You Might Not get a Raise Next Year, But Your Pay May Be Going Up.

A new stimulus bill is feverishly being prepared so it can be signed as soon as President-elect Barack Obama gets into office. With the economy the way it is it's likely your employer may not be giving you a raise, but one part of the proposed stimulus bill may put more money in your pocket.

While exact details have not been made clear the president-elects stimulus package is most likely to include a tax cut to boost spending. In some scenarios it could be anywhere from an extra $83 to $166 per paycheck.

One of Obama's top advisers, David Axelrod spoke on "Meet the Press" on NBC last Sunday. He said Obama had promised a middle class tax cut and that his economic recovery package will include a portion of a tax cut that will become part of the permanent tax cut he'll have in his upcoming budget.

Obama proposed a number of tax cuts for middle and low income households. One of the proposed cuts that I find interesting is exempting seniors with income under $50,000 from having to pay income tax. I wonder how long that would last? No mention has been made if that would be a permanent cut.

Obama's proposed Make Work Pay Credit is the one most likely to get money in the hands of the greatest numbers of tax payers.

The credit simply has employers reduce the tax withholding in a person's paycheck. The credit works as a payroll tax credit equal to $500 a year for individuals and $1,000 for couples.

The full credit would be limited to those making $75,000 or less and $150,000 or less for couples. If you make between $75,000 and $85,000 or couples making between $150,000 to $170,000 would get only a partial credit.

An individual who gets paid every two weeks and receives the $500 tax break amount would receive an extra $19.23 a paycheck. A $1,000 break for couples equates to $38.46 per pay period.

One option being considered is rather than spread this out over the course of a year workers would receive the full $500 credit or $1,000 credit over the course of the first quarter. That would mean an extra $83 a pay period for individuals and $166 for couples.

That amount could even double if the tax credit gets approved for two years worth of credits.

But does a temporary tax cut work as well as a permanent one? Was last years stimulus that beneficial to anyone? I am not complaining about a free $600, but come on. Is it enough?

A spike in the personal savings rate jumped in the second and third quarters of last year suggests that consumers saved more of the $100 billion in stimulus checks than they actually spent.

Another theory why the savings rate went up is everyone was being told we are in the worst financial crisis since the great depression and consumers may have put off spending on big ticket items.

Economists generally say that a permanent tax break works better to boost the economy. Why is that? It's because people feel more confident in spending knowing that they will get that amount every year rather than temporarily.

An additional proposal is to have there be no sales tax for 10 days in months of March, July, and October. But is that enough.

First and foremost I think confidence has to be restored before anything. But just how do we do that with all the doom and gloom being broadcast every second.

I think these options will help, but they will take time. I think the best way to get things going is going with the proposed give everyone over 18 $425,000 plan, which can read about on our blog entry http://financialelite.blogspot.com/2008/10/save-615-billion.html . May be they ought to revisit that one.

What stimulus package would would best for you? What would you do if yo were President?

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

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Tax Time Is Coming Up...What To Do With Your Tax Return.

With tax season right around the corner I thought I would posts some tips of what I've done with my tax return in the past.

I good way to reduce your interest costs is make an extra credit card or house payment. As we have discussed before paying extra will save you not only money in the long run, but months or even years in payments and finance charge. This can be huge.

Think about buying savings bonds. They earn descent interest and are safe way to save money. He can't cash them in for six months once you buy one. So it cuts down on the temptation to get the money. They have come in handy for me at times when I needed money. You can get bonds at most banks, credit unions or on line at savingsbonds.gov

Open a saving account. If you don't have one already now is the time to start. While your at have an automatic deduction go into the account every pay day.

Put your money in an IRA. If you qualify for a tax deductible IRA, you have until April 15th to contribute and claim the contribution for your current tax return. Or you can could put your tax refund in o an IRA for the following year. You will probably get a higher tax return because you can deduct it. Repeating the price every year will grow your IRA very fast.

If you don't qualify for a tax deductible IRA get a Roth. Even though you won't get the tax deduction The Roth IRA is a great tax free way to save money for your retirement.

If you must have some fun with it spend a little, but the Government has been earning interest on your money all year you might as well be earning some interest too.

Now That The Holidays Are Over Start Saving.

I heard Peter Schiff talk today on CNBC and say we need to start paying off our debt and start saving again. Now that the holidays are over it's no better time to start saving for next year and help stay out of debt.

Many banks and credit unions offer holiday savings accounts or what we used to call years ago, when a worked at the bank, Christmas Clubs. Those types of accounts don't usually allow withdrawals before the holiday season.

The holiday accounts are designed to save all year long for the next holiday season. You can usually open an account for as Little as $25 and make deposits through automatic payroll deductions or transferring funds from your checking or other savings accounts.

The interest rates are not generally that hot, but it is a good way to discipline yourself into saving money throughout the year and have cash when you need it. If you can do this with a holiday account imagine what you can do with your 401K.

Not all banks have these types of accounts, but a regular savings account will work just the same. The only thing is there is nothing to keep you from making a withdrawal. STAY DISCIPLINED!

Get to the bank this week! The sooner you start an account, the more time you have to accumulate a nice sum of cash for the next gift buying holiday season.

All this has happened before and it will happen again Part 5 The Great Depression

In part 5 of our discussion of bubbles and crashes. "This has all happened before and it will happen again," is a re-occurring theme in the re-imagined version of the TV series Battlestar Galactica, now in it's fourth and final season. We continue our discussion of history repeating itself in regards to bubbles and crashes.

Economically things are bad right now. We have been in an recession now for a good year and it will probably drag on a little longer. The longest recessions we have had since the Great Depression have lasted 16 months. Once in 1973-1975 and then again in 1980-1981. So either we are going to hit bottom in the next few months or we are going to beat the record. Barbara Deseor from Bank of America says they have done lots of research and believes we will see 3 quarters of negative growth and is forecasting a turnaround in late 2009.

But if you think things are bad now, nothing yet compares to the Grand Daddy of them all the Great Depression of 1929, which lasted 12 years.

A string of terrible days October 21, 24 and 29 led to a drop of more than 40% in the market. The market actually continued to to drop until July 1932 when it finally bottomed out and ended up being down as much as 90% from its 1929 highs.

Even after the Florida Crash, Which we discussed in part 4, American's were bullish as ever. As the first World War had been won Americans were confident that the Stock Market was guaranteed to make everyone rich. The industrialization was resulting in previously unimaginable luxuries. It was a great time to be an American.

Many people put all their savings into the stock market. Since the Stock Market was believed to be a no risk no brainer and expected to only go up. No one bothered to learn about the system or the companies they were buying into. At times traders, brokers, investment bankers, and company owners got together to manipulate stock prices and then get out with gains. Whenever consumers would notice a stock going up everyone would buy the stock (We of discussed this herd mentality before and we will see it again). On and on this cycle would continue.

The less an investor knows the more likely he will be swept into the popular opinion or herd mentality, which is studied in behavioral finance. This also has the opposite effect because uneducated investors are also easily spooked into panic. The herd just follows the cows that run the fastest and in turn trample the market.

The depression only ended with a declaration of war. As of yet this has been the worst economic blow to the United States.

Up next: The Crash of 1987

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

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Money Saving Tips: Gas

Residual heat can finish up what you have cooking. Turn off the stove a few minutes before the time is up. A little bit adds up over time.

Interest Rates Falling...Time To Buy A Foreclosure.

Mortgage applications have sky rocketed this week up 48% to be exact. With falling interest rates and the Federal Reserve cutting the fed funds rate to almost 0% things are going to start to move.

If you have been thinking of jumping back into the housing market now might be the time. The combination of low rates and foreclosure deals everywhere you could be like a kid in a candy store.

Here are some tips when buying a foreclosure:

1. Consider paying cash...if you can. Some banks are requiring deals close within days. Right now that's not enough time to get a loan from the bank. Most banks are taking up to 60 days to process a mortgage loan. Especially, if you need to go with a Government loan like FHA or VA. A hard money loan might be an option in this case, but you could paying up to 15% in interest plus points and you probably won't be able to refinance for a while.

2. Perform due diligence. Check out that house before you buy! Foreclosures are usually old as is. You can have the property inspected before you bid. Three have been a lot of disgruntled former homeowners that were not happy to get their homes foreclosed on. I have seen cement and wax poured down drains, outlets completed taken out, as well as complete kitchens and bathrooms gutted. Even after you put down a deposit, you can change your mind and get your money back.

3. Get a licensed appraiser. It doesn't matter how much the lender has discounted the note; the only thing that matters is how much the house is really worth. This should be a no brainer, but if the house isn't worth what it's selling for don't buy it.

4. Go for a short sale. Instead of a foreclosure you could try a short sale. A short sale is a buyer selling a house for less than what they owe on their current home. You may able to negotiate quite a deal. This transaction involves you, the bank, and the homeowners. Typically before a foreclosure takes place. You have more time to arrange financing and since the owning bank may have less costs to recover you may be able to get a screaming deal.

You can check your local public NOD (notice of default) listing for prospects.

Get out there folks. Let's buy some homes.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

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• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
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Hope Now Continues to Lend A Hand.

Hope Now is ramping up its foreclosure prevention help.

Hope Now, the coalition of major lenders, servicers and consumer advocates has completed 208,000 loan adjustments in November, and say that number will increase to more than 300,000 a month next year.

Some 2.2 million homeowners facing foreclosure will receive foreclosure prevention help this year. With the number expected to rise to more than 3 million next year many critics are predicting a great number of these workouts will fail and many families will lose their homes anyway. This has been showing to be true as it has been reported that as many as half the foreclosures that have been restructured have already gone into default.

Right now there are two types of workouts being offered.

1. There are simple repayment plans. These allow borrowers time to make up missed payments.


2. There are mortgage modifications. This is the more comprehensive and effective of the two types. It involves freezing or reducing interest rates and expanding the time given to repay loans or lowering mortgage balances.

Many of the workouts being issued by Hope Now members are mortgage modifications. These had increased by 29% during the three months ended November 30, while repayment plans increased by just 6%.

Hope Now's critics claim that a lot of the mortgage modifications will prove unsuccessful because they do little to actually lower mortgage payments. The merely freeze rates at unaffordable levels and add missed payments to mortgage balances.

Data released in December has revealed that 51% of those with loan modifications in the second quarter were already delinquent within just six months of the workouts.

The good news is the actual decline in the number of actual foreclosures. There were 69,075 foreclosure sales during the month. That's a 14% drop from October.

I think the next wave of foreclosures is on the way. With unemployment continuing to rise some the workouts could be all for nothing. Obviously, borrowers who don't have jobs can't pay their mortgages.

For free foreclosure prevention advice visit HopeNow.com or call 1.888.995.HOPE.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

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• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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Christmas...A Time To Give To A Charity.

Giving is definitely part of acquiring wealth. The Bible suggests tithing, which is giving 10% of your income, as well as saving 10% for yourself.I received an interesting Christmas card from my sister the other day with a donation in my name to the Heifer International.

Heifer International is a nonprofit, humanitarian organization, dedicated to ending hunger and poverty and caring for the Earth. Since 1944, Heifer has pursued their mission by providing livestock and training in environmentally sound agriculture to enable them to become self-reliant. Recipients also agree to "pass on the gift" of one or more of their animals' offspring and training to others in need, creating an ever-widening circle of hope.

Here are some interesting facts provided by Heifer International:

Milk, Hope, and Peace-Cows provide manure for fertilizer, draft power to plow fields, one calf a year and four gallons of milk a day. The milk that is not used to feed the family can be sold for income.

Old Reliable-For 12,000 years, sheep have provided milk, wool, and meat for people in a wide variety of climates. Their thick coats are a valuable -and renewable-income source for farmers.

Pigs for Progress-Pigs are an excellent source of protein and extra money. Thriving on vegetable matter that humans find inedible like carrot tops and damaged fruit, pigs do not compete with families for food and are also easy to keep.

Many Eggs in One Basket- Chickens boost family income and nutrition, providing a steady supply of protein-rich eggs and meat.

Nimble Assets-Llamas are terrific assets to farmers in the highlands of South America. Families weave clothing and blankets from llama's abundant wool fiber, and the nimble, intelligent creatures can survive on twigs and moss.

Gift Ark- A Gift Ark brings hope to many hungry families and supports Heifer's entire mission. It furnishes quality animals wherever they are needed most and provides extensive training and support for recipients. The Gift Ark is a life-changing parade of Heifer animals including chicks, sheep, rabbits, beehives, guinea pigs, llamas, goats, donkeys, ducks, pigs geese, camels, oxen, water buffalo and cows.

The Versatile Gift-Goats are an adaptable and inexpensive resource that provide vital protein and income from milk and diary products that people can use to pay for medicine, housing and school and their children.

Trees and Bees-Trees stabilize topsoil, protect groundwater and can be used as animal feed, fencing and firewood. Bees produce honey and wax that struggling farmers can sell for income. Bees also pollinate fields, often tripling crop yields.

Multiply the Investment- Because rabbits reproduce rapidly, they are a great source of protein and steady income for families with limited land. Their nitrogen-rich manure can also greatly improve crop yields.

The Farmers Friend-Water buffalo are mighty draft animals that can plow fields,provide manure for fertilizer, produce nutritious milk and increase crop production as much as fourfold.

So for the Christmas spirit of giving if you want to give to a great cause check out Heifer.org or call 800-422-0474.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

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• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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Tips on Last Minute Holiday Shopping...

Holiday shopping tips. Here's what the public has to say:



[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

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• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
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Holiday Shopping Up 2.2% From Last Year!

The National Retail Federation predicts holiday sales will be up 2.2% from last year.



[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

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• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
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Reverse Psychology May Be Needed To Save Economy...

The biggest threat to our economy right now is the changing American household psyche.

A poll conducting earlier this December by NPD Group, a marketing research company, polled 65,000 consumers and 31% said they were concerned about their job security and had cut back on their spending. But the biggest concern is the 69% of those polled who said they weren't concerned about losing their jobs but were still spending less.

Most people are starting to think that the right thing to do is shop less in a down turned economy. But to the contrary it is the worst thing.

By not spending more it causes a change reaction. Without a doubt unemployment is up, but 93% of the population is still working. When even people who are still making what the are used to making and their lifestyle is not changing and they are not spending that's bad. Not spending just makes things worse. People who are perfectly safe in their jobs could eventually be threatened if the economy doesn't improve.

I always say the economy will not get better until we get some good news, but if all we hear is bad there will be no change. Just continued decline.

If you follow my series "All This Has Happened Before And It Will Happen Again" you will see a pattern throughout history. When times are good people are lining up at the door and when things are bad they are running for the door. Warren Buffet says that when the stock market goes down it's the only sale that people run from. Why is Warren Buffet so rich? He does the opposite of everyone else.

Get out there people and shop. If you are still working and maintaining your life style live your life as normal. If we can have a descent holiday shopping season it could be just the good news we need to get the economy going again. Don't wait for your new President to bail you out. Go shopping!

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

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• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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Couple Lives On $1 a Day...Economic or Diet Experiment

I recently posted an article on Financial Elite how to feed a family for $5, but I think Christopher Greenslate and Kerri Leonard got me beat. Two high school teachers form Encinitas, California set out to to stick to a budget of $1 a day for food. The experiment reminded me of the documentary "Super Size Me", where a man ate nothing but McDonalds for 30 days.

The couple had five rules to live by when they began their experiment back in September. The rules were as follows:

1. All food consumed must equal $1 each a day.


2. They cannot except free food or donated food unless it was available for everyone in their area (foraging, samples in stores, dumpster diving).


3. Any food they plant, they had to pay for.


4. They will do their best to cook a variety of meals; ramen noodles can only be prepared if there is no other way to stay under $1. (They had six packages and wouldn't buy more).


5. Should they decide to have guests over for dinner they must eat from their share; meaning they don't get to eat their own $1 worth of food.

The couples breakfast and lunch's were generally the same-oatmeal for breakfast and Peanut butter & Jelly sandwiches on homemade bread for lunch. Dinners were a little more exciting having beans and rice, potato burritos, palenta with marinara sauce,
cheese-less pizza, and home made wheat gluten steak strips with rice and broccoli. Popcorn and peanut butter were used as snacks.

The couple lost a lot of weight in a unhealthy amount of time. Christopher lost 14 pounds in a month. The couple had to for go fruit and vegetables as the more healthy foods were too expensive. The couple would drink Tang to get the vitamin "C" they needed to prevent from getting scurvy.

The World Food Bank says nearly a billion people around the world live on a dollar or day or less. In the United States the typical food stamp allowance is a few dollars per person. The average American eats $7 dollars a day in food. With our overabundance here in our country how are so many people going hungry.

As the couple found out fast foods and junk food usually costs less than healthier fruits and vegetables. There is something seriously wrong with the system. It's almost like some master plan to weed people out or drive the cost of health care up.

I think what the couple is doing is fantastic and is bringing great awareness to not only our food and eating issues in our country, but shows there are ways to cut back. Maybe not to that extreme but cut back none the less. If there is a will, there is a way.

To follow what Christopher Greenslate and Kerri Leonard are doing check out their original blog at One Dollar Diet Project. You can read their latest at DollaraDayBook.com

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

We Also Suggest:

• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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Feeding a Family on $5...

A lot of people are experiencing hard times right now with this lackluster economy. I haven't been a big shopper at the $1 store, but there are some good deals there every now and then. And when items are only $1 you can't really go wrong. But looking through the isles you really can put together a descent meal for $5. It might not be the best stuff in the world, but when you really need to cut back on spending this really can come in handy. I found this complete dinner for $5:

-Box of pasta. Pretty much every kind you can think of.


-Jar of spaghetti sauce.


-Frozen garlic bread.


-Container of Parmesan cheese.


-Pint of ice cream for dessert.

Abracadabra a complete meal for $5. You can probably doctor this up a bit for a couple dollars more with some meatballs, but really with a little creativity you can put together an inexpensive meal if you need to.

Please share your cheap meal recipe's with us.

All This Has Happened Before And It Will All Happen Again...Part 4

In part 4 of our discussion of bubbles and crashes. "This has all happened before and it will happen again," is a re-occurring theme in the re-imagined version of the TV series Battlestar Galactica, now in it's fourth and final season. We continue our discussion of history repeating itself in regards to bubbles and crashes.

Just like the British Empire of the 1700's the Unites States was chugging along economically during the 1920's. Year after year constant prosperity continued hence giving the decade it's nickname the "Roaring Twenties". It was no wonder people thought this level of prosperity was infinite. But in 1926 it was real estate market that suffered a crash before the Stock Market crash of 1929.

Land that was bought for $800,000 could later be sold a year later for $4,000,000. In 1926 prices were so inflated that to buy a condo style property you would have to pay the same as you would now for a luxury home in a guard gated community in Miami for $4,500,000 without adjusting for inflation. Sounds a little bit like the real estate boom we just went through doesn't it.

Florida had become a popular U.S. destination spot as well as place to reside in 1920 especially for those who loved warm weather. Florida's population began to grow rapidly and in turn so did housing. The housing demand couldn't keep up with the population and soon housing prices started to double and eventually tripled. And as we have seen in our other posts and you will see in future posts anything that doubles and triples quickly people dive right in.

Money was being pumped into Florida like crazy and soon people were either a real estate investor or a real estate agent.But whether you pay to much for a share of stock or a piece of land you have to make that much more to make a profit. Soon land prices quadrupled and soon there were no more fools to pay for the over inflated real estate prices and prices began to adjust accordingly. Soon people realized there was a limit to the boom and began to sell their land in order to maintain their profits.

Then as usual, people began to see the hand writing on the wall and panic selling ensued. With thousands of sellers and few buyers the real estate market in Florida came crashing down.

Next Part 5: The Great Depression.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]


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• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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Final Holiday Money Saving Tips and Fun Christmas Facts.

With the final weekend before Christmas here and one of the busiest shopping days aside from Black Friday we are posting some final shopping tips and some fun Christmas facts.

Here's some fun Christmas questions:

1. Who is Rudolph the Red-Nosed Reindeer's father?

2. Where do Jewish households traditionally display the menorah during Hanukkah?

3. What gifts are traditionally given to children during Kwanzaa?

4. 'A Charlie Brown Christmas' was a made for TV animated film that debuted in 1965, the first animated 'Peanuts' special. In this special, which character quotes the Bible in delivering 'the true meaning of Christmas'?

5.Each year Manitou Springs, Colorado hosts the annual Great Fruitcake Toss. What is the record for the farthest human throw of a fruitcake?

6.While Christmas trees actually grow in all 50 States, which single State produces the most?

7. Hanukkah always begins in December?

8. Which December Holiday celebrates with the symbol of seven candles?

9. In the movie "It's A Wonderful Life" how do you know that an angel has received his wings?

10. Rudolph the Red-Nosed Reindeer was created as a promotion for what department store?

Answers to follow.

Plan out your day today. Everyone shopping for last minute gifts can cause malls to be a mad house. Make a list of where you need to go and the gifts you have remaining to buy. Make a plan and stick to it. Planning ahead can help alleviate stress.

If you don't want to go fight the crowds try shopping online or by a catalogue. It's fast and easy and you can compare prices. Also, since you are staying home you'll cut back on the costs of gas, eating out or making unplanned purchases.

If you are putting your last minute shopping on credit cards make sure you have enough money in the bank to pay off the amounts you charge when the bills start coming in next month. Remember stick to your budget.

Now for the answers to our fun Christmas Facts:

1. In the animated TV special, "Rudolph the Red-Nosed Reindeer", Donner is Rudolph's father.

2. The menorah is generally displayed outdoors or in a window.

3. Gifts generally include books to emphasize the African value and tradition of learning.

4. Linus delivered the quotes from the Bible of the 'true meaning of Christmas'.

5. The longest human toss to date is 290 feet. The 14Th annual Great Fruitcake Toss takes place on January 3, 2009.

6. Oregon produces the most Christmas trees, averaging between 7 to 8 million a year.

7. The dates of Hanukkah are determined by the Hebrew calendar, in some years the first night of Hanukkah occurs in November.

8. The Kwanzaa candlestick represents African American roots and each candle represents one of Kwanzaas Seven Principles of Life.

9. "Every time you hear a bell ring it means some angel's just got his wings."

10. In 1939, Montgomery Ward had one of their copywriters, Robert L. May create a Christmas story that could be printed and given away to shoppers during the holiday season. That year, Montgomery Ward distributed over 2.4 million copies of Rudolph's story.

We here at Financial Elite wish you and your family the happiest of holidays!

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

We Also Suggest:

• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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Credit Card Closures Can Hurt Your Credit...

We had great news yesterday as regulators passed some new rules to crackdown on credit card companies.

We reported that many credit card companies, such as Bank of America and Advanta, were raising credit card rates on consumers even when they were not late on payments and their credit was still good. Consumers in this situation have been getting the option to opt out of these increased rates only to have their line shut down and when the card is paid off the credit card is closed.

But what happens when your card is closed? Having your credit card closed can lower your credit score. The third most heavily weighed factor in your FICO score is the length of time your accounts have been open. Also, eliminating a card reduces your available credit, which also lowers your score.

If you have a great credit score say over 720 or higher, one closure won't hurt your score much. But if you have a few cards and a slim credit history, it's best to make sure your older cards stay open.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

We Also Suggest:

• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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Breaking News...More On The Credit Card Crack Down.

Report from CBS's The Early show. Maggie Rodriguez spoke financial expert Jordan Goodman about the changes in credit regulations.



[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

We Also Suggest:

• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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The Smackdown on Credit Cards Has Been Approved

As anticipated the Federal Reserve Board, the Office of Thrift Supervision and the National Credit Union Administration, all approved the proposed regulations on credit card practices.

The regulations will prohibit banks from practices like applying payments in a way that maximizes interest penalties and raising interest rates on pre-exisitng credit card balances.

This will also end the double billing cycle, which averages out the balance from two previous bills. Which means consumers carrying a balance will no longer get hit with retroactive interest on their previous months bill.

Another great regulation will prevent universal defaults, which was a policy that allowed credit card issuers to increase the interest rate on one card if a customer missed a payment on another.

These new regulations come just in time amidst the current economic situation. But is it in time? Although the regulations have passed, they are not going to take effect until July 2010.

I have heard so many stories of how these current practices are effecting consumers. A small business owner had most of his debt on credit cards. They had a 0% APR until January 2009 and would go up to 7.99% thereafter. One time his payment was received a day late. The credit card company, Advanta, then jumped the APR to 25.39%.

Most credit card companies allow consumers to opt out to prevent the increase from occurring, but are having their cards closed because of it. They are able to keep their lower interest rate, although it is unknown for how long, but can no longer use their credit line.

Some consumers are making their payment on time and are having their line reduced as soon as they make a payment. For a struggling business owner this could be the nail in the coffin. Depending on their credit limits to buy inventory or materials having their line closed or reduced can be disastrous.

These new regulation's are going to be great, but are they in time to save the ailing consumers and in turn the economy.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

We Also Suggest:

• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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What Happened To My CPM and CTR?

I have to say blogging has been great. I have a chance to share what interests me, as well as, share what knowledge I have. It has also been a way to make extra money through Google AdSense.

I have read that usually it takes about six months to start getting lots of views and start making money, but I started making money in the first month I started using AdSense and writing regularly. My readership and blog views have gone through the roof lately, but my CPM and CTR rates have diminished greatly. Also, my revenue has decreased.

CPM stands for costs per 1,000 views.The "M" stands for "mille", which is Latin for thousand. The advertiser pays based on how many times the ad is seen.

CTR stands for click through rate. It is a percentage of how often an ad is clicked relative to how many times it is displayed.

Having my readers and views increase is what I have been striving for and they keep growing. I love hearing from people and for them to share their knowledge as well. I also thought an increased viewership would increase CPM and CTR. I'd love for everyone to share their knowledge of CPM and CTR, as well as, their best practices with AdSense. Let me hear from you.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

We Also Suggest:

• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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Credit Card Smackdown on the Way!

I've been hearing all kinds of crazy credit card practices lately. People, who are paying their bills on time and may not even be carrying balances on their credit cards, are having their cards closed, interest rates raised, or credit lines reduced.

On Thursday December 18, 2008 credit strapped consumers might be getting good news as regulators vote to curb controversial credit card practices.

The news rules, if they go into effect, will prohibit banks from raising the interest rates on pre-existing credit card balances unless a payment is over 30 days past due.

Also, if approved the new rules will mean an end to double cycle billing, which averages the balance from two previous bills. What this means is consumers who carry a balance can have retroactive interest on their previous month's bill. Even if the bill has already been paid off.

Some set backs to these new regulations could be banks and credit card companies would have to charge higher interest rates to to offset losses and low introductory offers and zero percent balance transfers are likely to be cut back as well.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

We Also Suggest:

• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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Dow Jumps on Fed Rate Cut December 16, 2008

The Fed Rate is cut more than expected to a range of 0% to .25%.



[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

We Also Suggest:

• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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Federal Reserve Cuts the Fed Funds Rate...What it all means.

For the first time in history the Federal Reserve has cut the Fed Funds Rate below 1%. In it's most recent attempt to stimulate our economy, the Federal Reserve has cut its key interest rate to a range of between o% and .25%, and expects the rate to stay that way for a while.

What is the federal funds rate? The federal funds rate is the overnight lending rate used to set rates for different loans, such as credit cards, home equity lines of credit, adjustable rate mortgages, and business lines and loans. This does not effect conventional mortgage rates, which is a misconception with most people. Although, the bond market soared after the news and this will cause the mortgage to change.

The Federal Reserve uses this rate as a tool to grow or slow the economy. Lower rates generally encourage spending by making borrowing more attractive to consumers. Higher rates generally slow spending and the economy and people being to save more.

It hasn't been clear where banks would set their prime rate at. Usually, the prime rate is 3% higher than the fed funds rate. Many banks, including Bank of America, have announced they were lowering the prime lending rate to 3.25%.

The last time this happened our real estate market boomed. But rates haven't ever been this low before and loan programs have changed dramatically. It is going to be very interesting to see what happens next.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

We Also Suggest:

• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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Contributing to your 401K...The Sooner the Better

On my previous post I posted on, what is a 401K? I was asked why the risk tolerance made such a difference depending on your age. So, I thought I would put things in perspective by breaking things up by age and the normal life cycle.

The Twenty's: Retirement is not even in your vocabulary probably. Although, you may be wishing you could retire your debt of student loans. It is very important to start saving for your retirement as soon as possible. Not sure if my pal Suze Orman would agree, but you should at least start funding your 401K and then start working on the paying down of your student debt.

As we discussed before don't turn down the free money your employer gives you in form of a match for your contributions. Stash away as much as you can, but if you make $30,000 a year, saving 6% is only $35 a week. That adds up huge over time.

The reason you can have more risk tolerance at this time is when there are downturns in the economy it can be a boon to your 401K. If you have a long investment horizon you can afford to wait for a recovery while buying stocks and mutual funds at a reduced price.

The Thirties: At this point you need to start paying attention to your investments. Keeping your 401K in shape with the appropriate mix of risk and growth takes some work and diligence. Start managing your investments early or as we have discussed before get help from people who can do it for you.

The Forties: Most people don't contribute as much as they should at this point in their lives. The reason...they are saving for their children's education. This might sound bad, but you should be worrying about yourself. You can get car loans, you can get college loans, but you can't get retirement loans.

Save as much as you can. Your savings, including your companies match, should equal 10% of your income.

The Fifties: All your hard earned savings can get beat up by a down turned market.

Once you hit 50, you can make catchup contributions. Starting in 2009, you can put away an extra $5,500 into your 401K every year.

Most investors tend to leave their portfolios on autopilot. In the decade before you retire it is important to be sure you are controlling for risk and positioning your portfolio to ride out the down times.

The Sixties: When to retire. 55% of employees over the age of 60 say they will probably postpone retirement. Even though you have invested in a 401K for decades it may not be enough to retire on. Social Security may help fulfill the slack, but some of us may never see it. It is important to find other investment options as well.

Plan for longevity and for inflation. That means keeping a portion of your portfolio in equities even after retirement.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

We Also Suggest:

• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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What is a 401k Plan?

A 401k is a retirement plan that is sponsored by your employer and funded by you. Money is deducted pretax from your pay. The majority of employers will offer a matching contribution. Generally up to 6%. This is free money. If your employer offers a matching contribution make sure you take advantage of this. For instance if you contribute 6% and your employer contributes a matching 6%. That's 6% more going towards your retirement that you wouldn't have otherwise. For Free.

You will need to make the investment choices for your contributions to go into. Normally, your employer's 401K plan will offer you a number of investments for you to choose from. On occasion you will be able to choose from a wide range of options that are offered through the plans administrator. Generally, you can go to the company that manages your 401k. For instance, Fidelity houses a lot of 401K's. Find out who is managing your 401k and make an appointment to get help if the choices get to overwhelming for you.

Do some research on your own too and decide how you want to invest your money. You will need to determine your risk tolerance. Usually, the younger you are the higher risk tolerance you can have. As you get older you may want to start moving money to less risky investments.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

We Also Suggest:

• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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GM closing Saturn...I hope not.

My very first brand new car was a Saturn SL1. I remember first seeing the Saturn in Parade, the Sunday insert of the Sunday paper. I was in love. I had to have that car. The model was actually a SL2, but I ended up with the SL1 model. Although, I was twenty years old at the time the 4 door version seemed more practical.

I just moved back to Las Vegas from California after two years. I also had just started my banking career at the time I moved back too. Unknown to me my brother in law was friends with the owner of the newly opened Saturn dealership in Las Vegas. So by the Law of Attraction I would say I got me dream car.

My friends were jealous since none of them were able to get new cars. Like I say if you want something then get it. My friend Shaun couldn't wait to put the Saturn's special polymer plastic to the test and proceeded to give it a punch right in its side. He was amazed no dent, no nothing. Not a scratch.

I loved that car. Great mileage, tons of attention since it was new to the market, and just a great car. I even got to do a commercial for the dealership. Three years later I turned it in for another. This time for the 2 door version I originally wanted the SL2.

During my first marriage my wife, for whatever reason, hated my Saturn and made me turn it in. That was one the biggest mistakes ever made, including marrying her, and she had me by a KIA Sportage. What a piece of junk. The fuel injectors kept going out and caused the car to always stall. How embarrassing!

I originally was going to lease my first Saturn, but ended up getting a loan. This was the first major piece of credit I ever had. I had learned the difference between leasing and getting a loan back then, but didn't listen to what I knew before and ended up leasing the KIA.

Leasing basically is renting a car. At the end of the lease you can purchase the car by paying what they call the residual. The only residual I like getting is from a direct selling company or even from blogging. If you lease you will end up having a car payment forever. I feel, as do most financial planners I know, that purchasing is better than leasing. When it's paid off it's paid off and boy is great to have no car payment.

I couldn't get out my lease with my Kia and had to keep the entire term of the lease. The dealer said if I had purchased the car I would have been able to trade it in. So when that lease was over I couldn't wait to get rid of the thing.

Although, I never bought a Saturn again, I really don't why, I still remember the great car I had. Maybe because it's one of the first times I can remember having what a wanted materialize or that it began building my credit or that it was cool to buy my first brand new car at twenty. Whatever the reason I want to say. "Thanks, Saturn" I hope you are around for a long time to come.

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

We Also Suggest:

• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

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Don't Get Stuck in Analysis Paralysis.

I love the term "Analysis Paralysis", which I first heard coined in Loral Langemeier's book "The Millionaire Maker." I am re-posting a blog I wrote sometime ago about "Analysis Paralysis" and how it can affect so many situations in our daily lives.

"If the fire reaches the hangar pods it will ignite the fuel lines and we'll lose the ship. Do it!" This dialog is from the re-imagined series "Battlestar Galactica" in which, Chief Tyrol and LSO Captain Kelly debate on how to handle a critical situation, when Col. Tigh steps in and orders a section of the bulk heads to be sealed and preform a emergency vent of all compartments. I've found this to be the situation with many people, at times even myself, who don't follow through with things they need or want to do. Analyzing things to death and never taking action until it's too late. As Loral Langemeier puts it in her book "The Millionaire Maker" putting yourself in "Analysis Paralysis."

Kim Lavine discusses a similar situation in her book "The Mommy Millionaire" stating "I had a choice: lie here and worry or get up and find a way to get it done. This simple decision alone was the key to my company's eventual success. I know some entrepreneurs who never got past this point. They never resolved consciously to do whatever had to be done and instead focused on every problem, paralyzing themselves in fear and inaction."

If you want to do something do it. If you don't know how. Find out. Whatever you need to do to get it done. Do it! Don't get stuck in "Analysis Paralysis."

[This post is written and copyrighted by Financial Elite (http://financialelite.blogspot.com/ ).]

We Also Suggest:

• Bank of America's Balance Liquidation Program (BLP) Still Sucks     
• What's the Best Way to Pay off My Credit Card Debt If I Have a High FICO Credit Score ?
• How did This Economic Crisis Start?
• Should I Use My 401K to Pay Off My Mortgage?
• Should I Take Out a 401K Loan to Pay Off My Credit Cards? 

Now What Do I Do? 

• Follow my journey to pay off debt and subscribe by email.
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