You know that the economy is on shaky ground when the hottest topic in personal finance is making sure your bank deposits are insured. Many of us never think about what would happen to our money if our bank closed its doors. Almost all traditional commercial banks insured their deposit accounts up to $100,000, which is enough coverage for the average citizen. However, some of you are blessed with an abundance of money and $100,000 might not be enough. Many small businesses carry bank deposit balances over $100,000 as well. Traditionally, the only way to make sure you are fully insured is to spread out your money to multiple banks in $100,000 increments. In fact, Clark Howard suggests that you spread it out in increments of $90,000 to account for the interest you’ll accrue on the money. So, if the worst happens and your bank closes up shop, you’ll insure your interest as well.
This subject has hit home for me lately. I don’t even have a mortgage yet, so it’s not a personal situation, but someone I know is going through some financial issues right now with their mortgage. This is the first time that I’ve been affected by it on a somewhat personal level. Here are five things you can do to help prevent foreclosure:
The recent news of the financial turmoil on Wall Street is unsettling. For younger folks like me, it’s even more unsettling, because my generation has never been old enough to remember financial problems like this in the past. Older folks know that we’ve rebounded from situations just as bad or worse than this one. One thing that we need to remember is that this is what happens in a free market. The market corrects itself by snuffing out companies that took on too much risk. This is why I disagree with all of the government intervention and bailouts on a philosophical level. On a practical level, I agree that it had to be done, or the future of our financial sector would have been very grim. Also, we need to realize that the government isn’t just bailing out these large corporations for the sake of helping a bunch of rich executives. They are thinking about the consequences that would ensue for the average customer of a company such as AIG. It’s a tough situation, but there is always a light at the end of the tunnel.
I woke up this morning, logged on to the Wall Street Journal web page, and a huge lump formed in my throat. The rumors of Lehman Brothers, one of the oldest investment firms in the nation, has failed. Merrill Lynch, one of the most well-known investment banking firms, is sold to Bank of America for about $50 billion dollars. AIG, one of the largest insurance companies in the world, will undergo a re-structuring process with its equity and debt holdings. This might not mean THAT much to you when you first read or hear about it, but it is huge. There is no telling what the stock market will do, but my guess is that the Dow Jones will drop well below 11,000 for the first time in a couple years.
By Erik Folgate
We live in a society where service industries thrive by performing superior customer service. Because we live in a capitalistic economic system, a custom of rewarding superior customer service has developed through the use of tipping. Tipping is a controversial subject because many people disagree about who to tip, when to tip, and how much to tip. There are no set laws about these various aspects of tipping. In fact, there are not any laws about tipping at all. If you go to a sit-down restaurant, eat a meal, and leave without tipping, you won’t be breaking the law. The market correction for people who do not tip at restaurants is that they will build a reputation of not being tippers, and the servers of the restaurant will not give them good customer service. If you don’t tip when you should, you won’t receive good service. It’s as simple as that. Here are some ideas about who you should tip, when you should tip, and how much you should tip:
By Erik Folgate
Fannie and Freddie Mac mortgage companies may be worrying Wall Street, but they’re woes have given a gift to those looking to buy a house. On Monday, the prime mortgage rates on a 30 year fixed mortgage dropped from approximately 6.5% to 6.0%, and it has since fallen to about 5.75% throughout the week. The reason is that the mortgage rates sometimes fall in lieu of bad market news such as the Freddie and Fannie trouble and a turbulent market. I didn’t write this article in the beginning of the week, because I wanted to see if the drop was a fluke or not. It looks like these low rates are here to stay for a little while.
Facebook isn’t just a place to reunite with old friends and write cute little comments on your friends’ uploaded photos. There’s an application for everything, and the traveling applications are something that I’ve been checking out lately. Here are some facebook applications of interest.
Hostelbook.com application: this application helps you find the best hostel at the best rate wherever you may be traveling whether it’s in the United States or abroad. I backpacked around Europe four years ago, and we saved a ton of money staying at hostels. However, we didn’t have facebook to get quality reviews of which hostels to frequent and which ones to stay away from. There were hostel review sites out there, but facebook’s social network blows any of those sites away. Check this one out.
Enlighten me, because I can’t figure it out. I’m young, and I haven’t been tracking the stock market for too long, but the stock market’s pattern MUST be historic. One day the Dow goes up 200 points, and another day it goes down 300 points. I’ve never seen or heard about a stock market that acts so volatile. You know my thoughts about investing. I don’t think you should invest in the stock market unless you’re in it for the long-term. If you’ve been trying to day-trade the past 6 months, you’re probably about to jump off of a bridge, because the market has had no rhyme or reason.
By Erik Folgate
Do you need some extra cash? You may be entitled to some, but never knew it. There is such a thing as free money, well it’s not free, but it feels like it’s free because you never knew it was there waiting for you to claim it. Each state should have a bureau for unclaimed property, and many of them allow you to search by your name to see if you have unclaimed money to recover.
It’s that time of year again. Football season. Can you smell it in the air? I went to my first football of the season this past Saturday. We went to the Florida Gators vs. Hawaii Warriors, and the gators kicked butt. If you didn’t know, I’m a huge gator fan. All you bulldogs, volunteers, tigers, and seminoles can still read this blog, but realize that I don’t like you on Saturdays. Anyway, football season is here, and that means your fantasy football leagues are here as well. It is by far the most popular fantasy league of the year. Some of you might be asked by several different people to join their league, but there’s only so much time in a day! Offices around the country will suffer, but you don’t care. If you’re going to join some fantasy leagues this year, here are some tips for saving money this year.
Finally, there’s some good news to report about the economy, and I’m happy that the media isn’t ignoring it. If you didn’t notice, the stock market shot up today, but it’s been doing that a lot lately, and then the next day is drops like a rock, again. Here’s a run-down of the good economic news:
- Decline in Jobless Claims: the amount of people who filed claims for being laid-off dropped by 10,000 claim files this week, and declined for the third week in a row.
Please, keep this civil. I’m interested to know which candidate’s economic plan will be better for our country? Don’t know their differing plans? I’m not going to go through all of it here, so research it on your own.
By Erik Folgate
JLP from All Financial Matters made a great insight about the next financial bubble we face in the United States.
Much like sub prime mortgages are packaged together and sold to large financial institutions to earn from the interest of the borrowers, credit card debt is also packaged together and sold off to larger financial institutions to reap the benefits of the hefty interest rates that borrowers pay. if you think that unscrupulous lending practices were taking place in the sub prime mortgage sector, you don’t even want to know about the credit card lenders. Credit card lenders send applications to ANYONE and EVERYONE. Dead people, dogs, people with zero money to their name, children, and any other social security number they can get their hands on. Credit card companies have spent the last thirty years literally trying to financially drive this country into the ground. We’ve seen the statistics of $600 billion dollars of credit card debt in this country, and it is no joke. This is a bubble waiting to happen.
My wife and I are in the process of buying a home, and I have been frustrated lately at the hidden mortgage fees that brokers try to pass off as “necessary” to close the loan. When in fact, there are so many fees that don’t need to be paid by borrowers with good credit and stable income.
Here are list of some of the negotiable fees in a closing statement:
This week we’ve been talking about kids and money. Don’t gloss over these articles, even if you don’t have kids, because you most likely will someday. Lack of financial education is the number one reason why we have so much credit card debt and outrageous foreclosure statistics as a nation. We don’t receive financial education as young children, as teenagers, or as college students. Schools figure that parents will teach their kids how to handle money, but the the problem is that many parents don’t know how to handle their own money. Parents figure that schools will teach kids how to handle money. So, there’s an obvious deficiet of financial education in our country, and the only organizations that do give out free financial education are credit card companies. Can you guess how they teach how to handle money? It starts and ends with a lot of plastic.