How many people know someone who wrecked a car they still owed money on and when the insurance company paid them off there was still a balance on the car? I know a few... If you are "barely getting by" and there is a wrecked car with a balance on it what are the chances you are going to spend thousands to pay it off? Slim to none! That is where Gap insurance comes into play, let's quickly discuss this instance. Gap insurance does exactly what it says, it fills the gap between your insurance payment and balance due of your car. To me it's well worth the cost to save your credit score! Usually dealerships offer this insurance as an add on when purchasing the car and it's typically only a few bucks per month. By ALL means take this coverage. No one plans to wreck their car but when they do, this pays off 10 fold! I personally recommend it, it just doesn't make sense to not protect yourself.
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Once again another week of huge surges and crashes of hundreds of points the market has been so unpredictable that's it's almost predictable if that even makes sense! In my head it does... That means if the Dow drops 400 points in one day the next day there is a strong chance that it will at least see a 300 point gain or the day after. This is where day trading can make you a lot of money! Day trading isn't usually recommended for the casual buyer of stocks because we usually go with the "buy and hold method" instead of the constant buying and selling of stocks. There is still tons of fear in the market because of China's economy and oil prices being around $46 a barrel. Once the oil stabilizes there should be a little stability added to the market so once again... We shall see! I was given the honor of writing the ‘Merica post this week so I will also tie in the finance post to give you a well-rounded view. These few steps will help ensure you are prepared to the best of your ability.
1. Keep cash on hand, as we all know cash is KING! Its 2015 and a lot of people do not carry cash, but when bad weather is expected carry cash because you never know how the credit network will be affected, I have witnessed this first hand! 2. Buy Supplies a little at a time – Rushing and spending 100s to prepare for a storm is a terrible idea, you should have a plan in place to avoid doing this. Budgets are tight because of the economy and that might force someone to cover their prepping activities on a credit card; bad idea. 3. Have a safe - A safe place for all important documents, if the worst case was to happen and your house was flooded or blown away… proving to a bank or someone else who you are would be a difficult process if you have no documentation. 4. Insurance – All insurance policies are not created the same, make sure the policy you have covers storm, water, earthquake and any other type of coverage you need for your area. There have been cases where someone thought they were covered and found out the hard way they weren’t. Also verify you have the required deductible if needed! Friday... Where to begin? It was a complete meltdown on the DOW! The DOW lost 530 points, the most in a single day since he 9/11 terrorist attacks. It started as a bloodbath and continued on that path for the rest of the day, but we all want to know why did it come to this. The primary reason is the Chinese economy is beginning to show signs of a recession (see early finance post for more details). Overall, with an economy of that size it will send shockwaves through the world's economy. Besides China, the sliding of oil prices due to excess is also adding to the drop of the Dow due to a lot of large companies involved in the oil industry. These two factors together made for a very ugly day of trading. Monday is a new day and we all hope to see major gains in the market. Stay tuned, there may be an emergency finance post to cover topics as they come up!
The United States Capitalist economy operates (in theory) under the laissez–faire doctrine. The doctrine allows for businesses to operate with very little government interference. This is the case except when it comes to keeping business practices fair, an example would be preventing a monopoly. As of late there have been concerns about "greedy" corporations gouging the consumer, but can you claim an entity is making too much money when their entire reason for existing is to make money? I struggle with this, but at the end, I realize the consumer sets the price of products contrary to popular belief. Nothing will change a company's pricing policy more than a refusal of the consumer to buy the product. Companies charge what the market will bare, it is simple economics. It would be un-American for the courts to step in a create legislation to set prices of goods and services. That will create a precedence and a slippery slope to a communist government (slight exaggeration but stay with me).
In closing, there can be no fault upon a business for doing what is was created to do and that is make money and make it with the largest profit margin that the economy will bare. Personally, I would hate to create a business and the government steps in to say "oh wait, you are making too much decrease your prices." There would be outrage! We purchase all types of insurance, but one type we seem to always forget is life insurance, one of the most important things. We have car insurance and might never have a wreck. The same for house insurance and fires, earthquakes, etc., but still pay those monthly. Death is assured so why not get insurance that is guaranteed to pay off? It's a grim thought, but it's a reality. After you have gone to the cloud in the sky, you do not want your family thinking about how to bury you or pay off any outstanding debts you may have. They do not disappear after death if you have a consigner. The average funeral costs around $10,000 in 2014 so that should be the minimum amount carried. I either suggest it actually be one year salary's worth. If you are the sole provider, that number should be multiplied by 2 or 3 to guarantee your family has time to adjust without monetary issues. This topic must be discussed because of how common it is to see people asking for donations when some life insurance is less than $20 a month. Easily worth your family's financial security.
So I have touched on it before, but nothing in-depth... What is the best way to raise credit scores? We know how important they are, but people have the most trouble raising or keeping their score high. These steps should get you headed in the right direction!
1. Pay your bills on time- This would seem like an obvious thing, but this is the easiest way to bring your credit score up. If bills are constantly being late or not paid on time, it will definitely bring your credit score down and fast! So if you wonder why your credit score is dropping, take a look at those unpaid student loans or doctor bills. 2. Pay bills OFF- right behind paying them on time is actually getting the fulfillment of paying a bill completely off. It shows that you honor the agreement of paying off the loan in full and shows you can be trusted. Having a few items completely paid off does wonders for your credit score. These items are needed when looking to purchase things such as houses and maybe even cars. 3. Using Credit cards - using CCs is a great way to get that initial building up of credit, as long as you are very responsible with it; which means paying off majority of balance at the end of every month. This keeps your credit in use and shows month to month payments, if they are on time the credit company will increase your limit which looks good on a ratio they calculate. Also, if you pay off the entire balance of a purchase, you will save money by avoiding interest charges. Overall the three steps above will get you on the right track to raising ,maintaining, or keeping your credit score high! Best of luck! So this is a combination of finance in terms of the F-35 weapon system. The 5th gen fighter is the most advanced airplane ever built and that comes with a cost, it is estimated that the program will cost around 1 TRILLION dollars over the life of the program. The lifecycle is typically 40-50 years for a fighter jet so the financial impact is spread out over many years. Many people from the outside looking in only get the sticker shock but do not realize the advantages this plane will bring to our men and women fighting for our freedom! On top of helping to maintain our air superiority a program of this size activities a large amount of people to help produce it. There are currently 45 states, yes 45 that make parts for the airplane. It can safely be compared to what Eisenhower did with the interstate system. The opponents who claim it is a financial lemon should look into the numbers and see what would happen to the economy if the production was stopped. I am not saying that is solely the reason to keep it in production but it's a very good one! There are over 130k jobs directly and indirectly provided by the program it is the largest job generator in the DOD. Above are just a few reasons why the F-35 is worth the money, you would not want to be a guy on the ground needing aerial support but none was available due to budget concerns. This is a subject that has been discussed numerous times on various media outlets; Choose your college major off of possible income or what you enjoy? A short and sweet answer would be by what you enjoy, but this subject isn't that "black and white". We all want to get paid for what we enjoy, right? But that's not always the case. Quitting your job isn't an option because bills will keep coming. The decision should include quality of life, income, and your desire to work in the field. If a job pays you $75,000 a year, but you hate going everyday it might not be worth it because that $50,000 job house love would bring you more happiness than the extra money. The best advice I can provide is to walk to someone in the profession and ask about the hours they work and day to day activities. Never simply look at charts and randomly choose. And please do not let anyone convince you as to what you should choose, this is a personal choice that you will have to live with forever.
Last week I discussed the impact Greece was having on the stock market, but I failed to mention another contributing factor. The sliding of the Chinese stock market. China has one of the worlds largest economies so when it begins to slide, the world takes notice. By comparison Greece ranks 45th in economy size and China ranks 2nd. As China's economy has rapidly expanded due to government spending, the average wage for a worker has gone up. We know China is a major producer of goods, so when the price of production goes up, companies begin to move their operation to cheaper countries. If you haven't noticed, as of late, more and more products have been made in Vietnam and other countries. Check your tags of recently purchased products. With Greece and China both experiencing monetary issues at the same time, it should be understood as to why the market is very volatile. In only the last week, there have been swings in the U.S. markets of 200-300 points negative and positive so if you time it properly there is money to be made.
*Disclaimer: Trying to time the market is usually a bad idea, it is too unpredictable unless you have inside info... But that's illegal so I advise against it. Overall it is very exciting times in the financial world so we must stay tuned to what will happen in the next weeks! |
-Finance
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