Prepaid funeral plans got popular because they provide the opportunity to pre-arrange your funeral while you are still alive. By doing so, you relieve the burden of making decisions from your loved ones at a time when they are grief stricken. Since the average funeral in the US cost $6,000 with some as high as $10,000, many people opt not to put the burden on their family at such an emotional time and thus the idea for such prepaid plans.

The main intention is to leave some assets to your loved ones and not to leave a bill for them to foot. After all $6,000 can be a lot of money for some. Couple that with children or relatives of varying financial status, it can add another dimension to an already emotional time. More so if death occurred unexpectedly. Even if you do have significant assets to leave for your beneficiaries, it may take a while before they get their share of your with probate and all.

Besides all that, it is a way for you to have some control on how elaborate or simple your funeral should be. Here’s a book that you might want to check out to plan for final arrangements.

For prepaid funeral plans, a contract is made between the person buying the plan and the legal agreement that says you will pay for funeral services now that will be needed in the future. The contract will state what is included and what is not and will have provisions for the funeral, burial, cremation and/or misc services. You can pay with money, insurance, or an investment that you own.

The intention of prepaid funerals are great. However, there are also disadvantages to including reported abuses, mismanaged and stolen funds. Compounding the problem is mortuaries that go out of business or people relocating to another part of the country. Some plans charge a high penalty for withdrawal or transfers.

If you want to set aside a sum of  money to pay for your final arrangements, an alternative solution is to create a Totten Trust, which is an account earmarkeded to pay for your final arrangements.

Unlike money applied to traditional funeral prepayment plans, the trust funds are easily transferred or withdrawn if required. Furthermore, you have complete control over the money during your life. This trust is easy to set up. You just have to contact a bank or savings institution and earmark the account as such.

However if you still want to get a prepaid funeral, then at the very least, read the contract. You must verify and be satisfied that the company is legitimate and be financially stable. Shop around and get recommendations. It must be licensed and certified to do the particular undertaking.

You should carefully examine and understand all the provisions of the contract before signing it. Pay attention to provisions pertaining to the coverage as well as the exclusions. Look for a contract that is revocable. This should allow you to withdraw from the contract anytime and at will given the rules on equitable reimbursements. Some prepaid funeral contracts are not revocable and you should avoid these if possible.

Original article from Personal Money Tips

If you read the first part of Markets Gone Crazy, you’ll know that I left the article hanging. You may think that I did so like a “cliff hanger” so that you, the reader will com back to this blog. Yes, that was partially true. However, the more important reason was that somehow, I could put my thoughts in the correct way for you. I know the power of the internet and I surely do not want to write anything that you may perceive as advice and then go make investment decision based on what I write here. Further more, I’m no expert and do not want to you think of me as such.

Besides the 2 points above, I was working on other things and I’m glad I did not simply publish the second part of the article. Initially, I wanted to write something smart along the lines of creating and rebalancing your portfolio. Having observe the markets for a longer period, I came to the conclusion that it is anyone’s guess at the moment.

Heck, even this guy, the president of International Institute of Management, a US based research and education organization (and he predicted the 2008 financial crisis) have this to say, and I quote

The first problem is any prediction formula that is valid for one context is not necessarily valid for another. Formulas must be updated with changing environments.

The second problem with prediction is that even if you get the formula right, your prediction results are dependent on so many uncontrollable variables such as mother nature, geopolitical events, new regulations, and changing relationships that affect the prices of the assets in question.

Luckily, to be a successful investor you do not need to be right all the time, you just have to be more right than wrong. That is how Vegas Casinos make so much money and even the best gamblers lose, they only play games that have the odds in their favor, they play in more controlled contexts. Playing the stock market is not much different. Successful investing is as much about risk management as it is about forecasting.

The fact that the PIGS (European government like Portugal, Italy, Greece and Spain) are doing their utmost to instill confidence in itself to solve the issues, such actions make predictions even harder.

Looking at the way the market is behaving, I reckon any long term investment is practically out of the question. With such wild swings, them day traders will be darn happy. Day trading is not my cup of tea, but looking at the conditions now, that may be the only game in town.

I think the last point is key. Investing is as much about risk management. How well are you managing the risk? At the moment, the downside risk is higher than upside gain. And so you have to decide how much risk are you willing to take. At at time like now, the risk are high and so too the reward. Get it right, you’ll grow your money.

My first rule of investing. Don’t lose money and that means your capital. As for me, I’ve decided to concentrate on my business while keeping an eye on the market. After all, the markets have not really tanked. If you think it is risky, pull your money out and wait for the right moment to go in again. That way, you’ll sleep easy. If you have not invested, now it not the time to do so.

Work on your business or concentrate on your work. Getting sidetracked will get you nowhere. If you have time, read up and look for good solid companies that have taken a hit by the present fear. These companies will be the first to recover when things turn around.

Original article from Personal Money Tips

If you follow the stock markets for the past 2 months, you will probably know that the markets have gone crazy. Up a moment, down the next. What should you do in such market situations? Hold cash & weather the storm? Sit tight with your investments?

Before we start, let’s wind back up to 3 years.

Let me share with you what I did the last time that didn’t seem smart at all in hindsight. Just before 2008, my colleague and I were discussing what we read. There are warnings about sub-prime. We were looking at the US markets & what kind of indications. There was an investment guy we read and saw on youtube, who kept on telling everyone the sky is about to fall. At the time almost every investment expert was saying the subprime problem does not exist. By the way, the investment guy predictions were right only about 50%. Read more here.

The timing of approximately 8 to 10 years cycle was rather spot on. I read another article in Time magazine that says small factories in Chine was closing down as well. So what I did then was to sell a large percentage of my investments and park the money in cash. I was waiting for the time to move everything back to equities. The market did crash shortly after. However, I did not go back into equities due to fear of a double dip. Well the double dip did not happen, markets have rallied & I missed a great opportunity to gain something like 30% or more. Those who did not do anything and sat tight would have gain more than if they did what I did. If I did go back in at around the bottom, I would have gained quite a bit. However, fear got the better of me & I did not act. Goes to show that just because I knew markets will recover, I didn’t know if it were going to be a V sharp recovery or a U shape one. Having said that, in 2008, a second dip occurred! Ahh, if only one has a crystal ball.

I’ve seen the charts from way back and most recovery were V shape that take place between 6 months to a year. But the subprime is something totally new. So is sovereign debt across several countries, so having a real idea where things are moving is quite difficult.

There are however some principle you can follow. I’ll share that in the second part of this article

Original article from Personal Money Tips

It it that season again. Decision time. Should I buy or sell. I’m in somewhat of a dilemma at the moment. While the economy seems to be chugging along just fine, I have some friends who keeps an eye on the financial situation. One tells me to be cautious, another one is selling his investment to prepare for a downturn. Actually he is preparing his war chest or what I call a war portfolio. I wrote about having a war portfolio a while back.

The thing is this. While before the last down turn, I manage to switch my portfolio into defensive mode, I kept it there too long. Okay, I’ve funds in equity and these have gone up quite a bit but that is a small lump that I did not switch back to aggressive mode. And now, at this stage, I can’t say whether the economy will continue its uptick or not. In the past 2 years, the property market has sky rocketed. Real inflation i.e. prices of good has gone up a bit and now, fuel prices worldwide has hit 30 month high. All this the recipe for a perfect economic storm. The government has taken steps to cool things down a bit by limiting loans.

The thing that don’t match up is the timing of the cycle and the rebuilding of Japan. For the last round, the indicators plus the 7-8 year cycle was kind off spot on. This time round it don’t really match up. Jobs in the US seems to be on the uptick and yet . . .So I’ll most likely reposition my money somewhat.

What do you think? Where in the investment cycle do you think we are in at the moment?

Original article from Personal Money Tips

Recently I found out a close relative was being scammed. She was caught in a web of deceit from the internet. While most of us would think better of emails promising millions of dollars or pounds, there are enough people who fall for such things that email scams is a billion dollar industry! Some estimate that it is bigger than even the drugs industry.

Life savings have been lost, family broken, some are threatened.  Even those that are intelligent and in high position are conned. A doctor, former US congressman and other have lost money. Attached are links to sites and video that shows the extent of the problem.

1. 419Scam
2. Advance Fee Fraud – best article to get overall knowledge of the types of scam
3. How to fight back – Scam baiting

Youtube videos

1. ABC Report on Nigerian Scammer
2. Women loses 400,000 online

How to prevent and reduce such things.

1. If you are setting up email for the younger or older parents or uncles who are not so savvy, please set up spam filters to prevent them from getting such messages in the first place. By reducing exposure, you are reducing the opportunity for them to be scammed.

2. Educate new internet users in your home how to identify fraudulant websites and email addresses

3. Teach them that there is no such thing as free lunch

There are many variations of the scam. Some scams have know have a romantic interludes inside to cheat single men and women.

By the way, the Nigerian culture look up to such scammers. Here is a top hit music video produced in Nigeria parading such people.

Finally, if you have lost money, please don’t go after them. In the video, the police and reporters went after them. Don’t do this. People have been kidnapped and killed trying to go after the money they lost.

Original article from Personal Money Tips

First, I want to say that I’m not an expert when it comes to investment. However, I wanted to share this information I picked up from a seminar. This is one of the indicators to note when you want to invest and I think it would be useful if you are a contrarian investor. If you are the “go with the flow” investor, then probably this won’t be useful.

The Fear Factor chart better known as the Volatility Index, shows how volatile the market is. The higher the index, the more volatile, the more it indicates that investor are feeling fearful. The lower the index, the less volatile and investors are feeling safe.

While there is reason to invest in stock that are low in price, this does not mean investing blindly. You have to know the underlying company’s financial state. Is the fear well founded or irrational. People flee a stock for a reason. However, for good companies during times of uncertainty, when prices have dropped, it may make sense to invest.

Warren Buffett says "Be fearful when others are greedy; be greedy when others are fearful." This doesn’t mean be lazy!

Like I said in the early part of the post, this index is an Indicator.

You can see the chart at Yahoo Finance

Original article from Personal Money Tips

I did an interesting exercise a few months ago. The exercise helped me relook at goals versus desires. I know that there are ton’s of articles and books and numerous things people talk about Goals. How you must have them, looking at them etc.

For this past year, although I wrote down some goals at the beginning of 2009, I didn’t pay much attention to them. In my last article, I share with you my insights to goals for me. This year, I really didn’t pay attention at all to what I wrote down The result at years end is that my income dropped off quite a bit. And I really need to focus in 2010 or else the income will drop further.

The reason for the drop is I’m trying to redesign myself with regards to work and income. Anyhoooow, with the exercise I did several months ago and now that I know I need to focus, I brought out the good ole “Goal Card”. The one the successful people always tell you to carry and look at every day several times a day.

I’ve done that in the past but it never worked. However, this time my card is called Goad & Desire card. It has a twist. As a result of the exercise and new understanding, I decided to write down on the Goals column, things that within my control and Desires column, stuff that I can’t.

Well the experts always say, you can control it if you work hard enough or dream about it enough aka TheSecret. (Ooh I’ll be stepping on some toes here). I believe to earn $X amount by when is out of your control. Being a sales person, with enough data, you “can” gauge the ratio of sales activity (within your control) eg calls you need to make, to result in sales. While the ratio thing does work, you still can’t control who will buy and how much. Or if you get hit by a truck and be out of action.

So, the things I can really control, my Goals everyday, will be having a positive attitude, to have faith, to be focused, to be transparent and to take bold action. The Desires (things that I can’t control but look forward to accomplishing) will be perhaps a holiday overseas, a certain level of income, a new car etc.

I invite you to consider this. I’d certainly like to hear from you if you have done something similar.

Original article from Personal Money Tips

I went to a fund raising event with my other half and some friends recently. While we are not loaded rich to give money out simply, it was a cause that we believed in and wanted to support this non profit organization.

So we bought tickets for the dinner, which by my standards are for the well heeled to say the least. It was a new experience for us. The event was attended by some VIPs (perhaps 10 to 20 percent of the crowd). How I knew? There was only a few of them bidding during the auction.

What I did not expect during the dinner was raffle ticket sales as well as an auction, since we already paid a handsome chunk of change to eat. I have a sneaky suspicion the event was organized by pro’s for this kind of thing. I had to say there was no hardcore pressure of any kind for us to buy anything and no, our table did not once participate in the auction.

Anyway, what I learned during the event.

Tip 1. If you want to support any cause, calculate what you can and cannot afford and stick with it. While you may feel bad if you cannot contribute, I reckon it is better than to pay the price financially and emotionally later on.

Tip 2. While you might feel you have to buy something, in this case raffle tickets, you can always spread the price out among friends instead of bearing the whole bill. This is what we did and somewhat got us off the hook for not buying any at all

Tip 3. If all else fails and you find it hard to say no, run to the gents or the ladies. No, we did not do this but now that I thought of it, I reckon I share it here.

Tip 4. If you feel pressure is over the edge, look at Tip 3 and maybe next time, you might want to reconsider supporting the cause. If you know the person well enough, then some feedback is for them will do them good too. No point raising funds now and losing the important people, the backers right.

Tips 5. Just send them a check. Then you don’t need most of the tips above.

Hope these tips on how to survive a fund raising event help you manage your funds better.

pic credit

Original article from Personal Money Tips

In the movies, when the hero or heroine’s original plan fails, you hear the catch phrase, “Okay, its time for Plan B”. While in the movies, it is cliché, and having a plan B puts a twist to the story to make it more interesting, in real life, a Plan B is crucial.

If you haven’t noticed it yet, your job, company or industry can disappear or be radically transformed over night. I’ve also experience the disadvantage of being in a agent-principal relationship to start look at alternatives.

While I still hold out that the Almighty promised that He will take care of our needs, it doesn’t mean I don’t make provisions. Joseph in the bible had a dream that 7 years of prosperity will be followed by 7 years of famine. He prepared for it and Egypt became the riches nation at that time because of what Joseph did.

My Plan B looks like this

• I have an emergency fund that covers 6 months of living expenses
• Our only loan is our house loan
• I have developed a broad network of people I could rely on for referrals/job leads if my job ever disappeared
• I have spread our business not to depend on a single provider
• I’ve been learning about the internet and making a few bucks online

Some suggestions to think strategically. Ask yourself if:-

• your experience and expertise be transferred to other industries?
• Is there any certifications you can acquire to strengthen your position
• How much money do you have set aside?
• Who should you go meet now to build you need new connections
• Have you thought of what you would like to do even if you did not lose your job.

The present time is challenging but also a time to reinvent yourself. Grab this opportunity.

Original article from Personal Money Tips

I was passing through a shopping mall today when someone approached me with an investment idea. Normally I don’t stop for such 5 minutes on your feet talk but today, I have some extra time and I let the lady talk.

In less than a minutes, it turns out to be no investment idea at all. Apparently, people will call anything an investment to get you to join them. An anything that even has a hint of possibly potential income is touted as an investment. I highlight the phrase possibly potential inceome. Truth is, what the nice lady tried to sell me was nothing more than multi level marketing. They ask people to “invest” i.e. become a member, buy their products and get others to join. I don’t have anything against MLMs. But to frame the idea that what you are purchasing is actually an investment is hogwash.

I guess, to build a business, you invest your time, effort and money to get it going and calling it an investment is not wrong. Still, you have to recognize a spade to tell if it is a spade, or you might “buy” into something thinking is it an investment.

I did not stick around to hear more because I’ve been involved in MLM before and it takes a lot more hard work than what you think or are told to believe. And time was running out for my next appointment.

Lesson here. All sorts of people can call all sort of things investment. You have to decide what an investment is to you or else get suckered into someone else’s “investment plan”

Original article from Personal Money Tips