Investing Basics: Setting up your financial goals
Money has little to do with some of our most important personal goals. These include spending more time with family, doing volunteer work, or developing a hobby. Yet, other personal goals clearly can be defined as financial goals. These include:
Paying off your debts. By establishing a repayment plan, you can repay your debts in a systematic fashion. A repayment plan may take years. It requires discipline to control your spending. For example, to pay off $5,000 in credit card debt at 14% interest requires monthly payments of $240 for the next two years. That's assuming you make no additional charges. As long as you owe, you sacrifice other financial goals for the sake of paying creditors.
Saving for a down payment on a home. You may be thinking about buying your first home in a few years. The normal size of a down payment is 20% of the home purchase price. At today's home prices, this means saving somewhere in the range of $25,000 to $50,000. To save $25,000, you would have to set aside just over $4,000 a year for each of the next five years, if you can earn an 8% rate of return.
Saving for a child's college education. For the school year that began in August 2002, the average yearly tuition bill at public four-year colleges or universities rose 9.6% to $4,081, the College Board said in its latest survey. For private institutions, tuition prices rose 5.8% to $18,273 a year. By setting aside $260 every three months for the next 15 years, invested at 8%, you will have saved $30,000. This should make a considerable dent in the future cost of your child's college education. This assumes you use a college savings plan or other tax-advantaged account.
Saving for retirement. For most of us, saving for retirement is our most important financial goal. We may live 20 or 30 years after we stop working. Financial planners strongly advise against depending entirely on the income you receive from Social Security. To maintain a comfortable living, you may decide you want to save $500,000 in another 30 years.
Fortunately, you can invest with a tax-deferred account such as an IRA or 401(k) plan. In addition to postponing any taxes until the future, these accounts offer compounded growth. For example, if you invest $5,000 a year for 30 years at 8% in an IRA, the account will grow to almost $567,000. If you were to save with a taxable account and were in the 25% tax bracket, however, the amount would only reach about $395,000. This is the power of compounding you receive by using a tax-advantaged account.
Finally, keep in mind that it's quite common to have more than one financial goal. It's important to identify all of them, and set up a savings plan for each goal.
Top New Year's Money Resolutions
It's January. The credit card bills from your overspending at Christmas are beginning to hit the mat. You are worried that you are soon going to get a letter from the bank manager. How are you going to turn your finances around? With some careful financial management and ensuring that you are taking advantage of the best deals available you can sort your finances out in the coming year.
Tiscali's top 10 recommendations for your financial New Year's resolutions.
1. Switch to a cheaper credit card HSBC Standard charges 18.9% interest and the Lloyds TSB Classic - 17.9% on their credit cards. These are the worst examples of high rates of interest but many common cards are still charging high rates of interest when bank rate is at its lowest for many years.
Why pay nearly 20% interest when you need only pay 0% for six months as an introductory offer for a transfer of balance on a range of cards. You may also find that you have a period with no interest on any new purchases. You should also consider, for the longer term, which cards have the lowest APR. Use our cardfinder service to see what is the best deal for you. You just need to know the name of your card and you can compare it with the other cards on the market and check whether you can do better. For example if you changed cards from the most expensive and you had an outstanding balance of around £500 a month you could save yourself around £50.
Check out the current best buy table here. You should also think about how you use your card. If you pay off every month perhaps it might be worth finding a card with a longer interest-free period or no annual charge. Or perhaps it might be better to choose one with cashback or airmiles.
Check out other great deals here.
But remember, most important of all, don't get yourself into trouble by borrowing more than you can afford to pay back - either on a credit card or a loan. Make sure you know what you can afford to pay back on a monthly basis and borrow no more than that.
2 Consolidate debts with a cheap loan If you have an overdraft and credit card bills and other debts you might find that your best option is to find a low-interest loan, pay them all off and only be paying back to one lender - debt consolidation. Very often these are at much lower rates than overdrafts or cards unless you are lucky enough to get a 0% interest credit card. You need to shop around as there can be a big difference in rates offered. For example some of the highest rates on a £5K loan over 3 years are Lloyds TSB Standard at 15.9%, the Barclayloan at 15.9% and the Royal Bank of Scotland - 16.2%. Compare these with some of the best deals currently available
Lombard Direct - 7% typical APR.
But beware some low rates are only offered for short periods and then revert to a high rate so check the APR (annual percentage rate) and usually the one with the lowest APR will be the cheapest loan. Don't borrow more than you can afford to pay back and remember that if you use your home as security for a loan and don't keep up repayments you could lose it.
3 Think about changing bank accounts You may not be getting the best value out of your bank. Does your bank pay interest on your current account balance? Does it meet your overdraft requirements? Remember, if you have an overdraft do not go over your overdraft limit as you will end up paying a "penalty" rate of interest. You can find out whether there is a bank account better suited to your needs using our handy bank account tool. And following regulatory changes moving banks should now happen much more smoothly with all your direct debits and standing orders being changed without hassle. All you need to do is get in touch with your new bank, and agree with them the date upon which you want to make a transfer and they do the rest for you. Using your authorisation they will contact your old bank, arrange for the transfer of the balance, but also contact each of your direct debit companies, give them the details of the new bank and instruct them to take the debits from the new bank. The direct debit companies themselves will get a confirmation of that for security purposes from your old bank, tie the two up and hey presto you just have to deal with your new bank. It should be as simple as that.
4 Take a look at your mortgage With interest rates at their lowest for many years you might find it pays to switch mortgage. However, you must ensure that the savings you will make will outweigh any extra costs and penalties you might have to pay. You could have to pay an application fee for a special loan (perhaps £250-300), a valuation fee, and lawyers' fees too, and this bill could easily hit £700-800 in total. This may wipe out the savings. Check out our mortgage finder and see whether you could be better off.
If you are paying a lower mortgage rate than you have done for some time be sensible and think about what to do with the extra cash. If your mortgage lender will allow it you might do well to continue paying the old rate - overpaying - which then reduces the length of your mortgage. If not think about saving the money either in a high interest savings account or perhaps investing it in bonds or unit trusts for the longer term. Find an independent financial adviser to ensure that you get the best unbiased advice.
5 Move your savings to a higher paying account Don't have your savings moldering away earning you only 0.01% in the Woolwich Instant Cash Account when you could switch to an account paying far more. There are many poor paying bank or building society accounts and why stick with them when you could be earning something like 4.00% on Cahoot's Easy Access account. If you have more to invest or are happy to give notice you could get even higher rates. Use our savings checker to make sure you are getting the best deal available.
6 Get a better insurance deal Many people just keep going back to the same insurance company each year without finding out whether they could be saving themselves money. When you have to renew your car or your house insurance get a range of quotes to find out which is the cheapest. If you buy travel insurance don't just buy it from the travel agent you may be costing yourself money that you could be buying icecream or ski-passes with. You can get insurance quotes online to see how competitive your current deal is.
7 Don't leave it to the last minute to get an ISA January tends to see the start of "ISA season" where many people realise that they are not making the most of the Chancellor's generosity which means that you can save or invest without paying tax on your interest or profits. If you have some money to save or invest an ISA can make sense - check out our ISA section for details of how they work. Make sure you give yourself time to do your research, consult an adviser and make the most of your allowance.
8 Fill in your tax return on time If you have been sent a Self Assessment tax form if you don't fill it in by the end of January you could find yourself paying a penalty of £100. Check out our advice on filling in your tax form.
You should also make a resolution to keep all your financial documents in good order. The taxman can charge you a penalty of up to £3,000 for each failure to maintain or retain adequate records to back up a return (or claim).
• You need to keep any P60, P45 or P11D forms from your employer which have details about your pay (including bonuses) and tax deducted benefits in kind, expense payments and possibly about share scheme arrangements.
• Anything you are sent by the Benefits Agency about your State pension or other taxable social security benefits.
• Any information from your banks and building societies about the interest on your account(s).
• Details from all or any company in which you own shares about dividends you receive.
You need to keep the records for about two years after the end of the tax year to which they apply. Self-employed people and business partners will have to keep their records for about six years. (A tax year starts on 6 April in one year and finishes on 5 April in the next.) If there is an enquiry into a return, the relevant records must by retained until the enquiry is over.
9 Check out your pension situation To ensure that you are not left in poverty in your old age you should ensure that you have got adequate pension arrangements. First of all you can find out the value of your state pension arrangements which will give you a better idea of how big the gap you need to plug between what the State provides and what you feel will keep you in an appropriate standard of living. For an individual forecast complete form BR`9 and send it to the Retirement Pension Forecast and Advice Service. To get the form call 0845 731 3233.
10 Switch energy suppliers You may be paying around £100 more than you need to if you aren't buying your gas and electricity from the cheapest suppliers. Tiscali has teamed up with uswitch to give you an independent guide to the best fuel deals available. Check our Cut your Bills tool.
If you follow this plan you should certainly have a wealthier and wiser new year.
SENATE REVIEWS IMMIGRATION PROPOSALS
By Ehsan Tabesh
Washington, D.C. August 5, 2005 (Revised Version) - On July 26th, the Senate Judiciary Committee discussed proposals for a comprehensive overhaul of the nation's immigration laws which have resulted in “exploited workers, divided families, community tensions, and public frustration,” according to Committee Chairman Arlen Specter (R-PA). Two separate Senate bills, S.1033 and S.1438, were discussed by their Co-sponsors, Senators Kennedy and McCain and Senators Kyl and Cornyn, respectively.
Iranian Americans face several community specific immigration needs including relief from backlogs created by security checks, and more clearly defined entry and exit security regulations for H and F visa holders. These are not addressed by the proposed legislation.
However, some of the Iranian American community's immigration needs that overlap with the needs of other immigrant communities are addressed by S. 1033. Referred to as the “Secure America and Orderly Immigration Act”, S.1033 calls for a laundry list of reforms that include a worker visa program for unskilled workers, the opportunity for illegal aliens to adjust to legal status, an exemption for immediate relatives of U.S. citizens from the annual cap on family-sponsored immigrant visas, and an overall increase in the number of visas issued.
The legislation, as Senator McCain explains, “Was a response to the estimated 10 million person skilled and unskilled labor shortage” that was estimated by 2010, and reflects a compromise between what was once viewed as the conflicting agendas of national security and immigration reform.
In contrast, S. 1438, the “Comprehensive Enforcement and Immigration Reform Act of 2005,” proposes improvements in border security and visa verification measures which include a Biometric entry-exit system, broader authority to detain and remove “dangerous and illegal aliens”, and federal custody of illegal aliens apprehended by state or local law enforcement.
Although the legislation grants the Secretary of Homeland Security the power to identify an individual as subject to detention and removal, Senator Kyl emphasized that “There is nothing in our bill that deports these illegal immigrants.”
Following the Senator’s testimony, a second panel of experts met to discuss their recommendations for immigration reform. Author and immigration lawyer, Gary Endelman, criticized the divisions created among families of immigrants and advocated for abolishing limits on preferences given to the migration of families’ of permanent citizens. Additionally, Endelman supported the removal of limits to the H-1B temporary work visa program and called for a change in the criteria for allocation of immigrant visas from country of birth to occupation.
Although the Senators disagreed on the nature of the immigration overhaul, they agreed to propose and enact legislation by the end of the year.
In the coming weeks NIAC will provide a more detailed analysis of the current immigration proposals.
Top Eight Reasons NOT to immigrate to Canada
8. Discriminatory and Dishonest Immigration System.
Immigration to Canada is based on a point system, obtained with your education, qualifications and job experience. Points are good enough for immigration, but in Canada, they are not good enough to get a job in your field. Amazing, how the credentials that qualify you to come to Canada are the same credentials that don't qualify you for your profession in Canada. The reason is, Canada only wants immigrants to do the labor jobs - pizza delivery, driving taxis, factory work etc.
7. Out Of Control Cost Of Living.
From rent, to utility bills, to shopping, to phone, internet and cable bills, to gas, to car insurance, to eating out, to basically anything you have to pay for or buy, the cost of living in Canada has become astronomical. Recent immigrants are astonished as to how expensive everything is. It is estimated that compared to most countries around the world, the cost of living in Canada is on average five times greater.
6. Health Care Disaster.
Practicing physicians in Canada are in a shortage, 1 in 4 Canadians cannot get a family doctor. Canadian doctors are leaving to move permanently to the United States. Statistics Canada and the Canadian Medical Association both have identified that for every 1 American doctor that moves to Canada, 19 (nineteen) Canadian doctors move to the United States! Doctors in Canada are overworked and underpaid, and there is a cap on their salaries.
5. Very High Taxes.
Yes, you have the GST, the PST, totaling 15%, on practically everything you purchase and many other taxes taken out of our weekly paycheck. You have to pay a whopping amount to the government, out of your hard earned salary, so that the government can turn around and give it to beer drinking, hockey watching welfare bums. Fair? It does not matter, it's Canada.
4. Money Hungry Government.
Canadian Embassies around the world lie to foreigners, painting this picture that Canada is Utopia, because they want foreigners to come to Canada. Why? Because foreigners bring money! So after being deceived, these foreigners come. They must bring with them at least $10,000. Canada has an immigration quota of 250,000 per year. So please do the math, 250,000 multiplied by $10,000 each equals a whopping 2.5 Billion dollars that Canada gains from immigrants every year.
3. No Culture.
Unlike almost every other country in the world, Canada has no culture. Actually American culture is what dominates Canada. When was the last time you had some 'Canadian' food? There are no Canadian traditions and no national identity. What does it even mean to call yourself a 'Canadian'. . .nothing really. People living in Canada, still identify themselves as to where they 'originally' came from.
2. Worst Weather.
Yes, Canada has the worst weather conditions of any country in the world. Freezing cold temperatures, snow, ice, hail, winds, storms etc From the Prairie provinces to the Maritimes, from the Territories to southern Ontario, the weather is so horrific and disgusting that many Canadians leave Canada simply because of this reason alone.
1. No Jobs.
Yes, coast to coast, there are no jobs. Immigrants are highly qualified (MD's, PhD's, Lawyers, Engineers etc.) but they are driving taxi cabs, delivering pizza's or working in factories. Even people with bachelors degrees from Canadian Universities cannot find jobs after graduation. This is the tragedy associated with immigration to Canada. I feel sorry for those immigrants who are stuck in Canada for the rest of their lives. It is indeed a very sad and hopeless future.
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Multiples Born to Older Moms Do Not Suffer Higher Risk of Complications
While many studies have found that single babies born older mothers are at increased risk for birth complications, a new study says that multiples born to older mothers do not face that same risk.
Researchers at the National Institute of Child Health and Human Development (NICHD) and the University of Kansas studied data from more than 147,000 twin pregnancies and more than 5000 triplet pregnancies. They found that twins born to older mothers were not more likely to experience birth complications and that triplets born to older mothers actually fared better than those born to younger mothers.
The researchers believe that the fact that many older mothers conceive through assisted reproductive technology (ART) may contribute to the trend. Multiples conceived through ART are less likely to be identical, and identical multiples are more likely to suffer complications at birth. Also, mothers who conceive via ART tend to be monitored more closely than are mothers who conceive multiples naturally.
The study appears in the September issue of Fertility and Sterility. (09-17-02)