conventional wisdom of investing in stocks and real estate for some of his woes, along with poor financial advice, he accepted much of the blame himself. "We spent too much," he conceded. "I have a fourth grader, an eighth grader and a girl who just finished high school. I should have kept working and put the money in bonds."
 
Mrs. Martin recalled the summer night in 1998 when the family was having a spaghetti dinner at home in Paso Robles, in central California, and a bank representative called to ask where to wire the money. "It seemed like an unbelievable amount," she said regretfully. Soon after the money arrived, the family decided to leave Paso Robles, amid some lingering tensions that Mr. Martin felt with his brother and brother-in law, who had run the business. Mr. Martin had never been in management at the billboard company, though he had been on the board and worked at Martin Brothers Winery, another family business. First, the Martins bought a house in Somerset, England, near the home of Mrs. Martin's parents, and he decided to write a novel. At about the same time, they spent $250,000 on the 3.5-acre camp with four structures on Tupper Lake, deep in the Adirondacks, as a summer home. They began extensive renovations at the lake, adding a stunning three-story boathouse and two other buildings. Clouds gathered quickly. Life in England turned sour when Mr. Martin's novel, "Anthony: Conniver's Lament," did not sell, and the family's living costs — school fees, taxes and even advice for filing tax returns — swelled. In 2002, fed up with England, the Martins chose a new base, Vermont, and plunked down about $650,000 for a home there, as renovations continued on the Tupper Lake property.
 
By March 2007, the Martins were determined to move to the lake full time. They managed their expenses for a while, but the costs mounted and mounted some more as they worked at refurbishing the Adirondack property — eventually totaling a staggering $5.3 million, Mr. Martin said. He poured another $600,000 into the Vermont property, he said. He vacillates between blaming the builders and blaming himself for letting costs get out of hand. "We should have built something quite modest," he conceded. Tensions rose in 2007 as summer came without any offers for the Vermont home. "I thought that housing was going into a tailspin," he said. "I had the feeling that something bad was happening."
So "we started selling cars, shotguns, antique furniture, whatever," Mr. Martin said. The Aston Martin fetched $395,000. With a big gap in his employment history, he found a job teaching English at Paul Smith's College near his home in Tupper Lake for $14,000 a year. For an additional $7,000, he coached the school's cross-country runners.
 
Then came the financial crisis. The markets plunged, as did the value of the Martins' trust. By fall 2008, with much of the family's net worth tied up in housing, Mr. Martin faced a series of margin calls. He needed more cash in his brokerage accounts because he had been tapping into a credit line with his investments as collateral. In January 2009, he cashed in a retirement account worth roughly $91,000. The houses could not be sold quickly. Though if they had been, some of the pressure would have lifted. "To maintain those things, you have to have a pretty good cash flow," Mr. Martin said. The family ultimately put the Adirondacks property on the market for $4.9 million, then quickly slashed the price by half. Last month, the Martins got an offer for just half of the latest $2.5 million asking price. They have stopped making payments on their $1.1 million mortgage and their $53,000 in annual property taxes in the Adirondacks as well as the mortgage and taxes on their Vermont home. They cannot afford those obligations on Mr. Martin's current salary of $51,000. Their household income is down from $250,000 four years ago.
 
At the moment, they are working with a loan modification unit at their bank. The lender proposed a new payment of $3,550 a month, reduced from $7,400. Given his current status, Mr. Martin argued, that it does not make much sense. He predicts that the house will ultimately be sold or taken over by the bank. Meanwhile, for the Christmas holidays and some of next summer, the family has found renters for the main house to help cover some of the costs.
 
Over lunch recently at Barleycorn's Downtown Bar and Deli in Wamego, Mr. Martin said he believed "the worst is behind us."
Perhaps. But a forced restructuring can be difficult for children and spouses even in longstanding marriages. Sometimes he and his wife took it out on each other, he said. "She bought a bunch of horses. I blamed her for the horses. I bought cars. She blamed me for the cars — and the house being too big. We had a rough time," he acknowledged. "But I think we have gotten over that." Until Christmas, when she plans to join him, Mrs. Martin continues to work as a substitute teacher with autistic children at an Adirondacks elementary school: a $12,000-a-year job she loves in a place she says she is hesitant to leave. With their younger daughter, she has moved into a smaller building on their big property.

A lively woman who loves bike riding and horses, she has built a close network of friends. "What is the place in Kansas like?" she asked a reporter with some trepidation before her first visit at Thanksgiving. Mr. Martin, who moved to Kansas last April, brought the couple's 13-year-old son, Edward, to join him in the fall. He has been counting the days until his wife and Sophia, 9, come permanently. The older daughter, Mrs. Martin's from a previous marriage, has found work in Florida after finishing high school.
 
In the meantime, Mr. Martin is also overseeing a one-acre vineyard beside the Oregon Trail Road, drawing on his knowledge of the wine industry from his California days. He does what he can to lessen the family strains. "I have a temper. I have to control my temper," he said. "I could drink like a fish, but if you have problems in your life, drinking does not help." And he recites a quotation he holds dear : "The measure of a man is not whether he falls down, but whether he gets up again." Still, Mr. Martin is prone to ruminate over the loss of so much money. He is furious at the banks and the bankers, who he thinks gave him bad advice, and he still sounds angry at his brother and others who decided to sell the company and who he says gave him little voice. Some of them got more than $100 million each, he said, while he got $14 million, as did his father and his sister Ann, because they were all minority shareholders. His brother-in-law David Weyrich said that if Mr. Martin had objections to the sale, he did not voice them.
 
Mrs. Martin says she believes the move from California was motivated in part because he resented his brother and brother-in-law's bigger role in the community. She also speculates that the Adirondacks estate was alluring partly as a way of keeping up. "I think he wanted to show his brother and brother-in-law that he had a big home, too," she said over dinner recently in Saratoga Springs, N.Y. Mr. Martin disagreed. "We are Irish Catholics, and we thought it would be a compound for our family over generations," he said. After the cramped rooms at their house in England, he liked the big rooms, he said. "Sometimes, things don't work out."

LINK

_Getting Rich Quick: True Tales of Overnight Millionaires
by Abby Ellin
Monday, September 20, 2010
 
It's everyone's dream: Win the lottery! Sell your company for millions! Invent Beanie Babies and move to Fiji! In truth, though, instant millionaires don't quite get the joy ride they are hoping for. There may be a giddy rush of success, but the new money can also cause an enormous amount of anxiety.
 
In fact, when we interviewed some of the suddenly wealthy — a former flight attendant whose side business took off, a cancer survivor who won a medical malpractice judgment, a factory worker who won the lottery — we found a thread of caution running through all their responses. "I acquired a lot of friends — not by my choice," says Eric Ruthman, an inventor, investor and gambler on Long Island, N.Y. His advice to others: Change your phone number.
 
Read on to see his story — and those of four other overnight millionaires.

The Inventor
Name: Sandy Stein
Age: 59
Location: West Hills, Calif.
 
Source of wealth: The former flight attendant created a product that helps people find their lost keys
What did you buy? I bought a new Lexus convertible and paid cash for it and didn't even get a deal! I just took it right off the lot. I went on many trips and enjoyed plays, musicals, and concerts — as many as I wanted to see without feeling guilty. I even took my staff to Las Vegas for the weekend to celebrate our fifth anniversary.
 
Smartest thing you spent it on? A team of lawyers who have been protecting my patent from all the copycats who think it's OK to steal my idea.
 
Dumbest thing you spent it on? Paying full retail for my car. I have never done that before, nor will I ever do it again!
 
What are you doing now? I quit in 2005, after 35 years [as a flight attendant]. Now I am in the office five days a week, going to trade shows, and figuring out how to make more sales and solidify a spot in the marketplace.
 
Advice to others? It is fun to share your wealth with your community and friends. It is fun to spend the money on things you normally would not have spent it on, when you had limited funds. But it is even more fun to invest it wisely so that you don't have to worry what home your son is going to put you in as you get older.
 
The Dealmaker
Name: Eric M. Ruthman
Age: 51
Location: Long Island, N.Y.
 
Source of wealth: Sold a plastics company for $75 million — then invested early in eBay and made $14 million more
 
How did you get rich? I was involved in some manufacturing deals for the thermoplastics industry, invented some items and sold the company to a major player in the world of plastics — that was the base from which I started. As it turned out, my broker was engineering a great run into a new stock called eBay. It turned out to be a great deal — not only was I racking up stock and it was going to the moon — but when I realized what eBay was, I started cleaning out estates all over the East Coast , buying treasures for almost nothing and selling them on eBay. The cash flow from just that could be as much as $100,000 on little or no investment. ... I am also an avid gambler and have done very, very well for many years; some winning years have [made me] seven figures.
 
What did you buy? I have purchased many things through the years: a really nice boat that I spend most of the summer on; a home in Las Vegas and another in the Bahamas. I have an extensive watch collection that includes some really silly inexpensive items and some rare and cherished timepieces. I have 22 cars in my collection — the best is my little SmartCar. And I have a vast number of custom sport jackets from Versace and other designers.
 
Smartest thing you spent it on? The love of my life: Jenny, my Lab! She is numero uno.
 
Dumbest thing you spent it on? I invested some funds to help a friend establish a seafood company. I bought in hook, line and sinker (excuse the pun), and he failed. He would not take the advice of the investors he wrangled into the deal. I was not hot on the idea and should have listened to my inner voice, but a friend is a friend.
 
What are you doing now? I'm always up early — 5 a.m. at the latest, seven days a week. I start with televised news and printed news, spend time with Jenny, then hit the computer and TV for about an hour and tune into the world. I try to spend about three to four days in October through May at Harrah's in Atlantic City ... In the summer I'm on Long Island with the boat. I also do charity events and donate time and efforts to regional causes.
 
Advice to others? First, change your phone number! Then take 80 percent and invest it in solid growth-oriented funds with regular returns and minimal risk, and don't touch it for any reason. Live within the means of whatever your investments yield. Take 5 percent and go crazy with it — get it out of your system. With the other 15 percent, you can take the risk plunge into investments that may get you a nice windfall.
Finally, remember to take care of your family, friends and animals. Seriously: Give back, pay it forward, find a cause and support it. You will sleep a lot better at night.
 
 
The Entrepreneur
Name: Tracy Howe
Age: 40
Location: Frenchtown, N.J.
 
Source of wealth: In 2007, Howe and her husband, Peter Kraft, sold their college-recruiting software company for a multimillion-dollar sum.
 
How did you get rich? First of all ... "rich" means different things to different people. To us it doesn't just mean money, it means a house full of people, animals and activity. It means a "rich" life full of things to do. We made our by money building a technology company, Goalquest, in higher education. We built it from scratch and sold it eight years later.
 
What did you buy? We bought a house in the Hamptons as an investment property, but we haven't gotten our money out of it yet. Fortunately, the Hamptons is as near a recession-proof location as you can get, so we're optimistic about this investment. We also bought a horse farm in Florida — we're equestrians and show "jumpers," and we participate at the Winter Equestrian Festival in Wellington, Fla. That area, unfortunately, isn't as recession-proof as the Hamptons. Not only didn't we get our money out of that investment yet, but we'll probably lose money on that one. The market in Florida is terrible. We also bought a few horses for us.
 
Smartest thing you spent it on? Our kids' private education. It's incredible how much we can see the positive impact the school is having on their development, maturity and confidence.
 
Dumbest thing you spent it on? A very expensive grand prix show jumper [horse] for our trainer to ride and then resell. That definitely did not work out the way we had hoped it would.
 
What are you doing now? We started a new business in social philanthropy called SequentialT. We sell sequentially numbered shirts to people around the world. Each shirt raises money for charity and counts people in to a united effort to make the world a better place.
 
Advice to others? Take the time to think through want you really want for the next stage of your life, and don't rush into things too quickly. With unlimited amounts of money can come impulsive behavior. I think it's important to reward yourself for your success, but then you need proper planning for creating long-lasting assets so that you never [again] have to feel financial pressures.
 
 
The Lawsuit Winner
Name: Marv Doniger
Age: 65
Location: Laguna Niguel, Calif.
 
Source of wealth: After a bout with cancer, Doniger won $3.3 million in a medical malpractice lawsuit.
How did you get rich? I was forced to retire as a result of my longtime physician failing to recognize that I had cancer. After three months at UCLA Hospital and having lost my bladder, I was released — unable to walk. I have regained the ability to walk but was unable to resume my career as a management consultant to Fortune 500 companies. After years of litigation and two trials, I was awarded $3.3 million.
 
What did you buy? I have acquired a car and two poodles, Will & Grace, who are my constant companions. I also set up a trust fund for my grandchildren.
 
Smartest thing you spent it on? Investments that I made in accordance with my previously developed financial plan.
 
Dumbest thing you spent it on? I did not make any dumb financial decisions because I had a financial strategy and plan to cover the financial needs of my wife and myself. I have always looked at windfalls as something to be saved not squandered. Since I am no longer able to function as a management consultant, I chose to deploy the funds so as to ensure my wife's and my financial future.
 
What are you doing now? Based on my experience and reflection on my own personal financial plans, I have written books on managing finances.
 
Advice to others? A sudden influx of money presents one with a set of choices. You can use it to satisfy near-term desires, or use it to ensure your financial future. Develop a strategy for dealing with unforeseen financial needs. And beware of those who present you with investment ideas you don't understand and don't need to achieve your financial goals.
 
The Lottery Winner
Name: Dave Gehle
Age: 56
Location: Nebraska
 
Source of wealth: Together with seven of his co-workers at ConAgra Foods, Gehle won $365 million in the lottery in 2006. His share after taxes: about $15 million.
 
How did you get rich? I won the lottery!
 
What did you buy? A new snowblower and a new car; that's pretty much it. I still live in the same house I lived in before I won.
 
Smartest thing you spent it on? Travel. I went to Vietnam with another winner who was from Vietnam. He was being shot for a movie about lottery winners. I've also made some investments.
 
Dumbest thing you spent it on? To be honest — I haven't, really. I've been really careful. I guess I'm still kind of overwhelmed.
 
What are you doing now? I try to help out around town — I shovel snow for my neighbors and plow in the winters. For a while after I won I stayed at my job at ConAgra, but I finally quit.
 
Advice to others? Be really careful; be frugal. Don't blow it all. Invest. It's really tempting to spend it all. Don't.
 
SOURCE
 

FTC Tips: Money Matters Tips from the FTC: Scam & Fraud Alerts
Scam & Fraud Alerts
 
The predators are coming out of the woodwork: scam artists follow the headlines, and news about tight credit, foreclosures, and layoffs has given them a new lease on life. Through ads in the newspapers, on the Internet and on TV and radio, they’re preying on people’s anxiety and working hard to get them to part with their money.
 
These crooks are really good liars: Their claims are just good enough to be believable; their services and products just practical enough to seem legitimate. Some even try to look like a government agency to enhance their credibility.

So how is someone supposed to know whether a product, service, or offer is legitimate? Count on the fact that the FTC is working the law enforcement front to stop them. At the same time, the agency is counting on consumers to know how to spot, stop and avoid them. Here’s a road map to recognizing the kinds of scams people have reported:
 
http://www.ftc.gov/bcp/edu/microsites/moneymatters/scam-watch.shtml
    

Clark's Investment Guide
 
What kinds of investments are right for you?   Here's Clark's guide.
 
When I talk with someone trying to get started saving for the future, I sometimes notice their eyes glaze over as I answer their question. I can even tell when that glaze sets in as I talk to someone on the radio. It's typical -- investing can seem so complicated that you might feel tempted to shut down and do nothing -- or hire a salesperson to guide you.  Regardless of your level of investment knowledge, I want to help you tear down that wall.
If you are a regular listener or viewer, you hear me talk about both the Roth account and 401(k)s regularly. The purpose of both is to give you your earnings a tax break to save for your future.
 
A tradititional 401(k) is a  retirement savings plan that allows a worker to invest money now, and defer paying income taxes on the saved money (and earnings) until withdrawal, at retirement.

A Roth is a modified individual retirement account in which a person can set aside after-tax income up to $5,000 per year ($6,000 for those age 50 or older).  Earnings on the account are tax-free, and tax-free withdrawals may be made after age 591/2. This tax-free status beats just about everything. And you can set up a Roth account yourself.

Where do you put Roth money? Just about anywhere you want: A bank; credit union; full-commission stock broker; financial planner; in no-load mutual funds (a fund sold without commission) or with a discount stock broker. When you are young, I like for you to put the money with a discount broker or a no-load mutual fund. That's because I want all your money working for you.
 
Roths are really flexible depending on which company you choose to put your money into. You may be able to start with $50 and put as little as $50 per month into one. Or you may be able to open one for $100 with some companies, or $500 or $1,000 with others. (Here are some of my favorite low-cost investment options, broken down by the dollar amount you need to get started. )
 
My goal for you is to have an automatic deal where you put in a set amount of money each month to build the habit and reduce the risk to you. By making regular contributions monthly in equal amounts, you are doing what's called "dollar cost averaging." That's just a fancy way of saying in months that the stock market is tanking, your money buys more shares, and in months that the market is climbing, your money buys a smaller number of shares. In other words, dollar cost averaging is a way to pace your investing so that you're buying more shares when prices are low and fewer when they're high. Over time, putting money in this way reduces the possibility of panic in you and keeps you steady as you go. And staying in the game makes you more money over the long haul.
 
Investment Guide for all experience levels:
 
I hear from a lot of people who have the first part down -- putting the money into a Roth -- but are lost on the second part -- what to put the money in. On my investment guide choice list, I show a number of my favorite investments that could lose money in the short term, but make big bucks long term. Based on your level of investment knowledge, pick one of the following guides.
 
The EASY guide is for beginners, or those who want to "set it and forget it."
LINK


The MEDIUM guide is for intermediate investors, requiring more involvement.
LINK
 
The ADVANCED guide is designed for the most experienced investors.
LINK
 
 

Digging Out Of Personal Debt

Consumer debt is on the rise in more than just a few countries around the world. According to numbers released in March 2006 by the U.S. Federal Reserve Board, household debt has topped the $2-trillion mark in the U.S. - and that doesn't include mortgage debt. Consumer debt is a common topic of discussion and analysis, but it should not be considered a way of life. How can consumers get their debts under control? For an ever-growing number of them, the answer is debt consolidation. In this article, we show how consolidation can help - and why it often fails.
 
Tutorial: Budgeting Basics
 
The Ideal Process
Debt consolidation basically involves taking all of your debts and moving them to a single source. This often includes personal loans, home-equity loans, car payments, credit card balances and mortgage debt. Most brick-and-mortar lending institutions offer a variety of debt consolidation options. Online vendors also provide a vast selection of programs and a convenient medium for comparing them against each other. When it is done properly, debt consolidation results in a lower interest payment, a lower monthly debt payment and an increased amount of discretionary income each month. 
 
Ideally, the lower payment and reduced interest provided by debt consolidation free up enough income to enable you to live within your means. Once you can afford to make the monthly payment on your loan, you can begin to get out from under your debts by making extra payments in order to retire your loan as quickly as possible.
 
 
Watch: Consolidation DebtThe Reality of Debt Consolidation
While there are a number of financially savvy individuals who use debt consolidation as a tool to manage their finances, this is not typically the case. For most consumers, the need to engage in debt consolidation is a sign that they have been doing a poor job of managing their money. If they weren't, it isn't likely that they would be so deeply in debt in the first place.
 
Further cementing this argument is the fact that, immediately after consolidating, many of these individuals are no longer feeling pressured by their inability to pay their debts, so they go on a spending spree. Their previously maxed-out credit cards now have zero balances and, often, these consumers can't resist the urge to shop. 
 
In short order, many people who consolidate their debt go on to rack up so much additional debt on their credit cards that all of their newfound money is once again needed to make credit card payments. In other words, instead of using debt consolidation to reduce indebtedness, consumers are simply using it to dig themselves a deeper hole. (To read more, check out Home-Equity Loans: The Costs and The Home-Equity Loan: What It Is And How It Works.)
 
Change Your Behavior
Debt consolidation is the first step toward getting your bills under control, but changing your behavior is an equally critical part of the equation. In order for debt consolidation to have a meaningful and lasting impact on your financial situation, you need to break the debt cycle. Simply put, that means that you need to stop spending money that you haven't earned yet.
 
One of the easiest ways to minimize your spending is the elimination of your credit cards. Credit card abuse is one of the leading causes of consumer indebtedness. Another easy step is to put a moratorium on new loans. Your debt consolidation loan was taken in order to get your debts under control. Taking out additional loans is counterproductive. Keep in mind that "loans" include any scenario where you are racking up bills that require repayment at some point in the future. This includes the purchase of new automobiles and the purchase of items that offer no payment and no interest for a predetermined amount of time. (For more tips, see Take Control Of Your Credit Cards, Understanding Credit Card Interest and Credit, Debit And Charge: Sizing Up The Cards In Your Wallet.)
 
Conclusion
Ongoing debt minimization is critical to the long-term success of debt consolidation. Financial experts often note that your outstanding debts, including credit cards and mortgage payments, should not amount to more than 36% of your gross monthly income. That 36% figure is often referred to as a debt-to-income ratio. The ratio is calculated by dividing the amount of money you spend each month to service your debts by the amount of your income. When they do the math, people are often surprised to discover that their debt-to-income ratios are significantly higher than the recommended amount. Determining your debt-to-income ratio provides an excellent reminder that you aren't supposed to live paycheck to paycheck, spending every single dollar that you bring in each month.
 
If you find yourself in financial trouble, use debt consolidation as a tool to get your finances back on track, and then use good spending habits to keep your bankbook in the black. 
 
For additional information about sound ways to manage your money, see The Beauty of Budgeting, Seven Common Financial Mistakes and The Indiana Jones Guide To Getting Ahead. 

SOURCE  

G-20 labels eight US banks as SIFIs

by KERRI PANCHUK

Friday, November 4th, 2011, 1:55 pm

The G-20 international monetary policy organization named eight U.S. banks systemically important financial institutions, or SIFIs, this week.

The eight institutions are part of a list of 29 global banks that obtained the designation from the G-20, putting the institutions in the position of having to comply with global SIFI requirements that will eventually enforce capital surcharges that fall somewhere between 100-basis points and 250-basis points, the G-20 said. Critics of the SIFI designation say it is simply a more politically correct way to describe "too big to fail" at said financial institutions without solving core operational issues.

The eight U.S. banks designated as SIFIs include Bank of America (BAC: 6.49 -6.08%), The Bank of New York Mellon, Citigroup (C: 30.34 -1.43%), Goldman Sachs (GS: 105.04 -2.45%), JPMorgan Chase (JPM: 33.97 -1.19%), Morgan Stanley (MS: 16.72 -1.36%), State Street (STT: 39.99 -0.94%) and Wells Fargo (WFC: 25.40 -1.59%).

The G-20 reported both positive and negative news stemming from the official naming of the world's systemically significant financial institutions. The positive is the fact that the move "should open the door for the big U.S. banks to boost their capital distributions in 2012," wrote analysts at MF Global. However, the negative is the fact that global regulators decided to hold off another 12 months before naming where in the 100-to-250 surcharge range the SIFIs will fall in, the firm said.

Surcharges on the SIFIs will not be phased in until January 2016. It is likely to take another three years before that process is complete. The G-20 noted in its Friday report that "there was no talk of accelerating the phase in (of the charge), which is another reason why we believe the door is open to higher capital distributions in 2012," MF Global said.

Write to Kerri Panchuk.


http://www.housingwire.com/2011/11/04/g-20-labels-eight-us-banks-as-sifis

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Factbox: The FSB's list of 29 globally important banks

Fri, Nov 4 2011
Factbox: The FSB's list of 29 globally important banks

CANNES, France | Fri Nov 4, 2011 10:40am EDT
(Reuters) - Following is an alphabetical list of the 29 global systemically important financial institutions (G-SIFIs) released by the Financial Stability Board (FSB) on Friday:

Bank of America

Bank of China

Bank of New York Mellon

Banque Populaire CdE

Barclays

BNP Paribas

Citigroup

Commerzbank

Credit Suisse

Deutsche Bank

Dexia

Goldman Sachs

Group Crédit Agricole

HSBC

ING Bank

JP Morgan Chase

Lloyds Banking Group

Mitsubishi UFJ FG

Mizuho FG

Morgan Stanley

Nordea

Royal Bank of Scotland

Santander

Société Générale

State Street

Sumitomo Mitsui FG

UBS

Unicredit Group

Wells Fargo

(Reporting By Daniel Flynn)

http://www.reuters.com/article/2011/11/04/us-g20-fsb-list-idUSTRE7A344L20111104

G20 names 29 banks for capital surcharge, recovery plan

By Daniel Flynn
CANNES, France | Fri Nov 4, 2011 10:30am EDT
Nov 4 (Reuters) - Twenty-nine banks were named on Friday as being deemed so important to the global financial system that they are likely to need to hold more capital than rivals and must put in place a plan to allow them to be wound up without taxpayer help if they hit trouble.

Of the banks listed at the Group of 20 meeting in Cannes, 17 are from Europe, eight are U.S. banks, including Goldman Sachs , JP Morgan and Citigroup , and just four from Asia, including Bank of China .

The G20 endorsed a core capital requirement surcharge starting at 1 percent and rising to 2.5 percent of risk-weighted assets for the biggest banks -- which would be phased in over three years from 2016. The aim is to ensure taxpayers will never again be called on to foot the bill in a major banking crisis.

International industry watchdog the Financial Stability Board (FSB) also said the 29 banks need to meet resolution planning requirements, dubbed "living wills", by the end of next year. National authorities can extend this requirement to other banks at their discretion, it said.

The list of global systemically important financial institutions -- known by regulators as G-SIFIs -- will be reviewed annually each November. The capital buffer will apply to banks identified in November 2014.

"We consider these to be minimum rules," said Svein Andreson, secretary general of the FSB, which has been tasked by the G20 with coordinating the global regulatory response to the financial crisis.

He said a top level of 3.5 percent could be imposed on banks as a deterrent.

http://www.reuters.com/article/2011/11/04/g20-financials-idUSL6E7M42LC20111104

How to read the date on your dinar
 
This will help you find the date on your dinar notes.

http://www.imageurlhost.com/images/wlw4w030ma60o69jzpu4_dinar.jpg

Thanks to Johnny for sending this

Thanks Going Global....BofA employees flood bank's rivals with resumes ...


Related (Bank of America) Articles:

Is Bank of America preparing for a Chapter 11?... 

Bank of America Will Generously Offer Ways To Avoid Having Them Totally Rip You Off ~ "Isn't That Special" ... and .. Bank of America drops $5 debit card fee plan ~ JPMorgan Chase & Co and Wells Fargo & Co last week decided to cancel test programs ... 

November 02, 2011

BofA employees flood bank's rivals with resumes 

CHARLOTTE, North Carolina (Reuters) - Bank of America Corp employees are flooding rival companies with resumes as a major cost-cutting program gets under way at the second-largest U.S. bank.

Competitors say they are getting an influx of calls, emails and LinkedIn connection requests as the bank embarks on a plan to slash 30,000 jobs over the next few years. The employees are scouting jobs in retail, commercial and investment banking, bankers and recruiters said.

"It's definitely picking up," said a senior executive at a rival consumer bank.

The uncertainty at Bank of America gives competitors a chance to nab talented employees, bankers said. But they cautioned that many companies are only hiring selectively.

Continues ...

In the most high-profile departure, PNC Financial Services Group Inc last week hired Bank of America strategy executive Mike Lyons to lead its corporate and institutional banking unit. Lyons had advised CEO Brian Moynihan on his plan to sell off nonessential assets.

John Dunn, director of the banking and financial services practice at recruiting firm Stephen James Associates, said he has had about 20 calls or meetings with Bank of America employees in recent weeks, mostly in investment banking and capital markets operations. Normally, he might have talked to or met only two to four over that period.

"Now these folks are looking to get out of choppy water before they get displaced or asked to relocate," Dunn said. "It's much easier finding a job while you have a job."

Moynihan is chopping expenses as new regulations, a sluggish economy and low long-term interest rates are crimping profits across the banking industry. Charlotte, North Carolina-based Bank of America in particular needs to build capital to cover mortgage-related losses and meet new international standards.

The bank's efficiency program, called Project New BAC, aims to streamline a company bloated by years of acquisitions. But executives risk cutting too deeply or creating an unsettling environment for those who remain, said Beth Livingston, assistant professor of human resources studies at Cornell University.

"You get the survivor effect," Livingston said. "Everyone is on edge. There's a culture of fear that permeates the climate."

SHAKE-UP

In recent months, Bank of America has laid off employees, including senior leaders, in consumer, human resources, capital markets and other areas, people familiar with the situation said. The cuts are part of a round of 3,500 layoffs announced in August and the first wave of Project New BAC, which takes its name from the company's stock symbol.

New BAC cuts began in September when Moynihan ousted consumer banking head Joe Price and wealth management head Sallie Krawcheck and handed their duties to co-chief operating officers David Darnell and Tom Montag.

In reorganizing his management team, Darnell is merging mortgage operations into the consumer bank, leaving the future position of mortgage head Barbara Desoer unclear. The shake-up also displaced Bank of America veteran Henry Fulton, who has held top credit card, mortgage and consumer banking positions.

Last month, the company said the "implementation" of the first wave of New BAC, which focuses on consumer operations, was to start in October. The second phase, which will address capital markets, commercial banking and wealth management units, begins in the spring.

Bank of America said it had 288,739 employees on September 30, up from 288,084 three months earlier, but about 2,000 have been told they will be let go.

Bank of America spokesman Scott Silvestri declined to comment on the layoffs.

The company ranks behind JPMorgan Chase & Co in terms of assets.

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Bank of America drops $5 debit card fee plan

Rick Rothacker
Reuters US Online Report Top News

Nov 01, 2011 12:11 EDT

(Reuters) - Bank of America Corp is dropping plans to charge a $5 monthly fee for debit card use, the bank said in a statement on Tuesday.


The second-biggest U.S. bank said the move was in response to customer feedback and competition. Bank of America was under pressure to make the change as rivals backtracked from plans to charge customers for using their debit cards.

"We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee," David Darnell, the bank's co-chief operating officer, said in a statement.

JPMorgan Chase & Co and Wells Fargo & Co last week decided to cancel test programs, while SunTrust Banks Inc and Regions Financial Corp said on Monday they would end monthly charges and reimburse customers.

Bank of America had planned to start charging customers next year. Banks began crafting the monthly charges to make up revenue lost to a law that slashes the fees they charge retailers when consumers swipe their cards. The fees sparked a firestorm of criticism from consumers and politicians, and many smaller banks and credit unions shunned the practice.

Bank of America began softening its stance on the fee last week. The Charlotte, North Carolina, bank planned to give customers more ways to avoid the charge, such as maintaining minimum balances, having a paycheck direct-deposited or using their Bank of America credit card.

The reversal is another embarrassing about-face for Bank of American CEO Brian Moynihan. This spring, he signaled plans for a modest dividend increase this year, only to have the Federal Reserve Board deny the request.

(Reporting by Rick Rothacker in Charlotte, North Carolina; editing by Lisa Von Ahn; editing by Andre Grenon)

Source: Reuters US Online Report Top News

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