Receive FinancialRx Alert by email FREE. Send your e-address to FinancialRx@TheInsidersGuides.com. NEW Blog entry: “Every $100 you invest becomes $10,000 to spend later” at YourUnbiasedAdvisor.blogspot.com/ Terry finds $4,584 Rates on 15-year mortgages dropped to 4.95 percent this week, down from 5.21 percent last week. Terry was paying $1549 on a 30-year mortgage of almost $150,000. HSBC offered 4.75% with $750 fees and 0 points. This lowered the mortgage payment to $1167 per month--$382 less. Terry will invest this amount for 15 years and have an extra $200,000 for retirement. Move mutual funds and save $5,200 a year John and Shirley of VT did not know why their mutual fund Eaton Vance National Municipals B was doing so poorly. They compared their fund using a calculator in our Guide and discovered they were paying 1.46% instead of 0.17% for the same holdings at another firm. That difference amounts to 1.29% of their account, nearly 5,200 a year. They moved their portfolio immediately. Over their retirement, that could mean $100,000 for their kids. Use our mutual funds guide to save. Todd saved $465 a year on his life insurance! After reading our Guide, Todd found a $500,000 policy costing $ 200 a year for 10 years. 40 year old Todd is healthy. He had just bought a policy for $665 a year. In addition, his new carrier gave Todd a bonus: If his wife applies for a policy at the same time, they may each be eligible to receive an annual common billing discount equal to $30 per policy per year. That’s another 30% off Todd’s cost. Todd only needs coverage until his kids are grown. He will cancel his other policy, get a refund and invest the $4,650 difference to provide $136,000 for long term care costs should he or she need them in 30 years. Frank saved $5,000 on his annuity Our member Frank was offered an annuity by his broker but checked our Guide before buying. The broker talked about “L shares” which Frank had never heard of. Good thing Frank checked it out. His broker said L shares have a shorter surrender period, which sounded good. Most annuities have 7 years of charges if you want to cancel your annuity. By the way, most contracts pay commissions of 5% to 5.25% of your deposit. With an ‘L,’ you also pay 1% per year for life. This makes them more popular with sellers since the firm gets 5% and at least another 5% instead of the typical 5% only. If the broker leaves, the firm collects the commissions for years. Frank saved $2,500 plus $500+ a year on his $50,000 annuity by buying direct. Buy auto insurance online—save $50 extra Member Bob D. of New Jersey asked about an offer to buy and sign the application online from unitrindirect.com/. Unitrin Direct's Esignature discount is automatically deducted from the car insurance rate when you get a free, no obligation online quote by going to the "Get A Quote" box at the Web site and typing in their zip code. The auto insurance company offers another savings of $25 at the first policy renewal. Thanks for the tip Bob. Bob used our Guide to ask for every discount and policy benefit he qualified for. BEWARE: long-term care insurance READ this article http://www.nytimes.com/2007/03/26/business/26care.html?_r=1&hp&oref=slogin before you sign up. The complaint rates for Conseco, Bankers Life and Penn Treaty are exceptional! Summary: “The bottom line is that insurance companies make money when they don’t pay claims,” said Mary Beth Senkewicz, who resigned last year as a senior executive at the National Association of Insurance Commissioners. “They’ll do anything to avoid paying, because if they wait long enough, they know the policyholders will die.” See our Guide for alternatives. Fran of California saved $238,000 on her 401k fund! Fran had been saving over 10% of her salary in her employer’s pension fund. She read that most employers’ plans overcharge her fund in order to pay the money manager, the bookkeeper for participants and the employer’s broker. She asked her HR person for the cost of the funds available. She compared them to low-cost provider Vanguard. Most were 2% more than a comparable Vanguard fund. She switched funds she was in to the least expensive market index fund and international index fund. Now she pays 0.5% and 0.7% for her funds each year. She calculates this will provide an extra $238,000 in the next 15 years when she retires. Members track investments quarterly—the secret to wealth: buy “assets that grow by themselves” and leave them alone!! Because most members have the majority of their wealth in retirement plans at work (most contribute the max allowed), they don’t really follow the market or read the financial press. They only have one goal: maximize their nest egg over the long term. They have decided that they want to earn 10-12% a year in index funds so they don’t need to move their money around. They have the family agree on the goals—monthly contributions go to retirement, college, and other goals automatically. There is no debate about how much to send each month. They pay their mortgage and live on what is left. Credit cards are for convenience not a loan. A quarterly statement from each mutual fund/broker is reviewed and filed in a binder of important papers. Top performers for the long term! Vanguard Primecap--13.6% over 20 years--#1 in Large company growth stock funds. Vanguard Small Cap Index fund--9.7% over 20 years--#9 in Small and midsize blend funds. Vanguard STAR--10.2% over 20 years--#10 in Balanced stock and bond funds. Vanguard International Value--10% over 20 years--#3 in Diversified international funds. Vanguard Health--17.4% over 20 years--#1 in Sector funds. Vanguard Energy--16.4% over 20 years--#2 in Sector funds. Vehicle insurance costs $1,470 less by phone/internet! Progressive, like other insurers, sells through brokers and direct by phone/internet. You can save by choosing to go direct. Our Guide shows you how to pick only the options you need and save. We show you examples of the actual rates for both. The difference can be $1,470 or more in some zip codes. Life insurance costs $1,250 less by phone/internet! Small but well-capitalized insurers charge $185 per year for a male, preferred health, age 39 for $500,000 10-year term if you buy by phone or internet. The agent-sold equivalent plans cost $310 or more. That’s $125 less or $1,250 over 10 years—Just by applying yourself! These insurers don’t have high overhead—no local offices. Your beneficiary gets the same $500,000 check. You just pay less using our Guide: Pete saves 45% on vehicle insurance—Wealth Reserve may increase by $576,455. Our member Pete, Plainfield, NJ saves $1065 a year. He and his wife were with Fireman’s Fund paying $2329 for a SUV and car. He shopped and found Amica. Now he pays $1264. It’s the same coverage—and the service is better. Pete opened a Roth IRA and deposits the savings each year. By retirement, he will have an extra $576,455. Not bad for one lunch hour's time. Pete said, “Thanks. I am going to shop for life insurance next.” New Jersey drivers may save with new insurer Blue star insurance has designed a low-cost flexible policy to cover your basic needs for coverage. Use the internet http://bluestarcarinsurance.com/ or find a local agent at http://www.proinsureco.com/Contact_Agent.asp. Texas and Colorado drivers to see premium cut Progressive plans further rate cuts, including some in Texas and Colorado , "in the next few months" but not to the extent of earlier reductions. You may be loosing $500 a year by not shopping for a better price. Get all the discounts in our Guide. Progressive gives discount for LoJack anti-theft equipment Drivers can obtain a 20% discount on their premium and substantial savings on the device. See our Guide for all the discounts. Use a tax-FREE account to boost the amount you actually can spend. (Kiplinger slide show: Top 10 mutual funds by type and time-frame.) Vanguard provides winners for a successful diversified portfolio for life. There are 8,000 funds. These have weathered the storms. 25 Vanguard funds are Forbes Best Buy 1/3 of all funds on the list are Vanguard funds due to their consistent returns and low cost. www.Forbes.com New Jersey drivers-- A new insurer, 21st Century, claims to be able to provide a policy for less—21% less—than your current premium. Use our Guide to take advantage of the discounts that agents never mention: Michigan and Oregon drivers save up to 25%. Progressive offers a discount on coverage for drivers who drive less. Progressive recognizes that not all drivers commute and thus do not pose the same risk as those who do. The program is called TripSense at Progressive.com. Our Insider recommends other ways to cut premiums by buying only the coverage you need. Use our Guide to shop every 2 years: Maryland’s 529 picked Best by Morningstar. By eliminating its enrollment fee and cutting its program-management fee last year to only 0.28%, Maryland's College Investment Plan has been selected as one of the best 529 college savings plans by Morningstar Inc. The minimum amount required to open an account is $250, or you can contribute as little as $25 with automatic monthly contributions. The Worst list included Alabama's Higher Education 529 Fund and Nebraska's AIM College Savings Plan. Other plans selected as the worst by Morningstar include West Virginia's Cornerstone SMART529 and Leaders SMART529 and Missouri's MOST 529 Advisor. Get all the facts with our Guide: Top mutual funds fail to be top in 2006-- Standard & Poor’s latest mutual fund persistence scorecard, which measures the consistency of top mutual funds, showed that in 2006 “very few” funds consistently managed to repeat top-half or top-quartile performance. Our member Bill’s portfolio had a 5-year annual return of 13.66% as of 12/31/06. See how members use index funds FREE: Auto rates drop again-- The Auto Insurance Pricing Report shows a national decline in premiums of 5.7% or approximately $116 in 2006. That average of $116 means you could overpay by over $1000 in ten years if you have more than 1 vehicle and they are new. Decreases were seen in Minnesota, Pennsylvania and California, while Delaware, Rhode Island and North Carolina saw increases last year. The states with the highest rates are Louisiana, and New Jersey - even though the report shows that the premiums have been getting lower in those states. Our Guide pays for itself with insider ‘tips’ that save you money: Prepaid Burial policies are NOT prepaid AARP Bulletin 3/7 reports some funeral homes may not honor your “policy” because they claim their trust funds are gone. Previous owners may have “mismanaged” the money. State laws vary on your rights. If you can get your money back now, put it in a stock mutual fund so your executor can pay the costs from your will. BEWARE ID theft AFTER loved one passes The creeps are out stealing your identity after you die. They use your obituary information to obtain new SS cards and checking accounts and credit cards. New cars and vacations are the reward. In your final requests, ask your lawyer to send death certs to all credit bureaus. Florida passes law to lower homeowner’s bill-- A policyholder who paid a $2,200 premium last year would have paid $3,540 after two scheduled rate hikes in January and March of this year had the measure not passed, according to information provided by the governor's office. With the new law, policyholders will pay $1,900, the governor's office said. Mortgage points don’t always save money-- Paying points (1%) to lower your interest rate sounds good but a recent study shows that most people don’t keep the mortgage long enough for lower payments to offset the higher up front expense. The average homeowner paid off the mortgage about three years before reaching the break-even point. Only 1.4% of borrowers kept their loans long enough to make paying points worthwhile. People refinance for many reasons. On a refinance, points paid in cash are deductible but the deduction must be spread evenly over the term. On a purchase transaction, points paid in cash are fully deductible in the year the loan is closed. The study also found that borrowers who declined to pay points almost always made the right decision. Only 1.5% of them would have saved money by paying points. Use our Mortgage Guide to save money on closing costs: Consumer-driven health care not popular-- Americans with consumer-driven health plans are less satisfied with their health care than those with more-comprehensive coverage, according to a study released last month by the Employee Benefit Research Institute and The Commonwealth Fund. Use our Guide to find coverage: Ohioans get paid to diet-- Medical Mutual of Ohio will send $150 to plan members who participate in Weight Watchers weight management sessions for at least 36 weeks. Keep tabs on your auto accident repair-- Esurance.com, an internet-enabled insurer, offers customers the ability to watch the progress of their vehicle’s repair anytime. The AutoWatch.com system posts pictures and milestones when customers use recommended repair shops. For other ways to make sure your repairs are done well, use our Guide: Some annuities lock up your money-- Minnesota alleges that Allianz, a large annuity seller, is selling "unsuitable" annuities to people over age 70. Equity-indexed annuities are the main target. MN alleges that Allianz did not adequately disclose that annuity investments could be tied up for 15 years with hefty early withdrawal penalties, failed to properly supervise annuity sales and paid agents overly lucrative commissions. MN gave an example at the press conference: A 73-year-old man who had invested $40,000 in an Allianz annuity had to pay a $6,000 surrender penalty to withdraw money for medical bills. Look at the alternatives with our Guide: Grandparents become targets-- Anyone who must begin taking distributions from their retirement funds at age 70 is the target of the industry selling 529 college funds through advisors, according to some observers. Advisors can continue to “manage” the money. Emotional appeals are used first. Then advisors promise tax and estate benefits for the gifts. Consider all alternatives with our Wealth Transfer Guide: Health care savings tips-- AARP has tips at http://www.aarpmagazine.org/health/affordable_health_care.html Your insurance score is now for sale-- Insurers use your credit history to forecast if you will file a claim. Insurers think low scores mean more claims. A court will decide if the use is legal. You can obtain the scores at http://www.truecredit.com/insurance. It may be cheaper to make sure your report has no errors by obtaining a free copy first at https://www.annualcreditreport.com/cra/index.jsp. Our Banking Guide shows you how to fix errors: State Farm changed tactics—denies Katrina claims-- A U.S. District Court jury awarded one policyholder $2.5 million in punitive damages after the judge determined State Farm had failed to investigate their claim and determine what it owed for wind damage. The state investigation has centered on whether State Farm minimized or denied claims without meeting its obligation to investigate the cause of loss. See www.katrinaclaimdenial.com. An employee testified that State Farm cancelled requests for reports on damage to homes. Instead it just denied claims. Apparently State Farm never saw The Rainmaker movie. Our Homeowner’s Guide explains how to fight a claim denial: Young people may have lower tax rate now than in retirement-- If you are just starting a job that offers 401k retirement savings plans, you may be better off placing your investments in a ROTH IRA if there are no matching funds from your employer. Your tax rate is low now. It may be higher even in retirement when you will have to pay the income tax on the gains in your 401k. All gains will be FREE when you retire. Do to the changes in Social Security and the economic world, your income tax rate may be higher then. It is easy to start a ROTH IRA with our FREE Guide: Households with assets over $1million got best Bush tax deals—Here are more!! New tax credits and deductions reminders (this is not tax advice)-- You may have to pay the AMT if you have a large number of personal exemptions, a large sum of state and local taxes, itemized deductions, deductible medical expenses, stock options and large capital gains. Energy conservation credit of $2,000, $4,000 in college bills (line 35), $250 teacher supplies (line 23), ''sales tax'' on line 5 of Sch A, $3400 hybrid vehicle credit, $60 phone tax, photo-proof charity gifts. Some credits are not on the IRS forms. Don’t give your IRS a loan this year-- About 70% of all filers get tax refunds and the average refund will be around $2,200. This means you may have lost $ 330 this year in investment earnings. If you had increased your W4 exemption number last year, you could have had $210 a month invested in your Wealth Reserve. Over time, that may provide $ 744,000 to supplement your retirement. Start today with our FREE Guide: Time to save-- It is time to shop for new rates on financial services. Rates fell on life and vehicle insurance, college savings plans, mutual fund fees, 401k expense fees, mortgages, diamonds (BlueNile.com), and savings vehicles. Check beneficiary on policies, accounts, legal entities and documents. Start your Dream-maker account today FREE: LTC for federal employees is less than success-- After 5 years of offering long term care insurance, there are fewer claims and policies than expected, according to a new study. Another annuity scheme?-- Some companies are buying the long-term income stream of an annuity from grandparents in order to raise cash to pay for college. Some see this as an alternative to taking out a loan or borrowing against home equity lines. For some grandparents, this makes sense as a gift for the grandchild and a way to eliminate unneeded assets. However, the company buying the stream can price in a huge profit in the form of returns greater that 15% on each transaction. Check alternative gifting to the university with our Wealth Transfer Guide: Drivers with a poor record-- Allstate, a carrier that had shied away from insuring accident-prone drivers in years past, now has policies for drivers with spotty records. CEO Liddy said that Allstate's auto policies were not always the cheapest, but it was winning business through customer service. If you know a driver with a poor record, you can suggest they try Allstate. Give them our Vehicle Insurance Guide to buy only what they need and save up to $600 a year. By keeping your car for 15 years, or 225,000 miles of driving, you could save nearly $31,000, according to Consumer Reports magazine. That's compared to the cost of buying an identical model every five years, which is roughly the rate at which most car owners trade in their vehicles. The magazine found 6,769 readers who had logged more than 200,000 miles on their cars. Their cars included a 1990 Lexus LS400 with 332,000 miles and a 1994 Ford Ranger pick-up that had gone 488,000 miles. Members shop for the most reliable used luxury. Your money doubles every 6 years-- The stock market has returned over 12% average total return since 1950. The oldest market index fund just turned 30 years old. Its average return is 12.23 since 8/31/1976 . If you had invested $2,000 a year or $60,000 total, you would have over $600,000 today. This asset doubles about every 6 years. In another 6 years, it may be $1.2 million. You don’t have to do anything to make it grow. Buy “assets that grow by themselves.” See our FREE Guide. Market index fund up 15.54% in 2006-- If you are paying a commission and annual fees of more than 0.18% and earning less than 12% over the long term, you are losing money. Members who used Modern Portfolio Theory to pick funds earned 13.24% annually over the last 5 years with less risk. Our member Bill’s portfolio had a return of 13.24% for each of the last 5 years of 12/31/06. See our FREE Guide on how Bill and other members set up their portfolios. New member saved $570-- Betty, a new member acted on the discounts in our Vehicle Insurance Guide and saved $570 on her car insurance. She liked the FREE Guide’s examples of investing and opened a Roth IRA. She has her bank send the mutual fund $100 a month. With compounding, she will be adding over $100,000 to her retirement pension. She knows she will need to have more in 20 years since her pension does not keep pace with inflation. Take advantage of all the discounts listed in our Guide: Virginia drivers save-- Farmers Insurance is offering up to 40% off when you have both homeowners and auto with them. This may be the time to shop with our Guides: Most credit reports are wrong--Fix yours before you need it! Many studies show most reports are wrong. Fix it before you change insurance or buy a car, home, or a college loan. Otherwise, so you won’t receive the lowest rate. Insurers consider credit scores very important in your rate. Disputed information on your credit report can be changed with a letter. See the instructions at http://www.ftc.gov/bcp/conline/pubs/credit/repair.htm. See our Guides to save on the purchases: Tax-Advantaged investing-- 401(k) plans allow you to sock away up to $15,500 this year, plus up to an additional $5,000 if you're 50 or older. Roth IRA contributions limits are $4,000 this year, plus another $1,000 if you're 50 or older. Usually it is best to invest enough in the 401k to receive the free employer matching funds, if offered. Members who invest 10% of their net income have always been happy they did. See our Wealth Reserve Guide. Gift of a lifetime-- This year, do something different on their birthday: Give the Gift of a lifetime. Start your child or grandchild on the path to financial freedom—establish their Wealth Reserve. This insures them of a lifetime foundation for living. It establishes a path for their investing. Begin with as little as $50. See our FREE Guide. Safe rides-- Subaru was a big winner with this year's Insurance Institute for Highway Safety (IIHS) awards, the 2007 Subaru Legacy, Forester and Tribeca all earned the TOP SAFETY PICK designation. http://www.iihs.org/news/rss/pr112106.html 401K expenses killing your retirement compounding-- More employers are being sued for providing poor investment choices. Why don't employers shop around for better deals? Maybe because their own money is not at stake. The company may pick up some recordkeeping costs, but the fees on the underlying funds are almost always borne by the workers. "Employers have a legal duty to oversee 401(k)s with the same care they do traditional pensions, but the incentive isn't there because employees bear the brunt of the costs," says Jerome Schlichter, whose firm, Schlichter, Bogard & Denton of St. Louis, is pushing the spate of recent suits. 401K documents make it impossible to find the total cost of investment alternatives. Pick a money management firm owned by its participants. See which ones in our Mutual Funds Guide. New Jersey drivers save-- If you commute to work, Skylands Insurance njsi.com/ offers an extra 10% off your vehicle coverage. Use our Guide to decide what coverages you need. Don’t buy more than you need. Savings accumulate over time. If you are a safe driver, you can save over $6,000 in 10 years. Vehicle Guide. Indiana drivers save-- Countrywide Mortgage Bank is offering discounts to current Countrywide customers that could potentially save them as much as 23% off of regular rates. You can obtain an auto insurance quote from Countrywide Insurance Services, Inc. by calling a licensed auto insurance agent at (800) 669-6656. Use our Guide to decide what coverages and other discounts to request. Massachusettes drivers save-- Plymouth Rock Assurance https://www.prac.com/ offers a 10% discount on their rates to members of the WBUR radio station in Mass. You may call (800) 521-2163 for more information about the WBUR discount program. Use our Guide to decide what coverages and other discounts to request. Commissions lowered-- New York Attorney General Eliot Spitzer told four large U.S. insurers they must stop paying contingent commissions to agents and brokers selling automobile, homeowners and other insurance. Effective date is January 1, 2007. Shop around for the savings using our Guides. Health insurance alternative-- If you’re thinking of buying your own health insurance, think twice. The average worker pays only $627 of the $4,242 employer cost for single coverage, or $2,973 of the $11,480 cost for family coverage. Individual insurance is can be less expensive if you're healthy and live in a state with a competitive health insurance marketplace. If most of your co-workers are older and sicker, you may have an edge. Check out the cost of what you need with our Health Guide. New self-directed health plans-- People in the new HSA health plans that make you pay for a bigger share of care appear to be more cost-conscious than those in traditional plans. More than 60 percent of people in the plans said it is hard to find good information about the cost of doctors' services and hospital care; and about 50 percent said information on quality of care is hard to come by. Half of those enrolled in the plans said they would switch out if given the choice, compared with a third of those in traditional plans. And they were twice as likely as those in traditional plans to say that they went without care because of cost. The new plan is popular with wealthier, healthier and more educated. They save premium. See our Health Guide. Tax refund idea-- The Pension Protection Act of 2006 allows the deposit of all or part of an income tax refund into the taxpayer's individual retirement account or into the spouse's IRA in the case of a joint tax return. Many members don’t give Uncle Sam this FREE loan. Instead they change their withholding rate (W4) so Uncle Sam has to wait for his money. Their income tax refund goes into their IRA a year early so they can earn 12% on average. See how members do it in our FREE Guide. Mutual funds pay brokers with your money to steer clients-- Hartford, MetLife paid fines for doing it. Use the mutual funds owned by the shareholder’s so this can’t happen to you. See our FREE Guide. 50 ways to save on health care costs--Money magazine: http://money.cnn.com/magazines/moneymag/moneymag_archive/2006/11/01/8392429/index.htm. Our Insiders help you decide how and where to buy Health Insurance. Do you have life insurance at work?-- If you pay for coverage at work, you may be paying too much. Compare 100's of companies’ rates instantly. Save up to 73% on life insurance. If you are under 40 and in good health, your group insurance at work may cost more than paying separately. Why? Group policies have no exams. Healthy people subsidize the unhealthy. A healthy 38 year old pays $14 a month for $250,000. Check your pay stub now and save. See our Life Guide for the how and where. Vehicle insurance rates drop-- Auto insurer Progressive said other insurers are lowering rates, in part because of fewer accidents since 1999. More auto insurance price quotes are being generated over the Internet. The company plans "no major changes" to its typical 10 percent commission paid to agents who bring in new customers. Shopping direct saves—the average savings for some shoppers is still over $500 per policy. See our Vehicle Insurance Guide. Are you on your own now?-- Citigroup, DuPont, and IBM have decided to cut pension plans. IBM said the move will save the company “billions of dollars.” They join the list of many profitable companies that leave you on your own. Taking control of your financial life is good. Rollover your pension with our Retirement Spending Guide. ROTH 401k at work?-- Why switch to a new Roth 401k plan? Income tax rates will go up. Pay income taxes now since we know the current rate. Contribute 10% of your income to the plan now and have more when you need it. A $5,000 annual contribution for 30 years will give you $1.4 million, TAX-FREE. That will give you about $50,000 annual income (inflation adjusted) without taxes of 25%. It is the simplest retirement plan available to most people. See our FREE Guide to start. LTC insurance vs self-insurance study-- Researchers at the University of Southern Maine conducted a study to determine just how financially desirable long-term care insurance is compared with self-insuring. Specifically, they looked at the financial feasibility of making annual insurance payments to cover nursing home care for up to $4,000 a month for a maximum of five years. They estimated these payments to be $1,190 for someone beginning to pay at age 40, $1,867 for an individual starting at age 55, and $3,322 for someone starting at age 65. The researchers compared the purchase of insurance with the cost of investing the required funds at three different rates of return. See the surprising conclusion and alternatives in our LTC Guide. Annuity Buyers-- A recent study by Gentry and Rothschild reports that many buyers of immediate annuities lose 15 to 20 percent of the value of their premiums to commissions and fees. The older you are, the shorter the time to spread out these fees. Insurers base their payouts on the fact that those that will live longer usually are the buyers of these annuities. So insurers must lower the payouts to make money. Members consider all the alternatives with our Annuity Guide. Brokers hide the facts-- Chase Investment Services (JP Morgan Chase) and MetLife Securities were ordered to pay $1.66 million for failing to supervise the sale of 529 College Savings Plans to client’s trying to save for college. Advisors don’t tell buyers that their own state may give a tax advantage to plans with mutual funds OTHER than MetLife/Chase funds. See which alternatives are best for you with our Education Funding Guide. Why permanent insurance is no longer appropriate-- Old rule: Advisors said buy universal life or whole life when you are young to lock in affordable coverage for life. You will always have cash value to borrow against, they said. You will earn interest on the forced savings portion of the premium. You will never have to worry about not qualifying for coverage. New rule: Save the fees: It is easy to set up an automatic investing plan with a low cost mutual fund. A stock market fund contribution will guarantee that you will have more “cash value” than a policy. Compare 30 years of paying for insurance versus investing in a market index fund. A 21 year old male may pay $47.77 monthly for $200,000 permanent coverage. Cash value after 30 years is about $48,205. A 30 year term policy may cost $19 monthly. Investing the difference, $29.25, over 30 years produces $103,250. Since our life expectancy is over 80 years, we need to keep paying for the $200,000 insurance for another 30 years. However, if we stop investing and paying for term at age 51, our “self-insurance” fund grows to $3.7 million at age 80, $12.2 million at age 90. Permanent coverage is not appropriate anymore. See our Self-Insurance Guide. Pet insurance reviewed: Self-insure and save-- UrbanHound, a city dog guide, says health insurance for dogs is best used to help cover unexpected expenses from accidents and injuries. Look for is a simple accidents-only policy with good reimbursement limits. “Even then, given the relatively low per-incident reimbursement limits of most plans, pet insurance should be viewed as only one source for covering your dog's health-care costs. A prudent dog guardian should also open a savings account dedicated to unexpected vet bills.” http://ny.urbanhound.com/houndHealth/healthInsurance.asp In other words, Self-insure using our Spending Guide. Disability Insurance vs Self-Insure-- According to disability sellers, the odds are that 1 in 10 people between the ages of 25 and 64 will suffer a disability. Compare that ratio to the odds of being victim of a house fire (1 in 122); injured in an automobile accident (1 in 160); or even of death (1 in 117). Also, they say 1 in 7 people between the ages of 35 and 60 will become disabled for five years or more. That means that 10 people you know (average 70 acquaintances) are disabled. Since I don’t know 10 people disabled, you must know 20. These stats forget people use savings, Social Security, Workmen’s Comp, family member income to provide benefits. See the alternatives to giving money to insurers with our Disability Guide. Beware of annuity sellers-- SEC investigators are finding specific problems with the methods used to sell annuities to senior citizens and pre-retirees. Full disclosure of complicated contracts without legal representation seems difficult to attain. See how members dealt with these contracts in our Annuity Guide. New car "Gap" insurance hussle-- Ron Moore, MetLife Auto & Home, says, “Surprisingly, a new car depreciates up to 30 percent during the first year, and many insurers will take a deduction for depreciation during this time. That means that a person could pay $20,000 for a vehicle, but only receive $14,000 if it is ‘totaled.’ In addition, if you have a loan on the vehicle or if the vehicle is leased, the bank or leasing company could ask you to pay for the difference between the amounts the insurance company pays and the payoff amount of the loan or lease. As a result, you might have to pay several thousand dollars out of your pocket.” according to sellers. See how members avoid this problem with our Vehicle Purchase Guide LTC insurance alternative-- Nearly four in ten Americans say they would turn to family and friends if they were ever to need long-term care services, compared to relatively few who say they plan to rely on insurance or private savings. See our Guide. Associations you belong to can save you money-- Take advantage of low rates with group coverage from your associations. For instance, teachers may save using insurers Horace Mann or California Casualty. Our Vehicle Guide has over twenty-five insurer association listings for special rates. See our Vehicle Insurance Guide. Marylanders-- Maryland ordered Allstate to return $17.5 million to 20,571 Allstate auto policyholders. This restitution is for not providing notice of premium increase with the disclosure of the accident or violation which is the basis for the premium increase. Allstate just raised the rates for no reason. Better to shop every two years for lower rates with our Guide. Your credit score-- If states outlaw credit-scoring for pricing vehicle insurance, some observers say, rates could change by as much as plus or minus 25 percent. If your score is high, you could see an increase to pay for poor drivers. Shop every two years if you are a safe driver. Women can obtain micro loans-- Make Mine a $Million Business program to help women entrepreneurs grow their businesses, develop innovative products and services and create jobs. Make Mine a $Million Business is a national movement inspiring one million women entrepreneurs to reach one million dollars in revenue by the year 2010. Since launching this movement in March 2006, more than 15,000 women have already joined the community. http://www.makemineamillion.org/m3/home.php Californians-- Beware: Fax message to purchase health insurance offered by Prime Med Care or Prime Star Health Care. The companies don’t provide valid coverage. America's Best Health Plans, the annual rankings of commercial, Medicare and Medicaid health maintenance organizations and point-of-service plans are available online at http://www.usnews.com/healthplans. New Yorkers-- You can now freeze their credit reports at the three major reporting agencies, effectively stopping identity thieves from opening charge accounts or loans in their names. They can’t use your good credit but neither can you. The first credit freeze is free, as are any if you can prove through a police report that you've been a victim. The agencies want fees to control your data!! Beware: Bank credit card new fees-- Citi has raised the balance transfer fee to $250 maximum effective November 17. After February, 2007, the max is unlimited. So you pay a finance charge and a fee too. Members use their own self-funded “bank” to borrow from. See our Self-Funded 'bank' Guide. What will your retirement be like?-- Use this retirement calculator: http://www.bloomberg.com/invest/calculators/retire.html to see how your savings and investments grow. Our FREE Guide helps you set up your financial future—whether you are aged 18 or 81. Average investor returns: 5.3% or 8.9%?-- For mutual funds that were the most volatile, investors earned an annualized 5.3% over the past ten years, while the funds themselves returned 8.1% annualized. For the least volatile funds, investors and the funds returned exactly the same amount: 8.9%. Morale: stick with least volatile funds. See members’ picks in our FREE Guide. Beware: brokers that say indexed annuity is guaranteed-- Brokers must treat the sale of fixed equity index annuities as though they were Securities and Exchange Commission-regulated securities. Many hidden fees need to be disclosed. Check alternatives before you buy with our Annuity Guide Colorado drivers-- State Farm cut auto rates in Colorado by 7.5% on Oct. 30. Premiums for the comprehensive and medical payments coverages are decreasing the most. Many members have already dropped these coverages to save over $6,000 so the rate drop won’t affect them much. See discounts with with our vehicle Guide. LTC facts--NOT the hype, please!-- The average nursing home stay is 300 days but the median nursing home stay is 90 days! Over half of nursing home residents stay for a short time (less than 6 months). Most come from a hospital. They undergo rehabilitation or deal with short-term medical care needs. Long-term residents are demented. Most have behavior problems such as wandering, violent behavior or calling out. So, the most likely situation we face is 90 days of facility care costing $12,000. A LTC policy can cost $120,000. See our Guide or read the studies yourself at: http://www.ahcpr.gov/research/longtrm1.htm Perfect retirement plan-- We wish all Americans had the same retirement plan that Congressmen have. They pay the lowest money management fees around--.06% or 60 cents per $1,000. The industry average is 1.4%. The ‘S’ Fund returned about 10% annually for 10 years. Those in charge are salaried not overpaid CEO’s. Congressmen save more with each raise. A cost-of-living-adjustment (COLA) increase takes effect annually whether they deserve it or not. No wonder they are celebrating their retirements. See our members’ choice in our FREE Guide. Wall Street is switching its support to Democratic--candidates for the elections. 51% of its contributions went to Dems this year, matching its percentage in 1994. See the waste of your dollars: http://www.porkbusters.org/ What can you buy for $5.56 a day?-- Starbucks Frap, Lunch/Snack, Drink after work, Gasoline, Cigarettes, OR invest it: $38,723 in 10 years, $84,096 in 15 years, $166,524 in 20 years, $316,272 in 25, $ 588,318 in 30 years. How long would it take to buy your dream? Check the math: http://www.moneychimp.com/calculator/compound_interest_calculator.htm $2,000 per year, 10 years, 12% earnings, compound 12 times. See where members invest in our FREE Guide. Earn $400 an hour!-- Use our Insider’s Guide to Vehicle Insurance to find out how much you could be saving each and every year. You can save up to $600! Members have taken less than 2 hours to tell a licensed call-center person what policy they want. They pay by credit card and receive the new policy in days. Some have also received a discount on their homeowner’s policy too. That may add another $200 to the savings by Holiday time. See what members have done in our Vehicle Guide. Credit for Women-- Guide to Business Credit for Women, Minorities and Small Business is available through the new www.Business.gov site. A recent Harris survey found that many women (18%, in fact, compared with 9% of men) maintain a "secret stash" of money that's separate from the household accounts. This may indicate a pervasive fear of loss of security later in life. Women are wise to save for a rainy day in secret. The family won’t spend it. They just need to put the money to work. They need to buy “assets that grow by themselves” so they don’t have to worry about becoming a bag lady. Many members use one mutual fund to get started. See our FREE Guide. For 2007, you can contribute up to $15,500 into a 401(k) or 403(b) plan through salary deferrals. If you are 50 or older by December 31, 2007 you can contribute an extra $5,000. Self-employed? Contribute up to 20% of your net self-employment income into a SEP IRA. The maximum contribution for 2007 is $45,000. PWC Tax Guide: http://www.primezone.com/newsroom/news.html?d=107286 Widespread illegal incentives such as free ski trips, nights on the town or 50-yard-line seats at the Seahawks game might have played a big role in which title insurance company your real estate broker, your lender or your builder recommended the last time you bought or refinanced a home, an investigation by the Washington State Insurance Commissioner's office contends. Find title insurance yourself and save with our Homeowner's Guide. Few mutual funds are owned by their shareholders-- The Securities and Exchange Commission is investigating 27 mutual fund companies that may have accepted bribes worth hundreds of millions of dollars in recent years, according to the Wall Street Journal. The SEC believes that service providers charged shareholder accounts for administrative services, but would give some of that money to fund advisers to use for marketing purposes, the report said. The advisers then would ask funds' boards to offer contracts to those service providers. Check the ones most members use in our FREE Guide. Life insurance rates fell again-- People are living longer. Members are switching to term coverage even at 50 years old. $250,000 can cost as little as $22 a month for ten years. Compare that to paying $250 a month for a permanent policy. Or self-insure with that $250 for 20 years and have $250,000 to spend anyway. See options in our Life Guide. Another insurer that offers discounts on hybrids is Travelers. Travelers, now part of St. Paul, just came to New Jersey with hybrid discounts. You may qualify for the 15 discounts included in our Vehicle Insurance Guide and save 20%-40%. Who can you trust?-- MetLife was fined $5 million for "allowing late trading of mutual funds." This means they put down a bet on the winning horse after the race was over. "Even in a supposedly extremely inefficient segment of the market, such as emerging markets, 88% of managers did not beat the index over the five-year horizon," S&P Index strategist Srikant Dash said. marketwatch.com Read how members invest in our FREE Guide. Buckeyes-- Farmers Insurance said it is cutting your auto and home rates. Discounts on auto insurance can save you up to 39%. These discounts include a 30% discount for customers who insure their home and automobile at the same time. Everyone can save by shopping. Shop using our EasySheets. Use your savings to make a Gift of a lifetime to a child or grandchild-- $2,000 invested for only 10 years starting at age 20 brings a happier retirement than $2,000 invested for 35 years starting at age 30. The power of compounding over time is awesome! At age 65, early saver has $2,691,902 versus late saver with $1,217,661 assuming average market returns in low-cost mutual fund Roth IRA. Details in our FREE Guide. Do you know where your papers are?-- Insurance is about being prepared. If you have an accident or crisis, will you find critical information quickly? Do your loved ones (and yourself) a favor. Put all your important lists, papers (or copies) and contact numbers in one place. Some members use a 3 ring binder or a computer file or a file drawer. For instance, if there were a fire in your home, you can grab it and run. Use the one we suggest in our Homeowner's Guide. Did you know?-- Some wealthy older Americans borrow money to buy life insurance and then sell those policies to investment groups for a hefty profit. It sounds like a scam and it is. New York Life Insurance Co. confirmed that over the past several months it has fired an undisclosed number of agents in New York for selling so-called investor-owned life insurance policies. In addition, the company rescinded the policies sold by those agents. Why are women better investors than men?-- Women are better investors so why aren't they getting rich? How do they deal with the special challenges? See our Guide for Women. Where to invest?-- Ever wonder what type of account to invest in first . . . 401k, Roth IRA, IRA, brokerage, mutual fund? The key is how long can the money grow. Our Insider explains in our FREE Guide. A Sad Misunderstanding-- Fully ONE THIRD of 401(k) plan members invested NOTHING in stocks or stock funds, according to a new study by Boston College. Some advisers say it is because participants think they will lose money. Yet stocks are the only asset that has NOT lost money (inflation-adjusted) over any 15 year period. In fact, one of the top large blend funds for 20 years was Vanguard 500 Index with 10.9% per year. The category average is 9.5% per year. Kiplinger’s 9/6 See our members choice in FREE Guide. 401k Roth-- The new Roth 401(k) is about the only tax-free haven for those with incomes over $100,000. Note: Contribution limit is $15,000 per year and minimum distribution rules at age 70 1/2 apply. But it will be FREE money when you retire no matter what the tax rate is then! $3,000 in stock funds for 20 years may reach $249,786. See Do It Yourself Finance. Retirement Reality Check-- If you have done a great job saving for retirement, you need a professional to acknowledge it. Our Insider walks you through a reality check with our Retirement Spending Guide. You can also have a professional adviser keep you on track for a one-time fee of only $250 from a customer-focused fund family. Women asset buyers-- Female home-ownership is at an all-time high--with one-fifth of residential real estate now being held by single females. Women are now the primary breadwinners in roughly one-third of U.S. households. See Guide for Women. Women learning independence-- Many states have created resource centers for women entrepreneurs. Advice, micro loans, networking, group purchasing and other supports are available. See Connecticut for example: http://www.conntact.com/article_page.lasso?id=40344 HOWEVER The Labor Dept has estimated that nearly 90 percent of women will end up managing their finances alone. Unfortunately, this realization has not translated into concrete steps—including frank financial discussions with their husbands or partners, according to the sixth annual Allstate “Retirement Reality Check” survey. Few respondents said they feel “very prepared” financially for retirement, although men are a bit more optimistic than women (23 percent of men versus 19 percent of women). People say they will have a fun retirement, and on the other hand they say they haven’t saved enough. Denial is the most dangerous habit. This isn’t just about women being alone in retirement. It’s denial about the need to start saving earlier.” Start FREE with our FREE Guide. Wrong timing?-- Mutual funds have begun to imitate hedge funds in a strategy that banks on stock market declines rather than growth, according to the Wall Street Journal. This is the wrong time to do this since the Standard & Poor’s 500 Index outperformed 80.3% of actively managed large-cap funds during this third quarter, according to the latest Standard & Poor’s. Year to Date Return is 8.67%, 1-Year Total Return: 10.59%, 3-Year Total Return: 12.20%. See how members decide which mutual fund with our Guide. Wrong thinking?-- Parents seem to think their kids will get through college on scholarships and grants, according to a study by AllianceBernstein Investments. Financial aid administrators said 92 percent of parents overestimate the amount of scholarship money their children will receive. "Parents with children ages 14 to 17 plan to have an average of $12,000 saved when their child reaches college age," the study found. Parents are taking on debt to fund their children's educations. And they're also expecting the children to take on debt, which can make it harder for the young people to get on their feet financially after graduation. Which alternative is best for you? See Education Funding Guide. Fewer than half of all Americans age 55 and older have even $45,000 saved up for retirement, according to the EBRI's 2005 Retirement Confidence Survey. The median net worth of retirement-age Americans is about $30,000. If Social Security is reduced, most Americans are going to have a bare lifestyle. Fix yours in a few years with our Fix It Yourself Manual. Credit report checkup time-- Some surveys find that 80% of our credit reports have mistakes. There are no rules governing what can go in your report—bureaus don’t check data before adding negatives to your record. One member found other people’s records in his report just because the last name was the same. Different SS, DOB, address, first name were ignored. He found it after being turned down for credit. Read how he fixed it in our Banking Guide. Why LTCi is not for everyone-- Californian Vera Smith, 87 years old, had purchased a Home Health Care Policy from PENN TREATY INSURANCE in 1998. Ms. Smith, who is now physically unable to care for herself and cognitively incapacitated, had to move in with her daughter and is in dire need of full-time home health care. All the conditions required for her in-home care had been. When she applied for benefits, she was denied. Penn Treaty denied Ms. Smith payment of her benefits because "her residence no longer met the policy definition of HOME." See alternatives in our LTC Guide. Receive FinanicalRx Alert Weekly FREE!! Email request to FinancialRx@TheInsidersGuides.com |
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