Sunday, January 24, 2010
Wednesday, January 20, 2010
Tuesday, January 19, 2010
Monday, January 18, 2010
With an Irish Visa Credit Card you will pay interest for the money you access on it. Having a low interest rate compared to a very high one will significantly impact the amount of money it costs you to use that credit card. The goal should be to get as low of a credit card offer as you can when it comes to the rate of interest.
Be wary though of offers with a lower rate for a small period of time. After that, the interest rate could be extremely high. In the long run you are better off having an Irish Visa credit card with a moderate interest rate that doesn’t go up after you have had the card in your possession for a limited period of time.
If you are interested in an Irish Visa credit card, you can find plenty of great offers on the internet. It only takes a few minutes to apply for one. Then you will be notified by mail if you have been approved or not. There are credit card offers for all credit situations so find one that is a good match for your current situation.
You can also apply for a business credit card. That is a very good idea if you have your own business. Mixing your personal accounts and business accounts is difficult to manage. With a separate credit card your business can start to build a solid credit history. It also keeps your personal finances out of the business world.
In order to be approved for an Irish Visa credit card you will need to offer several pieces of verification. The most common one is verification of your identity. The second one is verification of your income. You need to be able to show you have a method of paying back the credit that is extended to you. Verification of residence in the form of utility bills is often required as well.
Sunday, January 17, 2010
This anecdote shows very well what the general trend was before the crisis, finance, even simple personal finance, was for the big shots in Wall Street, bankers and financial advisers. They were there to look after your money, to advise you on your investments, and to prepare your nest egg for your pension.
Unfortunately, it went all wrong. The finance professionals are collecting your money to invest it wisely and to advise you on your investments? That was the tale until we discovered that the pension funds are digging holes so deep we won’t be able to get out of it, banks were packaging CDOs based on mortgages from subprime borrowers who would never be able to pay it back, private equity companies were going public to raise money from mom and pops whereas in the end they destroy jobs. That is what happened, and all of it with your money.
Finance, and more specifically financial planning, is not complex. Although you might believe it is complex, it is less difficult to understand than Internet technology. The problem is that finance and financial concepts have been kept away from the crowd to benefit from information asymmetry. This means that you end up paying more for the service just because you don ‘t know how it works, even if it is based on very simple concepts.
So, what to do about it? Spend some time to learn about personal finance and financial planning, it is the best investment you can make. And guess what, you can do it for without paying a dime.
ProsperityPersonal.com offers interactive graphical tools to do your own financial planning taking into account retirement, buying a property, education fees and much more, everything for free.
Although building a financial plan on your own might be a little complex at first, you can start by using the application to understand the effect of compounding, why inflation is your worst enemy, and how buying a property can affect your long term cash position.
The site comes with many articles and examples on how to use the application, for beginners as well as for advanced users. With its friendly user interface and cute icons, the tool offers a very intuitive way of understanding financial planning.
Friday, January 15, 2010
The current financial situation in the
At some point in the near future, the Federal Reserve will be forced to decide whether to tighten the access to credit. In order to stem monetary inflation, the Federal Reserve will need to raise interest rates in order to contract the availability of money in the system. If this happens, it will result in a higher prime rate and higher credit card rates. This will increase the yield on short-term treasury notes, and will prompt many bond investors to sell their long-term bonds to purchase shorter term notes with higher yields. As more people sell their long-term bonds, it will push down prices and force up the yield.
Another option for the Federal Reserve is simply allowing price inflation to roll through the economy. This will happen as credit markets normalize, and more dollars end up chasing fewer goods and services. This will inevitably result in higher prices for consumer and capital goods, including housing. As prices continue to increase, a resurgence of the 'bond vigilantes' will occur as more people refuse to buy government bonds at the current low rates. As the government needs to discount their bond offerings to clear the inventory, it will push up effective interest rates on long-term bonds.
Regardless of which event transpires, there is an extremely high likelihood that long-term bond rates are headed up in the near future. This phenomenon will also push up mortgage rates since most mortgages are indexed against government bonds. As the mortgage rates continue to increase, the number of people in the pool of home buyers will decrease because higher rates translate into less buying power per dollar of monthly payment that a person can afford.
As more people transition out of the home buyer pool into the renter pool, it will increase demand for rental housing. This increase in demand will eventually manifest itself in higher rents as the supply of rental housing adjusts more slowly than the movement of people into the renter pool.
An important factor to consider is that income property owners will benefit greatly from this effect, as it will place upward pressure on rents. These increased rents will provide additional cash flow to people who bought at low fixed rates and locked-in their cost of borrowing for three decades. The most important point of this unfolding event is the fact that the window of opportunity to act will be closed very soon. Once inflation begins to occur, or monetary tightening commences, it will be too late to capture the best deals that are currently in the marketplace.
The reason is because either event will be quickly followed by a step-up in interest rates, which will decrease affordability for income property investors. Because of this, it is critical for prudent investors to act now and lock-in their cost of debt at the current low rates; this will protect you against the coming increases in interest rates by making them work to your advantage, instead of to your detriment.
Ultimately, we must 'pay the man' at some point by enduring the market correction that must eventually result from current government policy. By taking action now, you can benefit handsomely from the coming economic disruptions while many other people are enduring the problems implicit with trying to get something for nothing.