BONDS

Hey GABbers, Once again I have another Idea about savings

So recently due to the economy people have been afraid to put their money in stocks, banks, even CDs. But there is one lender who will almost never go broke, The United States Government. While lead me to the topic of Federally Insured Bonds.

There are currently two types of bonds you can buy today, I bonds and EE bonds. Of course there were many other types of bonds available a few years ago, like the H bond or E bonds. But for right now let’s talk about the types of bonds that we can actually buy today.

First is the EE bond, now although these types of bonds are great for long term investments, many are give these as gifts. EE bonds are bought half of face value, so a $100 EE bonds is bought for only $50. Which is why these are perfect for gifts, they look like $100 when actually the buyer only paid $50. Now EE bonds will reach face value in about 17 years, and the APY is 1.3%. Again a good gift for a new born baby, because in 17 years those bonds will be worth their face value and its perfect timing for college.

Next am I bonds, which I personally think are a much better investment. I bonds are purchased at their face value. So a $100 I bond will be bought at $100. Yet these bonds tend to have much higher interest then EE bonds. The interest rates for I bonds do change twice a year and are determined by two things; a fixed rate set by the U.S. Treasury and the rate of inflation. Today an I bonds has an APY of 5.64%, much higher then the I bond and most CDs offered.

Now both I bonds and EE bonds must be head on to for one year before they are cashed in. And if they are cashed in before the bond reacts the age of five, you lose 3 months of interest. Yet after 5 years you are free and clear to cash the bonds at any time, and they will continue to earn interest for 30 years.

But effective January 1, 2008, each social security number is only able to buy $5,000 worth in bonds per year.

At most financial institutions you can purchase bonds, but another place to go is TreasuryDirect.gov

Make Reasonable Credit Goals

How many of us have goals that we have set to accomplish? Well, if so have you thought of making credit goals? If not, I have some fun steps that you can follow on your way to achievement.

Let’s be kind with ourselves if we made credit mistakes in the past. We can learn and move forward, right? Approach this as a learning process. Proceed by first taking a look at what we know we can fix in a small time frame such as two weeks or less. We will call this our personal short-term goals. Improving your credit can take months and so you also will want to set long-term credit goals.

First, “sit up straight” and think of what you like to achieve (credit wise) over the years. Then, write down all of your goals in a journal or on a sheet of paper. You can use the list to keep track of your progress. Put the goals in order from short-term effort to long-term effort. Begin with a goal that you are doing daily in the present.

Some examples might be:
Apply for a credit card with a low interest rate
Apply for a gas card
Apply for a share secured loan
Pay bills on time.
Pay at least the minimum balance due on credit cards.

Having both revolving and installment credit is a good way to build credit. Revolving credit is credit cards. Installment credit is things like car loans and student loans.

Then take your list little by little and start to check off or scratch out what you have finished. Next, write your accomplishments on a separate list and display it where it can be seen by others. That will give you confidence to start on another goal.

Be careful not to overwhelm yourself with goals that are too high. When you have trouble, look at some of the resources out there pertaining to meeting goals. It’s also good to have someone to encourage you to stick with your goals.

Keep in mind that you are doing this for your future. Gain as much knowledge as you can if you’re not sure about one of your goals because you don’t want to have wasted time on a goal that is not achievable.

Remember this is a learning process. Take it slowly. It’s not a race. Meet your goals in a time frame that works for you. Using visual reminders can help, and when you’ve met a goal, reward yourself! Maybe go out to eat. With persistence, your hard work and determination will pay off!

New Loan research...

Hi everyone,

It was great seeing you this past week and hopefully we can see each other again soon! Now onto the fun stuff. 

Well most would think that a loan is a sum of money you borrow from a bank or some kind of lender. Well this is true but there are several loans out there that require a down payment. For instance some companies make you put 20% down on a loan you are taking out. I kind of think this defeats the purpose because you are taking out a loan most likely because you don't have the money. If you have to have down payment, most people would not have enough money to take out the loan. 

Now I can also see the good parts to this because most banks offer a lower interest rate if you put up a down payment. Also I can see that if a lender requires a down payment they can see you are going to be able to repay, at least in most cases. 

What do you think? Is a down payment a good or bad idea? 

Solution to America’s Financial Crisis

Saturday November 20, 2008, the Bush administration formally proposed to Congress the largest financial bailout in U.S. history. They requested the authority for the Treasury Department to buy up $700 billion in mortgage-related assets from financial institutions in the United States.

Less than three pages, the proposal was stunning for its demands. It would raise the national debt to $11.3 trillion dollars. Staff members from the Treasury Department and the House Financial Services and Senate banking committees immediately began meeting on Capitol Hill to negotiate these matters at hand.

If you ask me, this whole plan seemed like a clever way to transfer the bad debts of Wall Street into the obligations of American taxpayers.Key Democratic lawmakers made it clear that they were interested in including assurance for a program that would help troubled borrowers at risk of foreclosure.

In research, it is said that the government needs a bail out plan to clear the financial crisis.
If there continues to be no plan at all, American consumers, homeowners, taxpayers and more will all feel the impact. The risk of steep declines in the worldwide market poses a grave risk to all Americans, especially their retirement plans, college savings for children and their access to consumer credit including auto loans.

What are your opinions about the bailout plan?

November Meet and Eat

Hello!
It was great to see you all on Saturday! You had some excellent ideas on how to make the program even better. I am working on finding a date when we can start "filming our movie", or at least start working on scripts etc.

As promised, here are some pics!

THIS Saturday!!!

Hey GABbers,

Whoever responds first will get first dibs on what part of the Baltimore metro area we will have our next face-to-face meeting.

1. Baltimore City--fells point area
2. Glen Burnie
3. Towson
4. other ideas??

Remember its THIS Saturday, November 8

If marriage was a bussiness...

Wow Danni,
Your picture could have been the front cover of "My Big Fat Wedding" magazine!! (i.e. Carrie's wedding from 'Sex in the City') The black and white camera setting is absolutely magnificent:) In my opinion, marriage is similar to a business. Before I sign off on the (For better or for worst...) contract, I DO need to know your credit score(Do not put yourself in a situation where everything is in your name), I DO need to know your debt to income ratio(Once married, his/her debt becomes your debt), and I DO need a prenuptial agreement(just kidding...) Avoid a prenuptial agreement at all cost. As the investment cliche goes, "high risk, high return" and this agreement states loudly from one marriage-business partner to the other "I won't take a risk on your love." Pre-marital deficit....Not good

Any who, marriage is literally a business because once married your net worth and earning potential increases. (My source did not mention why, but if I had to guess I'd say a joint business venture is probably more successful than a sole proprietorship)

So, if marriage is a business than you need a detailed business plan and more importantly, a budget! To answer Danni's question... My wedding would have to be apart of the start up cost for our marriage-business. Sure, I'd prefer an extra house over a princess diamond cut platinum ring and a month long country hopping honeymoon over a $10,000 gown and pretty table decorations, but my ideal wedding definitely has a hefty price tag! You know that item on the menu at expensive restaurants that just says(market value) well that's how my wedding will be priced! But if I had to start the budget off it would look like this..

Month long honeymoon around the world = 50,000
3 bedroom summer house in Costa Rica = 200,000
Me for a life time = Priceless

"Oh yeah... love wouldn't be a bad marriage-business investment either...LOL"