Shocking Facts - What Debt Settlement Companies Don't Tell You
by: Denise Hall
If you're thinking about using a debt consolidation or debt settlement
service to help you get out of debt faster and save money on your monthly
payments, make sure you do your homework before choosing a company. There
are definitely shams and scams out there.
First let me say that debt consolidation is *not* the same as debt
settlement/negotiation, which most people don't realize.
Debt settlement companies charge hundreds of dollars as an initial "admin
fee" to set up your account, plus a monthly service fee. The fees vary
depending on the company and the amount of your debts.
Such companies take your money every month, but don't make monthly
payments to your creditors! Instead, they put it in a trust account,
negotiate your debts with your creditors, then make a lump-sum payment
when there's enough in your account to pay a creditor in full.
That can take *years* depending on the amount of debt you have with each
creditor. Meanwhile, you can be sued by your creditors and your wages can
be garnished! (Or just don't make payments to your creditors. You'll end
up in the same spot without paying someone to help you get there!)
Settlement companies don't ask your creditors to stop all interest, late
fees and overlimit fees from accruing. That means while the negotiations
are ongoing, your bills will continue to grow! So if you're sued and a
judgement is brought against you, you'll owe more money than before!
And shoddy companies, which there are alot of, don't tell you *any* of
this up front. I call it "getting permission by ommission" because they
simply don't tell you how their program works *before* you sign an
agreement with them. Or after, for that matter. But if you ask the right
questions, eventually you'll figure it out. (Or when the crap hits the
fan. Whichever comes first.)
Let me give you an example of how debt settlement works.
Let's say you have $20,000 in unsecured credit card debt. You owe $10,000
to one credit card company, $6,000 to another and $4,000 to a third. You
agree to a 5 year plan where you pay $250 a month to the settlement
company. (After all, $250 a month for 60 months is only $15,000, so
you're saving $5,000 and you'll be debt-free in 5 years, right?)
The admin fee will cost you $750. Your first 3 monthly payments go
towards that and nothing gets put into your trust account until your 4th
month.
The settlement company keeps $50 of your $250 payment each month for the
service fee. That means $200 a month is being added to your trust account.
Most debt settlement companies claim to be able to negotiate your debt
for about 50% of what you owe. So let's use the lowest credit card debt
as an example.
If you owe $4,000 and your creditor agrees to accept $2,000 as payment in
full, it will take 10 months at $200 per month to have enough in your
trust account to pay off just that one credit card.
But remember, your first 3 payments to the settlement company only paid
the admin fee. That means your first credit card settlement is 14 months
*after* you started sending them money.
So what's the problem? It's simple. Your creditor won't agree to accept
half of your actual debt unless, or until, it can be paid in full.
Otherwise, you're expected to make your normal monthly payments.
Since you don't have $2,000 in your trust account, and you won't have it
until more than a year after you stopped paying your creditor directly,
they'll probably take you to court and request that your wages be
garnished long before you have that $2,000 built up.
And what about your other creditors? Well, they'll be waiting even longer
to get their money from the settlement company. The $6,000 debt will take
15 *more* months to pay off, assuming your creditor waits that long and
agrees to 50%. And that $10,000 bill? You do the math.
On the other hand, if you signed up for a 3 year plan with the settlement
company, your debts would be paid off sooner. But, the question is, will
your creditors wait that long? Probably not.
The facts are, you can negotiate with your creditors yourself. Most will
agree to take a smaller monthly payment from you and stop all interest
and fees from accruing. And, of course, you'll save thousands of dollars
in fees to a settlement company.
Before signing up for any service, please be sure you check out the
company thoroughly. And don't let the words "non-profit" fool you either.
Alot of debt settlement companies claim to be non-profit.
Going back to the example above, if you pay them $15,000 over a 5 year
time frame and they settle your debts at half of what you owed, they'll
make $5,000 from you. I'd call that a profit, especially since they might
not have actually helped you in any way.
Most companies will allow you to cancel your account and get a refund of
what you've paid, less the non-refundable admin fee and the monthly
service fees. If you feel you've been mislead about their program, don't
hesitate to argue til the cows come home. File a complaint with the
Better Business Bureau or hire an attorney if you feel you're getting
nowhere.
You can visit the Better Business Bureau's website (http://www.bbb.org) and find reports on hundreds of companies. Here's a
small listing of companies that have poor reputations with the BBB:
National Consumer Debt Council LLC - Irvine, CA (A.K.A. NCDC, United
Consumer Law Group)
Financial Rescue Services - Burbank, CA
Debt Legal Services - Anaheim, CA
American Debt Relief - Los Angeles, CA (A.K.A. A M Debt, American Debts
Relief, Debt Relief)
Please be very cautious when choosing a debt help company and ask lots of
questions before agreeing to anything. If you find they're evading your
questions, run fast and run far. There are reputable companies out there,
so keep looking until you find one.
About The Author
Denise Hall is the owner of Home Business on a Budget which specializes
in tools and resources for your home business needs. Visit
http://www.home-business-on-a-budget.com today. Subscribe to Home
Business on a Budget Newsletter for weekly articles, tips, information
and resources. To Subscribe mailto:hbb_newsletter@a1ebiz.com
If you would like to receive her new articles when they are written,
please mailto:denise_hall@freeautobot.com
This article may be reprinted in its entirety with this resource box
included.
dmh0226@voyager.net
Friday, July 31, 2009
Thursday, July 30, 2009
Slam the Door on Debt
Slam the Door on Debt
by: ARA Content
http://IHateFinancialPlanning.com offers ten
tips to help you get out and stay out
(ARA) - According to American Consumer Credit Counseling, Inc., the
average balance on a credit card is $7,000, offering an average interest
rate of 18.9 percent.
Additional statistics show that the average household has 10 credit cards
and, not surprisingly, over half of those households report having
trouble paying their minimum monthly payments.
Common indicators of a debt problem include not knowing the state of your
personal finances; not knowing how much you owe or what interest rate you
are paying; missing payments; having poor savings habits; using one
credit card to pay another, or living paycheck-to-paycheck.
For many Americans, the statistics and debt problem indicators hit even
closer to home with the conclusion of the holiday shopping season and the
onset of the ever-dreaded tax season. Facing debts is one of the major
barriers for people in dealing with their personal finances.
One organization that understands the problems associated with debt
management is IHateFinancialPlanning.com
(www.IHateFinancialPlanning.com), a Web site intended for the 3 out of 4
Americans who hate financial planning. The site offers helpful tips for
eliminating debt and staying out of debt in the future.
"Millions of Americans love the instant gratification of using their
credit card and hate thinking about the serious consequences of
accumulating debt," says Randy Schuldt, a vice president with
IHateFinancialPlanning.com. "Debt can paralyze people from moving
forward. But, with a solid plan and the right tools, paying off their
credit cards and eliminating their debts can be tolerable and even
enjoyable."
Numerous options are available for those who are struggling to shut the
door on debt. Declaring bankruptcy is not necessarily the best option.
Sites such as IHateFinancialPlanning.com provide advice, tools and
resources for those needing assistance. Visitors to the site also have
the option of e-mailing their questions and receiving a free answer from
a professional with no strings or sales pitches attached.
To help you get started on the road to less debt and greater
gratification, IHateFinancialPlanning.com offers the following tips:
Put Yourself First
That's right! It sounds a bit surprising, but according to Debtors
Anonymous (www.debtorsanonymous.org), it's critical to take care of
yourself while eliminating debt. No, this doesn't mean that you can go on
a spending spree if you are feeling depressed. Instead, get plenty of
rest and eat well to keep energized while focusing on your goal of being
debt free.
Keep a Record and Prioritize
Keep track of every nickel you spend for a month and record amounts spent
in appropriate categories - i.e. housing, transportation, food, clothes,
entertainment, etc. It doesn't have to be a fancy software program - just
a pencil and a pad of paper will suffice. At the end of the month,
analyze where your money is going. Decide if the items purchased are
necessities or niceties. Be realistic. What spending can you eliminate or
reduce in order to reach your goal of being debt free? Perhaps you can
pack your lunch rather than eat out every day, rent a movie rather than
see the latest release, or scale down on your clothing budget. Do you
really need another tie or an additional pair of black shoes?
List Your Debts
Create a list of your debts - the amount you owe and the interest rate.
Make the minimum payment each month - but more importantly, make a
commitment to pay off the debt with the highest interest rate first by
making an extra payment. After you've paid off that debt, apply the
amount you were paying on the old debt to your next debt with the next
highest interest rate. Don't reduce the total debt payment amount just
because one debt is paid off.
Create a Spending Plan
Once you have made a record of how you spend your money and have
concluded which expenses are necessary, then you are ready to create a
spending plan. Start by projecting how much money you will spend in each
category for the month. Change the amount if your situation changes.
Didn't expect to break your arm and dent your vehicle's bumper in the
same month? Make adjustments and move forward. Create a new plan for each
month. This is the best tool to stay in control of your spending.
Remember that some of these tips are appropriate for your lifestyle, some
of them are not. Personalize your plan and keep focused.
Cut Up and Cancel
Get rid of those credit cards! Cut them up and cancel them. Be aware that
when you try to cancel your credit card, the company may offer you an
extended line of credit or a lower interest rate. Do not be tempted! It's
not your glowing personality that entices them to do business with you.
If you can handle having one, keep a credit card for emergency purposes
(which doesn't include a last-minute trip to the Bahamas to beat the
winter blahs). Pay off that one credit card each and every month - or
else be back in the same shipwrecked boat of debt. Minimum monthly
payments are not acceptable.
Debit Not Credit
Love the feel of plastic sliding through your fingers while making a
purchase? Worried you will have withdrawal? Use a debit card that
immediately withdraws money from your checking account. Experience the
feeling of gratification knowing you've paid for the item you just picked
out.
Income-producing Investments
Use credit to purchase items that give you some income-producing
potential. There is such a thing as good debt - a mortgage for a home, a
loan for an education or the start of a new business. Sorry, payments on
an expensive new SUV don't count unless you make a living as a chauffeur.
Credit is Not Income
If you apply for one of the seven credit card applications that arrive
annually in an average American's mail, and receive a $5000 line of
credit, don't consider it a raise. It's not your money and you haven't
earned it. You have simply been given the opportunity to accumulate debt
at the lender's benefit. Americans paid out approximately $65 billion in
interest last year alone. With the exception of your mortgage, credit
payments should never exceed 10 percent of your income.
Shop Around and Be Smart
Take a look at other interest rates. Be smart. Don't finance your car
with a credit card if you can get a car loan at a lower interest rate. If
your current interest rate on your credit card is 15 percent and another
company is offering you 8 percent, contact your credit card company and
see if they will meet the competitor's rate. If not, take advantage of
offers to transfer your higher interest rate cards to lower interest rate
cards. It's worth the time to shop around while you are lowering your
debt.
Save, Save and Then Save Some More
Start saving today. If your credit card payment of $500 per month was
eliminated and you were able to invest that amount in a savings vehicle
earning a 10 percent return, you would save over $1 million in 30 years.
That's real money in your piggy bank.
Leave the Piggy Bank Alone
If you have already started a 401K plan or have a savings account, resist
the temptation of using your investments to pay off your debt. Take
advantage of the good side of interest - the compounding side - and keep
your investments on track. Think long-term, not short-term, while paying
off your debts.
About The Author
Courtesy ARA Content, http://www.ARAcontent.com;
e-mail: info@ARAcontent.com
EDITOR'S NOTE: For more information contact Maclaren Latta, Carmichael
Lynch Spong, (612) 375-8570, mlatta@clynch.com
or Stephen Dupont, Carmichael Lynch Spong, (612) 375-8525,
sdupont@clynch.com.
Securities available through PrimeVest Financial Services, Inc., Member
NASD/SIPC. Call (320) 656-4300, ext. 64691, for a prospectus, which
contains complete information on expenses and charges. Read it carefully
before you send money or invest. IHateFinancialPlanning.com is part of
the ING Group, a worldwide leader in the fields of insurance, banking and
asset management, with more than 100,000 employees in 65 countries.
by: ARA Content
http://IHateFinancialPlanning.com offers ten
tips to help you get out and stay out
(ARA) - According to American Consumer Credit Counseling, Inc., the
average balance on a credit card is $7,000, offering an average interest
rate of 18.9 percent.
Additional statistics show that the average household has 10 credit cards
and, not surprisingly, over half of those households report having
trouble paying their minimum monthly payments.
Common indicators of a debt problem include not knowing the state of your
personal finances; not knowing how much you owe or what interest rate you
are paying; missing payments; having poor savings habits; using one
credit card to pay another, or living paycheck-to-paycheck.
For many Americans, the statistics and debt problem indicators hit even
closer to home with the conclusion of the holiday shopping season and the
onset of the ever-dreaded tax season. Facing debts is one of the major
barriers for people in dealing with their personal finances.
One organization that understands the problems associated with debt
management is IHateFinancialPlanning.com
(www.IHateFinancialPlanning.com), a Web site intended for the 3 out of 4
Americans who hate financial planning. The site offers helpful tips for
eliminating debt and staying out of debt in the future.
"Millions of Americans love the instant gratification of using their
credit card and hate thinking about the serious consequences of
accumulating debt," says Randy Schuldt, a vice president with
IHateFinancialPlanning.com. "Debt can paralyze people from moving
forward. But, with a solid plan and the right tools, paying off their
credit cards and eliminating their debts can be tolerable and even
enjoyable."
Numerous options are available for those who are struggling to shut the
door on debt. Declaring bankruptcy is not necessarily the best option.
Sites such as IHateFinancialPlanning.com provide advice, tools and
resources for those needing assistance. Visitors to the site also have
the option of e-mailing their questions and receiving a free answer from
a professional with no strings or sales pitches attached.
To help you get started on the road to less debt and greater
gratification, IHateFinancialPlanning.com offers the following tips:
Put Yourself First
That's right! It sounds a bit surprising, but according to Debtors
Anonymous (www.debtorsanonymous.org), it's critical to take care of
yourself while eliminating debt. No, this doesn't mean that you can go on
a spending spree if you are feeling depressed. Instead, get plenty of
rest and eat well to keep energized while focusing on your goal of being
debt free.
Keep a Record and Prioritize
Keep track of every nickel you spend for a month and record amounts spent
in appropriate categories - i.e. housing, transportation, food, clothes,
entertainment, etc. It doesn't have to be a fancy software program - just
a pencil and a pad of paper will suffice. At the end of the month,
analyze where your money is going. Decide if the items purchased are
necessities or niceties. Be realistic. What spending can you eliminate or
reduce in order to reach your goal of being debt free? Perhaps you can
pack your lunch rather than eat out every day, rent a movie rather than
see the latest release, or scale down on your clothing budget. Do you
really need another tie or an additional pair of black shoes?
List Your Debts
Create a list of your debts - the amount you owe and the interest rate.
Make the minimum payment each month - but more importantly, make a
commitment to pay off the debt with the highest interest rate first by
making an extra payment. After you've paid off that debt, apply the
amount you were paying on the old debt to your next debt with the next
highest interest rate. Don't reduce the total debt payment amount just
because one debt is paid off.
Create a Spending Plan
Once you have made a record of how you spend your money and have
concluded which expenses are necessary, then you are ready to create a
spending plan. Start by projecting how much money you will spend in each
category for the month. Change the amount if your situation changes.
Didn't expect to break your arm and dent your vehicle's bumper in the
same month? Make adjustments and move forward. Create a new plan for each
month. This is the best tool to stay in control of your spending.
Remember that some of these tips are appropriate for your lifestyle, some
of them are not. Personalize your plan and keep focused.
Cut Up and Cancel
Get rid of those credit cards! Cut them up and cancel them. Be aware that
when you try to cancel your credit card, the company may offer you an
extended line of credit or a lower interest rate. Do not be tempted! It's
not your glowing personality that entices them to do business with you.
If you can handle having one, keep a credit card for emergency purposes
(which doesn't include a last-minute trip to the Bahamas to beat the
winter blahs). Pay off that one credit card each and every month - or
else be back in the same shipwrecked boat of debt. Minimum monthly
payments are not acceptable.
Debit Not Credit
Love the feel of plastic sliding through your fingers while making a
purchase? Worried you will have withdrawal? Use a debit card that
immediately withdraws money from your checking account. Experience the
feeling of gratification knowing you've paid for the item you just picked
out.
Income-producing Investments
Use credit to purchase items that give you some income-producing
potential. There is such a thing as good debt - a mortgage for a home, a
loan for an education or the start of a new business. Sorry, payments on
an expensive new SUV don't count unless you make a living as a chauffeur.
Credit is Not Income
If you apply for one of the seven credit card applications that arrive
annually in an average American's mail, and receive a $5000 line of
credit, don't consider it a raise. It's not your money and you haven't
earned it. You have simply been given the opportunity to accumulate debt
at the lender's benefit. Americans paid out approximately $65 billion in
interest last year alone. With the exception of your mortgage, credit
payments should never exceed 10 percent of your income.
Shop Around and Be Smart
Take a look at other interest rates. Be smart. Don't finance your car
with a credit card if you can get a car loan at a lower interest rate. If
your current interest rate on your credit card is 15 percent and another
company is offering you 8 percent, contact your credit card company and
see if they will meet the competitor's rate. If not, take advantage of
offers to transfer your higher interest rate cards to lower interest rate
cards. It's worth the time to shop around while you are lowering your
debt.
Save, Save and Then Save Some More
Start saving today. If your credit card payment of $500 per month was
eliminated and you were able to invest that amount in a savings vehicle
earning a 10 percent return, you would save over $1 million in 30 years.
That's real money in your piggy bank.
Leave the Piggy Bank Alone
If you have already started a 401K plan or have a savings account, resist
the temptation of using your investments to pay off your debt. Take
advantage of the good side of interest - the compounding side - and keep
your investments on track. Think long-term, not short-term, while paying
off your debts.
About The Author
Courtesy ARA Content, http://www.ARAcontent.com;
e-mail: info@ARAcontent.com
EDITOR'S NOTE: For more information contact Maclaren Latta, Carmichael
Lynch Spong, (612) 375-8570, mlatta@clynch.com
or Stephen Dupont, Carmichael Lynch Spong, (612) 375-8525,
sdupont@clynch.com.
Securities available through PrimeVest Financial Services, Inc., Member
NASD/SIPC. Call (320) 656-4300, ext. 64691, for a prospectus, which
contains complete information on expenses and charges. Read it carefully
before you send money or invest. IHateFinancialPlanning.com is part of
the ING Group, a worldwide leader in the fields of insurance, banking and
asset management, with more than 100,000 employees in 65 countries.
Wednesday, July 29, 2009
How Do You Put a Value on Your Time?
How Do You Put a Value on Your Time?
by: Janice D. Byer, MVA
As a small business owner, does the following paragraph sound familiar to
you…?
“Other than doing the technical ‘fix-its’ with my computer…I do it all! I
have found that this keeps me very limited in growing my business and
taking on new clients. I wish I had someone to help but how can I justify
hiring someone when I can do the work myself…when I have the time?”
This is a very common issue for many small business owners. All the work,
whether revenue generating or not, needs to be done to keep the business
running smoothly.
We need to reconnect with our goals for our business and our vision for
its future. We need to focus on why we started this business in the first
place. Focusing includes deciding how much our time is worth.
But, how do you put a value on your time? How much is each hour of each
day worth, especially when you are doing projects that are not generating
revenue or increasing your customer base?
Is your time worth $25, $50, $100 per hour….or more? When you get busy
doing those tasks that don’t directly generate revenue, consider how much
it is costing you.
For example:
You charge $75 per hour for your services/time. You spend a total of 5
hours trying to catch up on your correspondence…entering information into
a database, typing and re-typing your letters and preparing them to be
mailed.
$75/hr X 5 hours = $375.00 of your valuable time and profit
If it would cost you less to outsource, why not do it? Why not allow a
professional to handle some of your tasks leaving you with more time to
generate revenue?
$25/hr (sample cost to outsource) X 5 hours = $125.00
$375 - $125 = $250 + the $ of the contract you signed while a
professional took care of the non-revenue generating tasks.
Although you are spending some of your hard earned money, you are gaining
so much more. Outsourcing gives you professional assistance, which in
turn saves you both time and money...the two things that most small
business owners need more of.
About The Author
Janice Byer is a certified Master Virtual Assistant and owner of
Docu-Type Administrative & Web Design Services (http://www.docutype.net). See this and other articles on her website.
jbyer@docutype.net
by: Janice D. Byer, MVA
As a small business owner, does the following paragraph sound familiar to
you…?
“Other than doing the technical ‘fix-its’ with my computer…I do it all! I
have found that this keeps me very limited in growing my business and
taking on new clients. I wish I had someone to help but how can I justify
hiring someone when I can do the work myself…when I have the time?”
This is a very common issue for many small business owners. All the work,
whether revenue generating or not, needs to be done to keep the business
running smoothly.
We need to reconnect with our goals for our business and our vision for
its future. We need to focus on why we started this business in the first
place. Focusing includes deciding how much our time is worth.
But, how do you put a value on your time? How much is each hour of each
day worth, especially when you are doing projects that are not generating
revenue or increasing your customer base?
Is your time worth $25, $50, $100 per hour….or more? When you get busy
doing those tasks that don’t directly generate revenue, consider how much
it is costing you.
For example:
You charge $75 per hour for your services/time. You spend a total of 5
hours trying to catch up on your correspondence…entering information into
a database, typing and re-typing your letters and preparing them to be
mailed.
$75/hr X 5 hours = $375.00 of your valuable time and profit
If it would cost you less to outsource, why not do it? Why not allow a
professional to handle some of your tasks leaving you with more time to
generate revenue?
$25/hr (sample cost to outsource) X 5 hours = $125.00
$375 - $125 = $250 + the $ of the contract you signed while a
professional took care of the non-revenue generating tasks.
Although you are spending some of your hard earned money, you are gaining
so much more. Outsourcing gives you professional assistance, which in
turn saves you both time and money...the two things that most small
business owners need more of.
About The Author
Janice Byer is a certified Master Virtual Assistant and owner of
Docu-Type Administrative & Web Design Services (http://www.docutype.net). See this and other articles on her website.
jbyer@docutype.net
Tuesday, July 28, 2009
Credit Report And Correction Techniques
Credit Report And Correction Techniques
by: Virginia Broobin
The three major credit bureaus, Experian, Equifax and Trans Union are
similar and feature a "Credit Score", which is created from credit report
data submitted to them about you. Their report includes where you live,
your bill-paying habits, and bankruptcy and arrest information. The
information compiled by them is used to determine whether you would be a
good borrower. It may also be used by a business to decide whether you
would be a good employee.
Credit report repair involves techniques for removing negative credit
records from your credit report. These are the exact same methods credit
score repair clinics and attorneys may charge up to $3,500 to perform. It
is also possible to outsmart creditors who are damaging your credit score.
1. Many times the creditor does not re-verify in time or the credit
bureau is busy and does not handle your dispute properly. This credit
record must then be deleted from your credit report.
2. Every negative credit record on your credit report can be negated by
you at any time. The credit bureau must reinvestigate and if that item
cannot be verified within a reasonable amount of time, that credit record
must be removed from the credit file (credit report).
3. Challenged credit record when challenged can be erased by mistake.
4. The credit bureau must prove each credit record on your credit report.
If this is not possible, it must be stricken from the credit report. So,
if the credit bureau cannot verify the credit record when investigated,
it must be removed from your credit file (credit report) even if it is
true.
5. It is possible that a very old credit records cannot be verified
because records may no longer exist after 1 or 2 years on credit report.
Your credit score is important for obtaining credit. Your credit score is
important to know, whether you need a new credit card, an auto loan, or a
mortgage. Lenders use your credit scores to decide whether you are a good
credit risk. If you have a high credit score, you are more likely to
obtain the best rates.
To obtain the excellent credit report service, correct your credit, get
FREE online Credit Report, make your Credit Score higher or avoid
becoming a Victim of Identity Theft visit Legalhelper.ws (
http://www.legalhelper.ws ).
About The Author
Virginia Broobin- Financial marketing specialist.
contact@legalhelper.ws
by: Virginia Broobin
The three major credit bureaus, Experian, Equifax and Trans Union are
similar and feature a "Credit Score", which is created from credit report
data submitted to them about you. Their report includes where you live,
your bill-paying habits, and bankruptcy and arrest information. The
information compiled by them is used to determine whether you would be a
good borrower. It may also be used by a business to decide whether you
would be a good employee.
Credit report repair involves techniques for removing negative credit
records from your credit report. These are the exact same methods credit
score repair clinics and attorneys may charge up to $3,500 to perform. It
is also possible to outsmart creditors who are damaging your credit score.
1. Many times the creditor does not re-verify in time or the credit
bureau is busy and does not handle your dispute properly. This credit
record must then be deleted from your credit report.
2. Every negative credit record on your credit report can be negated by
you at any time. The credit bureau must reinvestigate and if that item
cannot be verified within a reasonable amount of time, that credit record
must be removed from the credit file (credit report).
3. Challenged credit record when challenged can be erased by mistake.
4. The credit bureau must prove each credit record on your credit report.
If this is not possible, it must be stricken from the credit report. So,
if the credit bureau cannot verify the credit record when investigated,
it must be removed from your credit file (credit report) even if it is
true.
5. It is possible that a very old credit records cannot be verified
because records may no longer exist after 1 or 2 years on credit report.
Your credit score is important for obtaining credit. Your credit score is
important to know, whether you need a new credit card, an auto loan, or a
mortgage. Lenders use your credit scores to decide whether you are a good
credit risk. If you have a high credit score, you are more likely to
obtain the best rates.
To obtain the excellent credit report service, correct your credit, get
FREE online Credit Report, make your Credit Score higher or avoid
becoming a Victim of Identity Theft visit Legalhelper.ws (
http://www.legalhelper.ws ).
About The Author
Virginia Broobin- Financial marketing specialist.
contact@legalhelper.ws
Monday, July 27, 2009
Details about Refinancing a Second Mortgage
Details about Refinancing a Second Mortgage
by: Allan Young
According to the Mortgage Bankers Association, 2009 will see the amount
of mortgage refinances rise from about $850 billion to over $1.9
trillion. While most of those refinanced mortgages will be primary
mortgages, there are many good reasons to consider refinancing a second
mortgage on your home. If you are making payments on a second mortgage,
also referred to as a home equity loan, refinancing could save you a good
deal of money on your loan repayment.
Why Refinance a Second Mortgage?
The reasons for refinancing a second mortgage are no different than the
reasons for refinancing a primary mortgage. When refinancing a second
mortgage you can potentially lower monthly loan payments, get into a
fixed rate loan from an adjustable rate loan, shorten the term of your
loan, and even get cash back at the closing. In addition to these
reasons, refinancing for a second mortgage also helps to combine your
first and second mortgage into one loan, so that you will have only one
payment to make. Refinancing for a second mortgage can also help to get
rid of private mortgage insurance. It is most important to know that
refinancing for a second mortgage is essentially the same process as
refinancing for your primary mortgage.
Does Refinancing Your Second Mortgage Make Sense?
There are many factors to consider when deciding whether or not to
refinance a second mortgage. Before you apply for a loan, you should
carefully weigh the costs versus the benefits, to see if it makes
financial sense for you. In order for a mortgage refinance to make sense,
most financial experts suggest that you follow some basic rules of thumb:
- A mortgage refinance may be a good idea if the interest rates have
dropped at least one percentage point below your current second mortgage
rate.
- A mortgage refinance only makes sense if you plan to remain in your
house for at least four more years.
- The costs of taking out a new loan plus any penalties for early
repayment of your old mortgage are less than your savings if you
refinance.
- Your financial circumstances have changed enough that you can qualify
for an interest rate that is at least one percent lower than your current
second mortgage interest rate.
How to Refinance a Second Mortgage
Before you decide on a second mortgage, you should first assess your own
financial health. Check your credit report to be sure that it accurately
reflects your current circumstances. If there are inaccuracies or
discrepancies on your credit report that may lower your credit score,
contact the credit bureaus to have the situation dealt with and removed.
If your credit is shaky, do what you can to rehab your credit score. Try
to pay off credit card balances as much as you can, and bring all of your
accounts to current standings. In certain cases, you may have to resolve
to make regular payments on all of your accounts for several months
before actually applying for a mortgage refinance loan.
You also want to decide what your aim is for refinancing your second
mortgage in order to figure out what kind of new loan to seek. For
example, if you want to lower your monthly payment and save money on your
overall mortgage, look for a mortgage refinance with a lower interest
rate. If you want to lower your monthly payment but the overall mortgage
is not important to you, try to refinance into a longer term second
mortgage. If your intent is to pay off your mortgage more quickly, look
for a mortgage with a shorter term. Your monthly payments will be larger,
but you will save a considerable amount of money over the life of your
loan. Lastly, if you want to combine your primary and second mortgage,
look for the lowest interest rates and shortest term that you can afford.
You will also want to get loan quotes from several lenders in order to
find the best deal. You do not have to refinance your current second
mortgage with the original lender, although your current lender may offer
you the best terms. Since each lender has their own criteria for
approving loans and deciding on interest rates, the loans that you are
offered can vary by as much as a full percentage point. It is to your
benefit to shop around and compare several different loan quotes. Not
only will you have a wider variety of choices of loans, but you will also
have bargaining power if you choose to negotiate with a particular loan
company.
Lastly, you want to choose the best second mortgage refinance loan that
you are offered. Once you have all of your loan quotes in line, compare
them carefully to choose the best one for your needs. Be sure to count in
the closing costs and any special incentives offered by the various loan
companies into your calculations. When you have made your choice, contact
the winning lender and finalize the arrangements for your mortgage
refinance.
About The Author
Allan Young is a freelance writer who writes about mortgages and home
ownership, often discussing a specific aspect of owning a home such as
refinancing home mortgage .
The author invites you to visit: http://www.absolutemortgageco.com
by: Allan Young
According to the Mortgage Bankers Association, 2009 will see the amount
of mortgage refinances rise from about $850 billion to over $1.9
trillion. While most of those refinanced mortgages will be primary
mortgages, there are many good reasons to consider refinancing a second
mortgage on your home. If you are making payments on a second mortgage,
also referred to as a home equity loan, refinancing could save you a good
deal of money on your loan repayment.
Why Refinance a Second Mortgage?
The reasons for refinancing a second mortgage are no different than the
reasons for refinancing a primary mortgage. When refinancing a second
mortgage you can potentially lower monthly loan payments, get into a
fixed rate loan from an adjustable rate loan, shorten the term of your
loan, and even get cash back at the closing. In addition to these
reasons, refinancing for a second mortgage also helps to combine your
first and second mortgage into one loan, so that you will have only one
payment to make. Refinancing for a second mortgage can also help to get
rid of private mortgage insurance. It is most important to know that
refinancing for a second mortgage is essentially the same process as
refinancing for your primary mortgage.
Does Refinancing Your Second Mortgage Make Sense?
There are many factors to consider when deciding whether or not to
refinance a second mortgage. Before you apply for a loan, you should
carefully weigh the costs versus the benefits, to see if it makes
financial sense for you. In order for a mortgage refinance to make sense,
most financial experts suggest that you follow some basic rules of thumb:
- A mortgage refinance may be a good idea if the interest rates have
dropped at least one percentage point below your current second mortgage
rate.
- A mortgage refinance only makes sense if you plan to remain in your
house for at least four more years.
- The costs of taking out a new loan plus any penalties for early
repayment of your old mortgage are less than your savings if you
refinance.
- Your financial circumstances have changed enough that you can qualify
for an interest rate that is at least one percent lower than your current
second mortgage interest rate.
How to Refinance a Second Mortgage
Before you decide on a second mortgage, you should first assess your own
financial health. Check your credit report to be sure that it accurately
reflects your current circumstances. If there are inaccuracies or
discrepancies on your credit report that may lower your credit score,
contact the credit bureaus to have the situation dealt with and removed.
If your credit is shaky, do what you can to rehab your credit score. Try
to pay off credit card balances as much as you can, and bring all of your
accounts to current standings. In certain cases, you may have to resolve
to make regular payments on all of your accounts for several months
before actually applying for a mortgage refinance loan.
You also want to decide what your aim is for refinancing your second
mortgage in order to figure out what kind of new loan to seek. For
example, if you want to lower your monthly payment and save money on your
overall mortgage, look for a mortgage refinance with a lower interest
rate. If you want to lower your monthly payment but the overall mortgage
is not important to you, try to refinance into a longer term second
mortgage. If your intent is to pay off your mortgage more quickly, look
for a mortgage with a shorter term. Your monthly payments will be larger,
but you will save a considerable amount of money over the life of your
loan. Lastly, if you want to combine your primary and second mortgage,
look for the lowest interest rates and shortest term that you can afford.
You will also want to get loan quotes from several lenders in order to
find the best deal. You do not have to refinance your current second
mortgage with the original lender, although your current lender may offer
you the best terms. Since each lender has their own criteria for
approving loans and deciding on interest rates, the loans that you are
offered can vary by as much as a full percentage point. It is to your
benefit to shop around and compare several different loan quotes. Not
only will you have a wider variety of choices of loans, but you will also
have bargaining power if you choose to negotiate with a particular loan
company.
Lastly, you want to choose the best second mortgage refinance loan that
you are offered. Once you have all of your loan quotes in line, compare
them carefully to choose the best one for your needs. Be sure to count in
the closing costs and any special incentives offered by the various loan
companies into your calculations. When you have made your choice, contact
the winning lender and finalize the arrangements for your mortgage
refinance.
About The Author
Allan Young is a freelance writer who writes about mortgages and home
ownership, often discussing a specific aspect of owning a home such as
refinancing home mortgage .
The author invites you to visit: http://www.absolutemortgageco.com
Sunday, July 26, 2009
Why Your Mutual Fund Doesn't Return as Much as You Think
Why Your Mutual Fund Doesn't Return as Much as You Think
by: ARA Content
(ARA) - As tax time nears, many mutual fund investors are starting to
wince. While most mutual funds' returns were down last year, their tax
bill remains high.
After years under-performing the S&P 500, the average US stock mutual
fund finally beat the index last year. But while the average fund was
down just 0.37% v. the S&P 500's 9.1% drop, investors in the average fund
actually lost around 3% when you add in the fees and capital gains taxes
they must pay, says James O'Shaughnessy, CEO of Netfolio.com
[http://Netfolio.com] and author of the bestseller What Works on Wall
Street.
"Mutual fund performance figures often leave out the taxes and some fees
you are required to pay as an investor," says O'Shaughnessy, a former
mutual fund manager and architect of a new investment service that
eliminates the big drawbacks of mutual funds. "The little guy is left
thinking he didn't do too badly when in fact he didn't do nearly as well
as he thought."
Even the Securities and Exchange Commission is fed up. Just weeks ago,
the SEC set new rules requiring mutual funds to disclose what they
haven't disclosed for years -- the impact of income taxes on a fund's
performance.
In the 1990s, investors all but overlooked their tax hit and the hidden
costs in mutual fund investing. Strong and steady bull market fund
returns made taxes a non-issue. But now, as investors gear up to pay
taxes in April, many are discovering the inequity of paying high taxes on
funds that declined in value.
How do taxes eat into fund returns? Let's say you invested $1,000 in the
average mutual fund in January 2000. You would think that because the
fund declined 0.37%, it left you with about $996 in December. Not too
bad, you say, it could have been worse.
But not so fast. Throughout the year, the manager of the average mutual
fund commonly sells 92% of his fund's stocks in an attempt to boost
returns. Who pays the capital gains taxes on his giddy trading activity?
You do. In fact, you'll have to pay a higher, short-term tax rate on the
gains from assets the manger held for less than a year.
That means you'll have to use your income tax bracket to calculate your
bill rather than the lower 20% rate charged on long-term gains. Your tax
rate on these gains could be as high as 50% after you add up the your
federal, state and local tax rates.
But taxes are only half the story. The typical mutual fund also charges
annual fees, an expense ratio it uses to pay the fund manager, and
transaction costs it uses to pay the fund's brokerage expenses.
Now let's revisit that $1,000 you invested in the average mutual fund
last January. By December, you would have paid about $18 in fees and
about $12 in capital gains taxes. So you lost about $30 on your $1,000
investment, not $3.70. That's about a 3% decline rather than the 0.37%
drop reported recently by fund-tracking firm Lipper Inc. The 0.37%
decline is the gross return of the average US stock fund and does not
include taxes or fees.
"Mutual fund investors should be offended by the amount of taxes and fees
they have to pay," says O'Shaughnessy. "Mutual funds may seem like
no-brainer investments but they can compromise your long-term savings
potential. All the money you spend on fees and short-term capital gains
taxes could have remained invested and compounding."
O'Shaughnessy has identified five big mutual fund drawbacks:
1. High expense ratios. Investors pay a fee for the privilege of
owning shares. That fee goes to the fund's manager. But instead of a
flat amount, the fee is based on your assets in the fund. The more
money you have invested, the higher your fee.
2. Undisclosed transaction costs. This is the fee that a mutual fund
pays to its broker to buy and sell stocks. The fee is not found in a
fund's prospectus and is deducted from the fund's returns. The higher
the fund's portfolio turnover rate, the higher its transaction costs.
3. No control. You have no say over what stocks the fund owns. Some
stocks may be ideal for you while others are not.
4. Little knowledge. Because you don't know what specific assets a
mutual fund owns on a daily basis, you could wind up owning the same
stocks in several different funds. Or the types of stocks the fund
buys now may differ from the ones it set out to buy when you
originally invested.
5. Significant tax hits. In addition to the capital gains taxes you
pay when your fund manager actively trades stocks, you also face
"embedded capital gains." These can occur when a fund you recently
bought sells a stock it has held for many years. Your tax hit on that
trade will be equal to someone who has the same amount invested but
owned the fund for many years and profited from that stock's long
run-up in price.
What's the average mutual fund investor to do? Alternatives are emerging
that provide individuals with more control over their investments and
taxes. The Web-based services in this new "personal fund" sector offer
stock portfolios that are tailored to an individual investor's personal
financial goals.
Instead of buying mutual fund shares, investors in personal funds buy an
entire portfolio of stocks for a relatively low minimum investment. By
owning the stocks in a personal fund, you control your capital gains
taxes by choosing when to buy and sell stocks. You also know at all times
the stocks you own.
The low cost of ownership and individual control of tax responsibilities
offer individuals significant advantages over mutual funds and other
popular investment vehicles. As such, Forrester Research, an e-commerce
research firm in Cambridge, Mass., predicted that more than $1 trillion
will be invested in personalized funds rather than mutual funds over the
next 10 years.
"The days when mutual fund investors have to eat what they are served are
over," says O'Shaughnessy of Netfolio.com. "Personal funds make it
possible for every individual investor to own a professionally selected
stock portfolio that is reasonably priced and designed for their needs
and goals."
***************************************************************************
*******************
Netfolio.com is one of several new services offering individual investors
personalized fund portfolios and -- surprise -- the first headed by a
former mutual fund manager.
To begin investing at Netfolio, you pay $200 a year or $20 a month to
subscribe to its service. Then you open a Bear Stearns account online at
the Netfolio site at no additional cost.
To invest, you ask Netfolio to recommend personal funds that suit your
investment objectives. Or you can pick them on your own from Netfolio's
list. Each personal fund comes with a recommended stock portfolio that
you can customize prior to investment.
You can buy an entire portfolio of stocks in a personal fund with a
minimum investment of just $5,000. And there are no commissions when you
invest in Netfolio's personal funds online through Bear Stearns.
"This type of personalized investment advice used to be available only to
the superwealthy," O'Shaughnessy says. "Now, thanks to the Internet,
individual investors everywhere can access the same type of service
through their computer."
About The Author
Courtesy ARA Content, http://www.ARAcontent.com;
e-mail: info@ARAcontent.com
by: ARA Content
(ARA) - As tax time nears, many mutual fund investors are starting to
wince. While most mutual funds' returns were down last year, their tax
bill remains high.
After years under-performing the S&P 500, the average US stock mutual
fund finally beat the index last year. But while the average fund was
down just 0.37% v. the S&P 500's 9.1% drop, investors in the average fund
actually lost around 3% when you add in the fees and capital gains taxes
they must pay, says James O'Shaughnessy, CEO of Netfolio.com
[http://Netfolio.com] and author of the bestseller What Works on Wall
Street.
"Mutual fund performance figures often leave out the taxes and some fees
you are required to pay as an investor," says O'Shaughnessy, a former
mutual fund manager and architect of a new investment service that
eliminates the big drawbacks of mutual funds. "The little guy is left
thinking he didn't do too badly when in fact he didn't do nearly as well
as he thought."
Even the Securities and Exchange Commission is fed up. Just weeks ago,
the SEC set new rules requiring mutual funds to disclose what they
haven't disclosed for years -- the impact of income taxes on a fund's
performance.
In the 1990s, investors all but overlooked their tax hit and the hidden
costs in mutual fund investing. Strong and steady bull market fund
returns made taxes a non-issue. But now, as investors gear up to pay
taxes in April, many are discovering the inequity of paying high taxes on
funds that declined in value.
How do taxes eat into fund returns? Let's say you invested $1,000 in the
average mutual fund in January 2000. You would think that because the
fund declined 0.37%, it left you with about $996 in December. Not too
bad, you say, it could have been worse.
But not so fast. Throughout the year, the manager of the average mutual
fund commonly sells 92% of his fund's stocks in an attempt to boost
returns. Who pays the capital gains taxes on his giddy trading activity?
You do. In fact, you'll have to pay a higher, short-term tax rate on the
gains from assets the manger held for less than a year.
That means you'll have to use your income tax bracket to calculate your
bill rather than the lower 20% rate charged on long-term gains. Your tax
rate on these gains could be as high as 50% after you add up the your
federal, state and local tax rates.
But taxes are only half the story. The typical mutual fund also charges
annual fees, an expense ratio it uses to pay the fund manager, and
transaction costs it uses to pay the fund's brokerage expenses.
Now let's revisit that $1,000 you invested in the average mutual fund
last January. By December, you would have paid about $18 in fees and
about $12 in capital gains taxes. So you lost about $30 on your $1,000
investment, not $3.70. That's about a 3% decline rather than the 0.37%
drop reported recently by fund-tracking firm Lipper Inc. The 0.37%
decline is the gross return of the average US stock fund and does not
include taxes or fees.
"Mutual fund investors should be offended by the amount of taxes and fees
they have to pay," says O'Shaughnessy. "Mutual funds may seem like
no-brainer investments but they can compromise your long-term savings
potential. All the money you spend on fees and short-term capital gains
taxes could have remained invested and compounding."
O'Shaughnessy has identified five big mutual fund drawbacks:
1. High expense ratios. Investors pay a fee for the privilege of
owning shares. That fee goes to the fund's manager. But instead of a
flat amount, the fee is based on your assets in the fund. The more
money you have invested, the higher your fee.
2. Undisclosed transaction costs. This is the fee that a mutual fund
pays to its broker to buy and sell stocks. The fee is not found in a
fund's prospectus and is deducted from the fund's returns. The higher
the fund's portfolio turnover rate, the higher its transaction costs.
3. No control. You have no say over what stocks the fund owns. Some
stocks may be ideal for you while others are not.
4. Little knowledge. Because you don't know what specific assets a
mutual fund owns on a daily basis, you could wind up owning the same
stocks in several different funds. Or the types of stocks the fund
buys now may differ from the ones it set out to buy when you
originally invested.
5. Significant tax hits. In addition to the capital gains taxes you
pay when your fund manager actively trades stocks, you also face
"embedded capital gains." These can occur when a fund you recently
bought sells a stock it has held for many years. Your tax hit on that
trade will be equal to someone who has the same amount invested but
owned the fund for many years and profited from that stock's long
run-up in price.
What's the average mutual fund investor to do? Alternatives are emerging
that provide individuals with more control over their investments and
taxes. The Web-based services in this new "personal fund" sector offer
stock portfolios that are tailored to an individual investor's personal
financial goals.
Instead of buying mutual fund shares, investors in personal funds buy an
entire portfolio of stocks for a relatively low minimum investment. By
owning the stocks in a personal fund, you control your capital gains
taxes by choosing when to buy and sell stocks. You also know at all times
the stocks you own.
The low cost of ownership and individual control of tax responsibilities
offer individuals significant advantages over mutual funds and other
popular investment vehicles. As such, Forrester Research, an e-commerce
research firm in Cambridge, Mass., predicted that more than $1 trillion
will be invested in personalized funds rather than mutual funds over the
next 10 years.
"The days when mutual fund investors have to eat what they are served are
over," says O'Shaughnessy of Netfolio.com. "Personal funds make it
possible for every individual investor to own a professionally selected
stock portfolio that is reasonably priced and designed for their needs
and goals."
***************************************************************************
*******************
Netfolio.com is one of several new services offering individual investors
personalized fund portfolios and -- surprise -- the first headed by a
former mutual fund manager.
To begin investing at Netfolio, you pay $200 a year or $20 a month to
subscribe to its service. Then you open a Bear Stearns account online at
the Netfolio site at no additional cost.
To invest, you ask Netfolio to recommend personal funds that suit your
investment objectives. Or you can pick them on your own from Netfolio's
list. Each personal fund comes with a recommended stock portfolio that
you can customize prior to investment.
You can buy an entire portfolio of stocks in a personal fund with a
minimum investment of just $5,000. And there are no commissions when you
invest in Netfolio's personal funds online through Bear Stearns.
"This type of personalized investment advice used to be available only to
the superwealthy," O'Shaughnessy says. "Now, thanks to the Internet,
individual investors everywhere can access the same type of service
through their computer."
About The Author
Courtesy ARA Content, http://www.ARAcontent.com;
e-mail: info@ARAcontent.com
Saturday, July 25, 2009
Mr. Cheapie's Frugal Budget Tips
Mr. Cheapie's Frugal Budget Tips
by: David Leonhardt
So you feel like a hamster spinning your wheel? The faster you run, the
faster the wheel spins. Just when you get a raise, you notice the price
of hamster wheels jumps!
Mr. Cheapie is here with his super-charged budget-cutting tips.
One of the biggest wastes of money is restaurant meals. You can cook a
meal at home for about 2 cents a plate. Just put leftovers in the
microwave, and Presto!
Those same leftovers cost a lot more at a restaurant. They call it "the
buffet", and they sell it to you for $10.95.
Consider also the steak dinner that costs, say, $7 at home. At the
restaurant, you pay $13.95 for the same meal. Or, if you want fancy
napkins, $39.95.
Plus tax.
Funny thing about eating at home; you don't pay tax. But step into a
restaurant, and guess who jumps in: "Hello, my name is Taxman. I'll be
your waiter tonight. Would you like to start with something to drink?
Perhaps a very nice glass of wine? That will be 50 cents, plus the price
of the wine, of course."
"Why would you tax my wine?" Mr. Cheapie wonders. "It's not like the
government made it."
"Who do you think keeps this country free and safe so that you can enjoy
your wine?" Taxman demands. "Do you think Saddam Hussein would let you
drink wine if he was still in power?"
"I don't see how he could stop me."
"Hah!" Taxman replies. "He has spies everywhere. He knows you drink wine
and he has targeted this very bottle to self destruct."
"Actually, I don't drink wine. His spies must run on the same technology
as his scud missiles," Mr. Cheapie muses. "How about a steak dinner?"
"An excellent choice," Taxman beams. "That will be $1.73, plus the price
of the meal."
"Now what?" Mr. Cheapie demands. "Are you saying that Saddam is targeting
my steak."
"Of course not," Taxman giggles. "We have him locked away. But watch out
for North Korea."
"Why?"
"North Koreans are starving," Taxman explains. "They don't have steaks."
"Ah, so the North Korean government wants to take my steak and give it to
their citizens."
"Not a chance. That would violate the official North Korean policy of
starvation for all. They would never feed your steak to the people. But
they would hold it up to taunt them," Taxman grins. "Then they would
throw it into the fire to fuel a nuclear missile trained on this very
table you are sitting at."
"Which is why you need to tax my steak."
"Exactly," Taxman nods.
"It's like a security deposit."
"That's right," Taxman smiles.
"It's protection money."
"You understand," Taxman winks.
"It's your tip."
"That's what I sa ... no it's not! It's national defense," Taxman insists.
At home, you never have to tip the microwave. But, at the restaurant,
your waiter expects 15%.
Mr. Cheapie has discovered a legal loophole to save 15% on your
restaurant bill. According to a national Mr. Cheapie survey, your plate
usually has 15% too much food on it. Set aside 15% of your meal. When
your waiter comes to collect his tip, pay him in food. Your waiter raved
about today's special, so Mr. Cheapie is sure he will appreciate having
some for himself.
If Taxman is your waiter, don't actually give him the food. Just taunt
him with it -- then mail it to North Korea. Then they won't have to blow
up your table to get it themselves. Why pay for national defense when the
postal service can protect your freedom to eat for just the cost of a
stamp?
Aren't you glad Mr. Cheapie offers such useful, free advice?
About The Author
The author is David Leonhardt. Sign up for his weekly satire column up at
http://www.TheHappyGuy.com/positive-thinking-free-ezine.html or read
more columns at
http://www.TheHappyGuy.com/self-actualization-articles.html. Or join in
the happiness at http://www.thehappyguy.com.
info@thehappyguy.com
by: David Leonhardt
So you feel like a hamster spinning your wheel? The faster you run, the
faster the wheel spins. Just when you get a raise, you notice the price
of hamster wheels jumps!
Mr. Cheapie is here with his super-charged budget-cutting tips.
One of the biggest wastes of money is restaurant meals. You can cook a
meal at home for about 2 cents a plate. Just put leftovers in the
microwave, and Presto!
Those same leftovers cost a lot more at a restaurant. They call it "the
buffet", and they sell it to you for $10.95.
Consider also the steak dinner that costs, say, $7 at home. At the
restaurant, you pay $13.95 for the same meal. Or, if you want fancy
napkins, $39.95.
Plus tax.
Funny thing about eating at home; you don't pay tax. But step into a
restaurant, and guess who jumps in: "Hello, my name is Taxman. I'll be
your waiter tonight. Would you like to start with something to drink?
Perhaps a very nice glass of wine? That will be 50 cents, plus the price
of the wine, of course."
"Why would you tax my wine?" Mr. Cheapie wonders. "It's not like the
government made it."
"Who do you think keeps this country free and safe so that you can enjoy
your wine?" Taxman demands. "Do you think Saddam Hussein would let you
drink wine if he was still in power?"
"I don't see how he could stop me."
"Hah!" Taxman replies. "He has spies everywhere. He knows you drink wine
and he has targeted this very bottle to self destruct."
"Actually, I don't drink wine. His spies must run on the same technology
as his scud missiles," Mr. Cheapie muses. "How about a steak dinner?"
"An excellent choice," Taxman beams. "That will be $1.73, plus the price
of the meal."
"Now what?" Mr. Cheapie demands. "Are you saying that Saddam is targeting
my steak."
"Of course not," Taxman giggles. "We have him locked away. But watch out
for North Korea."
"Why?"
"North Koreans are starving," Taxman explains. "They don't have steaks."
"Ah, so the North Korean government wants to take my steak and give it to
their citizens."
"Not a chance. That would violate the official North Korean policy of
starvation for all. They would never feed your steak to the people. But
they would hold it up to taunt them," Taxman grins. "Then they would
throw it into the fire to fuel a nuclear missile trained on this very
table you are sitting at."
"Which is why you need to tax my steak."
"Exactly," Taxman nods.
"It's like a security deposit."
"That's right," Taxman smiles.
"It's protection money."
"You understand," Taxman winks.
"It's your tip."
"That's what I sa ... no it's not! It's national defense," Taxman insists.
At home, you never have to tip the microwave. But, at the restaurant,
your waiter expects 15%.
Mr. Cheapie has discovered a legal loophole to save 15% on your
restaurant bill. According to a national Mr. Cheapie survey, your plate
usually has 15% too much food on it. Set aside 15% of your meal. When
your waiter comes to collect his tip, pay him in food. Your waiter raved
about today's special, so Mr. Cheapie is sure he will appreciate having
some for himself.
If Taxman is your waiter, don't actually give him the food. Just taunt
him with it -- then mail it to North Korea. Then they won't have to blow
up your table to get it themselves. Why pay for national defense when the
postal service can protect your freedom to eat for just the cost of a
stamp?
Aren't you glad Mr. Cheapie offers such useful, free advice?
About The Author
The author is David Leonhardt. Sign up for his weekly satire column up at
http://www.TheHappyGuy.com/positive-thinking-free-ezine.html or read
more columns at
http://www.TheHappyGuy.com/self-actualization-articles.html. Or join in
the happiness at http://www.thehappyguy.com.
info@thehappyguy.com
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