Apr 16 2015

Living Large – Enjoy Las Vegas and Go Home with Money in Your Pocket

By |April 16th, 2015|General Personal Finance|0 Comments|

If you were asked to name a budget-friendly location where you might expect to go home with some cash left in your pocket, Las Vegas is not likely to be the first place you think of.

Most of us associate sin city as the ultimate destination for entertainment with all the casinos, five-star hotels and dazzling entertainment on offer, but you can have it both ways and have a wild time on a budget, as long as you follow a few tips on how to do it.

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The view is free

The first thing to say is that just wandering the strip is a lot of fun in itself and of course, absolutely free.

Watching the gondoliers wandering around the Vegas version of Venice or taking in the pyramids of Luxor won’t cost you a dime and neither will the botanical gardens at the Bellagio. There are also free attractions inside some of the casinos, like massive tropical aquarium at the Silverton Casino or the wildlife gardens at Flamingo’s.

The idea behind these visual treats is to tempt you in to the casinos of course, but at least you won’t be paying to enjoy the view if you can keep some of that cash in your wallet for a bit longer.

Finding a hotel

Unless you are a high-roller and going to get a suite in return for spending large in the casinos, which rules out most of us who actually have a budget to work with, you are going to need somewhere to stay at a price that won’t leave you short before you start your trip.

Las Vegas hotels are world-famous, with so many outrageously large and opulent palaces to choose from and prices that have a few too many zeros added to them, unless you are a bit savvy with your booking plans.

Most of the hotels are often cheaper mid-week, so a bit of luxury should cost you less if your trip is before the weekend rush. Also search the Las Vegas convention calendar to see if there are any events that are on when you plan to visit, as this will drive prices up due to high demand for rooms.

Seeing a show

Shows are big business in Vegas and are probably more popular than the casinos these days, which means that there are plenty to choose from and a wide range of prices that you might be asked to pay.

You will find that a lot of show tickets are cheaper online, so if you have decided on a particular show you really want to see as part of your Las Vegas experience, go online before you go and see if you can take advantage of any discount offer or reduced prices.

Big names mean big prices, but there are some fantastic shows that will probably only cost you around $40 and will justify the tag that Vegas is the entertainment capital of the world, without busting your budget.

There are even some free shows in town if you know where to look. The Bellagio fountains run every 15 minutes in the evenings and are pretty spectacular and Circus Circus is a venue that lives up to its name, with a free circus show running every half hour at peak times.

Watch the extras

We all like surprises, as long as they are pleasant ones, but if you are not careful your hotel will deliver an unpleasant one at the end of your stay.

You may have negotiated a great deal on your room rate and been careful with your spending out and about in Vegas, but you could soon blow your budget on hotel extras.

Many hotels will charge you for wireless internet connections or to use the spa, so watch out for these and ask yourself if you really need any of these extras while you are there. You can also find that some hotels charge a resort fee, which can be up to $20 per day and includes “free” drinks and access to amenities. These very rarely turn out to be great value and can soon add a heavy toll to your bill at checkout, so watch out for this.

Follow some of these tips and tricks and you should be able to enjoy Vegas without emptying your bank account.

John Capone is a busy athletic recruiter. He loves to write about his experiences online. His articles can be found on many travel, sports and business websites.

Apr 16 2015

PPI Claims – Why Has the PPI Claims Scandal Not Yet Been Resolved?

By |April 16th, 2015|General Personal Finance|0 Comments|

It’s 2015 and the 5 year ppi claims scandal is still underway, volume claims have remained at steady levels and there are still 10s of 1000s of enquiries being generated by various websites and with people calling into to claims management firms’ to commission help as their busy lives demand they focus elsewhere.

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Why Has The PPI Claims Scandal Not Yet Been Resolved?

There are several major reasons why the claims scandal has not yet been resolved, including but not limited to:

1/ There are millions of UK residents that have been miss sold payment protection insurance, that have not yet reclaimed their compensation.

Reasons Why:

 Many don’t know how to reclaim their compensation, or where to begin the process.
 Many aren’t aware they have miss sold ppi on their loans, mortgages, credit cards or store cards as an attached policy
 Many have not been educated or informed correctly about ppi, and the criteria for miss selling insurance of this nature
 Many have just not taken the time to go through the process, or respond to correspondence they have seen either through direct contact or advertisements
 Many have tried to claim, however they have hit a snag or not provided complete details in relation to their policies

2/ The banks have not handled the claims quite as they should have done

In the following ways:

1/ The banks were recently fined millions for resolving the claims to an unsatisfactory standard, offering “alternative redress” and “representative redress”, meaning that the amount of money that was awarded to the customer was not the correct amount, this has also led to the banks’ being forced to re-open many ppi claims cases.

2/ The banks have also been fined for stalling on the processing on the claims.

3/ The banks have also been fined for rejecting claims that were later upheld upon further investigation by the FOS (Ombudsman Service)

4/ The banks have refused to co-operate with many of the claims’ management facilitators due to refusing to provide account details to the companies acting on behalf of the customer.

3/ The Overwhelming volume of PPI Policies that exist

1/ There are literally millions of ppi policies that require a refund be provided to the customer

2/ Only an estimated 1 in 3 miss sold ppi policies have resulted in a refund to date

3/ The volume has created backlogs’ not only for the claims’ management companies, but also for the financial ombudsman.
4/ The Time-scale It Takes For The Claims To Complete

1/ It is taking claims on average around 4-5 months to complete at the moment due to logistical issues with the bank and the ombudsman

2/ People are being late with coming back with the details to aid the companies handling the complaints on their behalf

3/ The companies that have miss sold the insurance stalling with the handling of complaints.

All of the above issues are contributing factors to the length of time it is taking the ppi scandal to complete, with all these factors currently at play it is difficult to determine when the scandal will reach a conclusion.

For people wanting assistance with their ppi claim or just some free advice these recommended ppi claims experts at ppiclaimsservice.co.uk are able to help facilitate this for you.

There is also lots of free information out there for individuals wanting to reclaim ppi without the use of a claims company, you can call the financial ombudsman for advice at +44300 123 9 123 for further guidance on how to process a claim yourself.

Apr 15 2015

Think twice before replacing lagging bonds with dividend stocks

By |April 15th, 2015|Blog, Personal Finance Tips|1 Comment|

Bonds are an important part of any investment strategy. As your time horizon shortens, bonds can be used to reduce the volatility (which should always be read as another word for “risk,” by the way) of your total portfolio. The trade off for this, of course, is that bonds offer lower potential returns than stocks.

Bonds provide interest income, which is taxed at the ordinary income rate, so taxable bonds are best held in a tax-deferred account like an IRA or 401(k) plan.

It’s easier to stomach the lower return of your bond portfolio when yields are high and interest rates are rising, since the absolute numbers are higher. The market disasters of recent memory have increased our tolerance for returns in the 5-7% range, since many of us feel lucky to be getting that much. But when rates are falling and bond yields drop, we sometimes find ourselves getting restless.

Low yields on bonds may leave you looking for an alternative.  Think carefully about dividend-paying stocks.

The silver lining to a low rate environment?

Enter the seemingly perfect solution – the dividend-paying stock. Like bonds, dividend-paying stocks offer income potential in the form of dividends, usually paid quarterly. However, since they stocks, dividend-payers offer greater return potential than bonds. In fact, dividend-paying stocks tend to outperform non-dividend payers over the long term.

Dividends also have tax advantages over the interest payments offered by bonds. For 2015, the tax rate for dividends is 15% (for all except those earning very high incomes) – the same as the capital gains rate. For this reason, dividend-paying stocks offer greater tax efficiency in a taxable account.

A dangerous strategy

If something looks too good to be true, it probably is, right? In this case, the answer is yes, unfortunately. Replacing taxable bond holdings with dividend-paying stocks may or may not pay off in the short term. But as a long-term strategy, it could end very badly.

A bond is a legal obligation in which the issuer agrees to pay interest in return for the loan. A dividend-paying stock, however, includes no such obligation. Certainly there are stocks that historically, have somewhat reliably paid dividends (that’s why dividend-paying stocks are a category), but there are no guarantees. As with all things performance-related, the past should not be used to predict the future.

Dividend stocks offer higher return potential than bonds, it’s true, but the overall performance numbers don’t tell the whole story. Dividend stocks come with all the volatility of an equity asset class. Swapping out bonds for stocks – any stocks – doesn’t make sense as an overall strategy, since the swap sacrifices the stability the bonds were meant to bring to the portfolio in the first place.

And that higher return potential? It’s not quite that simple. Historically, dividend stocks have outperformed other stocks, it’s true, but in a rising interest rate environment, dividend stocks tend to do poorly as bond yields catch up.

As to the impact of dividends on your tax bill, it should be abundantly clear that the negatives outweigh any potential gains there. Additionally, the tax code can be a fickle thing, and a change in tax law could wipe out this advantage at any point.

Stay the course

None of us likes to feel like we’re missing out, and watching other areas of the market do well can color our view of the less volatile portions of a portfolio. But those allocations are the bedrock that provides a measure of stability to offset stock market swings. Remember that – and let your bond allocations do their job.

Apr 13 2015

A savings plan for the college dilemma

By |April 13th, 2015|Blog, Personal Finance Tips|0 Comments|

Increasingly, I am seeing opinion and data-based pieces questioning the value of a college education. Exploding student debt rates and outrageous price tags make for flashy headlines and strong opinions, but the pros and cons list is, for lack of a better word, complicated.

Now, in the interest of full disclosure, I come down on the pro-college side. My parents are college-educated, and it was always a matter of assumption that my siblings and I would be as well. However, I can see that the decision to attend college mirrors many financial decisions in that it is specific to the person and the institution under consideration, and possible permutations of those variables number in the millions.

Which leaves us with a dilemma – to save or not to save. Happily, there is a savings vehicle that is nearly tailor-made for the times: the 529 plan.

The highlights

First, 529 Plans are named for section 529 of the Internal Revenue Code, which, as you might have concluded, is responsible for their existence. The intricacies of 529 plans are details for another post, so for purposes of my point today I will broadly differentiate between savings and prepaid plans.

These days, many of us are unsure if our children will attend college.  Consider saving anyway with a 529 plan.

With a 529 savings plan, you choose where to invest your contributions from the plan’s available options, and the proceeds can be used for college expenses at any eligible institution.   On the other hand, think of a prepaid plan as buying future tuition at a specific institution or group of institutions in today’s dollars.

The crucial elements

Two features combine to make 529 plans unique as college savings vehicles: large account limits and flexibility. 529 plans have no age, income or contribution limits, beyond the overall limit on account size. This limit varies by state, but several are over $300,000, a unique feature among college savings vehicles. Also, it is the donor, not the beneficiary, who retains control of the assets in a 529 plan. (There are a few exceptions to that, but they are unlikely to apply in this context.)

529 plan contributions are made with after-tax dollars, but earnings grow free of federal tax. Some states also offer tax benefits, from deductible contributions to no state tax on earnings. (You can invest in a plan from any state, no matter where you live or where you expect your beneficiary to attend college, but this state tax feature makes it prudent to check out your own state’s plan first.)

But what if you put all that money away and your beneficiary doesn’t attend college? 529 plans offer several options, none of which carry drastic consequences.

  1. Change the beneficiary.   Say you have three children (or grandchildren), and you open 529 plans for each of them. (Actually, if their ages suggest they won’t be in college at the same time, you could do with just one.) In the event one of them decides not to attend college, you can simply change the beneficiary to a sibling (or cousin, if you’re a grandparent) and use the funds for that child’s expenses. (Actually, you could choose to fund a neighbor’s education if you wanted – there are no restrictions requiring a familial relationship. I was merely going with the most probable.)
  2. Change the account owner. If all of your children have grown and you still have funds in a 529 plan, you have the option to designate your child as successor account owner, which means that the plan that was intended to fund your child’s education can now fund a grandchild’s. If grandchildren aren’t in the picture yet, don’t worry – your child can be listed as both account owner and beneficiary until the next generation makes an appearance.
  3. Make an unqualified withdrawal. This is the sole option with monetary consequences. (I didn’t say there wouldn’t be consequences; I said there aren’t drastic consequences.) Penalties for nonqualified withdrawals are income tax and a 10% penalty on earnings. Obviously, the issue is the 10% penalty on the earnings (the 10% does not apply to principal), and I’m the first person to agree that it’s not ideal. However, as worst-case scenarios go, 10% on earnings isn’t much of a downside risk, as it is somewhat offset by the benefits of tax-deferral. Additionally, the 10% penalty does not apply if the amount withdrawn is equal to a scholarship received by the beneficiary.

Obviously, there are many other factors to consider in choosing to invest in a 529 plan or to save for college at all. Determining whether you are in a position to save for college is number one, and a careful evaluation of the available options is a must. But tying your money up, in my opinion, is not a significant risk of 529 plans.

Apr 10 2015

Target-Date Funds Take the Guesswork out of Retirement Investing

By |April 10th, 2015|Blog, Personal Finance Tips|0 Comments|

Target-Date Funds are a big topic in mutual funds right now, for investors and fund companies alike. Investors see them as a one-stop shop for retirement investing. Fund companies have found target-date funds to be a gold mine. Morningstar reports that target date funds account for one third of investment flows for companies that offer them.

The concept of a target-date fund is fairly simple. Funds are categorized by year of retirement, and their asset mix reflects the amount of time before that date. For example, funds targeting retirement in 2050 are most likely invested in more stocks, theoretically giving them more return potential than funds targeting 2025, which would likely be weighted towards more conservative investments, such as investment grade bonds.

Look beyond retirement date

Estimating your retirement year is simple enough, but it isn’t the only consideration in choosing a target-date fund. The composition of a one company’s fund may differ dramatically from that of another company’s, even though they ostensibly target the same retirement year.

The formula for transitioning the portfolio from equities to bonds is called the fund’s glide path, and it is determined entirely by the investment manager’s philosophy. For example, some funds transition almost entirely to bonds, or even cash, as the retirement date nears, in order to protect the portfolio from short term market swings. Others maintain an equity allocation right up to, and sometimes beyond, the retirement date. Likewise, some portfolios remain static after the retirement date, while others continue to shift their allocations beyond retirement.

target date funds

Choosing a target-date fund

Every glide path comes with its own level of risk. How you choose a fund depends on your level of involvement with your investments. For example, if you find the idea of risk/return profiles relative to stocks and bonds mind-numbingly boring, you may want to choose based on your own risk category – conservative, moderate or aggressive. Rather than immersing yourself in the details of asset allocation, you can simply look at the fund’s risk relative to its benchmark index, and choose based on your own risk tolerance. If you have believe that only a fool would be invested in stocks past age 50, you should probably look for a fund whose glide path most closely reflects that belief.

Other considerations

Another aspect of target-date funds that bears consideration is expense. Since these are “funds of funds,” you need to factor in two layers of expense. The first is the cost of the target-date fund itself, and the second is the expense related to the underlying investments. As the asset mix changes in response to shrinking time horizon, the expense ratio may change to reflect the differing costs of the underlying funds.

Target-date funds are not for everyone. Once you make the initial investment in a target-date fund, you turn over the reigns. There is no phoning the portfolio manager to suggest a greater allocation to small caps, so if you like to tinker with your investments, you may want to think carefully about other options for all or part of your retirement savings.

A solid option for retirement investing

Overall, target-date funds are an option worth considering for retirement. A strategy that includes target-date funds can help to diversify your portfolio with investments that are reallocated automatically to suit your decreasing time horizon. Target-date funds can be used exclusively, if reallocating your own portfolio doesn’t appeal to you, or as part of a larger strategy that includes other investments.

Apr 10 2015

Going POStal: Don’t Make the Mistake of NOT Getting a POS System

By |April 10th, 2015|General Personal Finance|0 Comments|

“Insanity: doing the same thing over and over again and expecting different results.”

Everyone makes mistakes. I know I’ve made a few, and that’s OK. Mistakes that we learn from help us grow and broaden our vocabulary on what works out or what doesn’t work at all. Mistakes only become costly when you fail to learn from them and it becomes repetitive. See Einstein’s quote above? It works for your personal life and your business life. But since our focus is on business, let’s forego the life lessons for now. Let’s talk business.

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You Need a POS System

Any successful business owner will tell you that if you want to run yours the right way, you have to invest in a solid and reliable point of sale system. There is no two ways about it. A perfect example would be two restaurant owners, Pete and Julie.

Pete knew early on that he would need to invest in a POS system for his restaurant to monitor his inventory, employees and sales using just one system. Pete can get sales reports on the fly; he can remotely check stock and order from his suppliers; his staff clock in automatically using the same POS system, making monitoring and payroll easier. Customer orders and checkouts are also faster because Pete opted to get handheld POS for iPad use. Orders are sent straight to the kitchen and customers can settle their bill tableside.

Julie wanted to save money. She bought a cash register, note pads/pens for order taking, a log book where she manually logged everything in her stock room and asked her employees to use a spreadsheet to log in/out for their attendance and payroll. She also hired an accountant each week to crunch her numbers based on all tabs and receipts, which she had to tally with her staff every night right after closing time. Orders were manually taken and it took longer for customers to settle their bill.

Pete or Julie?

As you can see, Pete was doing everything right from day one. He thought long term and invested in a point of sale system so that he can put all his energy into running his restaurant instead of running around trying to manage every aspect of it. The point of sale system Pete was using warned him when his stocks were low and showed him what his top selling dishes were.

It also showed him which staff member made the most up-sells and who was taking extended breaks. He could check on his sales reports while on vacation and the system also allows him to reward his most loyal customers because he knows who they are and what they love.

Jullie on the other hand, was trying to run a marathon with one foot. By not recognizing the importance of a POS system, her job slowly became a nightmare. Day in and day out, she used the same cash register and did everything old-school, even paying an accountant each week to help her balance her books and see if she was making any money.

She always seemed to run out of inventory, and would blame her employees for pilferage but she had no proof. She kept on doing what she was doing and using what she had, expecting to make money, expecting a different result. She might’ve made a little, but she could’ve seen better returns had she invested early on in a POS system for her restaurant.

The Right Investment

Don’t make the same mistake Julie did. You invested a considerable sum already on your business, not to mention all the time, love and sacrifice you put into it. Think long term and don’t be a cheapskate when it comes to investing in a point of sale system. It’s one of the best investments you can make and it’ll pay for itself in a few months because it just plain works. Mistakes don’t pay for themselves, because you always foot the bill.