Personal Finance Ology

I’m going to take a break from my posting today and enjoy reading some great articles that have been submitted to me as I host the Money Hacks Carnival: Bailout Edition.   So feel free to checkout the latest news and articles that these authors have posted to help me bailout my readers

Editor’s Top Picks

FMF presents An Example of What I’ve Been Talking About posted at Free Money Finance.

nickel presents Save Money by Renting Out a Room posted at fivecentnickel.com.

Mr. ToughMoneyLove presents Tracking Our Economic Recovery posted at Tough Money Love.

PFR presents Provident Bank Checking Account $123 Bonus posted at Personal Finance Reviews.

Patrick @ Money Saving Deals presents CoolSavings.com - Free Coupons and Money Saving Deals posted at Money Saving Deals.

The Smarter Wallet presents Charting Stock Movements With Fibonacci Trading Techniques posted at The Smarter Wallet.

Other Blogs - Should they be bailed out? You decide!

Investing
PT presents Tips on Dealing with Credit Rollbacks posted at Prime Time Money.

Brian presents Best CD Rates posted at Monitor Bank Rates.

Ray presents Is buy and hold investment strategy dead? posted at Financial Highway.

Finance Tips 101 presents Why Take The Risk Of Day Trading posted at Finance Tips 101.

Manshu presents Gold Funds - Expense Ratios and Minimum Investments posted at OneMint.

Michael Cohen presents Even If We Are The Next Japan, Stocks Aren?t Necessarily A Short posted at Stock Investment 123.

Buying Stuff
Junior presents What To Do If You Can?t Make Your Car Payments posted at Car Commentary.

mfd presents Optimize your Bank Interest through Automation posted at My Findependence Day.

Adam presents Basics of Prepaid College Tuition 529 Savings Plans posted at Your Money Relationship.

Loans and Credit
kathryn presents Get Your Taxes Done for Free! posted at Out of Debt - Christian Finances and Debt Help.

DebtLite presents What Are the Root Causes of Debt? posted at Debt Advice.

Abigail Perry presents How to deal with debt collectors posted at i pick up pennies.

The Investor presents The recession is not a lifestyle choice posted at Monevator.

Madison presents $8,000 First Time Home Buyer Tax Credit posted at My Dollar Plan.

Patrick @ Military Money presents Looking for a Job? Consider Joining the Military posted at Military Finance Network.

Carson Brackney presents How to Value a Charitable Donation posted at Personal Finance Analyst.

Sun presents Discover Escape Card 25,000 Bonus Miles Promotion posted at The Sun’s Financial Diary.

BankMan presents Limit Six Savings Account Withdrawals Per Month posted at High Yield Savings Accounts.

The Financial Blogger presents IACI actually makes a good move posted at Intelligent Speculator.

Curt presents 7 Reasons Why Banks Should Increase Interest Rates posted at PennyJobs.com.

Todd Johnson presents Search Engine Optimization posted at Richard Lee.

Dividend Tree presents Dividend Investing In All Economic Cycles | Dividend Tree posted at Dividend Tree.

Economy
Barry presents Tug Of War Between Retailers And Frugal Consumers posted at Associate Money.

Tom Tessin presents Secured Credit Cards that Report to Major Bureaus posted at FSC Blog.

Kevin presents How to Pay for the Octuplets posted at The Red Stapler Chronicles.

Pinyo presents Introduction to Peer-to-Peer Lending posted at Moolanomy.

Kathryn presents Freelancer’s Guide to Important Tax Deductions posted at KathrynVercillo on Bukisa.

D4L presents The Best Dividend Stocks In The World posted at Dividends Value.

Frugality & Saving Money
Momma presents Top Recommended Paid Survey Sites: Making Money with Online Surveys posted at Engineer a debt free life.

Beef Up Your Piggy presents Don’t Swear Off Plastic Completely posted at Beef Up Your Piggy.

Ramis presents Some tax savings strategies posted at Financial Highway.

MoneyNing presents Counter Intuitive Way of Lowering Your Spending posted at Personal Finance Blog by Money Ning.

Chris presents House-hunting expenses and how to minimize them (part 2) posted at Home I Own.

Investing School presents Beta and Alpha Returns for Us Sane Investors posted at Investing School.

Alex presents Printable Mothers Day Cards posted at Home Life Weekly.

ChristianPF presents How long does it take to get your tax refund? posted at Christian Personal Finance.

J. Money presents Shredding 700+ receipts: Not fun, but good to do. posted at Budgets are Sexy..

Mara Rogers presents Household Tips To Save You Time And Money posted at Secrets for Money.

LAL presents What did you get from your parents Part I posted at LivingAlmostLarge.

Jeff@Stretchydollar presents Dealing With Financial Frustrations, Part I posted at stretchyDollar» StretchyDollar.com.

Income
Frank Curmudgeon presents House Prices: The Long View posted at Bad Money Advice.

FIRE Finance presents TaxCut - Upto 36% OFF Discount Coupons posted at FIRE Finance.

Jake Stone presents Fake Money Blog » Hopeless sales gamble posted at Fake Money Blog.

FFB presents Economic Credit Crisis Visualized posted at Free From Broke.

Todd presents How To Pay For College posted at HarvestingDollars.

Savings Toolbox presents Finding Yourself unable to Make Your Mortgage Payments? posted at Savings Toolbox.

Destroy Debt presents More Grocery Shopping Saving Tips posted at Destroy Debt.

Scott Crawford presents Understanding Your Credit Report posted at DebtGoal.

Heather Levin presents Want To Live In A Shipping Crate? posted at The Greenest Dollar.

Tushar Mathur presents Zecco: Free stock Trades ? posted at Everything Finance.

Other
Dan presents Deal of a Lifetime in Muni Bond Investments? posted at Darwin’s Finance.

Mr Credit Card presents ThankYou Network Citi Rewards Review posted at Ask Mr Credit Card’s Blog.

Jeff Rose presents 8 Unusual Things to Hold in Your IRA posted at Jeff Rose.

Silicon Valley Blogger presents Zecco vs TradeKing: Which Online Stock Brokerage Account To Choose? posted at The Digerati Life.

Relax presents The happy way to spend money posted at The Wise Curve.

Ryan Suenaga presents Ask the Readers: What are your Best Money Hacks? posted at Uncommon Cents.

Thursday presents What Does the Economic Stimulus Plan Mean For You? posted at Wealth Junkies.

Dawn C presents 7 Little Hacks to Saving a Bucket Full posted at Frugal For Life.

jim presents Highest Short-Term CD (Certificate of Deposit) Rates posted at Blueprint for Financial Prosperity.

The Happy Rock presents Deep Freeze - Freezing Sale Items To Help Stretch Your Grocery Dollars | The Happy Rock posted at The Happy Rock.

TStrump presents 5 Tips to Make Travelling by Air Easier | The Strump posted at The Strump - Financial Blog.

Miss M presents Deliverance from Debt: A.D. – After Debt posted at M is for Money.

Filed under: banking, business, credit card, debt, equity, interest, money by admin - 664 Comments →

In the beginning, every financial facility had a certain group of functions they were allowed to perform. These regulations were strictly enforced not allowing them to overstep their boundaries unless they wanted to deal with stringent consequences. These laws were put into effect after the stock market crash and the Great Depression to protect banks from failures and over extension of loans. Banks were allowed to only provide the normal checking accounts, personal loans, commercial banking for businesses and other short-term loans. They were not allowed to provide any other financial services such as insurance or investments products. Alongside this regulation came the Federal Deposit Insurance Corporation, which provided protection for those depositing their money into the Banks.

After a stabilizing of the economy, there came deregulation. This lifted the previous restraint on banks and allowed them to venture into providing other financial services other than the simple checking account etc. They were not only allowed to provide investment products and insurance but they could also do business in home mortgage as well as home equity loans. This allowed Banks to become a one-stop shop for their customer’s financial needs.

Types of Banking Facilities

Not only did deregulation open up doors for Banks but it also opened up doors for other Banking Facilities to compete for the attention of financial customers. Banking Facilities such as Savings and Loans, Savings Banks and Credit Unions began to emerge. The FDIC protects some of these Banking Facilities however some are not protected.
An important point to remember is that, in advertising, anyone not protected by the FDIC are required to say so while those that are protected by the FDIC will also say so. Therefore, even though you may find a better deal at a Banking Facility that is not FDIC insured it would probably be wise to go with a facility protected by the FDIC ensuring that your money is safe.

Savings and Loans

These are often called S&L’s or Thrifts. They are known for providing a certain level of financial service for a long period of time. They are mainly in the business of collecting deposits for savings accounts or to go towards loans. Their history was in dealing mainly with the housing market. Many of them were organized as “associations”. This meant the customers who held accounts with them were owners of the Thrift or S&L. This posed a problem, as due to this type of organization the Thrift was unable to sell stock so that they could make money to grow.
During the emergence of deregulation, a lot of the Thrifts changed their organization towards corporations and also found themselves diving into commercial real estate lending. Due to Thrifts being more geared towards savings and unable to compete with the larger Banks the majority of them are located in smaller towns rather than big cities.
Also included under the umbrella of Savings and Loans are Credit Unions and Savings Banks.

Credit Unions

Credit Unions are similar to the earlier days of Thrifts. They started out as a savings club with members only being allowed to join if they met the requirements. A lot of these requirements were living in the same place, working at the same place or something else that was common amongst all of its members. Nowadays the qualifications for becoming a member have become a little more lenient and you could very well find a Credit Union that only requires you live in a certain city or county to become a member.

Credit Unions started out making personal loans to its members and then eventually graduated to auto loans. Due to their non-profit organization they were able to provide loans with lower interest rates and savings with higher rates. Another reason they are able to offer better rates is because they are not required to pay federal taxes. This gives them a big advantage over Banks and S&L’s. One other difference between Banks and Credit Unions is that The National Credit Union Administration, not the FDIC, protects the Credit Unions customers’ money up to $100,000 and governs them.

A few disadvantages of Credit Unions are that they usually don’t have multiple locations and they may be able to offer good rates on some financial products but not all of them. That’s why it is always important to shop around various Banking Facilities before you commit to a product.
Savings Banks

This type of Banking Facility has decreased in number rapidly due to its functions overlapping with those of Banks and S&L’s. Once very popular, especially on the East Coast, Savings Banks are now obsolete due to deregulation. Their initial functions saw them growing rapidly because they could function like a Commercial Bank, in that they were able to offer business loans as well as like a Thrift in that they could receive payments on these loans and savings accounts. However, once the deregulation occurred allowing Banks to do the same the services, Savings Banks were no longer needed as the customer could get all of their financial needs met at a Bank.

Which Is Better?

When it comes to choosing which type of Banking Facility is best for you, it is really about choosing the one that provides the mixture of products that best suits your needs. You may want to think about the products you need now and how this may change in the future. Another factor to consider would be location. If you feel you are settled in your area then you can focus more on personalized customer service rather than presence. However, if you feel you will be moving, or you tend to travel a lot the local Credit Union may not be as convenient as a Bank with a national presence.

No matter which Banking Facility you choose just remember that you are not locked in to purchasing products from that institution alone. You are always free to shop around for deals that will work to your benefit.

Filed under: banking, business, home ownership, money by admin - 58 Comments →

The better you organize your finances the easier it will be to utilize tax strategies that will allow you to keep more of your earnings for yourself. You have to create an entity that will draw in revenue and allow you to write off certain things as an expense.
There are a few options and you should definitely look over your situation and decide which entity best meets your needs.

1. Limited Liability Corporation
A Limited Liability Corporation, or an LLC, is like a combination of the best parts of a partnership and a corporation. It offers the owners protection from personal liability for any debts the LLC may incur. In this way it is similar to a corporation. It differs from a corporation in the way it is taxed. An LLC doesn’t pay it’s own taxes it is considered a pass-through tax entity. This means any profits or losses of the LLC passes through to the owners. The owners in turn will report them on their tax returns.
Along with the passing through of any profits or losses, the owners of an LLC are protected from personal liability for any debts the business incurs or any claims filed against the business. In other words, if your LLC is unable to pay a creditor that creditor cannot come after any of your personal possessions. This is where the “limited liability” comes from.
Now even though your personal possessions are protected under the “limited liability” there are some instances where you can become liable. If you yourself directly injure someone, personally guarantee a bank loan, fail to deposit taxes withheld from your employees wages, intentionally perform fraudulent acts that cause harm to the company, use the LLC as an extension of your personal affairs this will cause you to become liable for your actions.
It is very important that, if you choose to form an LLC, you treat it as it’s own business and keep it separate from your personal affairs.

Tax Outlook
The key tax advantage of creating an LLC is that you don’t have to pay taxes on the money that your business spends. Legitimate expenses to your business can be deducted or “written off” from your business income. This will lower the profits of your business that you have to report to the IRS and in turn decrease the taxes you will be required to pay.

2. Corporations
A Corporation is a legal entity separate from its owners. Like an LLC, it has liability protection. Therefore your personal assets are separate from that of the Corporation and you aren’t held liable for the debts of the company. The difference between Corporations and an LLC is that with Corporations you can raise capital by selling shares of stocks.
There are also some additional responsibilities that are involved with Corporations. For instance, in order to remain a Corporation you must hold an annual meeting and take Corporate minutes and appoint the appropriate officers.

Tax Outlook
Aside from being able to write off the expenses of your business, a Corporation is also an independent tax entity, separate from the owners and anyone who may control and/or manage it. Therefore, the owners will not use their personal tax returns to pay tax on any of the Corporations’ profits. The Corporation will pay the taxes on these profits itself. The owners will pay income taxes only on salaries or bonuses received from the Corporation.

Filed under: business by admin - 57 Comments →

There are many different types of business entities that you can set up if you have started your own business. Some include: Limited Liability Corporations,  C-Corp and an S-Corp. Regardless of which formation you decide is best for you, there are advantages in forming an entity. More on the different types of Corporations later.

Personal Asset Protection
This is a biggie! This is probably the main reason anyone starts a corporation. If you get sued, or the business just tanks, you are not liable for the losses. Meaning your personal funds are not at risk. This  allows your personal affairs to be separate from the companies. This leaves you free and clear from any debts or claims incurred by the company.

Professional Appearance
The appearance of Inc. or LLC after your business name can add authority and convey an image of seriousness and dependability. This will make a potential customer feel comfortable in doing business with you. Plus this will make you feel special too. There is something to be said for owning your own business. If you can put LLC or Inc. at the end of your business name, it makes you special(or at least feel special).

Name Protection
In the majority of states, no other business can form a Corporation or LLC using the same name of your Corporation or LLC. That means if you start up a business called Widgets-R-Us, no one can do business under that same name. This is good protection to have incase someone with a big wallet tries to steal your business model and customers.

Deductions
Normal business expenses can be used as deductions from the profits of the company allowing for a decrease in taxes. You can actually claim deductions if you are just a sole proprietor as long as you are not doing it as a hobby, which can sometimes be hard to prove. If you are incorporated, you are obviously a business.

Remember, I am no tax pro, so if you plan on starting your own business you should probably see a professional to verify the facts. It may cost a few hundred bucks to go from sole proprietor to corporation but the peace of mind from these benefits probably makes it worth it.

Filed under: Uncategorized, business by admin - 94 Comments →