Here's a real simple way to become wealthy.
Marty and his wife live at home with their 2 children. They own a 3 bedroom house in a middle class neighborhood and try to live within their means. Marty works full time in the Printing Industry, while his wife is in charge of the home and looking
after the children.
They've accumulated some credit card debt and have 2 years left on a car loan. They try to stay out of debt as much as possible and together they've managed to contribute a total of $32,000 to their own Retirement Fund. It is kept in term deposits receiving 5% interest annually.
Two years prior, the couple bought an older house that they fixed-up and rent out for $850 a month. After paying the mortgage and taxes $300 is left over each month. This goes into their savings account each month.
At Christmas, the family bought themselves a new computer and decided to start a home-based business. Things started out fairly slowly but after 8 months they were receiving a steady check of $400 a month which also goes into their savings account. This part-time business will continue to grow with the effort they dedicate to it.
This business also offers them some very lucrative tax savings. By taking advantage of these Tax Strategies they are able to save an additional $300 a month on tax that was normally deducted from Marty's paycheck at work. This monthly income is also added to the couple's savings.
Marty has just begun writing an E-book about his "production expertise" at work. His plan is to market this book on the internet for profit.
Every Sunday the couple takes a drive to stay familiar with the Real Estate market in their area. They're looking for another property, a "handyman's special" to fix-up and rent out. They have saved enough for a down payment and their credit with the bank is well established.
The family's total monthly expenses are $2000. Now, here's the question:
Does Marty's family have Wealth yet?
To answer this question properly you first have to understand exactly what "wealth" means.You achieve wealth when: *Your Passive Income is the same or greater than your Expenses.* So what does this mean?
First, what is Passive Income?
Passive Income is money that you are paid over and over again for work that you only do once. (This excludes using a gun or finding cash on the street) Some examples of this would be royalties for writing a book or a song, commissions that you receive for sales that others make and interest from bank savings or dividends on stocks/options that you own.
Second, what Expenses are we talking about? This one's a little easier to understand. Expenses are the total amount it takes to run your household and your life. This includes, rent, mortgage payments, car insurance, food, credit card and loan payments, etc………
Let's look at Marty's family a little closer…………. Does Marty have any Passive Income? Yes he does. Marty's salary is not considered Passive Income. That's because he has to work 40 hours a week just to get the basic amount. If Marty doesn't go to work then he doesn't get paid. His overtime also doesn't count as Passive Income.
The interest from their Retirement Fund does though. It's paid to him month after month as long as it's left in that account. So, $32,000 at 5% is $1600 a year. Divided by 12 months equals $133 a month in interest. Ok…..what else?
After the mortgage and expenses are paid with the rent money they receive on their rental property they are left with $300 every month. This is Passive Income. Just as long as the tenant stays and pays his monthly rent.
How bout that $400 from the home-based business and the Tax savings. Is this Passive Income? Well, Marty's wife made sure that she chose a company where she could sign new business accounts and get paid commissions on those accounts over and over again. They've made a 5 year commitment to build this
business part-time. So yes, both the $400 and the $300 in Tax Savings would apply as Passive Income. Let's add up Marty's total Passive Income.
Interest $166.00 Rental Income $300.00 Home Based Business$400.00 Tax Savings $300.00 Total $1166.00
Not including Marty's salary from work, his family's Passive Income is $1166.00. Not bad. Every month this amount flows into the family's bank account, regardless of anything else they do.
We said that Marty's monthly expenses total $2000.00 a month. And we also said………… You have Wealth when: *Your Passive Income is the same or greater than your Expenses.*
$2000 Expenses subtract $1166 Passive Income = $834 monthly balance needed to have Wealth.
Marty's Expenses are still more than their Passive Income so they're not wealthy just yet. But they're well over half-way there. With this kind of knowledge a family can know exactly where to focus their financial attention.
Maybe when Marty writes that ebook he could get some sales and royalties from it. Also the new Real Estate and more work on their Home-based business would certainly help them to attain more Passive Income. Once Marty's Passive Income is more than the family's Expenses then Marty could start to have much more
freedom. He may even choose to quit his job and continue developing his Passive Income streams.
Take a look at your own finances. What are your monthly expenses? Do you have more Passive Income than your Expenses? If you do Congratulations. You're Wealthy!!! If you don't. It's time to get started and start adding Passive Income from other areas as soon as possible.
When you truly understand this principle, you'll be well on your way to becoming wealthy.
Are You Wealthy Yet?
Fitness and Exercise Can Prevent Diseases
Exercise reduces the chances of developing health problems. If you are suffering from obesity and diabetes, immediately plan an exercise schedule. Exercise and fitness programs are useful in managing your blood sugar levels. Adhering to an exercise program is necessary if you need to see results.
The most common heath problem in America is high triglyceride levels (high cholesterol). This problem is closely associated with other problems such as strokes and heart attacks. So to prevent this proble m, it is better to pursue a wholesome diet. At the same time a regular exercise schedule is required too.
Nowadays people prefer to stay indoors due to the various entertainment devices at home. No activity has led to obesity. Parents must encourage their children to take up sports like basketball, volleyball and other exercises. Most of the Americans have become health conscious and are engaged in diverse sports types like swimming, aerobics, sports, running etc.
Brisk walking has become a ver y easy form of exercise today because it does not require any training. Volksmarch is a very popular activity in Germany where many people get together and go for a long walk in the evenings. They also enjoy eating together. So, go out and start exercising to stay healthy and fit.
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Why Is Small Business Health Insurance Worth It?
If you’re looking for a guide to how to get health insurance and what kind of health insurance is best for your small business, then this is the article for you. Your business qualifies for small business health insurance if you have anywhere between two and fifty employees in it. If you are self employed then you’ll want to look into getting self employed health insurance.
There are many benefits to getting small business health insurance. A small business health insurance plan will help spread the financial risk around to everyone and not just yourself. As this is the case, this generally will bring lower premiums and more extensive coverage. Along with this, the health insurance provides medical care for you and all other employees as well.
With a small business health insurance people often get group insurance. This too has its advantages on several different aspects. All contributions from the employers are 100% tax deductible, and you’ll save on payroll taxes as well. Small
businesses will be eligible for group insurance just as long as you have two or more full time employees working.
When setting up a group insurance plan for your small business, all members will be set up with a coverage plan with rates calculated using the group and individuals. After that it is up to the separate employees themselves if they wish to add riders
and additional coverage to satisfy their needs. Keep in mind that not all employees in the small business have to join the group plan. Just as long as there is no fewer then two employees in the business that have the group insurance plan,
then you will be fine.
The cost of the group insurance plan varies based on several different characteristics. Some of these include age, health status, business and/or residential location and so on. Like everything in this world it’s not going to be cheap, but it will be cheaper then having a bunch of separate health insurance
plans.
Most health plans are going to require employees to pay at least half of the premium cost for covered employees. Some employees will offer to pay 100% of the cost, white now there is a new health plan giving employees the option to pay as little as 25% of the cost. Just know that typically most types of coverage
will cost employees a minimum of $1,600-$2,500 per year per employee. By clicking on the link below you can begin getting quotes for your small business health insurance.
http://www.buyerzone.com/benefits/health_insurance/qz_questions_2.jhtml
Just remember that many times medical services are needed unexpectedly. If you or other employees do not have health insurance this could be a devastating blow to the wallet. The cost of a hospital visit, depending on the circumstance, will
many times be much higher then the cost of health insurance. You want to be able to live life knowing that you’re insured just in case the unexpected happens. Nothing hurts to at least look at some quotes and talk it over with other employees, but
you have the power to make the decision.
China Portfolio Insurance
Are you excited about the upside potential of China but can’t pull the trigger because of the significant downside risk? Here is a way to invest in China growth and still sleep at night.
China has been the largest economy in the world for eighteen of the past twenty centuries and it is clearly determined to regain its role as the hegemonic power in Asia and then challenge U.S. global leadership. Will it be able to sustain its 10% economic growth rate, quell rural discontent, build a sound market-based financial system, privatize dominant state-owned enterprises and move towards openness and democracy? This is a tall order and you can put me in the skeptic column.
Nevertheless, China’s raw industrial power, momentum and the palpable ambition of the Chinese people could realistically yield a huge return. I advise my clients to go ahead and invest in China but emphasize that this is a speculative investment. It is smart to protect against the considerable downside risk.
Here is a simple plan you might want to execute to capture the upside while cutting your losses if the Chinese economy hits a speed bump.
First, you could take a broad stake in China through investing in the China iShare exchange-traded fund (FXI) that is comprised of 25 of the largest and most liquid China names. All of the 25 stocks included in the China iShare are listed on the Hong Kong Stock Exchange. Some of them are incorporated in mainland China (H shares) and some of them are incorporated in Hong Kong (red chips). The China iShare has been picking up steam in the last few months and is up just over 12% so far this year.
The China iShare provides good exposure to three key sectors of China: energy (20%), telcom (19%) and industrial (18%). This concentration can be viewed as a plus or a minus depending on your perspective. For example, some smart investors are placing a bigger bet on China’s consumer markets. The top five companies represent 40% of the index. The annual operating expenses of the China iShare are only 0.74% compared to 2% plus for other alternatives out there including actively managed China and greater China regional funds. Keep in mind that most of these companies are still largely controlled and owned by the Chinese government.
Next, you could take out some insurance to protect this position by purchasing a put option on the China iShare (FXI). It sounds complicated but is actually very straightforward. An option is a right to buy (call) or sell (put) 100 shares of a security on a fixed expiration date at a set price (strike price). For this right an investor pays a fee or premium.
While you may grumble about paying the premium with cold hard cash when you might not need it, you probably have home insurance just in case disaster strikes and no doubt you have some life insurance as well. Why not protect your portfolio as well? It is especially important to consider hedging against more risky emerging markets such as China. While countries like China offer tremendous upside potential, the downside risk can be daunting and immobilize even the bravest investor.
Let’s look at a couple of examples. Say you buy 100 shares of the China iShare (FXI) which is trading at $62 per share. Your total exposure is $6,200. Then purchase a put option (right to sell the China iShare) that gives you the right to sell FXI at a price of $60 on the third Friday in January 2008. I think we all can agree that a lot could happen to China, good and bad, from now until January, 2008. If the price of the China iShare moves down toward the strike price, the value of the option will increase.
This will cost you a premium of a little over $500 but limits your potential loss to $2 per share plus the premium. Or buy a put option at a strike price of $50 and your premium drops to about $200 with a worst case scenario of a loss of $12 per share plus the premium.
Here is another example. You know Latin American markets are hot and believe the bull market will continue but are wary that there is the potential for a sharp pullback. You could buy 100 shares of the Latin America 40 iShare (ILF) giving you exposure to Brazil, Argentina, Mexico and Chile at a price of $113 for a total exposure of $11,300. Then buy a put option giving you the right to sell 100 shares at a strike price of $100 in March 2006 for a premium of around $300. Your worst case scenario would then be a loss of 15% with unlimited upside.
Keep a cool head when investing in emerging market countries like China. They should represent only be a small portion of your portfolio and, whenever possible, take out some insurance.
GE Mortgage Insurance Issues Statement on S&P Credit Watch Action
RALEIGH, N.C., June 27 /U.S. Newswire/ -- GE Mortgage Insurance today released the following statement in response to the decision by Standard and Poor's to put GE Mortgage Insurance on CreditWatch:
S&P made its decision despite the fact that our capital position has never been stronger.
The S&P action is based on a change in S&P's rating methodology, not on any change in the financial condition of GE Mortgage Insurance. S&P noted that changes within its rating criteria "now limit the rating support for a strategically important subsidiary to one notch below the parent's rating" unless there is a significant explicit support agreement from a higher rated parent. We believe we have such an agreement from GE Capital, which is rated AAA by Standard & Poor's. Our implicit and explicit support from GE Capital has not changed.
GE Mortgage Insurance always has been one of the strongest capitalized participants in the mortgage insurance industry and continues to hold capital well in excess of S&P "AAA" requirements. In fact, we have operated with the lowest Risk to Capital Ratio (the industry measure of capitalization given a company's portfolio of risk) in the industry for the last five years.
The other two rating agencies, Moody's and Fitch, continue to recognize the unmatched financial strength of GE Mortgage Insurance. Both agencies recently reaffirmed their ratings for the company at "AAA," their highest levels.
We appreciate the fact that Standard & Poor's sees GE Mortgage Insurance as having "strong fundamentals" and "very strong earnings and market position, extremely strong capitalization, and deep and experienced management." Those factors make it clear why GE Insurance includes credit enhancements such as mortgage insurance in its vision for the future.
GE Mortgage Insurance (Web site: http://www.gemortgageinsurance.com) is part of GE Insurance, a global family of insurance and reinsurance businesses with $13.6 billion in premiums and assets of $188 billion. GE Insurance provides life insurance, retirement income products, property and casualty insurance, risk prevention services, mortgage insurance, and selective financial guarantee insurance. GE Insurance is part of General Electric Company, a diversified services, technology and manufacturing company with operations worldwide.
Car Insurance - How Can You Lower Your Premiums?
Many factors influence the premium for your Motor insurance policy. Your insurer will have asked you many questions whilst producing your quote - some of which will affect your premium and some will not. Below we discuss the key variables that are within the policyholder's control.
Consolidating policies
By insuring a number of vehicles with the same insurer, or by trying to take out home and life insurance through your car insurer, you may be able to secure a ‘bulk buy’ discount.
Location
A big influence on the cost of your car insurance is where you live. The chance of your car being broken into or stolen is a key concern for the insurer. More urban areas traditionally facing greater risk of theft and therefore tend to be more expensive than countryside locations.
Excess
By agreeing to pay a greater excess on each claim you can reduce your car insurance premiums. This is because you are reducing the liability of the insurer and therefore in return they are able to offer you a lower premium.
Your Vehicle
The cheaper and slower your vehicle the lower your premiums are likely to be. If you are looking to buy a new vehicle make sure you fully consider the cost of insurance – you may be able to buy the car but can you afford to run it?
Mileage
You can control your insurance premiums by restricting your annual mileage. However, be aware that if you exceed the restricted number of miles you'll then become uninsured!
Parking
Where you park your vehicle overnight is also very important to the insurers. If it is kept in a locked garage, you should be offered a lower premium than if you leave it unattended in the street.
Security
Security devices that prevent or hinder theft may also reduce your premium. Common examples include alarms and immobilisers, however, be aware that as we improve the quality of our security devices the thieves just become better at bypassing them.
No Claims Discount
Save up your no claims discount by avoiding making small claims upon your policy. After a set number of years, 4 or 5 typically, you'll often be offered the option to pay an additional small premium to protect your no claims bonus. This can prove very helpful if you subsequently end up having an accident.
Advanced driving skills
By taking an advanced driving course you may also be able to reduce your premiums. The Institute for Advanced Motorists and the Royal Society for Prevention of Accidents each offer membership which provides you with discounts for both the cost of driving courses and your car insurance premiums. Two key variables NOT within the policyholder's control.
Your Sex.
Women are statistically less likely to have an accident and, if they do, it's less likely to be serious. Because of these statistics women benefit from lower premiums. It is also worth noting that if you represent one half of a couple you should consider having the female as the primary driver with the male as the second driver.
Your Age
The older you are, the less likely you are to make a claim. As a result insurance companies charge lower premiums for more mature drivers.
One final piece of advice.
A large percentage of car insurance is now sold on the Internet. That's because it's convenient and cheap. Many insurers now give a further 10%-15% discount if you buy online.
No Excuses Exercises
It's old news that exercising is the single best way to spark up your weight loss efforts. The activity perks up your metabolism, and eats up more calories. In addition, the more you exercise, the better the effect. Exercising builds muscle mass, which is denser and more compact than fat. That means your body has to expend more effort to pump blood through it, and it requires more nutrients to keep it healthy. The end result? Even at rest, your body naturally burns more calories.
Unfortunately, the prospect of exercising tends to elicit groans from most people. There's all the logistics to work out - the time, equipment, expense and the sheer, utter boringness of it all. Negative thinking about exercise can sabotage all your good intentions. Here's a list of answers for some of the most commonly used excuses not to exercise.
I don't have time to exercise!
Exercise could be one of the most important things you'll do for your health today. MAKE time to exercise. If you're doing traditional workouts - move those weights and mats right out into the family room and make use of your television time. Instead of flopping down in a chair while you watch the news or your favorite show, be active. Run in place, do leg lifts or heft weights. Use time in your car to tighten and tone muscles with isometric tummy tighteners. Walk up the stairs instead of using the elevator. Exercise doesn't have to be a solid hour at the gym. Anything that revs up your motors is great for your body.
I don't have the right equipment at home.
You don't need equipment to exercise. A brisk walk around the block is good for you - and burns over 200 calories. Vacuuming your carpets can burn nearly as much. Flip on your radio or pop in your favorite high-energy CD and dance. Don't fool yourself into thinking that your 'exercise' has to be a carefully planned workout to work all the right muscles in the right order with the right tension. Exercise means being active. Just do it.
I can't afford a membership to the gym.
If you'd rather exercise at the gym (and have access to their fitness machines, whirlpools, swimming pool and trainers), there are a lot of ways to make it more affordable. Check with your health insurance company to see if they offer incentives. Most of the major health insurance companies, including Blue Cross, cover part or all of fitness club memberships as part of your benefits. If yours doesn't, or if you don't have health insurance, call your local YMCA or YWCA. Most offer 'scholarships' or sliding fee scales for memberships to their facilities.
But exercise is such a chore!
Says who? Make getting your daily exercise fun. Play a game. Go dancing. Grab a few friends for a weekend hike in the state park. Exercise doesn't have to be routine. Stop thinking of it as a chore and start thinking of it as recreation. You'll be amazed what a difference it makes.
Long Term Health Care Options
As you grow older, housing may pose more and more of a concern, especially if your health is failing. If you are worried that you may not be able to take care of your basic needs as you age, such as cleaning, cooking, bathing and maintenance, then looking at your long term health care options is an important choice. Let’s start right away with your options.
In-Home Care
In-home health care is the best option for people who have a higher level of fitness, and want to remain as independent as possible throughout their later years. In this situation, home health care nurses may come and visit you daily, or every couple of days, to take care of your everyday medical needs. Also, a housekeeper may be utilized, as well as a personal health care attendant, who would be responsible for more of the day-to-day living help – such as a companion, driver, cook or the like. In-home health care is quite easy to locate; just contact a nurses’ association or look in the Yellow Pages.
Continuing Care
An intermediary between nursing homes and independent living, continuing care, or retirement communities, offer a wide variety of health benefits and services to their inhabitants. These communities are usually all-inclusive, where dwellers receive lodging, meals, social events, varying levels of health care, and sometimes other perks as well.
Entrance fees for these establishments can be quite high (ranging from $10,000 to over 300,000); added to their monthly fees (ranging from $800-4000), and this option can prove to be expensive health care. However, services are guaranteed for the remainder of your life if you choose this option, and if your health falters, you can always be moved to the nursing home portion of their health care facility.
Because of the all-inclusive nature of this kind of health care, you’ll want to read the fine print carefully in your contract. What are all of the recurring and one-time fees? What exactly is covered with those fees? What health care options are, and are not offered? Do you need to purchase extra health insurance to cover your specific care costs? Also don’t forget to check up with the Better Business Bureau about the status of the facility you are interested in; if you plan on living there the rest of your life, you may want to double check it’s reputation, too.
Nursing Homes
In a very simple sense, nursing homes will take care of your health care needs when you are no longer able to. This may be for a short period of time while you are recovering, or for a longer period of time as you age. Nursing homes are the whole meal deal of health care for the elderly or otherwise incapacitated. If this is an option that you think you may require, there are many things to discuss and consider when looking at your options. Does the home provide the type of care that you will require? Research the history of the nursing home; are there any black spots on their record? Talk to people who have lived there, have used their services, or who are still living there now, if at all possible. Get their viewpoint.
A Canadian Pharmacy is a Lifesaver for Some Americans
Many of you may have heard about the ongoing war between the Canadian pharmacy and the American pharmacy. The American FDA has recently been trying to crack down on prescription drugs imported from Canada to the United States. But why is this? What exactly got the FDA's feathers ruffled?
The FDA states that it is illegal to import any prescription drugs from overseas. Anything found at the United States border will be seized. But this shouldn't include a Canadian pharmacy. Canada isn't even overseas... right? That's what many Americans say who frequently cross over the American border into Canada to go to a Canadian pharmacy. This has gotten the FDA a tad angry.
Now why on earth are Americans going to a Canadian pharmacy? With the rising prescription drug costs and the lack of good affordable health insurance many can't afford to buy it in America. Canadian pharmacies often save people as much as 40%, if not more. For some people, a Canadian pharmacy is the only way they can afford to get their much needed medication to survive. Just recently, you can now order from a Canadian pharmacy online and have it mailed directly to your home.
The FDA states that getting prescription drugs from a Canadian Pharmacy is not safe. However, they have never shown any evidence of this. They also state that purchasing prescription drugs from a Canadian pharmacy will lead to lost jobs for us Americans. There is no evidence of this either. Besides, people still can't afford to buy there prescriptions in America anyways. In fact, some states (like Wisconsin and Texas) encourage people to buy prescriptions from Canada and they are even attempting to incorporate a prescription drug plan with Canada.
A Canadian Pharmacy is safe and legitimate. There is no evidence that a prescription from a Canadian pharmacy poses any health risks. They also insure the same quality and potency as American prescriptions but at a much cheaper price. To make you feel more at ease, all Canadian pharmacies ask that you have a prescription from your doctor and include you medical and allergy history before you can purchase any prescriptions. This is also the same if you order from a Canadian pharmacy online. Before ordering online from any company, make sure that the company has a legitimate address and that they provide a toll free number with live operators to assist you.
Purchasing prescription drugs from Canada is an answered prayer for many Americans. Some Americans wouldn't know what to do if it wasn't available. It gives peace of mind knowing that there is still an affordable way to get the prescriptions people need, even if the FDA doesn't like it.
You May Have Found The Best Advice Regarding Life Insurance.
You may have found the best advice regarding life insurance. When you are trying to find top advice concerning life insurance, it will be easier said than done extricating superior advice from foolish life insurance suggestions and support so it is important to know how to judge the advice that is offered.
Now we'd like to offer you some advice which we think you should use when you are trying to find information about life insurance. You need to understand that any recommendation we present to you is only pertinent to internet help on life insurance. We are unable to offer any guidance or advice for conducting research offline.
A great hint to follow when you're presented with help or advice about a life insurance web is to verify the ownership of the website. Doing this could reveal the owners life insurance credibility The quickest way to work out who owns the life insurance web site is to find the sites 'about' page.
Any worthwhile website providing information on life insurance, will almost always provide an 'about' or 'contact' page which will record the site owner's contact details. The details should divulge major points about the owner's skill and understanding. You can then arrive at a decision about the webmaster's familiarity and qualifications, to provide advice to you regarding life insurance.
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