Archive for January, 2010


Can I Stop Repossession?

Filed Under: Personal Finance by Bill — Comments Off
January 31, 2010

When a financial hardship strikes, many people wonder whether they will be able to stop repossession from happening. Although it is not the primary concern for most people that are in debt, it can quickly become a reality if the individual does not come up with enough money to pay the bank what they owe. There are many people that are issued billing statements for thousands of dollars that they have not been able to pay. Since they are not able to pay these statements back (for various reasons), the people are still held accountable to get the bank money as soon as possible.

If they are not able to pay back what they owe, then the person may not be able to stop repossession. In most cases, though, people can stop it from happening if they are willing to talk with the bank that they are members of and negotiate. Most bank workers want to hear that you are at least making an effort to pay off your debts. If you are not even trying to pay the amount of money that you owe, then the banker may not even be interested in helping negotiate new terms of payment with you.

Asking the question “can I stop repossession?” to yourself is really rhetorical. You can do anything if you put your mind to it. The most effective way to put a halt to it is by getting the money that is required to stop it. If you are not able to come up with money, you can still try to revise your contract or even write a hardship letter. There are many techniques to get yourself out of a repossession or foreclosure, but most people do not even try to utilize them. The ability to get yourself out of a sticky financial situation all comes down to your mindset. If you are determined and motivated, then it is certainly possible to overcome any difficulties that you may be facing.

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Reading The Details Of Your Fixed Annuity Contract

Filed Under: Fundamental by Bill — Comments Off
January 27, 2010

The importance of properly reading your fixed annuity contract cannot be understated. The nuances between companies, contracts, and products requires you to have an eye for detail. The subtle differences between one contract to the next can make the difference between thousands and thousands of dollars for you down the road. For this reason you should always read the fine print and fully understand the financial product you are placing your hard-earned money with.

The fixed annuity can be tricky enough without having to pour through page upon page of detailed descriptions. There are a couple of statutes that you should try and look for in your contract, and be certain that you are receiving what you believe you are receiving.

The first thing to fully understand in a fixed annuity contract is the surrender terms. Annuities are notorious for having steep surrender charges. An annuity can be an excellent financial planning product when incorporated into a well-developed financial plan, but can have devastating effects for a fly-by-night investor. Once you purchase your annuity product, you should understand that it will be difficult and expensive to pull your money out of the contract prematurely. Determine what the surrender charges for your specific contract, and understand the effects of pulling your money out early.

Another important feature of annuity products that you want to make sure you understand is the interest rate on the account. The account may have a somewhat variable interest rate, depending upon market conditions. Determine what the minimum expected interest rate is, and any special conditions to any other interest rates. You may determine that the annuity will not perform as well as you would like during the current economic conditions.

If fine combining over the details of financial products is not your strong suit, make sure that you consult with a properly trained and licensed professional. Have them walk you through the details of the contract, and do not let them sell you on anything without them first explaining both the pros and cons of the contract.

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Dividend Yield Definition and Ex Dividend Definition

Filed Under: Glossary by Bill — Comments Off
January 26, 2010

We have to accept this fact that financial terms are not a part of our daily vocabulary, therefore learning their meaning is necessary before investing because paying the cost of misunderstanding  can be costly. This rule of thumb applies to all terms in finance, but this time we are going to talk about ex dividend definition and dividend yield definition.

A dividends yield is a percentage return from dividends income, which is based on share pricing. This yield is paid annually . When there are not capital gains, dividend yield is defined by return on stock investment, in both dividend yield definition and ex dividend definition, dividend yield helps investors to determine the amount of cash flow obtained for every dollar invested in an equity position.

In the past, investors used to look at dividends coming from their share holdings to secure cash flow by investing in stock paying higher dividends. Today they are more concerned about capital gains investing in stocks that pay higher. Therefore, dividend definition can be explained as the portion of a company’s earnings  which are paid to shareholders.

On the other hand, stocks ex dividend definition refers to the classification of trading shares belonging to a seller instead of the person acquiring such shares, but once the corporation has authorized the seller to receive such dividends.

Shareholders remain qualified to receive dividends, but difference between dividend yield definition and ex dividend definition strives on the date in which shares are sold for  dividends payment, either coming from registrars or the stock exchange, so makes no difference who is the new shareholder when it comes to receive a payment after sale, although once an ex date is declared, stock drops often in price proportionally to the total amount of dividends a seller may expect.

There are companies that offer dividend reinvestment plans and these  are for those who are looking for good passive income by dividends.

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Margin Call is Just Before Last Call

Filed Under: Glossary by Bill — Comments Off
January 25, 2010

Margin, investor’s siren song, is often hard to resist.  The temptation of leverage to see huge returns, portfolios rocketing into the millions, it is the fantasy.  So what keeps us from throwing caution to the wind, trusting our instincts and research, and leveraging to our eyeballs for big wins?  The margin call. 

When you buy stocks on margin you are borrowing money for a portion of the purchase.  Typically average investors can only borrow half of what they wish to purchase.  Crazy hedge funds can get away with borrowing much much more.

If your investments fall in value and the amount of your investments is worth an amount close enough to the amount you owe the brokerage may initiate a margin call.  In most instances they will sell enough stock, regardless of the price, to pay off your loans usually leaving you with nothing or near nothing.  Unless you are well established you have very little say in the manner.  Any firm you buy stocks on margin with should provide a margin call formula or margin call calculator so there is no misunderstanding on when your account will be in danger.

Having your stocks sold on a margin call has two devastating impacts to the investor.  One is the stocks are sold when the price is down.  This is usually the exact opposite of when you wanted to sell unless it saved you from a plummeting stocks.  The other negative impact is to the psychology of the investor.  They now feel defeated and will be less capable of pulling the trigger on the next good investment they come across.  Hesitation on a well defined plan leads to lost profits.

Margin needs to be used as part of a well developed plan and not a guarantee of massive gains.  If your losses aren’t minimized to smaller swings than your wins than high margin accounts will wipe you out.

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