Financial Answers "IN SIMPLE LANGUAGE"

So you finally decided to get involved in your 401(k) or 403b plan at work.  You don’t know much about investing but you do know it is a good idea to be putting some of your hard earned money away for your future. 

You know one of the best ways to do that is through your employer’s defined contribution plan commonly called a 401(k)…the section of the Internal Revenue Code that allows this program.  If you work for a non-profit organization you would have a 403b…the section of the Internal Revenue Code that allows this program.  Either way it is a good deal for you.

 Understanding your investments

So you have opted into your 401(k) program and now you have to choose where you are going to invest your money in the wide variety of mutual funds that are available in your 401(k) plan.  This is the part that usually confuses most people because this part can be confusing.

You ask yourself which mutual fund or funds do I put my money into?  And how much do I put into each individual fund?  You say to yourself that you wish there was someone to ask to help you with these questions.

Sometimes the mutual fund company that handles the 401(k) program proves a question and answer phone line that you can call and get help.  Sometimes they have one of their professional representatives visit your company and do presentations and meetings with you one on one or as a group.  Usually you are on your own.

Here are some things to look for when choosing your investments

Ask yourself what you are trying to accomplish by funding your 401(k)?  Why am I doing this?  This answer is usually for a more secure retirement.  If that is the case then you need to find out which of the mutual funds offered in the 401(k) plan (I keep referring to 401(k) plans but this holds true for non-profit 403b plans also) will provide growth for you.

Depending on your age, the younger the better, you want to chose a mutual fund that fits your investment temperament.  Ask yourself how well will you sleep at night with your money invested in this particular mutual fund?

Another thing you want to look at is what is the cost of buying this mutual fund?  There usually is not a cost upfront for a mutual fund in a 401(k) plan but there are ongoing administrative and management costs that you need to be aware of.  These costs will directly affect what you make on your mutual fund investment.  Obviously the lower the costs the more you get to keep.  Call the 401(k) provider and ask them or ask the mutual fund representative that comes to visit your company.  It’s your money and you need to know.

Find out how often you can switch between mutual funds and if there is a cost for doing so.  Some companies may charge for this and others may not.  Again this is one of those things that is going to affect how much money you get to keep and that is what it is really about…how much money you get to keep.

I have barely scratched the surface on what you need to know about investing in your 401(k) and 403b programs but you have to start somewhere.  Do your homework and educate yourself on how these programs work and you will have a bright financial future ahead of you.

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

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Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

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I just got done writing last week’s article about how credit card issuers are taking advantage of their customers and I came across this story.  As I said in last week’s article called “Are You Going to Continue to Put Up With This?”, if the financial institutions would only put the time and effort into treating their customers right rather than finding ways to screw their customers out of their money it would be a better world.  But then I am naiveté I guess.

Wells Fargo & Co. rides its customers again

Isn’t this the same Wells Fargo & Co. that accepted TARP money from the government (your money)?  Now rumor has it that Well Fargo didn’t want to accept TARP money but was forced to accept it.  They in turn paid back the money before any of the other banks that received TARP money.

Maybe they didn’t need or want the TARP money because they already had other sources of ready cash that they could count on.  So what are some of those other sources of cash they could count on?  One of them was the exorbitant overdraft fees they have been charging their customers since 2001.

Business practices sighted as being deceptive and unfair

Recently in California, a federal judge accused Well Fargo & Co. of deceptive business policies which have led to many of their customers being charged excessive and unwarranted overdraft fees.  The abuse was so widespread and blatant in the Well Fargo & Co. system that the judge ordered the bank to return over $200 million to the affected customers.

Now this is exactly what I have been talking about in previous articles, mainly about the arrogant behavior of some of our financial institutions in the treatment of the very people that put them in business and keep them in business.

Somewhere along the road to reaching the executive suite corporate bankers lose sight of what their real purpose is.  They lose sight that the customer is critical to the success or failure of the bank.  They forget what their jobs “really” are and they take this arrogant, condescending, pompous attitude that they know best.

As a former bank examiner I speak from experience with dealing with many of these people.  It seems that nothing has changed.  Actually it has gotten worst.

If you would like to know all the details of what this California Federal Judge said and did, about this blatant case of screwing their customers, than Google “Judge William Alsup accused Wells Fargo” and you can read all the gory details of another large bank running amok.

I am just glad that people are starting to fight back and not taking the crap from the “big boys” anymore.  That is the only way you are going to be treated fairly.  If you think something is wrong with your credit card statement, bank statement, investment statement then contact the appropriate institution you are dealing with and don’t take no for an answer.  Be doggedly persistent until you are truly satisfied with the answers and results.  “Go get um”!

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

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Copyright © 2008-2010 “All Rights Reserved”

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

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Here we go again folks.  The government passes a bill to help you out and the financial institutions give us all an obscene gesture and stick it to us anyway.  If the financial institutions would spend the time dreaming up ways to generate income the right way instead of dreaming up ways they can screw their own customers it would be a better world.  But that would be too much of an effort on the part of corporate financial America.  In their minds, based on their actions, it’s easier to stick it to their complacent, ignorant credit card holders who seem too stupid and lazy to fight back then to do things the “right” way.

 The Card Act

When the Card Act (The Credit Card Accountability Responsibility and Disclosure Act of 2009- see my articles titled “Is this new credit card law a joke?” dated May 26, 2010 and “Credit Card Relief???  dated February 17, 2010 for more information) was enacted by congress to protect you from the confusion and complexities of the credit card system, the credit card issuers were already working on ways around it.  And to their sleazy credit they have managed to find many ways to stick it to you again.

Three of the top credit card issuers, Citigroup, Inc.(didn’t you bailout these dirtbags out recently?), J.P Morgan Chase & Co.(didn’t we also bail these dirtbags out also?) and Discover Financial Services are already coming up with ingenious new ways around the new credit card law to shake you down with new fees and charges.  These are just the obvious dirtbags.

What’s happening is our government regulators pass the laws and the deep money pockets of the credit card issuers have their herd of lowlife lawyers find ways around the laws and regulations which is another way of saying, “we can’t screw our current credit card holders this way anymore so let’s find new ways to do it.  We need to maintain our exorbitant lifestyles and not worry about the lower classes…their only there to serve our needs anyway.”

Isn’t this the greedy corporate mentality we have been seeing more and more of?  If you don’t believe me than Google “Forbes HP Hurd” and read this article about how Hewlett Packard’s CEO is being paid $28 million to go away.  Are we out of control or what?

Watch Out for these New Tricks

Unfortunately I can’t list all of the tricks the credit card companies are using but this will give you some idea of what they are trying to pull.

If you receive something in the mail that talks about a “professional card” be very careful before you decide to accept the issuer’s offer.  These new “professional cards” aren’t covered under the new credit card law.

Also watch out for the new “rebate card” were you will get a rebate on your finance charges if you pay on time.  The trick is that rebate offers aren’t covered by the new credit card law and the credit card issuer can revoke them without warning and hit you with high fees.

Watch out for the increase in “balance transfer” fees.  In some cases the transfer fee was more than doubled… from 2% of the outstanding balance transferred to 5% of the balance transferred.

Warn your kids about “low-credit-limit-cards” and the upfront fees the credit card issuers are charging.  These fees are exorbitant and can cause your child to overdraw their card the first time they use it causing additional fees to be charged to their account.

I have only briefly highlighted four areas to be aware of.  There are more and the never ending negative creativity of the credit card issuers will guarantee that more than ever you had better read the fine print on your credit card statements.

It makes you wonder why we continue to put up with this crap and our elected legislators never seem to fix any of the problems we have to continually deal with.  I guess greed rules in this country and we can accept it and move on or try and do something about it at the voting booth.

What do you want to do?

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

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Copyright © 2008-2010 “All Rights Reserved”

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

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You have been feeling the sting of the last couple of year’s financial woes.  You thought that you had planned for your financial livelihood and felt comfortable in that plan.  You did all the right things in listening to your financial advisor’s advice and followed through with all of the financial plans you had discussed with your financial advisor.  Yet, here you are feeling like the whole financial world has fallen in around you.

Your 401(k) plan at your corporate job or your 403b plan at your non-profit organization has taken large hits and is slowly coming back to where it was several years ago.  But you feel reluctance on getting more involved in investing in the market.  It just seems like it hasn’t been working out for you.

Here’s an idea

What I am about to talk about is not the end all be all to your investment woes.  It is a part of the whole picture of what your financial portfolio could and should look like.  So what is this mysterious financial idea…it’s an annuity?

Now before you go crazy and tell me that all the insurance companies are having problems and you would be nuts to give any more of your hard earned money to them just listen to what I have to say and then you can make your own informed decision. This is just “part” of your investment portfolio.

First of all for those of you who don’t know what an annuity is it is an insurance contract with an insurance company that basically says that you give the insurance company x dollars they will guarantee to pay you back an income over your life.  Now this is the most basic of definitions and there are, like most investments, many variations on this definition so that it can fit your needs.

Just think about this.  Who has more money than any other business entity on the face of the planet?  Who do the banks and investment companies go to when they need money or need to finance one of their monolithic corporate headquarters buildings…insurance companies?  So where do you think you should investment, at least, a part of your investment dollars…with an insurance company?  Please remember that I do not sell any investment or insurance products so I have nothing to gain by telling you to invest part of your money with an insurance company.

Which company?  Which Annuity?

You need to do your homework and go on the Internet, your library, talk to relatives, friends, your financial advisor, and a variety of insurance professionals before you make your decision as to which company and which type of annuity you should invest in.

Once you feel comfortable with what you need to do than you need to do it.  I am very keen on annuities because I have seen how they have become a stable source of income for many people during these difficult financial times.

Besides giving you a stable source of income, the annuity, usually can’t be outlived.  Meaning you don’t have to worry about running out of money.  Up to this point in time you have probably concentrated on accumulating money for tomorrow and your retirement.  What you probably haven’t planned for is what’s called the “distribution” phase of your life when you will be living on this pile of money you have saved.

During this distribution phase you will want to get a regular check from your 401(k) or 403b and your social security.  An annuity can be another source of lifetime income which you usually can’t outlive.  This will give you that additional piece of mind that you are all looking for.  Check out annuities and see how they can fit and fill part of your future income needs.

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

• Please ask your questions of In Simple Language and we will answer you as soon as possible in the comments section of the blog article you asked about.
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Copyright © 2008-2010 “All Rights Reserved”

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

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For the last couple of days, I have been inundated with information about the passing of the “great” financial reform bill.  I am glad to see that congress is finally getting off their asses and following up on fixing the financial mess that you and I were thrown into.

On the surface this bill looks like it will prevent a lot of past financial problems from recurring.  I mean it is a step in the right direction…cleaning up the mess caused by the greedy dirtbags on Wall St.

What I don’t understand is why a large hole in the financial system-a glaring huge hole-is being left uncovered.  Does congress think that you and I are too dumb to notice?  Apparently so!

What am I talking about?  The two pseudo government mortgage giants called Fannie Mae and Freddie Mac that aren’t even being addressed in the new financial reform bill.  What is going on here?

Congress’s Black Hole

Once the great American dream, owning a home for many Americans may be a thing of the past.  This new financial reform bill must have a reason for not addressing the two mortgage giants, Fannie Mae and Freddie Mac.  It doesn’t make sense for them to be purposefully left out of this reform bill unless congress is looking at a new direction for the American homeowner.

Think about this.  The two pseudo government mortgage agencies either guarantee or own almost half of the home mortgages made in the United States.  That’s about 30 million home loans totaling somewhere in the neighborhood, pun intended, of approximately $6 trillion.  Yes I did say $6 trillion ($6,000,000,000,000.00)…trillion with a T.  That alone is a mind boggling number. Yet after pouring upwards of $150 billion into Fannie and Freddie, the financial reform bill doesn’t even address either one.

Do you think that maybe the United States government is thinking about getting out of the mortgage business?  What would be the implications of this?  Who would the average American seeking a mortgage loan now turn to?  Is the average American home seeker now going to deal exclusively with banks…the same banks that screwed everyone and had to be bailed out by you and me?  What’s going on here?

More questions than answers

Unfortunately I have raised many more questions than answers.  Maybe you need to call your congress person and ask them the above questions.  It seems to me that the American way of life, especially for the middle class, is slipping down another notch. 

Will the middle class now be forced into renting rather than owning?  Is this what congress is trying to tell us?  Does this mean you don’t have the right to own a home anymore unless you can “really” afford to pay for it?  What do you think is going on?  Let In Simple Language readers know what your thoughts are.

If you read this far there may be something about this post that you are relating to.  There may be some financial related pain In Simple Language is talking about.  Tell us your story.  We really do want to know.

• Please ask your questions of In Simple Language and we will answer you as soon as possible in the comments section of the blog article you asked about.
• Please give In Simple Language your comments and suggestions about this post and/or future topics of interest to you.
• Like what you read?  Send it to a friend.  Click on “share this post” right above leave a comment below.
• Did you remember to bookmark this blog?

Thank you for taking the time to visit In Simple Language.   

Copyright © 2008-2010 “All Rights Reserved”

Looking for a financial speaker or financial writer?  Contact Rich today at rsowa@insimplelanguage.com or call Sowa Financial Media, LLC now at (502) 569-1714.

Check out the “SERVICES” tab above the beginning of the post for all available services.

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