By

Lois Center-Shabazz

Stock Research Tips

Use this stock research information to start your stock research and investment in equities, including mutual funds.

Stock research tips - what are equity securities.

Equity Securities

of the first stock research tips you should know is; an investment in a stock issued by a company is an equity security. There are individual equities or stocks and you can purchase equities in mutual fund shares when the mutual fund is made up of stocks. I personally feel beginners, but many seasoned investors are better off investing in mutual funds – mainly because they have expert management. But, you must understand individual equity securities before you start to invest in mutual funds.

Earnings and Profitability

Check to see if your company has earnings. Then check to see if there has been a yearly increase in earnings for the past five years. After earnings verify the company has a profit. To the novice investor, it seems that a company cannot exist without profits. But, companies can and they do. Some companies get their start with venture capital funding, this funding is paid to companies as high as 5, 10, 50 million dollars and up.

Some companies make good on their venture capital funding, pay the investors, and make a profit, and some don’t. This is what happened with the dot-com bombs of recent years, many of those companies had venture capital funding. Some of them were given millions of dollars without having a company, earnings, or lest I say, profitability. Only a few of those companies persisted, developed products, and turned a profit. Since this is the highest risk level of a new venture company, it is best to invest in these companies after they have proven products and have turned a profit.

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P/E or Price to Earnings Ratio

First look at the company’s earnings as they stand-alone. Does the company even have earnings? How can a company even exist without earnings? During the recent dot-com craze of the late 90’s , many of the companies’ stock prices increased dramatically in just a few hours to a few days, after going public, but yet the companies had no earnings. The reason they were able to debut on the stock market, was in part, as I mentioned above, because of funding from private sources or venture capital companies. After going public, their stock prices dramatically increased because of speculation that they would have future earnings.

The Internet was and still is relatively new. Some companies have made a lot of money and real earnings on the Internet in a relatively short time, or it seemed relatively short compared to the standard brick-and-mortar companies, as they are called. Actually, many of the Internet companies that are making a lot of money with real earnings had been in existence for a few years, some developing for quite a few years behind the scenes, before they went public.

What was the clue that investors had that the dot-bombs (as I call them) had no earnings. Inexperienced investors could have looked at their P/E or price to earnings ratios. It was not uncommon to see a price to earnings ratio of 300 or 350 for some of these companies! Now that is high! In contrast many value companies have price to earnings ratios of 15, 20, or 30.

P/E or price to earnings ratio: Calculations

To calculate the price to earnings ratio, divide the stocks latest price by the earnings for the past four quarters.

Example:
$20 current stock price = $10
$2 past earnings per share

This is called the trailing PE because it is based on the companies past earnings. You can also figure out the companies projected earnings with the same formula, just substitute the projected earnings figure with the past earnings figure.

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Price to Book Ratio

The price to book ratio compares the companies price to its assets.

Example:
$20 current stock price = 100% price-book ratio
$2 book value per share

If the company sells for more than its book value, investors think highly of the company. If it sells for less, investors don’t think much of the assets. Some people buy undervalued stocks, that is, stocks selling below book value because they feel they are getting a bargain. Sometimes when you hear media reports about a stock you will hear them mention that the current stock is “selling below book value.” Some people use that as a clue to start research on that stock.

Debt Ratio

Since the Enron stock scandal, other companies have been audited by the Securities and Exchange Commission, and had to restate their earnings or have voluntarily restated their earnings. Another fundamental they have had to restate is debt. Low debt is a fundamental that many investors use to purchase a stock. In light of the Enron scandal, some companies have admitted to hiding debt in various ways. In order to understand most of the fundamentals of a company, you will need to read the annual report, and the quarterly reports. Look for things that don’t add up, that don’t make sense or just seem “padded.”

The debt ratio; is the liabilities of the company minus the total shareholders equity. 30% debt-equity ratio is considered low debt.

Example:
10 million total liabilities = 20% debt-equity ratio
50 million?????????

Compare debt to your house mortgage, if you have no mortgage, and therefore no debt on your home, the less you depend on your income to sustain it. You primarily have maintenance cost and taxes. Debt is a good measure of a company’s stability because the less debt a company has the less it has to depend on financing to sustain itself. If debt is used wisely and the company can handle the payments easily, debt is not a problem. There is always the potential for problems if the company has high debt and their core products stop selling or have to be recalled for some reason, and they can’t make their debt payments. Conservative investors usually opt for low-debt companies.

Dividend Payout Ratios in Equity Investments

Tells how much of a companies profits are paid out in dividends. Older more established companies pay high dividends, where newer growth companies invest back into the company for growth and development of new products.

Example:
$2 dividends per share = 50% dividend payout
$3 earnings per share

Dividend payouts more than 50% means the company is not reinvesting much back into the company.

Industry Leader/Company Leader

Check to see if the company is in a leading industry, and that the company is a leading company in its industry. You wouldn’t want to invest in an industry that is going out of business, or a company that is doing the least business out of all companies in its industry. You can find leading industries and leading companies categorized in major financial newspapers. Leading companies are also mentioned on televised financial news reports.

Stock Investment Management

Analyzing the company management is not a quantitative measure, but it is an indicator. Research the company management to see if they have been successful developing products for their company in the past, or if they have successfully developed other companies or products. Read about them in online proprietary stock reports, read their history in sec (securities and exchange commission) reports, read about them in your brokers online reports. Some financial newspapers and magazines will also feature reports on company management. Jack Walsh, the former CEO of General Electric is an example of great company management, as touted by the press.

Read Annual Reports for Stocks

There are several places to study the companies you are interested in researching. First, start with the company annual report. You can call the investor relations of the company and order a report. Also, some financial newspapers provide a place where you can order annual reports. Just check the stock section of major financial newspapers. Some annual reports are available online. Check with your online service or your online broker service to see if you can get annual reports online. You can also use “Edgar” online. Use “Edgar” at: www.sec.gov/edgar/quickedgar.htm

The Securities and Exchange Commission provides Edgar. Using “Edgar,” you can do company research. You can read annual reports, quarterly reports, mutual fund annual reports and mutual fund prospectuses. There is even a tutorial to teach you to use Edgar, at the Edgar website.

Long-Term Hold

Why do stocks work best when held long term? It takes time for a company to develop a product, it takes time for a company to market and sell a product, and so it takes time for a stock to move up in price. With that said, even though you research investments before buying them, buy and hold does not mean, buy and ignore.

You should periodically evaluate the companies you hold to verify that it has not taken a bad turn, and stands to go bankrupt. You can also monitor your investments with company news using financial newspapers, financial news on television, and online financial news. There are companies that go bankrupt periodically.

If you research your company well and make an informed decision to purchase your company stock, invest in companies with high value, and monitor your company periodically, your chances of losing money with a bankrupt company should be slim.

Summary: What factors should you consider in your investment research?

Long term investing

Low taxes on investments

Strong quality companies

Great company management

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9 Ways Big Box Stores Like Costco Entice You to Buy More Than You Need

Big Box Stores Like Costco9 ways big box stores entice you to spend

Start with The Costco Website

First of all, big box stores like Costco entice you to sign into their website with your Costco card number, although they say that is not a requirement. Most of the prices on the website have discounts. So, that would place most of them on sale or to appear on sale.

There are “member only” items that entice you to click through and check out the price. Non-members online may be assessed a surcharge, and executive members may receive a credit for a 2% rebate.

People will cheat you if you let them

Coupons

Costco mails out a coupon booklet to card carrying members monthly.On coupon day many shoppers are seen around the store with coupon booklets in hand, after a mailing. The coupon booklet is not needed to get an in-store discount, but it makes it easier to identify the months Costco bargains. This draws shoppers to the store and to buy. The coupons are a powerful draw for the coupon addicted.

Discounted Items That Have a Purchase Limit

Many of Costco’s discounted items have a limited number of items you can purchase. The limit gives you the psychological mindset that there must be a lot of value in this item, so it makes your mind think you must buy to the limit, so you can get your share.

Because of this process, you end up buying more than you normally would in a regular grocer to make sure your mind knows it’s not missing out on a huge deal.

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Pre-Packaged Big Food at Costco

Food is packaged in 2’s, 3’s or 4’s. Most people don’t buy 3 or 4 of each item they need when they go to the regular grocery store, but in Costco they force multi-packaged items on you since the items are taped together in multiple numbers.

Because items are pre-packaged in multiples, we don’t even think to comparison shop the price, we just assume it is less than if you purchased it alone.

Costco Loves Sample Tasting

Sometimes on busy days there are tasting stations. Most of the tasting is for pre-made food items, sauces or frozen goods. After tasting items, many people automatically walk over and buy that item. I have tasted items, purchased them, and didn’t even use them after I got home due to allergies.

Product Placement as You Walk Costco Ailes

Upon entering the store the first merchandise that grabs the eye is some must-have seasonal products on the left, then the cameras, television’s, and computers on the right, and the expensive jewelry practically hits you in the face. Then before you get to the groceries, it continues to force you to look at clothes on the left, and other must-have but not-needed items.

Then you pass the attractive wine racks and beautifully appointed bakery goods. Finally, you get to the quadruple packaged meats, tripled packaged deli products, and then cheeses and fruit. It goes on and on, smartly placed to make your mind tell you to buy, buy, buy.

Containers and Packaging

In addition to the multi-packs of items in many of the big box stores like Costco, you will see a lot of large containers of items. This forces you to buy more that an average person would, and for most shoppers they will also settle on stocking more than normal, because they have more. This is great for large families, but it alse keeps busy people from making frequent shopping trips, so in that sense it great for everyone. Calculate the price per unit on each item to comparison shop at other stores, so the actual value reflected in the packaging is reflected in the price.

The Dress of the Employees

Lastly, most of the employees wear jeans and t-shirts. This gives you the feeling that you are in a super-discounted place, because even the employees dress down. No uniforms and no company logos on t-shirts.

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The No-Frills Warehouse Design

The no-frills warehouse design gives you a feeling of plain, simple and inexpensive overhead that will be passed on to you the customer. When you get to the counter the no-frills feeling is continued with the recycling of boxes the Costco merchandise comes in, these boxes are reused to hold your groceries and other items.

With items 1-9 above, you now know what the process is to saving money at big box stores like Costco. Go to the website first and establish what you need, then make a list, write down the price of each item and stick to your list with your new-found Costco shopping awareness.

Note how long each of the items will last you so you know when you need to shop again and how much you will spend in a one-month or two-month period. Costco warehouse can be a great way to save money, if you have what I call “Costco Awareness”.

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Student Loans Can Be Scary, Do Your Homework

Student Loans Scary

Student loans can be scary because student loans ruin your life.

The Cost of a College Education Can Be Outrageously High if You Are Not Careful

During the past 20 years the cost of a college education has skyrockted way past the rate of inflation. Educational cost are far above the reasonable loan repayment with an entry level job. The average entry level pay of most college graduates is not sufficient to repay student loans and cover living expenses. Because of this sad saga, you must be diligent in understanding college cost and the process of college financial aide, especially college loans.

There are different types of loans, with a wide variety of repayment options. Some of the loans are very reasonable, while some can become very expensive if you do not understand the repayment terms. Some loans do not charge interest during school attendance, during deferment, or the grace period, while others charge interest during all there of the latter periods.

Direct Loans are low-interest loans for students and parents to help pay for the cost of a student’s education after high school. The lender is the U.S. Department of Education (the Department), though the entity you deal with, your loan servicer, can be a private business.

With Direct Loans, you:

Borrow directly from the federal government and have a single contact- your loan servicer- may be a private institution for everything related to repayment, even if you receive Direct Loans at different schools.

Can choose from several repayment plans that are designed to meet the needs of almost any borrower, and you can switch repayment plans if your needs change.

The Direct Loan Program offers the following types of student loans:

Subsidized: for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods.

This is by far the best type of student loan, if you can qualify. The deferral of interest payments makes this an affordable loan, if paid in a timely manner after graduation. The current interest rate for this loan is 3.4%.

Unsubsidized: not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods. The interest could almost double your payback at graduation, unless you make interest payments during college.

Because interest is charged during all periods, it is possible that this loan could spiral out of control if small payments are not made during the entire loan period, including while enrolled in school. The current interest rate for the unsubsidized loan is 6.8% (this may be different by the time you read this article).

PLUS: unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods. This loan requires a credit check.

If you cannot survive a credit check 1. — You can get a co-signer (this person is responsible for repaying the loan in the event that a) you do not get a job, b) you loose your job, c) you cannot pay due to disability or long term illness. d) you do not make enough money to repay your loan. 2. — You can plead your case and write a letter of explanation of bad credit, this may give you an exemption.

The current interest rate for plus loans is 7.9%. This alone makes it imperative for graduate and profession students to make a payment during the school attendance, grace, and deferral period. A young girl was profiled on dateline who finished medical school, did a residency and saw her total school loan balance balloon from $250,000 to over $500,000 during residency.

She stated that she did not understand the interest charges during her residency deferral period. She could have kept this balance at $250,000 had she understood that making an interest payment during her residency would have solved this issue.

College loans are awarded after a student submits a FAFSA (Free Application For Federal Student Aide). This application can be started and finished online directly at the FAFSA government website, by creating a PIN. This procedure is more efficient than applying at one individual college of your choice, since you can verify that all of the requested information is completed in a timely manner.

Every single college you think you are interested in should be placed on the online application, and the completed application will be forwarded to the school of your choice when you decide where to attend.

Denial: Students have the right to deny any portion of the student aide as loans or ask to decrease the amount of loans that may not be needed. The fewer loans a student has the better off they will be later, due to low debt.

Consolidation: Eligible federal student loans can be combined into one Direct Consolidation Loan. The government gives you a deadline for consolidation of school loan debt. This may ease your payment burden if your loan payments are too high or come from too many sources.

You also have a choice of private school loans. Private school loans are more expensive than government loans, they have more fines and fees if not paid due to illness or disability, and they have less forbearance. With private student loans you have no safety net. Private loans are easy to get, but have no deferment or forbearance on the loans.

They have no sympathy for those who get into trouble. Because of this it is important to get the maximum from government loans  before you think about private loans. Most students have no business at all with a private loan, considering the risk involved. You can understand more of the nuances of student loans by going here.

Related Link: Student Loans eBook

A Word About Home Loans

A word about home loans

It is best to build equity in your home over a number of years. Your goal should be to pay your home off in 15 or 30 years or earlier, if possible. Then sell it, and live off the proceeds as part of your retirement, or leave money to your heirs to purchase their own home.

Should you decide to acquire a new home loan your income should easily support the new payment. If you do not have an income or your income is limited, you should not acquire a new loan. A loan has to easily supported by your income NOT your equity. The income you have is what you will use to pay your monthly mortgage with

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If you do acquire a new home loan you should:

  1. Have income to easily support your home loan.
    This sounds like a simple concept. But, for many who want a home they think, “buy the home first, then figure out how to pay for it”. Please don’t put the “cart before the horse”, so to speak. You make yourself susceptible to bad loans and bad lenders when you buy a home before you have done your research and determined that you can afford a quality loan. The keyword being quality. The high quality loan, the more qualified you are the more likely you are to stay in your home long term, build equity, and retire without a payment, because it will be paid off by you.
  1. Have researched an affordable, high-quality loan yourself or have a relative research one for you. Compare several home loans, read the fine print, ask plenty of questions, understand all of the terms of the loans. See home buying at Msfinancialsavvy’s home buying course where you will learn over 100 ways to successfully buy a home. It is targeted to women, buy of course men will benefit too. Home buying is tricky, so I recommend you take this very inexpensive home buying course well in advance of buying a home.
  1. Make sure the appraised value of other homes in your neighborhood substantiates the added cost of a new or additional home loan. Understand and verify in writing you have a high-quality loan with no balloon payment attached. Some home buying purchase a home based on emotions and not all of the facts they need to make sure they are not cheated. You can easily overpay for a home when you buy on emotions. This can happen if the sellers lie about amenities or if the neighborhood is going down in value, so for instance you check the last four home sales in the area, but home values are trending down, so you get a home that you could have negotiated way down if you had this information.
  1. Understand in writing, the actual interest rate of your loan, obtain an interest rate you can afford or do not obtain the loan. Sometimes interest rates change before signing for your new loan.

A word about home loans for successful home buying for women

  1. Understand it does not make good financial sense to replace a loan that is nearly paid off with a long-term loan of 15 or 30 years. Once you have your home paid off you are home free. No more payments, you can call it rent/mortgage free, so DON’T mess it up at this time. Especially if your income is not set after retirement, you don’t want to increase your liabilities with a new loan if you are not increasing your income.
  1. Visit, www.fdic.gov (see “looking for a mortgage”)
    There has been a lot of information in the media lately about predatory lenders, they prey on the poor, under-educated homeowners with lots of equity in their homes. If you know of anyone in this category educate them about the dangers of unsolicited home loans or home loans with potential balloon payments.

Remember; do not forget to read the fine print. Also, if you don’t have a job, don’t get another loan. If you need a business loan, don’t use your house; get a bank business loan or Small Business Administration loan, see www.sba.gov. Another option is to delay starting a business until you can acquire proper funding.

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Your 7-Year-Old Child’s Budget

Your 7 year old childs budget, spoiled kids make difficult adults

If a 7-year-old has a great child’s budget, will that make him a frugal adult? It may, and it may not. But, we do have lots of evidence to suggest that spoiled children often become over spending and greedy adults. What happens at 7 could easily happen at 70, since good and bad habits grow over time, so why not start growing good habits with a child’s budget early.

Psychologist say the earlier you teach someone a skill the better chance they will perfect it overtime. That is seen in teaching skills such as music, sports and education. In my humble opinion, that also works with budgeting skills.

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Some folks can’t figure out why their kids constantly beg for everything in sight, then they look back at the fact that they did not set proper limits on spending early. They felt that a happy child was a child that had everything they wanted, until of course, the child hit their teens and then twenties, and their begging for “things” and spending money developed into out of control behavior.

Here are 3 things you can do to put your 7-year-old on the right path for life.

  1. Give him an allowance, a piggy bank and chores to begin his child’s budget

Some parents think children should not be paid for the chores they do around the house. I am of the camp that feels there is nothing wrong with giving a child an allowance for working around the house if it is in line with age and chores.

The child does their chores on a schedule, they are paid on a schedule and they are encouraged to save a portion of their allowance and budget the remainder. It teaches them early that we all must work for money, and money has a limit.

  1. Discuss value, which is the pinnacle of a child’s budget

Some products appear cheap, but they will not last after the first usage or wash. So, teach them there is a difference between expensive, cheap and value for a product. You can purchase a product that appears cheap, but has very low value because it is made with low quality materials or craftsmanship, and quickly falls apart and becomes useless.

An example is buying a computer that is very inexpensive but it only last for 3 years, versus paying slightly more, say 30% more for a computer that last for 12 years — the savings is obvious. On the other hand, you can purchase an extremely expensive car, the upkeep is extremely expensive, and the breakdowns are frequent. That car may look good and go fast, but has little value for practical use and longevity. The maintenance cost out way the looks and performance.

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  1. Teach your child about budgeting, savings and costs to round out your child’s budget

The earlier a child understands what a budget is, how to budget out the total sum of the money they receive, and how cost effects their savings, the better they will be in the future.

Sit down and decide with your child what is important for them, you can look at the internet or newspapers and find the prices of items they are interested in. Inform them that prices change from time to time, but this will give them an idea of what they must save. Allow them to set short term savings goals – a sports item like a basketball or doll, and a long-term savings goal like a more expensive game.

When you buy their more expensive items like bicycles, ATF’s, computers, and clothes, use this time to also discuss value, longevity, and cost.

Using steps 1,2, and 3 will allow your child to start early to process a functional child’s budget, so they can take budgeting into their adult life as an expert.

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Life Without Affordable Health Care

The Affordable Health Care Act
Life Without Affordable Healthcare

Also known as “Obamacare”, has been in operation for about nine years now, as of 2019. Unfortunately, there are some politicians who have politicized it, and now patients are in jeopardy of losing their Affordable Health Care Coverage. Many did not know the health insurance they held, was given to them under the Affordable Health Care Act, according to polls.

The Health Care Debate

There has been a lot of debate about the government provided health care coverage in the United States. Who would have thought there would ever have been a debate about saving lives? With the uninsured rate sky rocking from 2 million in the 1970’s to over 50 million (uninsured and under-insured), before the government-sponsored health coverage began. We would have thought everyone would have been ecstatic about its lifesaving function. After all, the politicians who don’t agree with it get government sponsored paychecks, pensions, and health care.


Is Health Care Important if You Are Not Rich

There are many reasons health care is important; it encourages Americans to visit the doctor on a regular basis and go to the hospital when needed. What happens when you have no health care and no other way to pay when you go to the hospital. There are a few devastating things that can happen. First of all, many uninsured will stay away from doctors and hospitals when they are sick, and continue to get worse. But, equally devastating is the financial aspect, if you own a home, they can eventually place a lien on your home and do a forced sell to pay a large unpaid hospital balance. They can also get a court order to garnish your check for payment. Now, would you rather have government sponsored health care, (with subsidies, to help for payment, if you make under $50,000), or would you rather lose all of your assets for (potentially) the rest of your life.

Small Business and Health Care

I spoke with a small businessman about health care. He has 3000 employees nationwide. He was really upset he had to provide health care for his employees, initially. Then, he complied and went into shock. His employee attendance rate increased by 50% immediately. His employee morale increased drastically. He was happy to find out he also received a subsidy to help with the payments. It was a win-win situation for everyone involved. His best surprise was that health care worked wonders on his business bottom line, despite his previous misgivings. His employees revealed they stayed home with the slightest illness because they were afraid to get sick. They could not afford to go to the doctor or hospital, without the fear of either being turned away or financially devastated as a result of treatment.

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Health Care From a Physicians Point of View

Another health care scenario is that of a physician I spoke to who worked in the emergency room for 6 years. He said the first person to usually see the incoming patient is the insurance person, if not immediately, soon after arrival. He witnessed one of three things: The person was given no treatment if they had no insurance and appeared to be ok, or band-aid treatment, that is enough to make them comfortable and safe at the moment if they had no insurance. Or, treatment with a huge bill sent to them if they had a job or home. Before the Affordable Health Care Insurance, a few patients were
treated and given the government hospital subsidy if they qualified.

Do You Really Need Health Care

I am trying to establish a pattern why you need to have health insurance if you are uninsured or under-insured (many individual plans will place you in the under-insured category without your knowledge), and be grateful that you have affordable government options if you get sick, just as the politicians have. The companies providing the coverage are private insurance companies.

The affordable health care insurance is for those who don’t have health insurance or are under-insured. It will provide yearly physicals and health maintenance procedures like mammograms, colonoscopies, pap smears, and physicals to help maintain your health or catch problems when they are small and treatable. You will also be covered for hospital room and board, as well as hospital procedures. Concentrate on low deductible and low payment insurance plans to keep it affordable for you and your family.


Affordable Health Care Update 2019

For health care you can get coverage that starts January 1, 2019, if you sign up by December 15, 2018, you have until January 31 to get covered for the coming year.

If you lose your job, get divorced or lose your insurance, you may be able to sign up anytime. You may also need to re-sign if you move to a different state.

Here is the health care web page: Affordable Health Care Website


Affordable Health Care Update 2019

Unfortunately, at this point, I don’t know what the future of the Affordable Health Care Act is. The new administration is committed to destroying it.

A friend of mine is a specialist in medicine with many very sick patients who are currently in the middle of expensive medical treatments, under the insurance bought with the affordable care act. The republican administration says they have a replacement, but we have not seen a viable plan, only promises. A friend of mine who is a specialist in medicine has several republican patients getting serious treatment.

They were not aware that the Affordable Health Care was the same as “Obamacare”, now they are terrified that they may not be able to finish their medical treatments. Hopefully, they will re-think their position and allow lives to continue to be saved with Affordable Insurance. Out local newspaper just reported that a major University Hospital that gets tax breaks and government subsidies is regularly putting liens on the homes of patients without health care and garnishing checks of people who work at places such as walmart. Get insured and stay insured.

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Personal Finances Should be Personal

Your Personal Finances

I was speaking at a women’s meeting about personal finances and a young woman, about 35 came up to me and ask me what are “personal finances”. I was really shocked since being there meant that she was in some way affiliated with a business she owned.

She looked me in the eye with a very serious face. I pointed to her and said “your – personal – finances”. Your finances that you take very personal. You monitor, you manage, and constantly improve your finances yourself, even if you have help. It’s crucial that you understand your own finances.

It seems like it would be common sense to understand the term personal finance. But, the definition seems to elude some of the most intelligent, and highly successful people. The proof is in the finances of many.

The workplace embezzlements of high-level employees, the bankruptcies of high-income people, the general personal finance mismanagement of people which becomes evident when they lose a job and lose all or most of their assets due to mismanagement.

I CAN SUM IT UP IN 3 WAYS:

  • RANDOM SPENDING

Take your finances serious – don’t randomly spend money. This is the most important aspect of personal finances. Some folks act as though the money they have in their checking account belongs to someone else, so they spend it until it is gone or before all bills are paid.

Then they go to the credit cards, when those run out, they go to others to borrow money and make up the difference. Then they lose relationships, which is can be more serious than wasting their money.

  • TRACKING YOUR SPENDING

Keeping track of your spending is getting very personal with your finances. Most people don’t understand how fast money goes when it is spent randomly. You can see this also when you charge on credit cards the balance escalates rapidly.

A major aspect of getting personal finance maintenance is paying cash as much as possible unless you use a credit card for points and you have the money and discipline to pay off the balance once a month. With frequent credit card use, many tend to lose track of spending, and their finances become very impersonal.

  • BUDGETING YOUR MONEY

I talk to people all the time who tell me they thought they were budgeting until they read many of my budgeting articles and the advice I give on budgeting. My program includes guerrilla budgeting.

With all the distractions, we have – advertising – expensive products – overpriced cars and high maintenance homes- getting personal with your finances means that you must create a guerrilla budget to survive no matter what your income.

Some folks think all they must do is make more money until they find out they spend more for things and get more expenses, so they are either in the same place or worse financially, as income goes up. They realize the problem is they did not get personal with their finances.

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Lois Center-Shabazz | Course Delta Agency

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The Reason Your Personal Finances Should Be Personal

5 Retirement Tips for your Retirement Planning Young and Old

5 Retirement Tips That Make Retirement Planning a Serious Issue

5 retirement tips for your retirement planning young and old

Retirement tips are for those who never think that retirement day will come, or don’t know the potential difficulties they face when they retire. It always seems so far away, but those who have retired tell me it came faster than they ever imagined.

Here are some actual examples of problems seniors tell me they’ve had because they didn’t take their retirement date seriously in their 20’s, 30’s or 40’s. Here are 5 retirement tips to include in your retirement planning.

Retirement tips #1 – Medicare + 20%

Medicare pays 80% of most of the senior medical cost. Because of this, senior citizens are required to take out a Medicare Supplement policy. The supplement pays the extra 20%. Some seniors planned so poorly that they can’t afford or pay for the Medicare supplement. Because they have no supplement insurance, they are required to pay the 20% each time they go to the doctor, have surgery, chemotherapy or any other medical treatment. If they have a home, the home will be attached to pay for their medical balances, usually if they sell it or pass away. If they don’t have an insurance supplement or pay the 20%, some medical facilities will not treat them. There are two types of medicare: Regular Medicare (government sponsored) and Medicare Advantage (private coverage). Regular medicare typically pre-authorizes and pays promptly. Medicare advantage includes
many “extras” to “induce” seniors to sign up, but does not authorize major
treatment in many cases, and does not follow through with the extras. Doctors I talk to recommend seniors sign up for regular medicare.

Retirement tips #2 – Social Security as a Supplement

Many employees, both young and old, can pay into a 401k plan but opt-out of it, because either they, 1. Don’t understand what it is, 2. Don’t get matched by their employer, or 3. Feel they have plenty of time to worry about it later. The fact is there are numerous articles to explain 401k plans, the match is a nice side benefit—but you still get a tax benefit when you contribute without a match. The amount of a monthly social security retirement check is small compared to your working retirement income. Because of this, social security is meant to be a supplement to your retirement, so think hard about creating your main retirement now. The earlier you start, the easier it is, and the less you need to put into your account, monthly.

women love cars. So, buy them the right way.

Retirement tips #3 – 401k Protection

A popular retirement supplemental plan is the 401k, but you must protect it. Once you start to fund a 401k protect it with all your might. The protections include; 1. Leaving it alone for retirement – this means no borrowing. This is a provision that should not be allowed in a 401k plan since it is meant for retirement. Everything should be done to avoid borrowing from your 401k, including careful planning early in your career. Here are some protection ideas. Make yourself several “would if” scenarios and fulfill those scenarios early.

The examples are — “what if I lose my job”, “what if I need a large home repair”, “what if I want to go on a nice vacation”, “what if I have difficulty paying my mortgage”. All those issues can be addressed by 1. Creating savings accounts, 2. Cutting your living expenses now, 3. Make all major purchases affordable. You can come up with more solutions. The point is to come up with solutions to problems that don’t exist yet, so you never need to borrow against your 401k plan later.

Another protection is to keep your 401k balance to yourself. Scam artist prey on older people and sometimes younger people who have large 401k balances, because they know you can take that money out of your account anytime. A large lump sum withdrawal will trigger a large tax bill if you take it out at once. But, that is no concern of any sales person (many of whom are fake), when it comes to your 401k. You should be the only one who knows the balance. It’s not a good idea to share your balance with strangers.

The popular show, American Greed profiled the case of two ladies, not very old, but managed to retire with large 401k type accounts. One had $600,000 and one had $1 million. Both told friends, who told a fake investment person, who contacted them, talked them into investing with him, and he stole all their money. Their primary problem was that they should never have met with or believed in a stranger who claimed to be investing in the music production business with high returns.

The only thing they got was a huge bill from the IRS since they took the money out within a short period. The man went to prison, but they did not get their money back. Friends, family, and strangers have no right to the information in your 401k or 403b plan. Some elderly people have had their 401k stolen from them by their own relatives, including greedy children.

Retirement tips #4 – 403b Protections

The 403b is like the 401k, usually for non-profits. Fund the accounts, make sure you understand where to keep the money when you retire, you will have a few options. But, mostly understand that your balance is your personal business, and you must pay taxes on the amount you take out. The purpose of your 401k or 403b is to supplement a pension or other retirement plan.

Retirement tip #5 – Tax Shelter Annuity Movement

Many school districts offer tax shelter annuities as supplemental retirement accounts. After retirement, they are offered the right to roll over into an annuity outside their job. Be careful, make sure the costs aren’t prohibitive.  Also, you can only take out a little at a time, otherwise taxes would be too high. Again, your tax shelter annuity balance is your business, no one else’s. Look at online investment banks such as fidelity.com, troweprice.com, schwab.com or others – call and discuss low cost annuities to roll over your annuity. You can also discuss other low risk options. Take your time and don’t allow anyone to pressure you.

This is only the beginning, but if you take these retirement tips serious, and include them in your retirement planning, you will be on the road to retirement bliss. Understand the limits of social security when you plan your retirement.


Lois Center-Shabazz 

Personal Finance:  Author | Blogger | Course Creator | Money Strategist

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Get a Quality Home or Mortgage With Big Thing Buying Skills

Home or Mortgage; Buying an Affordable Low Maintenance Home and Get a Quality Mortgage

YOUR BUDGET

The first thing you have to ask is, “How much house can we afford” The payments include P+I+T+I (principle+interest+taxes+insurance). Most of your payment will be principle and interest, taxes vary according to state, and insurance is not a very big cost.

But, you can figure it out with most online calculators. You have to know how to calculate P+I+T+I to get a quality home or mortgage.

You should be stable in your job or with your business before you decide to take the leap to sign on with a mortgage.  

Most banks want you to be on your job or in your business for a solid two years. Set up a file system for steps 1-8, don’t rush and do your research.

Home buying the right way take skill

Step 1

MORTGAGE COST

Below is a typical cost analysis of a home or mortgage with average tax state, always find out how much typical insurance and taxes are in your state before you decide your budget.

Choose a home price you think you can qualify for based on total payment. You will keep adjusting home price until you can find one that is close to your budget. Use my mortgage amortization calculator at LiveRichCalculators.

Say your home or mortgage costs are as follow:
$300,000  price of home
at, 4% interest
30 year
Taxes=6000/yr
Insurance=500/yr
Monthly Payment and Interest=1,432.5
Monthly Taxes and Insurance=541.67
Total Payment=$1,973.92

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Step 2

DOWN PAYMENT AND ESCROW COST

Find out what a typical down payment is at your credit union, bank, or mortgage company. Now, make sure you have the savings or start a savings account with the down payment and escrow cost.

If you find a buyer who is anxious to sell and they have a lot of equity in their home sometimes you can negotiate that they pay your buyer’s escrow cost.

For the example above the downpayment is:
5%=$15,000
A 1% escrow cost = $3000

Step 3

MAINTENANCE COST

Allow a monthly saving account for maintenance cost, most homes have maintenance repairs from time to time.

Old homes usually have a higher maintenance cost than newer homes, unless all electrical, plumbing and other major items replaced. The important aspect of a good home is a good inspection, preferably by tradesmen.

I prefer hiring an actual plumber, electrician, and carpenter to inspect your new home instead of one single home inspector. Some of those home inspectors only take a 6 month home inspection course.

The tradesmen work in the field every day for years. You should also do your own inspection with a moisture meter and electrical meter to see if there are any glaring defects.

If you place a marble on the floor does it roll or stay put, if it rolls you could have a damaged foundation. That is extremely expensive to repair. If you know the repairs you may be able to add those into your mortgage and fix after your move in.

Step 4

CREDIT REPORT

Get a copy of your credit report before you start to look for a home. Read it carefully. Some people are shocked at the mistakes that get on their credit report. Make sure you document the mistakes on your credit report and challenge them with Experian credit bureau.

Experian will usually send the corrections to the other bureaus. When all corrections are in place, get another copy of your credit report, and credit score. Getting an affordable, quality home or mortgage starts with a good credit report and high credit score.

Step 5

PAY OFF BILLS

You know what your bills are, and you know if they are excessive. You will need to find room in your budget for a mortgage. You don’t want a mortgage that increases your current bills per month too much.

Like you don’t want to get from $500 per month of rent to $1900 per month for a mortgage unless you have been saving at least $2500 per month so that savings will go into your mortgage.

You should also still have room for a savings account or two after you get a mortgage. You will need savings for home maintenance, car maintenance, and general emergencies. Pay off as many bills as possible before you start a mortgage.

The ultimate home buying course for women

Step 6

SAVE FOR A DOWN PAYMENT AND CLOSING COST

Down payments are ranging anywhere from 5% to 10% down. The more you put down, of course, the lower your monthly payment will be. Then, there are buyers closing cost you must pay also. This is usually a surprise to new home buyers.

Closing cost is typically 2 to 5 percent of the purchase price. So, for a $300,000 home, the closing cost would be about $9,000.

Step 7

MORTGAGE RESEARCH

Before you decide to use a financial institute, do your research. If you have a credit union or local bank you do business with and you have good credit, it is usually relatively easy to get a loan at one of those places and you will save on additional cost that is charged by mortgage companies.

If you can’t get financing from your credit union or bank, research the best mortgage companies in your area. You can also ask friends and family who they had good luck with.

Before your visit anyone for a mortgage. Research mortgages, make absolutely sure you understand what a quality mortgage is. Know what the current rates are for a 15 year or 30-year mortgage.

Don’t allow anyone to give you a low-quality mortgage, if they think you have not done your research, some will try to give you a low-quality mortgage, even if you qualify for a high-quality mortgage.

If you qualify for a  low-interest high quality conventional low-interest rate 30-year mortgage, make sure you get one. The industry is full of nice, dishonest people, protect yourself.

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Step 8

MORTGAGE RATES AND QUALITY

Call your local credit union or bank to get current rates on quality mortgages.

Use my mortgage calculators at LiveRichCalculators.

Use the department of housing website to read about various types of Mortgage Issues.

This is most of the information you need to purchase a quality home or mortgage if it is your first home or your second or third.

Get all the facts  to buy a quality affordable home with low maintenance.

Lois Center-Shabazz | Course Delta Agency
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Summary

Remember that buying a home is a serious process. You should take your time and be very methodical.

Some places have home prices that are outrageous – in that case, you may have to drive a long distance to get to work, by living in an affordable area further from your center of town.

Some towns have affordable housing compared to income. Take your time it may take anywhere from 6 months to 5 years to go through the process I list above.  Article Updated 2019

How to get a quality home or mortgage with big thing buying skills

Buying a New Car, The Pros and Cons

Buying a New Car

There are many pros and cons to buying a new car. Below, I attempt to outline some of the most important factors to consider before you decide which car is best for you.

NEW-CAR DEPRECIATION

Depreciation is the value cars loose after you drive them off the lot, different cars depreciate at different values. Some cars have a high depreciation rate, and some have a low depreciation.

Potential new car buyers research the depreciation schedule of the car you are interested in.

Depreciation will not affect you much if you plan to keep a car for several years, and you will eventually get the value for your car. But if you change cars in a few years you will be affected and may even lose money.

The pros and cons of new car buying, it takes skills

In the past, if a new car was in an accident you could lose money due to the difference in what you owe versus the depreciated value, this happens if you don’t put down a large down payment.

Now, there is something called gap insurance, that you can purchase when you buy your new car and put down a low-or-no down payment. Gap 
insurance doesn’t always work, but it sometimes helps.

There are many ways you can research the depreciation of the car you are interested in, by searching the many car analysis websites, before you decide on a car.

According to Edmunds, one on the many car analysis websites, on average a new car loses 11% of its value the minute you drive it off the lot.

During the first 5 years, the average car depreciates by 15%-25%. After five years the average car is worth 37% of what you paid for it at the dealership.

THE MOST EXPENSIVE WAY TO BUY

A new car is the most expensive way to buy a car when you consider the price of the car is at the top, and you must pay new car warranty service.

Insurance is the most expensive due to the loan value and replacement cost, and car registration or taxes are at its highest.

The ultimate guide to car buying for women
FIRST YEAR WARRANTY SERVICE

New cars have a warranty for the first year, and most have additional warranties for major items that go on for 5 to 10 years. To keep your first-year warranty active, you must get warranty inspections, usually about every 3 – 6 months. 

Maintenance schedules vary according to make, model, and car manufacturer, your dealer will give you the maintenance schedule.

A major area many inexperienced new car buyers forget to include in their budget is the cost of the new car warranty service.

Get this information from the car dealer, before you decide on your car. Some new cars have a hefty new car warranty service.

The cost of the new car warranty service is what causes financial problems for many inexperienced persons.

Find out what the new car service cost before you purchase a new car. It is required to keep your first-year warranty in effect.

RECALLS OR LEMONS

There are those who think if they buy a new car, they will have the perfect car with no problems. That is not true. Pay attention to the recalls on new or near new cars.

You can research the recall schedule for the car you are interested in. One person, I talk to about car recalls told me he was forced to park his near new car because he kept getting recall notices.

He got a total of 37 recalls by the time I talked to him and simply did not have the time to take the car to the dealer at that time.

If these recall issues are not resolved, it can cost thousands of dollars in repairs down the line if the car is passed on to someone who does not check for the recalls.

It may also make the car unsafe to drive if the recalls are not addressed.

LOW MAINTENANCE VERSUS HIGH MAINTENANCE CARS

Low maintenance cars have two advantages. One, they don’t take a lot of your time. Two, they don’t take a lot of your money. Constant unexpected major car repairs are a large part of budget busting.

You can look up car maintenance history on cars at all the car analysis sites. New cars with high maintenance schedule should be avoided, this is another hidden cost.

During the car note period and after the warranty period, a high car maintenance bill could cause you to park it until you have maintenance money.

A low maintenance car is a more affordable option. Some cars have a high repair rate as near new cars and some have low repair rates as used cars.

If the potential owner maintains a regular maintenance schedule, with regular oil changes and tune-ups, and when something goes wrong it will be taken care of early.

Long Term Performance

Some cars last for several years without major problems some only last a few years. Check out the long-term performance of your car to see if you have a high maintenance car that requires a lot of repairs as a used car.

New Car Research

There are websites all over the internet where you can research new cars for cost, depreciation, new car repairs, warranty cost and just about anything else you need to know.

The following come to mind – Edmunds, consumer reports, Carfax, Kelly blue book (kbb), and many more. The important thing is that you do your research before you buy the car.

–Helpful Tools–

Lois Center-Shabazz | Course Delta Agency

->Interested in a Free Discussion about how I can help you with Fantastic Finances? Let’s Chat – Make an Appointment Here

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->How I Build Fantastic Finances ; Read More…

 

Big Thing Buying of Homes, Cars and Student Loans for Women

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