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Many consumers find that they are no longer able to mange their debt on their own. They need help. Debt management plans are an excellent tool for those that need assistance in eliminating their debt.

If you are considering a debt management plan, you probably have many questions as to how it works and what it costs. Each financial management plan agency will work differently, but in general, you should see some similarities between them all.

The debt management service will typically send a proposal letter to each of your creditors. The letter will request your creditor’s approval to enroll your account in the management plan. It will contain you several items, including your net income, living expenses, the names of your creditors, your proposed repayment amount for each creditor and the date of payment to creditors. This lays out the information for the creditor to see where you are financially and what your plan is.

Most debt management plans take you three to five years to repay your debts. This, of course, depends on the amount you owe and the terms set by your creditors. When you enroll, you should be given an estimate which lists all of your debts, the total debt owed to each creditor, the proposed payment to each creditor and the number of months estimated to complete the plan. You should know up-front how long it will take you to eliminate your debt.

The fees charged for your debt management plan will vary from agency to agency. You will usually pay for a copy of your credit report, a small set-up fee and a monthly administration fee. You want to make sure that the monthly fee is less than $50 a month. Be sure that you understand these fees before you enroll. Don’t trust any agency that asks for the first month’s payment up-front or a percentage of your total outstanding debt as the fee.

Most debt management plans require that you include all of your unsecured debts. There are specialized debt management plans designed for small business owners and those with good credit that allow you to keep one or two accounts outside of the plan. Once in the plan, you will most likely be unable to continue to use the accounts.

If a creditor rejects the management proposal, you can try to work with the creditor to reach an agreement. If nothing can be established between the plan and your creditor, you can elect to proceed with the debt management plan without the creditor. However, you will need to make these payments on your own.

Be cautious when choosing a company to work with. Make sure they are licensed and check them with the Better Business Bureau. It is also a good idea to check with your state’s attorney general’s office for any complaints or investigations.This is your financial security you are dealing with. Make a wise decision and then let the plan help you find financial freedom. Debt management plans are a great way to learn how to manage your finances while eliminating your debt.

By: Martin Lukac

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The current economic meltdown has changed the face of Wall Street, possibly forever. For decades the energy in the market had been fueled by high-rolling investment bankers, but look what’s happened in the last eight months. Lehman Brothers went bankrupt. Bear Stearns was snapped up by JPMorgan Chase, Merrill Lynch got bought out by Bank of America, and Goldman Sachs and Morgan Stanley had to convert to bank holding companies just to stay in business. Five major investment banks . . .and then there were none.

At the beginning of this year, those five firms had a combined market value of around $250 billion with the top firm, Goldman Sachs, valued at nearly $90 billion. Now the top banks, which are comparatively small boutique firms-Raymond James, Jefferies & Co, Greenhill & Co, Keefe Bruyette & Woods and Piper Jaffray-have a combined market value of $12 billion, a number that has shrunk by a factor of 20.

Essentially, the global economic crisis has ushered in the era of universal banking where massive financial firms offer every conceivable kind of investment product and service. Even smaller brokerage firms face being herded under the umbrellas of big banks, or else risk becoming irrelevant.

Historic Realignment of the Industry

When Goldman Sachs and Morgan Stanley opted to become bank holding companies it marked an historic realignment of the financial services industry and the end of a securities firm model that had prevailed on Wall Street since the Great Depression. But why did they make the change? Partly because it’s given both firms access to the Federal Reserve’s discount window – the same line of credit that is open to other depository institutions at a lower interest rate.

As bank holding companies, they can also tap into deposits from retail customers. The two firms had already received a temporary financial lifeline from the Fed-the Primary Dealer Credit Facility-the special reserves established to bail out Wall Street broker-dealers like the Bear Stearns deal in March 2008.

Even though Goldman Sachs and Morgan Stanley are now classified as bank holding companies and are part of the universal banking model, they’ll still be able to engage in investment banking activities. But after years of loose oversight by the Securities and Exchange Commission, they’re now faced with tighter regulations imposed by the Federal Reserve and they are subjected to Federal Deposit Insurance Corporation oversight.

The Golden Years of Investment Banking

A quick historical review of investment banks will serve as a backdrop to the events that led to their downfall.

Independent investment banks have been around for a long time, but originally they were small private partnerships that earned most of their money from offering corporate finance and investment advice, as well as some broking and other services. If you had walked into one of their offices and looked around, you might have mistaken it for a large law firm.

The success of their business model depended on the trust built through long-term relationships. There wasn’t much money at risk in the early days because the firms operated primarily with the partners’ own money. That meant there weren’t vast sums available to gamble on risky ventures with excessive leverage. But the lack of working capital and a desire to orchestrate splashier deals, motivated the firms to go public in the late 90s.

The Downfall Begins

With more capital in the coffers and a growing access to low cost, short-term debt, managers started to make larger, riskier capital bets-most recently those troubling and toxic mortgage-backed securities.

The regulations that had once separated investment banks from traditional banks were no longer in place. That opened the way for big global banks like Citigroup and JP Morgan to start competing with Wall Street for what had traditionally been the domain of the investment banking business. This forced Wall Street firms to expand their services, to use more leverage and to take even bigger risks.

When those risks led to profits, the dealmakers were rewarded with outlandish bonuses and the wheels were set in motion for bigger risk-taking. Throw patchy government regulation into the mix and you have, as the saying goes, a recipe for disaster.

Before long, major Wall Street firms were leveraged three or four times more than conventional banks, yet they still operated under far less stringent regulations than the banks.

It wasn’t until the financial crisis reared its ugly head in mid-2008 that the U.S. Fed stepped in and for the first time, allowed investment banks access to their discounted funds. Then when the credit crisis hit, highly leveraged Wall Street firms like Bear Stearns and Goldman Sachs found themselves in even deeper trouble. They’d already suffered huge losses with their hedge funds and high-risk ventures, but their excessive leverage compounded their problems as the credit crisis stripped them of the ability to raise the additional capital they needed to survive.

The Outlook for Wall Street

What’s the outlook for those working on Wall Street now? No doubt there will be less excitement and no more of the huge bonuses that dealmakers had grown accustomed to. But there are bigger concerns about whether the U.S. will lose its competitive edge and the ability to maintain its power status in the global financial system.

Some of the best and brightest might pull up stakes and head for better opportunities in the burgeoning Asian Markets, or they could flip over to the unregulated Hedge Fund market-at least for as long as those funds manage to survive. Thousands of Hedge Funds are going out of business, bringing serious grief to investors like the huge public pension funds, foundations and endowments that have poured billions of dollars into these private partnerships.

If there is any good news in this economic fiasco, it’s this: Main Street stands to eventually benefit from a better regulated Wall Street. With a more transparent financial system, a firmer foundation and a stronger business model, there might be a promising outlook for more stable and consistent growth.

By: Jose Roncal

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Debt management trouble … interesting title for a page, huh?

Here’s the thing. Things that I recall from my own limited experience of being (only) knee deep in debt and during my time as a mortgage adviser are all overshadowed by one thing. Worry.

Generally, I am a very (probably overly) optimistic person. Almost always happy and living life to the full. But I remember very clearly being worried by my debts. It did get me down. It was upsetting. It made me eat more, for comfort. That made me gain a few kilos which made me feel more sorry for myself.

And yet I view myself as being rather lucky. Why? My debts were caused in the main by an errant and untrustworthy business partner, followed by the financial burden of a new business with no capital (he had stolen much of it and run up other business debts besides). I could at least look in the mirror each day and feel no personal guilt about my debts. I felt that my debts and debt management trouble were not of my making.

You may not be so lucky. The debt management trouble that you find yourself in may be of your own doing.

Remembering how my debts made me feel causes me concern for others. If my own, pitifully small, debt burden could have a mental impact on someone as sunny as me, what could it do to someone of a less rosy disposition. And, what might bigger debts do to the situation? If someone really owed tens of thousands too many, that could cause feelings of hopelessness quite easily, I imagine.

If I recall how some of my clients felt, it was clear to me that the debt burden they carried was literally that – a burden. It really does have a mental impact and it isn’t positive. Back then, I didn’t fully appreciate the pain that debt management trouble can cause.

I’m not going to roll out some pithy platitude or other to try and give you a pep talk. You can do that yourself. I wouldn’t be so condescending. However, please just remember that you are not alone. In fact, there are lots of people with debt management trouble and problems. It is estimated that the USA currently has over 55,000,000 – yes 55 million – people with debt ‘issues’. That is a lot of people and one heck of a big special interest group.

So there are support groups out there. Local and national groups offer guidance and advice. You can find details of a few on other pages of this site. If you need to, speak to someone. Even if it’s only a friend offering you a shoulder to cry on and some moral support – you don’t have to battle on alone.

When we are down, we often feel alone and helpless and that often isn’t the case at all.

Back in late 2004, a friend of mine committed *******. I hadn’t seen him for about 2 years (but in my defence, I had moved abroad). He was in his mid 30’s (34 I think) and had recently split from his long term girlfriend. I’m not 100% certain, but I believe that was the cause.

I didn’t find out about the service until 2 days before and that is precious little time to prepare for even nearby international travel. My sister did however attend. She tells me that the church was ‘packed’ and there was barely room to stand. He wasn’t even that nice a guy! He was destructive, a womaniser, often drunk and had a well earned reputation for fighting.

Yet if all those people were willing to attend his funeral, there must have been many people whom he knew that would have offered him support – if he had only asked. It doesn’t need to be that way.

If you have debt management trouble and need to lift the weight on your shoulders, even if only for a little time – SPEAK TO SOMEONE. As long as you don’t choose your boss – I doubt it will hurt. Don’t suffer alone. There is always someone willing to help you through.

By: Stuart Langridge

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Kansieo.com

During these tough economic times, many investors are starting to panic. They’ve lost trust in the stock market but have no idea where to put their money. The problem is that many investors think their only investment option is the stock market. They may view alternative investment opportunities, take real estate for an example, as too risky. The bottom line is that they want their investments to be safe and smart, yielding positive results both now and in the future. After all, many of these investors are putting their life savings on the line.

In the face of such unsure times, there is a sound solution: invest your money in gold and other precious metals. No matter what part of the world you call home, gold is a safe investment. According to NBI (National Bullion Investors, LLC), “Gold prices will rise next year as the financial crisis pushes more investors into the precious metal safe haven.” In fact, the gold industry expects bullion prices to hit $958.6 per troy ounce by November of 2009. Considering that current prices hover around $902 per ounce, we’re looking at a hefty increase if trends remain the same over the next year.

For the past ten years, Alan Greenspan, the widely respected former chairman of the US Federal Reserve, has touted the wisdom of investing in gold. He predicted that fiat money would someday be worthless but commented that, “Gold is always accepted.” More and more investors, from the middle class to the very wealthy, are beginning to share his sentiments.

Jeremy Charles, the head of precious metals at HSBC in London, noted that many investors were turning to gold as their confidence in the U.S. dollar is shaken. Don’t expect this to be a temporary fix, though; Mr. Charles believes that we’re facing a structural change in the way people approach their investments. He states that even after the current credit crisis comes to an end, gold will be viewed differently. “High bullion prices are here to stay,” he declared. Meaning that gold will continue to be a wise investment option for many years to come.

According to FT.com, which recently covered an annual London Bullion Market Association meeting in Tokyo, some bankers are so worried about the security and stability of the financial system that they are putting their money into physical gold, which involves taking possession of bullion bars and coins and thus removing their investment from the financial system. Because of this high demand for gold coins, dealers worldwide are actually running out of stock of popular coins.

Now, more than ever, is the time to sit down with your portfolio and reconsider your investment needs. Open your mind to new opportunities and think about diversifying your investments. If you’re a bit uncomfortable with putting all of your money in gold, that’s okay; you can start off slow, putting 10 or 15% into the precious metal. Remember, gold is much more than the material that you wear around your ring finger; it’s actual money that can pad your savings account and help build your wealth.

By: Ron Wellman

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There are four general debt solutions available, although your options will depend on the level of your debt and personal circumstances. They are:

• Loan consolidation/remortgage
• Debt Management Plan
• Individual Voluntary Arrangement (IVA)
• Bankruptcy

Each solution has its advantages and disadvantages, which are outlined below.

Loan consolidation/remortgage

If you’re a homeowner and have equity in your home (ie it’s worth more than the amount of money you still owe on it), it may be possible to release this equity to pay off your debts, especially those unsecured loans with high interest rates, such as your store and credit card bills. This will reduce your monthly outgoings and is called loan consolidation/remortgage. The advantage of this ’secured’ loan, or remortgage, is that interest rates will be lower than those for an unsecured loan. However, your loan will take longer to pay off and if you fail to keep up payments, you’ll put your home at risk of being repossessed.

Debt Management Plan

A Debt Management Plan is an arrangement you make with those you owe money to (ie your creditors), usually organised and run by a debt management company, which allows you to reduce your monthly payments to an amount you can afford. These plans are often called ‘informal arrangements’ as they are not legally binding and apply to your unsecured debts only.

A good debt management company will often have close contacts with most major creditors and will be able to set up the plan quickly and smoothly. In addition, if you get phone calls or letters from your creditors, you can pass them on to the debt management company, who will deal with them for you.

The amount you pay is worked out by adding up all your monthly bills and reasonable living expenses, and deducting this total from your monthly income. The money left is known as ‘disposable income’, which you send to the debt management company each month. They then pay your creditors for you.

As you are paying back less per month then originally agreed, your debts will take longer to pay back, your creditors are not legal obliged to freeze interest and charges and your credit rating may be affected.

Individual Voluntary Arrangement (IVA)

An IVA is a legally binding contract between the debtor, ie you, and your creditors, ie those you owe money to.

The advantages of an IVA are that, instead of making payments each month to various creditors, you make one affordable payment, usually over 60 months, to what’s known as a licensed insolvency practitioner, who arranges and manages IVAs. The moment the arrangement is in place, your creditors usually have to stop adding interest or charges to the money you already owe, and they must also stop demanding any money from you. Any debt that is still outstanding at the end of the IVA is written off by the creditors.

The disadvantages are that an IVA will affect your credit rating (ie your ability to get loans etc in the future) for up to six years. In addition, you may also have to remortgage your home towards the end of the IVA, releasing some of the money tied up in the house to give to creditors.

Bankruptcy

Bankruptcy is often considered the last resort for people with serious debt problems. If you’re a homeowner, for example, your share of the property can be used to repay your creditors; any other significant assets can also be sold and you may be required to make payments from your income. Along with the stigma of bankruptcy, your conduct leading up to the bankruptcy will be reviewed.

Summary

This article provides a brief overview of the options available to those with debt problems. However, before you take any action, think carefully and make sure you carry out further research. In particular, you should seek advice from a debt advisor, who’ll be able to tell you the best solutions available to you, along with detailed information of those solutions, based on the level of your debt and your personal circumstances.

Whilst we make every effort to ensure this article is as up to date as possible, Accuma cannot be held responsible for changes in legislation or developments in case law since this article was produced and published. Article produced on 24th June 2008.

By: Steve Lawton

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Debt Management

We all want high return investments, but what is the best way to achieve substantial long-term capital growth?

Let’s look at the best investment, combined with the most powerful force in investing, and how they can create a high return investment that grows rapidly.

The Secret of High Return Investments

Albert Einstein called this: “The most powerful force in the universe” and investment terms he’s right.

Compound interest on an investment with low downside volatility is really the secret of getting high return investments to make huge gains over the long term.

Which is the Best High Return Investment?

When looking at high return investments the best combination is an above average return, linked to low volatility, combined with compound growth.

As an investment, UK land has provided better capital growth over time than most hedge funds, mutual funds, investment trusts, equities, or shares, and with a lower downside risk.

The overall price of farmland has increased by 30% in the last 12 months, and by 130% since the early 1990s, with an average 920% growth in the last 20 years.

The 920% over 20 years is average growth, and many investors have achieved far greater gains by careful plot selection.

Why UK Land is Providing Stunning Returns with Low Risk

UK land provides above average solid growth for the following reasons:

1. Population Growth – The population of the UK in 1981 was 56.2 million. In 2001, the population had increased by about 2.6 million to 58.8 million inhabitants.

2. Immigration – In terms of immigration, there is the granting of entry to the UK, of over 170,000 people per year. This constitutes over 60% of the annual population growth. Therefore, at current rates of growth the UK can expect to see at least an additional 3.4 million inhabitants within the next 20 years.

3. Social Trends – There is a rising divorce rate in the UK. Furthermore, more people are staying single by choice, and getting married later in life.

In the next 17 years, with the rising population and increased lack of affordable housing, the UK will need another 1.5 million homes.

Compounding a Small Sum to a Million!

We can see already that land has had fantastic growth year on year, and looks set to continue. The average gain was 30%, in 2004 alone.

Lets take an example now of compound growth in action:

$50,000 invested with a compound grow of 30% annually would take just 12 years to be worth over $1,250,000!

A steady compound growth soon adds up!

Of course, bear in mind that the above illustration is subject to the fact that investors may use bigger or smaller deposits, and there is no guarantee of 30% annual growth.

To make big gains, the formula for investment success over the long term is:

A High return investment + low downside volatility + the power of compound interest = big capital growth potential

Compound interest makes you money work harder, and as the amount increases, it soon adds up.

For High Return Investments Look no Further than Land!

Land tends to rise steadily in value year on year and with low downside volatility giving steady solid growth

Many hedge funds, unit or investment trusts, can be negative for years on money invested, or even never recover at all!

When considering long-term investments, land with its good growth potential and low downside volatility, makes it the ideal investment to benefit from compound growth

By: Stephen Todd

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Kansieo.com

It can seem daunting at times to try and break into investing, after all, you may be simply wanting to make some basic investments, but find yourself confronted with a variety of different terms that you aren’t completely sure what they mean.

To help you with this, several common investment terms are defined below. This should be enough to get you started with some of your investments, at the very least; it should be noted, however, that this is nowhere near a complete list of investment terminology that is used today.

Stock

A stock is a type of investment that signifies a partial ownership of a publicly- traded company. Each share of stock purchased is an equal portion of ownership that grants the same rights and privileges as every other share of the same type of stock. Some shares of stock may be designated as “common” or “preferred”… these are very similar, though preferred stock usually gives up the voting rights of the shareholder in exchange for advanced dividends and more security in case of a bankruptcy.

Bond

A bond is an investment into a loan fund issued by a government or institution. The bond pays interest for the term that it’s active, meaning that the longer you have your bond investment the more interest you’re going to collect. Once bonds reach their maturity date, the bond expires and the total amount earned is paid to the investor.

Index

An index is a grouping of different investments that cover the same items. Common indexes are precious metals, diamonds, and industrials. Indexes can often be invested in as a broad fund in much the same way that you invest in stocks.

Mutual Fund

A mutual fund is an investment that allows individuals to invest their money into a previously-created diverse portfolio that usually contains a variety of stocks, bonds, indexes, and other investment opportunities. Investors in a mutual fund are usually considered to own shares in all stocks included in the fund.

Dividends

Dividends are a portion of a company’s earnings that are distributed among shareholders at the discretion of the company’s board of directors. Dividends may be paid in cash, shares of stock, or other means.

Money Market

A money market account is a type of mutual fund that invests in different loans and financial services while attempting to keep the initial investment low. Interest is paid on the investments as it is collected.

Bull Market

A bull market occurs when investment prices are either on the rise or appear likely to rise in the near future. It is also referred to as an optimistic market, and tends to have larger amounts of long-term investment.

Bear Market

A bear market occurs when investment prices are either falling or appear likely to fall in the near future. It is also referred to as a pessimistic market, and tends to have larger amounts of short-term investment in order to get the most out of temporary gains and avoid long-term losses.

Futures

Futures are investments where an individual pledges to purchase or sell certain commodities at a future date for a certain price. This is often used to get a lower price on commodities that will be resold later for a higher price.

Margin Trading

Margin trading is where a stock broker allows individuals to purchase shares of stock for a portion of the price, with the broker lending the remaining amount. The borrowed amount must be paid back when the stock is sold, and service fees must be paid to keep the margin account open before that time.

By: Jerry Warner

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Investment and trading both involve the purchase of assets in the hope that they will appreciate in value. However, there are significant differences in these contrasting approaches with the prime differentiator being the time frame involved.

Investment is something everyone should be involved in to some extent or another. Many do not consider themselves investors, but if you own (or are purchasing in mortgage) your own home or have a pension plan or insurance policy then you are an investor and your financial well being depends on the performance of stocks and/or real estate.

Trading is a minority activity seeking to derive profit (income) from the short term buying and selling of assets, or put simply selling higher than the buying price.

Investment is a long-term endeavor. It may be for life, as in providing a roof over one’s head, or over many years, as in putting one’s kids through college or providing an income in retirement.

On the other hand trading is relatively short-term, ranging from day-trading where positions are opened and closed within the space of a day up to holding them for a month or longer.

Investments usually consist of holding actual assets, eg stocks, bonds, real estate… Trading can mean holding assets but also consists of devices such as short selling (selling an asset you don’t have in the hope its price will fall), making use of margin (or leverage – ie trading with borrowed money), foreign currency (FOREX) trading, and more sophisticated vehicles such as options, CFDs (Contracts for Difference), spread betting etc.

Investment is concerned with gaining both from an increasing asset price and the income gained from holding the asset (interest, dividends, rent…). Trading is primarily concerned with profiting from movements in the asset price.

Trading is essentially a form of gambling, though hopefully a more informed (and less random) kind than the roll of a dice or the spin of a roulette wheel.

Investors generally rely on fundamentals in choosing investments, ie they look at the global and national economy, what’s happening in a particular sector, and at the prospects for the asset under consideration. Traders do the same, but they also rely on technical analysis (chartism) which attempts to predict future price movements by looking at graphs or charts of historic prices. There’s absolutely no logical reason this should work, but charts do perhaps give a picture of market psychology, and more importantly are followed by many and as such may become a kind of self-fulfilling prophesy. Technical analysis tends to be used most for i) short-term (day) trading and ii) optimizing entry and exit points (timing).

The key point is to know whether you are a trader or an investor. As we’ve said investing is something that should be done by just about everyone, trading certainly is not. If you do decide to become a trader, make sure it is a conscious and informed decision. Study loads, and do lots of paper trading (trading with virtual rather than real cash – there are lots of trading houses out there that will let you set up practice accounts for this purpose). Find a system that works FOR YOU, and stick to it along with disciplined risk and money management.

By: J Finnis

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An investment growth calculator is use to determine the revenue or growth of an initial investment over a certain period of time or years. It can even take your initial investment amount to a certain number of years at particular earnings rate. The investment value being entered in the calculator is break down into three categories namely the compound earnings, simple earnings, and initial investment.

An investment growth calculator is a great investment tool that investors can use for their goal setting as well as the future growth of their investment calculations. Aside from being handy, this calculator is also very reliable. The operations of this calculator are just as easy as entering values by slide movements or value entering in the text field. Once data are entered in the input field, the graph is automatically drawn. The calculator enables the investor to input even hypothetical data and other variables that are not meant to reflect the performance of any current or security economic conditions.

To make the most on the usage of your investment growth calculator, you need to enable your Java applications in your Internet browser. Java applications are object-oriented programming languages run by Sun Microsystems that add animations as well as other actions on the websites where the investment calculators are usually run. It creates applets applications that can play back the graphical systems of the investment calculator. These graphical systems are usually Internet ready. However, your Internet browser should be Java-compatible for you make use effectively of your investment calculator. In any case that the applet cannot be loaded on your browser, the reasons could either be that your Internet browser does support the Java applications or your Internet browser dos support Java application but just not turned on.

As an investor and you want see how much amount you can accumulate from your workplace savings plan over the time then you should use the tax-deferred investment growth calculator. With this calculator, you just to enter your rate of return, existing balance, assumption amount of your investment time period, employer match if available, proposed contribution rates, expected amount of annual salary increase and current annual salary amount. After these entries have been made, press the Enter key and results of your retirement plan’s potential growth will be displayed. Various assumptions are used in the calculations of retirement plan’s potential growth. One of these assumptions is the total annual contributions and investments that are made at the start of every year. The investment returns are also one of those assumptions and the amount for these returns occur at the end of every year when you are being taxed or when tax rates are already entered. The ending values are also assumed where the earnings of the tax-deferred principal are made with tax deductible or pre-tax dollars contributions.

By: Candis Reade

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Investment