Don’t be afraid of unemployment in today’s economy – 2 recession proof options

May 2, 2009 · Filed Under Recession · Comment 

Recent statistics showed that the unemployment rate in US has gone up to 7.6% in January 2009. For many, they are not anymore afraid of getting laid off. They have started thinking more than that. When it is actually going to happen?

Jobs are no longer secured as they used to be earlier during the Industrial Age. Nowadays, many companies are downsizing the strength of the employees, with no plans of replacing them. There is less overtime and many employees find hard to see their hours cut. The number of benefits is also moving down and pensions are being raided or taken away. No one is immune to being downsized.

Management and HR department of the big companies are evaluating pay for performance strategies to implement in today’s struggling economy. They are assorting the top performers, rewarding them, and retaining them during tough economic times. Serious consideration is given to the base pay with additional income on performance. Most of the average employees are not finding this to be comforting news.

Here are two options that you may consider to stay on top of the recession period.

Option 1 – Franchise

  • Proven system with ongoing support.
  • High success rate and low risk.
  • Established market.
  • High startup cost. Average Franchise fee runs from $20K — $30K.
  • Full–time commitment for the 1st year.
  • Frequently takes a year to cash flow.
  • Usually requires a large overhead of employees, real estate, and goods.
  • Some Franchises might be less attractive while the economy is in a downturn.

Option 2 — Home Based Business

  • Work at home, no commute, and more time around family.
  • Can work part–time while holding a regular job.
  • Low startup cost, often $500 or less.
  • Low overhead: computer, long distance, high speed internet, and a few supplies.
  • You may have had a bad experience with the old style of Network Marketing — prospecting friends and family, buying expensive leads, having to attend meetings, lots of rejection, and a 95% failure rate.
  • New style Home Based Business is a new mind–set using new technology.
  • Social Media is an integral part of the new style of Network Marketing. Seldom a day goes by without you hearing about Twitter or Facebook in the news. Social media is changing the way people are communicating.
  • Abundant free training on the Internet on how to use Social Media.

Conclusion

You don’t need to worry about unemployment when you have a perfect plan in place to recession proof your income. Start executing your plans from the very first day after you find yourself unemployed. If you are fortunate enough of not having to lose your job, then consider these two options as a source of extra income. You will make your financially secure.

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Few important steps to stop foreclosure during the recession period

April 9, 2009 · Filed Under Foreclosure · 1 Comment 

The global economy is completely shaken and a very big financial issue amongst the average families is how to stop a possible foreclosure and work out a payment arrangement with the lenders and the banks.

According to the recent study, almost 18% of the homes in US will get foreclosed in the next three years. This means that almost 8,500,000 individual will lose their homes. You will definitely feel frightened when you hear this kind of news. There is still a way out to save your home now.

The prices of most of the homes have gone down because of the less demand for it. There are so many people losing their homes and the demand is decreasing all the time. A seller’s market with no buyers is definitely not going to work.

Most of the average families are trying to stop their homes from getting foreclosed. There was a time in the life of these average families when they were regular in their mortgage payments and suddenly some tragedy struck in the family and they had to lose their job making it hard to make the mortgage payments.
There are still a few who are not interested anymore to stop the possible foreclosure. They might owe a large amount of money to the mortgage company and their house is not that worth to cover the payments. Hence, they don’t see any point in stopping the foreclosure in the recent times.

There is a way to stop a possible foreclosure. The first step is to delay the foreclosure process for as long as possible. This does not mean that you have to make payments to the mortgage company when you are finding so hard to do it. Between food and a place to live, you cannot make a choice which one is more important. Foreclosure should be avoided by all possible means, even if you know that you are not going to live in that home anymore. You can continue staying in your home and stop it from foreclosure, even if you are not making your mortgage payments. You have to educate yourself.

Many people say that the lenders are quite tough to deal with and they are not willing to work on the borrower’s terms. And that’s the reason they don’t make any good contact. If you don’t talk to the bank or the financial institution, how are they going to understand that you are really facing some serious financial problems and not been able to make the payments? In that case, the chances of foreclosure will get eminent. Talk to the bank and explain your situation. Be very careful with your words. Your objective is to make them work on your terms and keep your home safe.

Beware of predatory counseling agencies that are blooming all of a sudden in the present shaky economy. They will say that they will negotiate with your lenders and work out suitable payment arrangements. You can do this on your own and get better results and you don’t need to pay any huge upfront fee for such services.

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Streamline Refinancing with an FHA Loan

March 31, 2009 · Filed Under FHA, FHA Loan · Comment 

Since 1934, The Federal Housing Administration has been helping Americans become homeowners. In 1934 the Americans were experiencing difficult financial times; times similar to the ones we are living in today. The FHA continues to work for its commitment to help American citizens buy and keep their homes. One plan available to help American keep their homes is the Streamline Refinance Program.

The FHA Streamline Refinance Loan has been available since the early 1980’s. The term Streamline refers to the minimal amount of paperwork required to originate and underwrite the loan. Streamline loans can occur with or without an appraisal and may not require credit underwriting. It may be possible to add or subtract names to title.

In general the following qualifications must be met to streamline a loan:

  • The current mortgage that is being refinanced must be an FHA insured loan
  • The mortgage being refinanced must be current (not delinquent)
  • The refinance must result in a lower monthly payment
  • No cash may be taken out on a streamline refinance

Some lenders may offer a “no cost” streamline refinance. This is possible in a few ways. By offering a slightly higher interest rate, the lender pays closing costs from the increased interest. Lenders may also include the closing costs in the new loan amount. This is only possible if there is sufficient equity in the home as determined by an appraisal, or if there is no appraisal, it may be possible if the new loan amount is lower than the original loan amount.

The FHA is committed to keeping Americans in their homes. You can turn to a HUD approved counselor for help with all your mortgage loan needs.

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Consolidate your credit card debts into one monthly payment

March 24, 2009 · Filed Under Consolidate debt, Credit card debt, Debt · Comment 

Credit card companies have been offering a variety of offers to their customers and this has been putting people deeper into debts. The credit card offers are spreading throughout the world like an unchecked plague. Customers often get attracted to one offer or the other. Specifically, one credit card company will offer a great offer in the airlines miles while the other company will offer other unique benefits that sound even better to the customers. Due to these varieties of offers, consumers simply max out their credit cards and need new ones to open up more credit avenues.

The outcome of taking so many offers from different credit card companies is that the monthly bills of various cards will get due and the customer will hardly see any money left to pay the credit card debt within the due dates. No one likes to see a plethora of credit card bills flooding in their mailbox, and if you are not paying the bills within the due dates, the credit card companies will charge very high interests and fees on the outstanding balance. Needless to say, your credit rating is taking a hit.

If you find yourself in such a situation, you need to keep a constant check on your spending habits and change wherever required. The next thing you need to do is to consolidate your debts into one monthly payment plan and have an affordable repayment plan. The credit card companies will be willing to work on your terms by reducing the interest rates and set a lower repayment plan.

If you are a homeowner, a home equity loan is a good way to obtain lower interest rate and to replace all those high interest credit card rates. If you can’t qualify for a home equity loan, apply for a debt consolidation loan to resolve your other financial problems. In the worst case, if you can qualify for a large-size credit limit card with a slightly lower interest rate, go for it.

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List of tax deductibles

March 9, 2009 · Filed Under Tax · Comment 

We all should have enough knowledge about filling out the tax return for the minimum amount of legally required taxes. To understand this, we should have fair knowledge about tax credits and deductions. Tax credits are more valuable because they directly reduce taxes. When a tax deduction is applied, the amount of income gets reduced on which you are taxed. For example, 20% tax on an income of $100,000 means that you will have to pay tax of $20,000. A tax credit of $10,000 is subtracted from the taxes owed and results in a $10,000 tax. A tax deduction reduces the income to $90,000 and results in a tax of $18,000 (20% of $90,000). Hence the best way is to keep a listing of tax deductibles during the year using a 12 month expense worksheet.


Tax credits: Tax credits are often helpful to the small number of tax filers. Many people use three tax credits.

Child care tax credits: This is available to anyone who pays someone else to take care of their child under the age of 13. Your list of tax deductibles must include the name and social security number of your care provider. If you do not provide this information, your child care credit will be denied.

Dependant child credit: This is available to anyone having a dependant less than 17 years of age. This credit is phased out for high income filers, and people with high adjusted gross income.

Tuition tax credits: This is of two types, the Hope Scholarship and Lifetime learning Credits. This is not available to High income filers.

  • Tax deductions

Tax payers can choose to take their standard deduction or to itemize their deductions. You should keep a list of the tax deductibles. If the total number of deductibles is greater than the standard deduction, you should itemize your deductions on Form 1040, Schedule A.  Some of the tax deductibles include:

1) Charitable Contributions: You can consider charitable contributions to qualified organizations as a tax deduction.

2) Medical/ Dental Expenses: You can deduct medical and dental expenses for yourself, spouse and dependents that exceed 7.5% of your adjusted gross income.

3) Business Expenses: There are a number of business expenses including Business Use of Home, Business Use of Car, Business Travel Expenses, Business Entertainment Expenses, Educational Expenses, and Employee Business Expenses that are itemized deductions. Therefore, keeping track of your business tax deductibles is critical. Employees can only claim business use of their personal property if the use is for the convenience of their employer and it is required as a condition of employment.

4) IRA: Contributions to an IRA can lead to increased retirement savings.

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