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Determining if You Can Afford to Stay Home with Your Kids

One of the big questions many new parents are faced with has to do with deciding whether or not one of the parents should stay home with the child. Obviously, if you’re accustomed to living on dual incomes, the thought of giving up an income may sound like a daunting task. Even so, if you sit down and crunch the numbers, you may find that it might be more doable than you thought.

The True Cost of Working

When you think about it, your job not only provides income, but it likely creates some expenses as well. If you were to decide to continue working with the child, you’ll probably create additional expenses in caring for the child. On the other hand, if you were to stay home, you would also eliminate many work-related expenses. Some of the expenses you may have if you decided to continue working with a child:

  • Child care: Depending on the level of care you require, you’re looking at anywhere between $400 and $700 per month per child. It isn’t uncommon to spend upwards of $7,000 each year on full child care during the child’s early years.

  • Food and Beverage: While you can save money by taking your own lunch and drinks to work, most people end up grabbing a coffee or a lunch on the go while working. Even just $5 a day on lunch adds up to about $1,300 each year.

  • Transportation: This varies greatly depending on how far you have to commute and whether or not you have public transportation, but even if you spend just $25 each week for transportation costs (gasoline, bus, subway, etc) you might be spending another $1,300 each year just to get to and from your job.

  • Odds and Ends: If you’re in a profession that requires certain attire, you may need to spend money on clothes or dry cleaning. This can add another few hundred dollars a year. Your job may also require certain licenses, professional fees, or continuing education courses that could tack on additional expenses annually.

As you can see, there is more to that second income than meets the eye. Most people will think of the paycheck that comes with the job and assume that’s the bottom line, but there are many other factors to consider. While giving up that job may result in a loss of income, if you consider the expenses you will also give up, the end result may not be as painful as you had suspected.

The Non-Monetary Benefits

While all of this discussion about money is good, you have to think about the other benefits tied to staying home with your child. Money can’t replace the time spent with your children, and if the bonding aspect of parenting is important to you, this can factor in greatly when determining whether or not you can give up an income. Everyone is different and your priorities may lead towards one direction over the other, but don’t overlook the non-monetary issues when making this important decision.

The Bottom Line

There’s no right or wrong answer, and as you can see, it isn’t as straightforward as deciding whether or not you can live with one less paycheck in your pocket. Depending on the type of job you have, how many hours worked, and how much money you make, you may reach the conclusion that it’s impossible to be able to provide for your family if you give up this income. On the other hand, you may find that after factoring in the expenses related to working and the other benefits of staying home, you’re giving up a lot less than initially thought.

So, take your time and go over your options carefully. The decisions you make will significantly impact your family, so it’s important to take everything into consideration. And if you do find that you can afford to stay at home, you can find plenty of assistance at’s own Stay-at-Home Parents site.

By Jeremy Vohwinkle,

An Investment Guide

Stock Markets Fall - Corporate FDs Rise
May 30, 2009 at 10:19 pm

At a time when stock markets zigzag, what would be the right investment arena? Corporate FDs or equities?

THE sharp fall in the equity markets has changed a lot of things including India Inc's fund raising plans. This, in turn, has changed investment avenues for retail investors. Till about a year ago, the only way for retail investors to participate in a company's growth was to buy equities either in the secondary market or invest in primary issues (IPO) or rights issue.

However, the primary market option currently is almost closed with the virtual drying up of the IPO market. Bearish sentiments and lack of investors' confidence due to wild volatility, on the other hand, has decreased the participation of investors in the secondary market. In such a situation, India Inc is now approaching the potential investors through fixed deposit (FD) schemes.

In fact, FD schemes are not new to India Inc. Earlier, every major company had an FD department and it was considered to be one of the main sources of funding. However, this way of funding decayed slowly as it became easier for companies to raise funds through equity and quasi equity. Besides, equity has no direct servicing cost (except earning and dividends expectations of shareholders), where as interest on FDs is a fixed cost and that has to be paid in all circumstances.

The wheel has now turned a full circle and newspapers are now flooded with advertisements by corporate houses inviting public to entrust their savings with them. To make the deal juicer, most of them are offering interest rates that are significantly higher than bank deposits. But, how attractive are these corporate FD schemes? Do they score over bank deposits or other traditional sources of assured returns only because former offers greater returns? For many investors corporate FDs can be lucrative substitutes for bank deposits. They not only offer higher returns, but many of them also structured similar to a bank FD with facilities, such as premature withdrawal, cumulative accrual of interest, TDS (tax deduction at source) cut up to a certain limit (Rs 5,000) etc.

However, investors should know that bank deposits are insured up to a maximum of Rs 1 lakh per customer and the way banks are regulated in India, it is difficult for retail customers to lose their money.

In contrast, corporate deposits have no such insurance and the investor is solely at the mercy of the company and its financial fate. Given this, it makes sense to invest in corporate FDs that have high credit ratings and are known for their financial soundness and credible past performance. Though corporate FDs look riskier, they carry higher interest rates.

While most corporate FDs are currently offering pre-tax interest ranging from 7–12%, for 1-3 years tenure, interest rate offered by a bank is between 10.25% and 11% for a three-year period. For one year, banks are offering 8.5-9% and there is no TDS up to an interest income of Rs 10,000 a year.

So, is higher interest rate a tempting one to invest his money in corporate deposits? Or is equity investment in these companies still a preferred route? A comparison of the current dividend yields on the company's stock with post tax return on its FD will give an answer. The sharp fall in stock prices of most companies has led to a spike in the dividend yield, based on the dividend payout last year. Tata Motors, for instance, is available at a dividend yield of over 11% as compared post-tax FD return of 7.6%. Dividends are also tax-free in the hands of the investor. The only catch being that dividends are slave of earnings and they tend to rise and fall in line with profit growth. In the near future, market expects most companies to cut dividend payouts. However, as soon as profit growth resumes, dividends pay out will catch up and the stock prices also will begin to soar. This way, equity investors get the best of both the capital appreciation and cash flows in the form of annual dividends payouts.

But, if equity has its advantages, there are risks, too. The biggest shortcoming here is the market risk associated with equity investments. Equity is a risk capital and returns are a function of external macroeconomic environment.

FDs, on the other hand, are relatively riskfree and, in most cases, post-tax returns from FDs are much higher than the tax-free dividend yields. The risk here, however, is that of creditworthiness of a company. Meanwhile, fear of the company defaulting has become prominent after the Satyam fiasco. But, in such cases, default applies to both debt and equity investment.

Investors are thus advised to go for well known companies that have a strong and credible standing in the market. Unlike a bank FD, where high interest rates usually dominate the investment decision over the choice of bank, the integrity of the company should be given the highest priority in case of corporate FD. A few basis points should not matter, for the assurance that the capital is in safe hands.

Understanding UK Payment Protection Insurance

Understanding Payment Protection Insurance Cover in the UK

On Monday, Building Societies and Banks will no longer be allowed to sell payment protection insurance at the point of sale.
They will also be banned from selling lump sum upfront single premium policies. This article explains the principles of PPI and how best to purchase it given the recent legislation and changes in the UK economy.

If you have ever bought a new car or a large flat screen television the chances are you paid for it with some type of finance plan, credit card or credit facility, or loan. Apart from being offered a breakdown warranty, in the past you may well have been offered an insurance plan to cover the repayments of the credit should something terrible befall you. This is the basis of payment protection insurance or PPI as it is commonly known.

What does PPI cover?
Payment protection is widely available these days to cover all forms of credit or borrowing. Loan protection products are sold that either individually or collectively cover credit cards, bank loans, car finance and all other monthly payments and outgoings. Until recently you may well have been offered this type of cover when you took out the loan or credit card; however this was made illegal in 2009 after a long enquiry by the Competition Committee looking into the restrictive practices of the major high street banks and lenders. Consequently payment insurance premiums and plans have become a lot cheaper now that independent suppliers have entered the market.
If you own a house under a mortgage you can purchase what is known as Mortgage Payment Protection Insurance or MPPI. This type of plan though often cheaper, will only cover the monthly mortgage payments.
Other protection insurance products are available, the most common being those that cover your salary or income often known as Income Payment Protection Insurance or lifestyle cover. With these types of products you are not limited to agreed repayments and can spend the income benefits as you would your salary or wages.

What does PPI cover you against?
All payment protection products cover you against and will pay a monthly sum to protect your payments, in the event of you suffering from one or a combination of accident, sickness or unemployment.
It is possible to buy these as standalone covers, although accident cover is more often than not sold alongside sickness cover. Unemployment Insurance cover, which protects you against sudden redundancy or unemployment is often sold by itself but because of the nature of the risk, commands a much higher premium.

How long does protection insurance cover you for?
The length of time of the cover is dependent upon how long someone wants the benefits to be payable for in the event of a claim. This varies by insurance company and is often only for twelve months although some of the better more flexible providers offer cover for up to 24 months, at a premium. It should be noted that this type of insurance is viewed by the providing companies as an invaluable short term solution to life's difficulties and not the correct type of cover for long term illness or disability, for example.

Purchasing payment protection cover
With so many offerings in the market it is a worthwhile exercise to shop around for cover. Most independent suppliers have online applications that literally only take a few seconds to complete. You normally have to supply you age, and how much benefit you would like each month.
When buying you will need to decide how long you wish to wait after you become sick or unemployed, before you start to receive the monthly benefits. This is known as an excess period and you will normally be offered periods of 30, 60 or even 90 days. Obviously the longer you wait the cheaper the monthly premiums will be! Look out for companies offering back to day one cover which will pay you back to day one of your claim once the excess period has passed.
When comparing payment protection insurance plans it is necessary to find one that will cover all of your monthly outgoings. Many providers have different limits and it is important that you find one that will not leave you with a shortfall for repayments!
As with purchasing all types of insurance, but particularly with payment protection cover, it is very important that you check that you are you eligible for cover and not excluded under the policy conditions, which are often more rigorous than for other types of cover.

When comparing payment protection plans for Mortgage Payment Protection Insurance and Income Protection Insurance it is sensible to visit a large respectable, independent supplier such as PPI Insurer of the Year for advice and quotes. Burgesses offer a vast array of information and online quotes backed up by a useful helpline of experts.

The Original Article Source and more information about purchasing specialist insurance can be found at:

American Heart Association Emphasizes Link Between Diabetes And Heart Disease!

American Heart Association twitter this morning, “80% of sudden cardiac arrest victims collapse at home. Are you ready to save someone you love?” It provided a link to a CPR website.

This Twitter @HeartofDiabetes is all about education on the link between diabetes and heart disease. This is a subject that we have continually talked about, the fact that when a life insurance underwriter looks at obesity and/or type 2 diabetes, they know that without effective management and excellent control other health issues are likely to follow. It’s not like the only thing they have to weigh is the chance of a person with diabetes going into a diabetic coma.

It’s the combination of risk factors and collateral health issues that an underwriter has to weigh when they consider an application. Especially in the overweight population having type 2 diabetes puts them at risk of high blood pressure, stroke, coronary artery disease and kidney damage along with a host of issues that have a lower mortality risk. The key to avoiding the downhill slide into health issues that will change your life and can end your life is taking the situation seriously.

Education, compliance and control should be the mantra. Know about your diabetes. Know what it is, what makes it worse and what makes it better. Know how worse and better are measured. Educate yourself on diet and exercise programs. Learn about the direct correlation between obesity and diabetes. Learn what the hbA1c is and why it’s important to keep it in a controlled range.

Compliance is all about listening to your doctor and following recommendations and prescribed treatment. When you don’t feel like you’re getting the information you need from your doctor, finding a diabetes education forum or a professional diabetes educator to help you take control of your condition and your life.

The good news with life insurance is that a diagnosis of diabetes doesn’t knock you out of the running for competitive, affordable life insurance rates. Given good control and no other risk factors, standard or better rates are not uncommon. If you are over age 60 and diagnosed in the last 5 years you actually have a good shot at preferred plus rates with one of our companies.

Bottom line. Diabetes is a destructive disease if not taken seriously. The diagnosis is a wake up call that you should definitely not be hitting the snooze button on.

Post from: Ed Hinerman On Life Insurance

Debt instruments safer in volatile markets

Here I have tried to lists out some investment options that are relatively safer in volatile market conditions

The stock markets are on a downward trend from the beginning of this year. Volatility in the markets is also quite high. There are many factors that contribute to negative market sentiments. For example, a persistent high inflation rate (especially the core inflation rate that is driven by basic commodities), rising commodity prices in global markets, anticipated slowdown in the global economy etc.

Foreign investors were investing heavily in emerging markets. They are now taking out money, especially from emerging markets. Large foreign investors are bearish on global growth and expect the global economy to deteriorate. They believe that in the era of a global slowdown, emerging markets will under-perform their global peers. Foreign institutional investors (FII) have taken out around $5 billion from the domestic markets so far this year.

Since the stock markets are in a sideway movement and not doing very well, equity funds are also not delivering good returns. In fact, most of them delivered negative returns over the last six months and many investors lost their money in equities and equity-based funds. Global stock market analysts' valuations in the domestic markets were overstretched last year. This is why investors witnessed huge corrections this year. Some analysts feel the domestic markets will remain in a sideway movement in the short to medium term (next six months or so) perspective.

Here are some safer investment options in volatile market conditions:
  • Tax-saving options
Since the markets are quite volatile and risky for investments, investors can concentrate on completing their tax-saving limit under Section 80C and keep the option open for investments in the stock markets during the later part of year. There are various options available for investors. Provident fund is one. The primary feature of these instruments is to build a fund for long-term needs (retirement). Insurance is another. Investors can look at investing in life and medical insurance in the present time to fulfil their insurance needs. The primary feature of insurance is to provide risk cover to investors against any unforeseen future event.
  • Potential equities
Investors with moderate to high risk appetite and a long term investment horizon can look at investing in blue chip stocks of select sectors. Many blue chip stocks are trading at attractive valuations in the market. Investors can invest in these sectors based on a careful analysis.
  • Debt mutual funds
Debt mutual funds invest in safe instruments like corporate debt, money market instruments, call money etc. The main objective of debt funds is preservation of principal, accompanied by modest returns. Debt funds are ideal for investors who want to take very little risk, are uncertain about the interest rate scenario or who are uncertain about what they should do with their money in the short term.
  • Cash
Investors looking to invest in stock markets should keep some amount of liquidity at their disposal. The valuation of some stocks and sectors will become quite attractive if the market goes through another fall of 5-10 percent. Investors should identify a few stocks and watch them to make investments.

Bank deposits are good for short-term investors. Short term bank fixed deposits yield 6-7 percent returns. Nowadays, many banks offer funds sweep-in and sweep out facility where a balance beyond a certain limit automatically gets converted into a fixed deposit and banks pay fixed deposit interest on it. This type of arrangement can be an option for the short-term horizon.

5/29 Insurance Blog

Consider Repairers When Getting a Classic Car Insurance Quote Online
May 28, 2009 at 11:56 am

Dave Healey of our resident classic car insurance specialists panel has warned of the dangers of getting a classic car insurance quote online without taking into account who might be repairing your classic car if you have an accident or claim. Dave points out that not all car insurance companies are the same and you pay for what you get!

Does Your Car Require Specialist Car Insurance and Repair Services?
By Classic Car Insurance specialist Dave Healey

When choosing a car insurance policy it is wise to consider what is offered in the event of a claim. After all, you are only insuring the car to have the potential to make a claim and the cover is only as good as the insuring company's claims department.

Although price is most peoples consideration when purchasing car insurance, one of things you should not overlook is who is going to repair your car if it is damaged? Do you own a non-standard car? Surprisingly a large number of vehicles fall into categories that the majority of mainstream insurance companies do not want to cover!

Such examples that may struggle to obtain motor insurance at reasonable rates are owners of performance,prestige, expensive, luxury, foreign, sports, convertibles, modified, veteran, collectors and classic cars. More importantly if you are the owner, if something happens and you need to make a claim on your policy, it is important that your car gets fixed by specialist professionals, using the correct parts. More often than not these type of car repairs require unique tools that are only available through specialist engineers and motor repair shops.

So it is most important when comparing car insurance to also compare the services that a car insurer offers in the event of a claim, especially those regarding choice of repairer.

All specialist car insurers and many insurance companies will offer a choice of repairer - many others will not as they have existing arrangements with so called approved repairers.

Trouble arises when an insurance company insists on employing a particular firm to fix the car against the policyholder's wishes, and it is not uncommon for major disputes to arise at this point.

For example, the insured may have an expensive Italian sports car bought from an exclusive importer and specialist firm of dealers who added a number of accessories and or modifications to the car at the insured's request at the time of sale; the same firm may have performed all the routine servicing since the sale and the insured may genuinely feel that they 'know' his car better than anyone else could, and that only they, in consequence, should be entrusted to carry out the repairs.

If the repair work quoted in an estimate by the specialist firm is substantially higher than that expected from the approved repairer and the car insurance claims department consider that the approved repairers are capable of carrying out the work to the same standard as the specialists , then the only way out of this impasse is usually for the insurance company to suggest that the insured pays the difference!

Clearly then it is very important to understand what you are buying with your policy when it comes to claims and repairs. Specialist car insurance policies always offer unique claims repair services and if you own an unusual, expensive, classic car or performance motor, then it would be sensible to opt for a policy that includes these repair services to avoid the above situations. What might look like a cheap policy might turn into fools gold in the event of a claim!

Dave Healey is a specialist car insurance expert and UK classic car insurance journalist who writes regularly at the Car Insurance Blog and here at Insurance Blog.

You can read the original article and more from dave at :

5/29 Ed Hinerman On Life Insurance

You Might Have Dave Ramsey, But It Doesn't Mean You Have It Right!
May 28, 2009 at 7:01 pm

I will tread carefully with this since the last time I questioned Zander Insurance, well, frankly I kind of over stepped my point and pounded on them a bit. I publicly apologized and we all walked away feeling OK and deciding that while we both believe Dave Ramsey is right on the money, Zander does business a little differently than I do.

A friend pointed out to me that Zander’s website had a few errors on it. I looked at it and decided that was no big deal. On one page they quote rates for a company that no longer sells insurance. US Financial hasn’t written business in a few years and it was just their rate on a child rider so really, as I said, no big deal.

While I was there though I decided to dig a bit like we all do to each other’s websites (checking out the competition), and I ended up on their tobacco use page. I ran rates on myself as a smoker since Zander stated that “Many of our competitors simply treat all tobacco users the same eliminating any potential savings but we have companies that offer competitive preferred tobacco.” The best rate they showed was Transamerica at $6295.00 annually.

I then ran the exact same scenario on our website and found both Liberty Life ($5210.00) and Western Reserve Life ($5375.00), around $1000 a year less. Let me just state for the record that “Many of our competitors simply treat all tobacco users the same eliminating any potential savings, but we have companies that offer competitive preferred tobacco rates.” And these aren’t impossible to get fantasy quotes. Both of these companies have been kicking everyone’s rear end for some time in the preferred tobacco arena.

Bottom line. Zander is a fine agency and they made a case the last time we conversed that they don’t do business with some companies for administrative reasons. And I respect their decision. What I don’t respect is them indicating their competition is doing something bad when their accusation should be spoken into a mirror. Personally, administrative reasons or not, I’m thinking Dave would have a problem with the fact that Zander isn’t really offering people the best option for their hard earned dollar. Dave busts his rear getting those dollars freed up after all.

Just an aside. I am currently facilitating a Dave Ramsey Financial Peace University, which I’ve been through myself and highly recommend to everyone. Dave admits freely that he doesn’t sell insurance so his opinion isn’t biased and I agree with Dave’s philosophy on the best way to buy and use term insurance. I know I’ll get yelled at for this, but personally I think Dave has placed a little too much trust in Zander in the life insurance arena. So, holler away!

Post from: Ed Hinerman On Life Insurance

You Might Have Dave Ramsey, But It Doesn’t Mean You Have It Right!

CEO's Fly More On Their Own Now!
May 28, 2009 at 5:07 pm


While the words CEO and flying may cause a little angst among some, the truth is that CEO’s are flying privately more often and whether that is on a corporately owned aircraft, a chartered jet, or their personally owned airplane, it is generally more efficient and cost effective to the company.

Life insurance underwriting for the pilot in all three of those scenarios is all over the board, but really that’s true of almost any underwriting topic other than the common cold. But private aviation and how different companies view it is about as diverse as you can get. While one company might give a private pilot preferred plus rates, another company will have them pay a flat extra fee for aviation coverage. Corporate pilots and charter pilots get the same wide variance in offers from best rate class to companies that really don’t want to cover them at all.

With the exception of airline pilots, underwriting of pilots really comes down to five primary questions.

1. Age of the pilot
2. Pilot rating - Commercial, private (IFR/VFR), or student
3. Total hours as pilot in command
4. Hours flown annually
5. Type of aircraft

Optimally the best rate class would go to someone over 26, IFR, 250+ total hours, 26-250 hours annually flying a proven, certified plane.

The truth is that private, student and commercial pilots can get very competitive rates and in most cases have the tough part of life insurance already whipped because they fall into that rare category of people who get regular physicals, so they actually know what their health is and it’s almost always good.

Bottom line. With good health being a given, even pilots that don’t meet the optimal criteria above can still get life insurance without paying a flat extra charge.

Post from: Ed Hinerman On Life Insurance

CEO’s Fly More On Their Own Now!

5/29 Prajna Capital - An Investment Guide

Gold ETFs glow gets brighter
May 27, 2009 at 10:18 pm

Investors are slowly warming up to the idea of exchange traded gold schemes from mutual funds. This isn't surprising since they have given an impressive 20%-plus returns in the last one year. The uncertainties in the economic environment is another reason why investors are parking money in gold, as it has always been considered a hedge against uncertainty in troubled times.

Investor interest in gold ETFs is slowly picking up. I won't say there are huge inflows, but we have certainly seen incremental flows into the fund. In between, there was lull when gold prices peaked.

We are getting a lot of enquiries on gold ETFs. This is mainly because of excellent returns in the last one year, which is almost double than that of debt schemes. Also, people are not able to take a call on the stock market. They want to park their money in a safer place till they are confident about the future course of the market.

However, investors should be realistic about expectations on gold ETF returns, warn financial advisors. Most of the gains are because of the volatility in the (US) dollar rate. At one point, the dollar touched 52; in a single day there was a movement of Rs 1.25. During such times gold is expected to give good return. However, these kinds of returns are not sustainable. For that to happen, the dollar should crack by 15% or more. It will sure weaken but not that much. Another scenario is the US government devaluing the currency, which seems very unlikely. However, this doesn't mean investors should overlook gold as it will not give impressive returns in future.

According to financial advisors, gold should always be a part of every investor's portfolio. You can expect 10-15% returns from gold. But it is important to include gold in your portfolio because it's a great way to diversify your portfolio. It always hedge you against uncertainty in troubled times such as the current one. Gold gives stability to your portfolio and buying gold ETF is the best way to do it.

About Credit / Debt Management: How to Clean up Your Credit Report Credit / Debt Management
In the Spotlight | More Topics | |
from LaToya Irby
While credit card issuers figure out how to continue making money after the new credit card rules, it's more important than ever for you to have a good credit score. Getting good credit hinges on having a good credit report.

In the Spotlight
Remove Errors From Your Credit Report
You wouldn't imagine the bump you could see in your credit score just from removing inaccuracies from your credit report. Don't ignore mistakes and errors on your credit report, instead submit a credit report dispute to have them removed.

Send a Pay for Delete Letter
If you have collections or charged-off accounts on your credit report, offer to pay the account in exchange for having it deleted from your credit report. Many creditors will oblige because they realize they won't get anything if they don't.

Credit Repair Checklist
If you're having trouble figuring out exactly what to do for your credit, use this credit repair checklist to guide you. Remember that better credit takes time, so the sooner you clean up your credit report, the sooner you can enjoy the benefits of a higher credit score.

Best Moves in a Bad Economy
Save & Invest the Right Way
Find out how to beat a bear market, make smart choices, and keep your cool even when the economy is unpredictable.

5/28 Ed Hinerman On Life Insurance

New York Life Not Immune From Rate Changes!
May 27, 2009 at 7:49 pm

Just got back from a conference in California and am catching up on the latest news. Life insurance giant New York Life, AARP’s partner in crime with their term insurance and whole life products, doesn’t seem to be making enough soaking us old folks.

They just announced today that they are raising rates on their no lapse guarantee universal life. This is coming from a company that has always made it’s name synonymous with being above all the fray because they have so much money.

I love the way they work. Actually I don’t care how they work because I’m not one of them, but if I was an agent from NYL and was told that I could only have my quotes illustrated by the home office because they don’t want to release their rate increase, I’d be upset. But again, I’m not one so it doesn’t affect me.

In their memo it states to the agents, “Only illustrations provided by our sales team will have the appropriate pricing incorporated. Applicants will be required to sign an acknowledgment that they are aware of the additional charge.” That’s just weird.

Bottom line. Just like New York Life’s AARP rip off and their overpriced cash cow whole life, it now appears their universal life portfolio is heading for the underground shelter where no one can really tell what they are up to.

Post from: Ed Hinerman On Life Insurance

New York Life Not Immune From Rate Changes!

5/28 Prajna Capital - An Investment Guide

Go global. Is it the time to invest in Global Markets?
May 26, 2009 at 10:17 pm

Still one can bet on global funds as a means of portfolio diversification.

Coming after a week when financial giants have collapsed and the world looks on in confusion, it may seem strange to say that investors should still look towards investing in global funds. But financial advisors still believe that you should consider global funds as a means for portfolio diversification and gaining exposure to different asset classes, investment styles, sectors and so on. To make things easier, this article gives you the how and why of investing in global funds.

MORE Diversification / OPPORTUNITIES

Investors should view global funds as giving them the chance to participate in opportunities and themes that are not available in the country such as investing in gold mining or metal companies or those sectors which are highly regulated in India like oil and fertiliser and to benefit from the boom in these sectors. Global funds also help you make the most of the strengths and the growth characteristics of other countries, which are governed by different, factors and have different cycles. Geographical diversification thus helps you reduce risks and brings more consistent returns.


For those who are still raising their eyebrows in scepticism, and are concerned about the interlinked nature of economies, financial experts have a few explanations. In spite of an increasing integration of global markets, the correlation between India and other markets, whether developed or emerging remains low, somewhere between 0.3-0.5. This means that even a basic level of geographical diversification can add stability to an investor's portfolio. Also, while certain markets have corrected sharply, there are others that did not face correction to that extent, owing to large domestic consumption and a powerful investment cycle. However, investors need to remember there will always be some markets which are underperformers and others which are out performers and that they need to look at systematic investments into global equity funds to mitigate the impact of event risk.

Investing via the global fund route also gives you the added benefits of an experienced fund manager or a team of experts who follow the course of the market and handpick stocks that will help them achieve their investment objectives.


If you are convinced that global funds may be a good option for you, then the next step is to determine their mode of functioning. Many global funds invest directly into reputed stocks abroad. However, some others choose to invest via a fund-of fund route, where the money you invest in a global fund is further invested in a mutual fund, which then invests in stocks in a particular country. You need to watch out as this could make a slight difference to your expenses. In case the fund takes a fund-of-funds route, the investor does not have to pay a double entry load. However, there is a double layer of expense ratios, which may affect the returns in a fund-of-funds. As per regulations in India, mutual funds are subject to a cap of maximum of 2.5% on expenses. The same will apply in the case of global funds run from India.


While most investors interpret global to mean the US or Europe, global funds do not go by this definition. On the contrary, many of the funds today are looking at Asia and other emerging economies as well, which show good potential for growth or have some inherent strengths or natural resources. While it is crucial to look at the track record of the fund house and to determine whether its investment objectives are on the same track as yours, it is also imperative that you know a little more about the economy that you are investing in.

Investors need to believe and back the theme that they are investing in by dedicating the required time for the investments to perform. Hence, proper due diligence by the investor in terms of a feasibility analysis of the economies being invested in is critical. The other factors that could aid you in your decision are liquidity, transaction costs and risk-return ratios of the fund.


Another thing you need to keep in mind is that global funds do not always invest entirely in global stocks. On the contrary, you will find that many of the global funds in the market are seen to invest about 65% in the domestic market and allocate only the remaining 35% to global investments. "With 65% in Indian equities, investors enjoy the prevailing tax benefit of long term capital gains applicable to all Indian equity funds. There are also other funds that invest 100% in global stocks and ultimately it is up to you to decide what suits your investment plans. However, experts recommend that investing in global stocks should only be undertaken after one has suitable exposure in domestic markets.


You should, however, not neglect the risks involved with investing abroad. The performance of global funds can easily be influenced by any political, economic and regulatory developments in the country of investments. Moreover, there is always the risk associated with sudden rises and dips in the exchange rate. However, currency delivers only a small component of a fund's performance.

5/28 InsWeb's Insurance Blog | Car Insurance, Home Insurance, Life Insurance, Personal Finance

If Your Dog Bites the Mailman, You'd Better Have Home Insurance
May 27, 2009 at 10:24 am

No animal loves the warmer months more than a playful dog. Leisurely walks around the neighborhood, visits to the park, playing with the sprinkler in the front yard--they're all a blast for our four-legged friends.

But man's best friend isn't always--well--friendly, and if your dog bites someone and you're lacking adequate home insurance coverage, you'll be left footing the bill for damages beyond your policy limit.

Over 4.7 million people are bitten by dogs in the U.S. each year, causing a whole heck of a lot of financial losses for home insurance companies. In fact, dog bites cost home insurers over $300 million in 2005, and account for over one-third of all home insurance liability claims.


Nobody knows ferocious dogs better than the mailman. When a dog chases the mailman out of the yard, everyone has a good laugh. "Rover is such a goof!" everyone chuckles. But a week later when Rover gets a good jump and sinks his teeth deep into the mailman's backside, the situation isn't funny anymore--especially when you're the one held responsible for the damages. That's why it's crucial that dog owners make certain they keep an adequate level of home liability coverage.

Hoping to stem their tremendous losses, some home insurance companies have banned particularly aggressive dog breeds from coverage. If your dog's breed is a poodle or a Chihuahua, your home insurance company probably won't bat an eye. But a pit bull, Rottweiler or other "blacklisted" dog breed could cause you to be denied coverage altogether.

If you're having trouble finding affordable home insurance coverage because of your dog, there's another option: you can ask your insurer to exclude your dog, in which case you'll be financially responsible for any damage he causes. But that's a last resort, and it may be in your best interest to shop around for a home insurance policy that covers all your needs.

Whatever the situation, keep your dog on a leash while outside enjoying the warm spring air. Otherwise, you may end up pleading Rover's case on the next episode of Judge Judy.

About Retirement Planning: Estate taxes and retirement Retirement Planning
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from Michael Rubin
Say you get divorced and, a while later, remarry another person. Being the responsible adult that you are, you update your will, leaving everything to your new spouse. You never think to review your old 401(k) beneficiary designation which still has your ex's name on it. Where does your 401(k) money go when you die? Not to your new spouse - the beneficiary designation overrides what your will says. That's why estate planning is important - even if you don't have a taxable estate.

In the Spotlight
Estate taxes and retirement
Although you should consider estate planning long before you enter retirement, many people understandably revisit the potentially complex issues upon leaving the workforce. Having a coordinated approach, especially more

Vesting schedules matter
You should never turn down the free money an employer matching program provides. You've probably heard that before, likely repeatedly. While it's quite easy to make such a mistake, more

Higher taxes and your retirement
While Benjamin Franklin said "In this world nothing is certain but death and taxes," Will Rogers took it a step further when he noted that "The only difference between more

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Kobrin Ememo - Life insurance & taxes after age 100

Life Insurance Consumer Tips
by Steve Kobrin, LUTCF

Life insurance & taxes after age 100
The Internal Revenue Service is reviewing its tax code in light of the upgrade to the life insurance industries mortality tables.

The IRS has recognized that the 2001 Commissioners Standard Ordinary (CSO) extend mortality to age 121. This change is significant because until this point, the Internal Revenue Code has followed rules which assume that cash-value life insurance policies will mature when the insured attains an age of 95 to 100. The IRS has proposed to provide a safe harbor for that cash after age 100 and is seeking comments to this proposal.

May You Live To 121

The prospect of living past 100 can be scary to many people. They envision a life of infirmity and misery. However, many men and women enjoy an extremely high standard of life that can even include adventure. They work and can be extremely productive.

Listed below are news items about people in their 80's, 90's, and 100's. We can all be encouraged by them and remain optimistic about our future.

Yoga's granny swami

At 100, she's still a key aide to lawmakers
Hundreds honor assistant sergeant-at-arms at Nebraska's Capitol

90-year-old getting his pilot's license

Man, 84, fights off carjackers with kicks

World's Oldest Person Turns 115,,20270375,00.html?xid=rss-topheadlines

About Personal Insurance: Test Your Skills: Take the Written Drivers Test Online and Let Me Know How You Did Personal Insurance

from Bobbie Sage

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Test Your Skills: Take the Written Drivers Test Online and Let Me Know How You Did
So, you think you are a good driver? Well, do you really think you could pass the written drivers test? The only time most of us have more

Graduate Insurance Anyone?
Is there such a thing as graduate insurance? And if so, what would graduate insurance cover? Well, there may not be a specific type of graduate insurance more

Weekend Insurance Tip: Know About Insurance Emergency Roadside Service
When you get your auto insurance, you are usually asked if you would like to add emergency roadside service. Since the cost for emergency roadside service coverage is minimal, more

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About Taxes: Working as an Independent Contractor Taxes
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from William Perez
Some people are working in an independent capacity, sometimes because contract work is the only work that can be found. These "necessity entrepreneurs," as UCSC economist Fairlie calls them, have a much different tax situation than regular employees. This week we'll take a look at how contractors are taxed, and what they can do to keep their tax bill lower.

In the Spotlight
Working as a Contractor
The most important thing contractors should understand is that two separate federal taxes will be imposed on their income, and how to keep both taxes as low as possible.

Paying Estimated Taxes
Contractors won't have any taxes withheld by their clients. That means contractors should set enough money aside and start making estimated tax payments. Figuring out how much estimated tax to pay can sometimes be as complicated, but a simple spreadsheet updated regularly can help you stay on top of your tax bill.

Should You Incorporate?
New contractors often wonder if they need to establish a formal business structure, a process called incorporating a business. Strictly speaking, you don't need to incorporate. There are pros and cons of each type of business structure, and you'll want to make sure the structure you choose meets your needs.

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Global pensions lose $5 trillion in 2008

GLOBAL pension fund assets in the 11 major pension markets fell by $5 trillion in 2008 hit by volatile markets, a Watson Wyatt report said on Monday. The study said that over 2008, global pension assets fell to $20 trillion from $25 trillion, a fall of 19% which took assets below 2005 levels.
Another reason for the decrease was lower government bond yields, which pushed pension liabilities further up. Pension schemes calculate their liabilities against AA-rated corporate bond yields — if yields fall, liabilities rise and vice versa.

Watson Wyatt said it had selected government bond yields to facilitate liability comparisons across the 11 countries. All countries in 2008 saw significant negative growth in pension assets, the study noted, except for Germany, which was protected by its high allocation to bonds.

Despite losing market share in the past 10 years the United States, Japan and the United Kingdom remained the largest pension markets in the world, accounting for 61%, 13% and 9% respectively of total pension global fund assets.

Australia emerged as the fastest-growing market and the country with the highest proportion of defined-contribution pension vehicles. Assets invested in defined-contribution pension schemes, account for 45 percent of global pension assets, up from 30 percent in 1998. Pension schemes also changed the way they invest their funds in the five years to 2008.

In the seven most-developed pension markets, which include the United Kingdom, the Netherlands and the United States, equity allocations fell to 42 percent from 51 percent in the five years to 2008, having reached a high of 60% in 1998. During the same period bond allocations increased to 40 percent from 36%. Alternative investments allocations like real estate, extent hedge funds, private equity and commodities, grew to 17% from 12%.

The pensions system is being tested on every level. Most notable in 2008 were the impacts on it of credit and collateral risk as well as greater issues around liquidity and volatility.

Fund Fall

  • All countries in 2008 saw significant negative growth in pension assets except for Germany
  • Over 2008, global pension assets fell to $20 trillion from $25 trillion, a fall of 19% which took assets below 2005 levels
  • Apart from market volatility, another reason for the decrease was lower government bond yields, which pushed pension liabilities further up
  • Assets invested in defined-contribution pension schemes, account for 45 percent of global pension assets, up from 30 percent in 1998
  • Alternative investment allocations like real estate, extent hedge funds, private equity and commodities, grew to 17% from 12%
Source from Here

3 Days to an Accident-Free Home: Home Accident Anytime-Cleaning Project #3
Home Accident Anytime-Cleaning Project #3

Bobbie Sage from Bobbie Sage

Physical hazards in the home are also a large part of emergency room visits and insurance dollars that are greatly preventable by a small amount of prevention efforts. Take some time to do this Physical Hazards Home Accident Anytime-Cleaning Project to make your home safer: Have a place for everything! Toys, papers, roller skates...whatever is usually left on the floor after coming in the door or just normal daily life. Keeping a box or bin for papers and toys in the living area will be a quick and easy way to keep things off the floor. Also, keep a storage area by the doors so when you have something in your hand it can go in the storage area instead of the floor until you can get around to putting it where it really belongs.

  • Liquid spills need to be cleaned up immediately. In the time it takes to go to another room to get a towel or mop to clean up a spill can cause an accident. Keep towels and mops nearby in areas where liquids may spill. Also, keep some rugs around the dog's water bowl to automatically mop up water if unknown spill happens.

  • Keep the lights on! Any areas that are dimly lit need more light to prevent falls and trips. Even at night, put up a battery operated sticky light in dimly lit halls and bathrooms.

  • Get a step ladder for the kitchen. I am guilty of this one! Using a chair to reach high things or for kids to get up to the counter is not safe. Chairs are made to keep their balance while sitting as opposed to standing or kneeling. Getting a special step ladder for the kitchen at your local hardware store will do the job and can fold up easily in a pantry after use.

  • Stairs: Check the boards frequently to make sure they are not in need of repair. Also, have a hand rail by the stairs and set rules for proper use such as no running or playing up and down the staircase.

  • Outside: Lawn Tractors are for adults, not children. Not even as a ride. Supervise children always outside on playground equipment and NEVER leave children around any water alone, whether it is a patio pond, mud puddle after a heavy rain or a swimming pool.

  • If guns are kept in the house, keep them unloaded and locked away in a safe. A safer option would be to keep firearms at a shooting range instead of the home.

  • Electrical outlets should be checked regularly. Make sure they are working properly, not showing any cords inside the wall, and no more than 2 plugs in an outlet. Also, check cords going into the outlets for broken or frayed wires. Get outlet covers for outlets not in use.

  • Do not use any appliance near water or anywhere that water can even splash out on an electrical appliance.

  • If mats or rugs need to be used anywhere in the home use non-slip mats or buy a non-slip backing to put under your rugs and mats.

    Congratulations! Your e-course is done. I hope you have a better understanding of how being accident free in your home is easily preventable and is better for your health and insurance costs!

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