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Breaking Down and Improving

As you may know, based on some recent articles, I have started my home buying process. I have looked at many factors like the economy, monies available for down payment and job security when weighing the decision to buy a place. However, I have found that the one financial factor that seems to be the most important in being able to afford the home I want is my credit score. This determines what kind of interest rate I can get on my mortgage, how much down payment and subsequently my maximum loan amount. In fact as I researched what is in a credit score, I have come to realize that it is probably one of the most important numbers in your financial life. Simply put and all other things being equal, the better your FICO credit score, the cheaper your cost of borrowing. So here is a breakdown of your credit score, how to get it (cheaply) and ways you can improve it:
Your FICO credit score breakdown
The term credit score usually refers to your FICO score, a number based on a formula developed by the Fair Isaac Corporation, which looks at a summary of all your credit accounts and payment history. Your FICO (credit) score determines your access to and cost of credit. Most lenders use it as the main basis for loan or credit approvals, so the higher the better and the lower the more problems. FICO score ranges from 300-850, and Fair Isaac calculates them for each of the three big credit-reporting agencies: Equifax, Experian and TransUnion.

Here’s how your score is determined:

• 35%is determined by your payment history. Do you regularly pay your bills or fines on time to any creditor that submits your information to the credit bureau? Overdue medical bills, parking tickets and other fines may appear here.
• 30% based on the amounts you owe each of your creditors, and how that compares with the total credit available to you or the total loan amount you took out (debt to equity ratio). If you’re maxing out your credit cards, your score may suffer.
  
• 15% is based on the length of your credit history, both how long you’ve had each account and how long it’s been since you had any activity on those accounts. The fewer and older the accounts, the better (assuming you’ve made timely payments).
• 10% is based on how many accounts you’ve recently opened compared with the total number of your accounts, as well as the number of recent inquiries on your report made by lenders to whom you’ve applied for credit. Your score can drop if it looks as if you’re seeking several new sources of credit — a sign that you may be in financial trouble. (If a lender initiates an inquiry about your credit report without your knowledge, though, it should not affect your score.) Shopping around for an auto loan or mortgage shouldn’t hurt, if you keep your search to six weeks or less. But every inquiry you trigger when you apply for a credit card can affect your score. So be selective.
• The final 10% is determined by the types of credit used. Having installment debt — like a mortgage, in which you pay a fixed amount each month — demonstrates that you can manage a large loan. But how you handle revolving debt, like credit cards, tends to carry more weight since it’s seen as more predictive of future behavior. (You can pay off the balance each month or just the minimum, for example, charge to the limit of your cards or rarely use them)

What’s not in your FICO credit score: Contrary to popular belief, your age, employment history and where you live are not used in determining your credit score. This is not to say this information won’t be considered by lenders when evaluating you for a loan, its just that it will not factor into your FICO score calculation.

How do I get my FICO score cheaply and is it any good?

Now that you know what your credit score is made up of, you want to see how your’s stacks up. If you have a social security number and have conducted any type of financial transaction, chances are you already have a FICO score. One important point to note is that your Credit Report (available free from annualcreditreport.com – the only authorized online site under federal law) is not going to give you your FICO credit score. It is a good place to start and identify errors, because it shows all your credit history, but it will not give you your actual score.

For that, you’ll generally have to pay. You can go through the three major agencies Equifax, Experian or TransUnion directly, which have 3 for 1 packages or sometimes their own scoring methodology, which can be different than the FICO scores lenders generally use when they evaluate your loan applications (so read the fine print). I have found that myFICO.com (Fair Isaac corporation’s own website) offers the best and most reasonably priced options on its site. The $15.95 FICO Standard package (as of March 2009) lets you get your credit scores from your choice of Equifax or TransUnion. With this comes a full explanation of the credit score and how lenders view you. Best of all, it also includes actions you can take to get your FICO score into the higher ranges. You can all also get myFICO’s Score Watch which monitors important changes to your score and alerts you (weekly) when there are any changes. Another nice feature: It also notifies you when you qualify for a better interest rate. It costs $8.95 p/month, you can try it for free via this promotion.

How does your credit score rate? For the best rates on a loan or credit card, you want a score that’s above 750. The median US credit score is 720 (half the population has more than this, while the other half is lower). The next section looks at how to achieve a good score, but here how the various FICO score ranges compare:

Top Shelf Score: A score above 780 means you have excellent credit with an excellent history of paying back and managing debt. Even in this economy, banks will happily lend to folks with 780+ credit scores, meaning they will get the best rates and easiest access to credit.

Middle of the Pack: FICO score from 700 to 780 is very good and above average (the FICO score is not a linear range). You may not get the best rates, but if you have a stable job and little debt then you should get a very competitive rate. However focus on getting to the 780 level, using the simple tips that follow
Work to do: FICO credit score between 600 to 700. You won’t be denied loans on this score but the terms aren’t going to be too generous. You need to work hard to get your score into the higher ranges or face the prospect of years of rising debt payments, while your higher credit neighbors live the cheaper debt life.

In the Dog House: Credit score below 600. Once upon time banks used to love sub-600 borrowers because they could charge them the highest rates and reap the biggest profits. This group were called the “sub-prime” borrowers. Then we had a crisis with the same name, and the rest is history. Now banks and brokers won’t give you the time of day. You really need to focus on repairing your credit (it can be done!) or learn to live without it. Cash is your best friend and stay away from the loan sharks.

You are likely to see improvement in your scores within 30 days if you pay down significant chunks of your credit card debt. But otherwise, credit repair takes time, and how much time depends on the many details of your credit reports. If you have serious black marks, such as bankruptcies or foreclosures, you can see significant improvement in your scores as time passes but you may have to wait until those negatives drop off your credit reports before you can join the 700-Plus Club.
Improving or Repairing your FICO Credit Score

The good news is that no matter what your score you can always do things to improve it. Some may seem counter-intuitive, but they are all looked upon favorably by the rating agencies:

• Check the credit reports that you get with your FICO score for errors, omissions and potential identity theft. Omissions matter because you want to show that you have paid off loans. If you notice information that’s inaccurate, you can submit a request for removal by mail or online with the major rating agencies. Be sure to specify what information you think is inaccurate and why, and include any documents that support your argument. Ask in writing that the information be corrected or removed from your report. By law, the bureaus must investigate your complaint, usually within 30 days, and give you a response in writing (or via e-mail, if your request was made online) and a free copy of your report, if the information is changed as a result. Your score should reflect that change shortly after.
  
• Paying your bills on time is crucial. Since 35% of your score is based on your payment history, delinquent payments and collections can have a severe impact on your score. If you can’t pay off your credit card debt every month, pay it down to less than half the maximum available balance.
• A quick and effective way to improve your credit score in this area is by paying down your revolving credit. In fact, owing the same amount but having fewer open accounts may lower your score. So don’t cancel the credit card once you’ve paid it off because the score considers longevity and available (revolving) credit.
• A common mistake for many frugal and debt averse individuals is never using a credit card. Advisers recommend that they use it even just once a year and pay it off immediately.
• A score can be hurt if multiple lenders request a person’s credit report because they’re shopping for a mortgage or auto loan. To avoid this, get “good faith” estimates from banks without giving your Social Security number.
  
• Re-establish your credit history if you have had problems. Opening new accounts responsibly and paying them off on time will raise your credit score in the long term.

Monitoring your Credit score

With the rise in identity theft over the last few years, there has been much debate about how often you should monitor your credit score. Companies like Lifelock have been advertising heavily about protecting your identity and hence your credit. Whether you need to monitor your credit that often is debatable. For most, a close look at the free annual reports from each bureau is probably enough. But if you plan to apply for a loan or credit card, check your score and report at least a couple of months beforehand. Not only will you be aware of how creditworthy you are, you’ll also have time to remove any errors you spot and make sure your score reflects the changes before you fill out any applications.

So there you have it – a pretty detailed look at how your credit score is calculated, measured and can be improved. Feel free to leave a comment if you have any questions or stories on how you improved your credit score.

Lessons from investing in a losing stock

Want to tell you a story about my trading history with Brocade Communications (BRCD). This was one the first stocks I bought after moving to the US. It had just announced good results and was trading around $10.50, There were some good articles about it and I saw some positive news stories about it. The fundamentals looked good, solid ratios, analyst buy ratings, no debt and it was in a duopolistic market – the only other major competitor was Cisco.
Yet today the stocks stands at $7. (It was down to $6 a few weeks ago and has had a run up before the earnings announcement today). So why did the stock drop so much, even though I did my homework? Well here are some reasons I think why :
- They had just been through SEC investigation for options backdating. Even though they paid a fine and had new management in place – this should have been a big red flag to me. It only takes one mistake for a company to lose it’s reputation but it takes a lot of time for a company to get it back. Institutions probably didn’t want to buy it until new management has a better track record.
- Their biggest competitor is Cisco- CSCO (up 5% in the last 7 months). I should have realized that Cisco is a much bigger, better established company. It has better margins and was more diversified! It was as they sat best of breed in the sector and I possibly should have bought this stock instead. I did do my research and that time felt BRCD had better relative growth prospects.
- Seasonal factors! Tech is normally weak during the summer. Brocade is a tech stock! I should have factored this in and waited to buy the stock
- Before and After the positive earnings announcement in Jan (just before I bought the stock), the share price ran up about 30% – so I bought at the peak. I should have waited and had patience.
Anyway, I am still holding the stock as I do believe in the long term it is a good company in a growth sectors (Networking and storage management). I am not selling anytime soon and hopefully their future earnings will improve. If the earnings and forecast are poor – I will probably sell and take the loss! However I will not forget the factors I should consider for my next investment,

Paying Off Student Debt Faster

Student loans are one of the most common forms of debt and can easily turn into a life-long hassle if you aren’t careful. If you are a recent graduate, the best thing that you can do for the state of your finances is to make paying off your student debt a priority. Here are a few ways to get your student loans taken care of as early as possible in your career.
1. Pay more than required to reduce principal
When your first student loan payments are due, your lenders suggest a minimum payment, usually based on a ten year repayment schedule. If you are able to afford it, it’s best to pay more than the suggested amount, which can help reduce interest rates. Be sure, however, to notify your lender in writing your intent to do so, as paying extra each month may only roll over to next month’s payment, in effect not reducing your principal.
2. Know exactly how much you owe, when payments are due, and how to get in touch with your lenders if you have questions.
Your school’s financial aid office is the best source of information about student loans. If you have any questions about when and how to make payments, or if you need to update your contact information, be sure to contact the office and clear things up. The worst thing you can do is go MIA when it comes time to repay student loans and default, which can ruin your credit score. Staying in touch is key.
3. Look into loan forgiveness programs.
Many recent graduates don’t have a specific career path mapped out once they leave school. If you’d like to take a few years off to help your community or others in need, consider applying to several programs offered by the federal government that can effectively forgive your student loan debt. Examples of such programs include AmeriCorps, the Peace Corps, and the National Guard. Teaching in specific low-income communities can also serve to forgive student debt. For information, check out this FinAid article on student loan forgiveness.
4. Loan consolidation is a good option for some.
While paying off your loans quickly is best for your finances in the long-term, if you’re interested in reducing your monthly payment and making it easier to keep track of your payments, consolidating your loans may be helpful. By consolidating, you can extend the repayment schedule of your loans, and you can also put everything into one easy payment. There are a few downsides to consolidation, which you can read more about here.
5.  If you want to pay off some loans ahead of schedule, work on the most expensive ones first.
If you have multiple student loans and would like to get rid of one or more as quickly as possible, pay off the ones with the highest interest rates. It’s also good to prioritize private loans, as their interest rates are more often than not higher than federal loans, and they don’t have the repayment flexibility that government loans tend to have either.
While student debt is something that more and more of us have to tackle considering the rising cost of higher education, if you’re smart about it, you can get rid of the debt in no time. Just be aware, stay on top of things, and don’t panic. A debt-free future is closer than you think.
This was a guest post contributed by Kate Willson

A New 2011 Economic Stimulus Package With Obama-Bush Tax Cuts and Unemployment Benefit Extensions

[Update - No New Taxes with Tax Extensions Approved] President Obama has now signed into law a bill that covers a temporary extension of all the bush-era tax cuts. The new bill also contains extensions to some of the 2008 stimulus tax breaks, and even has some new tax cuts. With this legislation he has essentially created a new 2011 Economic Stimulus package, estimated at around $858 billion. Here’s how various key components of the “2011 economic stimulus package” legislation will affect you:
No increase in federal income taxes as current rates stay the same. The table below provides the potential 2011 tax rates and brackets, which are slated to be the same as 2010 levels. Tax bracket ranges may move slightly when the official IRS tables are published, but with low inflation the changes should be minimal. A rise in tax rates would have cut the after-tax pay by $3,000 for the average tax payer, so this provision is worth a lot given current economic conditions. However, the tax rates extension is only for 2 years, and unless the economy really tanks, don’t look for these to be extended again.

Lower social security payroll taxes = More money in your paycheck. The employee payroll tax, which funds Social Security and Medicare, would also be cut by 2% during 2011 to help spur business hiring. Unfortunately this social security benefit will be of no help to seniors who will not receive another $250 supplementary social security payment (nixed by Congress, due to low inflation) in 2010. Seniors should benefit from the unchanged tax rates, but are probably the group getting the least benefits from all the deficit adding stimulus spending.
Extension of unemployment benefits for 13 months. This will allow the long term unemployed to keep their unemployment benefits longer. Over 2 million unemployed would have lost their benefits this month if the insurance was not extended. However the maximum is still 99 weeks and the growing number of ultra-long term employed is a worrying trend for everyone.
Small business owners get capital equipment tax breaks. Under the compromise deal,  business’ will get to take a full deduction for equipment purchases that currently must be deducted over time (accelerated depreciation original proposed in small business jobs bill). The proposal would accelerate $200 billion in tax savings for companies in the first year and benefit 1.5 million companies and several million individuals who run businesses.
Capital gains and dividend taxes unchanged providing a boost to equities -Long-term capital gains (on assets held at least a year) and qualified dividends will continue to be taxed at a maximum of 15%. This benefit will mean that investors can keep more of their gains and should see the stock market enjoy more gains in 2011.
Estate limit increase and lower taxes – Existing thresholds will be raised to $5 million for an individual or $10 million for a couple for both estate and gift-tax levies, with a top tax rate of 35%.  These new provisions are only for 2 years and will expire at the end of 2012, meaning a lot of revised estate planning for families. Taxpayers who have already used some of their lifetime exclusion under the old rules ($1 million) will be eligible for the higher exemption limit. The annual gift limits will  remain at $13,000, or $26,000 for a couple, a year for each beneficiary; this is in addition to the lifetime limits.
The extension of the tax cuts also reinstates many smaller, but still valuable, tax credit provisions that were also scheduled to expire at the end of 2010:

• The American Opportunity Credit, which allows college students and their parents to save up to $2500 on their taxes.
• Teachers Tax Credit for teachers who purchase classroom supplies using their own money. They can continue to write off eligible costs up to $250.
• Child Tax Credit  of $1000 per child under 17 years-old will continue to be available to parents or legal guardians on the child.
• The already expanded  Earned Income Credit, which reduces the marriage penalty and creates a “third tier” of the EITC for families with three or more children, has been extended for another 2 years.

I will continue to update this post as the legislation passes through Congress and encourage you to subscribe (free) to get the latest news.

2011 Employee 2% Payroll Tax Cut Holiday For Social Security and Medicare. Making Work Pay Credit Not Extended

As part of bush-era tax cuts extension legislation (Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010), a number of new tax breaks were made available. One was a temporary one year cut in employee payroll taxes, which funds Social Security and Medicare, of 2% during 2011. The current rate is 6.2%, which will be 4.2% of wages paid next year, and equates to a $1000 saving for the average American employee.  Employers and payroll companies will typically handle the withholding changes, so workers shouldn’t need to take any additional action, such as filling out a new W-4 withholding form. Employers have until January 31, 2011 to implement the new payroll tax rates, and make any necessary adjustments or corrections by March 31, 2011.
The payroll tax break, which in essence is another economic stimulus payment, has been provided to help workers and spur business hiring.  The employer tax rate for social security remains unchanged at 6.2%. The 2011 social security wage base limit is $106,800. In 2011, the Medicare tax rate is 1.45% each for employers and employees, also unchanged from 2010. There is no wage base limit for Medicare tax. The reduced Social Security withholding as a result of the payroll tax cut will have no effect on the employee’s future Social Security benefits.
Further, the Making Work Pay tax credit expires on December 31, 2010. As a result:
-  The income tax withholding tables for 2011 will no longer be adjusted for the Making Work Pay credit.
- There is no longer an optional additional withholding adjustment for pensions.
- The procedure for withholding on wages of nonresident aliens has been modified
The IRS has also released instructions to help employers implement the 2011 cut in payroll taxes, along with new income-tax withholding tables that employers will use during 2011. The IRS will also publish the official 2011 Federal tax rates and brackets in a few days which incorporates the above changes and encourage you to subscribe (free) to get the latest news.

Child Tax Credit Extension For 2011-2012

As part of bush-era tax cuts extension legislation (Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010), a number of popular tax breaks were extended. This includes the valuable tax credit for dependent children that many parents have taken advantage of over the last few years. Thanks to past legislation the child tax credit was doubled to its current level of $1,000, plus making the eligibility and qualification thresholds lower so that more families can take advantage of it. The latest legislation keeps all past rules intact and funds the credit for another two years.
Child Tax Credit
Under the recently approved legislation, the Child Tax Credit (CTC) of $,1000 per child under 17 years-old will continue to be available in 2011 and 2012 to tax paying parents or legal guardians on the child. This credit is the largest tax provision benefiting families with children. Full CTC eligibility is subject to income limits of $110,000 for married couples and $75,000 for single parents. After these income levels the credit is reduced by 5% of adjusted gross income. Because it is a credit, and not a tax deduction, taxpayers receive it is a refund if no taxes are owed. The IRS has published some other additional information around claiming and qualifying for  the credit:
Additional Qualification – A qualifying child for this credit is someone who meets the qualifying criteria of six tests: age, relationship, support, dependent, citizenship, and residence.

1. Age Test – To qualify, a child must have been under age 17 – age 16 or younger – at the end of the year in which the credit is being claimed for
2. Relationship Test – To claim a child for purposes of the Child Tax Credit, they must either be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister or a descendant of any of these individuals, which includes your grandchild, niece or nephew. An adopted child is always treated as your own child.
3. Support Test – In order to claim a child for this credit, the child must not have provided more than half of their own support.
4. Dependent Test – You must claim the child as a dependent on your federal tax return.
5. Citizenship Test – To meet the citizenship test, the child must be a U.S. citizen, U.S. national, or U.S. resident alien.
6. Residence Test – The child must have lived with you for more than half of the year you are the claiming the credit for.
7. Limitations – The credit is limited if your modified adjusted gross income is above a certain amount. The amount at which this phase-out begins varies depending on your filing status. For married taxpayers filing a joint return, the phase-out begins at $110,000. For married taxpayers filing a separate return, it begins at $55,000. For all other taxpayers, the phase-out begins at $75,000. In addition, the Child Tax Credit is generally limited by the amount of the income tax you owe as well as any alternative minimum tax you owe.
8. Additional Child tax Credit – If the amount of your Child Tax Credit is greater than the amount of income tax you owe, you may be able to claim the Additional Child Tax Credit.

The Child tax credit can be claimed in addition to the existing credits for Child Dependent Care expenses.

2011 Tax Changes – Updated IRS Tax Tables and Income Thresholds

The IRS has released its 2011 Tax Rates and Income thresholds following approval of the Bush-Era Tax Cuts. The latest 2011 IRS federal tax table is shown below with the following key tax changes:
- Personal exemptions and standard deductions will rise and tax brackets will widen due to inflation adjustments related to provisions that were either modified or extended by the legislation extending the Bush-Era tax cuts. The value of each personal and dependent exemption, available to most taxpayers, is $3,700, up $50 from 2010.
- The new standard deduction is $11,600 for married couples filing a joint return, up $200, $5,800 for singles and married individuals filing separately, up $100, and $8,500 for heads of household, also up $100. Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions, such as mortgage interest, charitable contributions and state and local taxes.
- Tax-bracket thresholds increase for each filing status. For a married couple filing a joint return, for example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $69,000, up from $68,000 in 2010.
- The standard deduction for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of (A) $950, or (B) the sum of $300 and the individual’s earned income.
- The maximum earned income tax credit (EITC) for low- and moderate- income workers and working families rises to $5,751, up from $5,666 in 2010. The maximum income limit for the EITC rises to $49,078, up from $48,362 in 2010.The credit varies by family size, filing status and other factors, with the maximum credit going to joint filers with three or more qualifying children.
- The modified adjusted gross income threshold at which the lifetime learning credit begins to phase out is $102,000 for joint filers, up from $100,000, and $51,000 for singles and heads of household, up from $50,000.
- The 2% payroll tax cut and making work pay credit impacts have been reflected in the latest tax table.
Several tax benefits will also remain unchanged in 2011. For example, the monthly limit on the value of qualified transportation benefits (parking, transit passes, etc.) provided by an employer to its employees, remains at $230.
The IRS also announced that as a result of delays in passing the the tax extensions and from new tax breaks, some tax payers may face delays with filing and receiving their returns. People claiming the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction as well as those taxpayers who itemize deductions on Form 1040 Schedule A — will need to wait to file their tax returns until tax processing systems are ready, which the IRS estimates will be in mid- to late February.
The IRS will announce a specific date in the near future when it can start processing tax returns impacted by the late tax law changes. In the interim, people in the affected categories can start working on their tax returns (e-file recommended), but they should not submit their returns until IRS systems are ready to process the new tax law changes.
I will provide an update when these issues are resolved and for other tax information I encourage you to subscribe (free) to get the latest news.

Tax Tips If You Are Looking for a Job – Deducting Moving, Education and Job Search Expenses

With almost 10 percent of the United States workforce currently unemployed, the idea of owing money at tax time is downright scary. If you are actively looking for a job, there are a number of tax benefits – including some sizable tax deductions available to you – that should help minimize your tax implications during the upcoming tax season.
Tax Deductions for Job Seekers
Most of the expenses directly related to your job search are tax deductible, provided you are not seeking employment for the first time or trying to find work in a different industry. You may not have thought about the possibilities of tax deductions for job search expenses, because, individually, most of your expenses may not seem like much, but once you start adding them up, you might be surprised at how much searching for a job actually costs you.
If you itemize your tax return, you will be able to claim a deduction for eligible job search expenses that exceed two percent of your adjusted gross income.
Eligible expenses include a wide variety of job search expenses, including, but not limited to:

• Car mileage to and from an interview; parking tolls; highway tolls
• Fees to employment agencies
• Long distance phone calls or faxes to seek employment or send resumes and applications
• Expenses associated with the creation of your resume, printing or mailing of resumes
• Advertisement or classified space in industry trade magazines, job search websites or newspapers

Moving Expenses Associated with a Job Transfer
If your job search efforts result in new employment that requires you relocate, some moving expenses can be deducted at tax time. If your employer is covering relocation expenses, you cannot claim any of those expenses as tax deductions. In order to qualify as an eligible moving expense, your new employment must be more than 50 miles from your current (or primary) residence.
Eligible moving expenses may include:

• Mileage from your current home to your new home; parking fees and road tolls
• Hotels, if needed when traveling from your current home to your new home
• Packing supplies and expenses
• Moving companies

Education Expenses Associated with a New Job
If you decide to return to school to improve your odds of landing a job in your field, you may be able to deduct some of your education expenses. The amount you can deduct will depend on your adjusted gross income, with the maximum deduction of education for job seekers being $3,000.
Tips for Claiming Job Search Expenses on Your Taxes

The tax deductions for job seekers are designed to help cover the costs associated with the job hunt. It may be tempting to add on additional expenses that are not eligible for the deductions, which are very likely to be flagged and caught by the IRS.  Make sure you are only including expenses that are directly associated with your job search and save all of your receipts in case you are audited.   If you have any questions as to whether or not your expenses are eligible, it is highly recommended that you consult a tax professional.
This guest post was provided by BackTaxesHelp.com, a website that helps taxpayers with various tax problems. Visit their site to find more information on handling an unfiled tax return, an IRS wage levy and many other tax problems.

Just about anything involving money is a source for negotiation, but many people don’t think about the fact that their severance package is as well. Although we don’t want to think about that day when we may be laid off, it’s important to be prepared to negotiate our compensation package. Especially if you’re in a higher position in your company, don’t leave without negotiating your severance package.
Why?
First, it’s important to realize that your employer is under no obligation to offer you any type of package upon leaving but providing you aren’t let go for issues involving wrongdoing, it is often in a company’s best interest to offer you some type of package.
Companies don’t want you badmouthing them, going to work for one of their competitors and sharing sensitive information and they don’t want you so sue them for wrongful termination. In short, they want you to exit cleanly and quietly and they’re often willing to compensate you for it.
If you are laid off in a mass layoff situation, you probably won’t have much leverage in negotiating a package since a standard package is often offered to all who are laid off. Still, don’t be afraid to try because the extra cash could come in very useful in your future job search.
What should be in my Severance Package?
Of course there is no standard package bust most have these parts:
Compensation - A common practice is to offer you one or two weeks of pay for every year you worked for them and if you’re in upper management or other executive position, you may get an even larger amount. If your field is specialized which would make the time it takes to get a new job much longer, negotiate a higher payout. If you can get four weeks of pay for every year worked, consider that a victory.
Health Insurance – Health insurance is expensive. If you have to enroll in the COBRA plan which allows you to continue health insurance coverage after you leave your job, you are going to pay a much higher amount than you were when you were employed. Try to get your employer to pay for health insurance for a certain period of time. If you can get 18 months or the start of a new job, this would be a victory for you and your family.
Outplacement – Ask your employer for a favorable letter of recommendation as you leave. Ask to draft the letter yourself so that your accomplishments are highlighted correctly and prominently.  Some employers will also pay for job search services that will help you get a job similar to your last position.
Perks – Did your former employer give you a laptop or other perk? Negotiate a deal where you could keep these perks, at least until you find your next job. Of course this is low on the list of deal breakers but something like a laptop may assist you in finding a new job.
Announcement - Negotiate an agreed-upon date and type of announcement about your termination. Maybe you’re taking time off to be with family, moving out of the area, or simply moving on but this announcement is what will make its way around not just the office but colleagues in your industry. You don’t want to look for another job in your industry with the rumor mill buzzing about your firing.
Now that you have your severance package negotiated, make sure that you consult an attorney if the language isn’t clear to you. Once you sign it, it’s in effect so make sure you know exactly what you’re getting and committing to.
What’s Next?
If you’re laid off or fired, apply for The Federal-State Unemployment Compensation Program. Your taxes have been used to pay others who are in your situation so you should take benefits as well if you qualify. This compensation package will last for 26 weeks and your eligibility is governed by state law (recent economic stimulus funding has temporarily extended this to 99 weeks in many states). Often, you must go to the county agency who governs this program but in some states and localities, the application can be completed online.
Hold Your Head High
It’s happening to many people around the world and often layoffs have nothing to do with you as a person. See it as a business decision instead of a personal decision and be prepared to negotiate an equitable severance package with your employer.

2011 Economic Outlook and How to Invest and Prepare For the Year Ahead

So what will 2011 look like for the US and global economy? 2010 was a year of recovery, but it was sputtering and many questioned whether the recovery was real and if it could be sustained. As we head in to 2011 things are looking brighter following a booming stock market (up 13%), a new 2011 Tax Stimulus package, and housing markets stabilizing around the country.  But the one major area of concern is still unemployment, which is staying stubbornly high around 10% despite improving corporate and small business profits. With all these factors in mind, here’s what to expect for the year ahead and what you can do to leverage the forecasted trends.
Economic Growth: U.S. gross domestic product expanded 2.8 percent in 2010, confirming views that the US economy is on the mend. The 2011 tax-cut stimulus bill will pump another $858 billion into an economy that’s already starting to turn the corner, raising the prospects for decent growth in 2011 and 2012 – 3% on average according to forecasters. Consumer spending, a key driver of economic growth, accelerated to above 3 percent in the last two quarters of 2010. Economists are forecasting that it could accelerate up to 4 percent in 2011 on back of the strongest holiday season since 2005 and increasing consumer confidence.
Stock market: 2010 was a good year for the equity markets and 2011 looks to be just as good as the economy continues to improve. According to a Bloomberg survey of 11 stock analysts American equities will rise 11% on average, with many leading forecasters predicting returns above 15%. Equities will be further boosted by the growing number of mergers, acquisitions and stock buy-backs as companies seek to use their record cash stockpiles. All these factors and growing optimism make being invested in the market a must for short and long term investors. (See how you can trade stocks for free at Zecco.com)
Housing: The housing outlook for next year calls for a slow recovery as the national market continues to clear out inventory driven by the large number of home foreclosures. Some areas where unemployment is lower than the national average, like cities in the North East and North West, could even see home price rises in the summer of 2011. But with expiry of the home buyer credit and the prospect of more foreclosures, home prices are likely stay mostly flat in the year ahead. The good news is for existing home owners though, with interest rates at record lows, is that refinancing provides an easy way to lower their monthly payments and put that extra cash into their 401K or equity accounts.
US dollar: The once mighty US dollar has lost a lot of its sheen and perceived superiority over the last few years due to various government and Federal Reserve actions.  Unless there is geo-political uncertainty or a serious slump in global economic growth, the US dollar is likely going to continue its slow downward trajectory against most major currencies.  However the good news with a weaker US dollar is that our exporters and multi-national companies should benefit from foreign earnings, confirming views that the stock of these sort of companies are likely to do really well in 2011.
Inflation and Interest Rates: Despite scare mongering from the gold bugs out there and Federal Reserve’s quantitative easing actions (akin to printing money) inflation seems to be a problem for the future and should not really be a factor in 2011, or even 2012. However longer term inflation is a real issue and you should look to keep a small part of your portfolio in TIPS and/or Gold.
Interest rates will likely rise in 2011 after touching all time lows this year and sparking many mini re-finance booms in 2010. Interest rate rises will be driven by growing private-sector borrowing and an expectation of a slowdown in the Federal Reserve’s quantitative easing actions. But interest rates, like inflation, probably won’t rise till later in 2011. Still, if you have good credit and a stable job, refinancing in 2011 may be a good idea if rates are expected to go up.
Stimulus and Tax Breaks: President Obama;s recently approved $858 tax package will build on the existing 2008 stimulus package to further pump up the economy in 2011 and 2012. Economists are predicting the new stimulus will add between 0.2 to 0.5% to GDP, driving the expected 3% growth next year. This alone won’t be enough to turn the unemployment situation around, but should create a base for solid growth between 2012 and 2015.
Employment: With 3% growth, the unemployment rate should start to fall in 2011. But don’t expect it to fall fast. For one thing, there are a lot of discouraged workers who aren’t even looking for jobs anymore and, therefore, don’t show up in today’s unemployment statistics. But once growth starts to rise, they may re-enter the labor force, slowing any decline in joblessness.
And then there are those pesky interest rates mentioned above. As they rise, they could act like the governor on an old-fashioned steam engine, choking off growth just as it gets going. The result could be a long period – maybe years – of sub-par growth and uncomfortably high unemployment rates.
National Debt:  With all the stimulus payments and quantitative easing measures it is clear that the government is determined to do anything in its power to sustain and foster economic growth. However the cost of all these measures are borne by tax payers and adds to our growing national debt, which is already at record levels.  The debt reduction commission has put forward a number of tough measures for Congress to take to tackle the national debt, but with a fragile economy and 2012 presidential election ahead, it is unlikely that Congress and the administration will take any serious measures to cut debt levels.

Estate Tax Changes and 2011-2012 Exemption Extension

A change to the estate tax exemption was recently passed into law as part of the Bush-era tax cuts extension. The taxable estate exemption thresholds will be $5 million (from $3.5 million in 2009) for an individual or $10 million for a couple for both estate and gift-tax levies, with a top tax rate of 35% for estates above these levels.  These extensions are only for 2 years and will expire at the end of 2012.  If Congress had failed to act before the end of the calendar year, the estate tax would have come roaring back in 2011, jolting those who lost a wealthy loved one. While the estate tax may only seem applicable to the super wealthy, you may be surprised to learn that it applies to more people than one may think.
History
The estate tax is often called the death tax because it imposes a tax on a person’s estate once they pass away.  The estate tax dates back almost three thousand years. As early as 700 B.C., there was a 10 percent tax on the transfer of property at death in Egypt.
Looking ahead to the United States, the tradition of taxing assets at death began with the Stamp Act of 1797. The Stamp Act required a federal stamp on all wills which, as you can imagine, came with a hefty price tag. The Stamp Act was nothing more than a way to pay the expenses of the Revolutionary War.
Estate planning in today’s world though is much more complex and just writing a will will not suffice. It now includes organizing your assets in a tax effective way that reduce taxes due on death and to also help avoid family fights.
The modern estate tax debacle dates back to 2001 when Congress voted to gradually raise the estate tax exemption while cutting income tax rates. Congress has continued to debate this contentious tax with Republicans supporting it using the argument that why should wealthy Americans, who shoulder most of the tax burden, be taxed twice for assets/money they own. Democrats and the administration on the other hand argued that the cost to tax payers from extending the exemption levels was too high and only less than 1% of Americans benefit from estate tax provisions.
Impact
If the estate tax was reinstated in its pre-Bush Tax Cut levels, rates return with a vengeance of  55% on estates worth $1 million to $10 million and 60% on estates worth more than that. Of course there will be many who won’t have estates that reach the minimum amount but between IRAs, 401(k)s, real estate, and other assets, $1 million isn’t difficult to reach.
With the extension and raising of the estate tax exemption (under a Obama-Republican compromise deal to get other tax extensions approved) many families can now transfer significant amounts to heirs without paying taxes. However the rules around which assets can be transferred tax free and how to account for capital gains can get quite complex, which makes consulting a tax professional a must (after all you can probably afford it!)

(Extension Recap) For 2011 and 2012, estates worth $5 million or less won’t be taxed at all. For estate values greater than that, a 35 percent tax rate will apply.
That’s better than the 2009 law, which imposed a $3.5 million exemption and a 45 percent tax rate on the excess. And it’s much better than what would have happened had the Bush tax cuts expired. If that had happened, estates worth more than $1 million would have faced a 55 tax rate.
The bad news, though, is that Congress has set up a repeat of 2010 in 2013. Unless it acts again, the original $1 million/55 percent rate law will be back.
The head of the American Bar Association’s section that focuses on estate law estimates that less than one-half of 1 percent of people who die in 2011 will be hit by the estate tax. That’s minuscule compared to the 10.5 percent of estates that paid Uncle Sam in 1977.

Options for Claiming the Estate Tax in 2010 Returns: Under the estate tax wording in the bill, the heirs of people who died this year will have two options for a tax bill. If they chose to treat the estate by the tax laws in place in 2010, they will have to calculate the capital gains on all assets in the estate to determine if the value is above a level the IRS is allowing. This “artificial step-up in basis” is $1.3 million to any heir and $3 million to a surviving spouse.
The other option is to apply the 2011 law, which would exempt the first $5 million of the estate and impose a rate of 35 percent on anything above that. This is far more generous than the 2009 law — a $3.5 million exemption and a 45 percent tax rate — which many people thought would be reinstated.

2011 Business and Corporate Tax Rates with Small Business Jobs Act Tax Changes

With the passing of the Bush-era tax cuts and small business jobs act tax provisions, a number of tax laws will come into effect this year. Here is a summary of the key tax changes and how your business and personal income taxes could be affected.
2011 Tax Rates
The 2011 corporate tax rates are the same as the last few years as shown in the table below. While the tax rate structure may not look uniform, it does produce an effective flat tax rate of 34% for incomes from $335,000 to $10,000,000, gradually increasing to a rate of 35% on higher taxable incomes. Different corporations and business’ are subject to special tax provisions for which the IRS website should be consulted. Further, corporations are subject to state and local taxes based on the area in which they are incorporated and/or operate.

You can find the 2011 personal income taxes here, which are important for small businesses incorporated as sole proprietors, partnerships and S-corps.
Temporary exclusion of 100% of gain on certain small business stock
Business’ now have an additional incentive for investment in qualified small businesses, whereby  investors in qualified small business stock can exclude 100% of the capital gain upon sale of the stock. The exclusion under this provision is not an item of tax preference for purposes of the alternative minimum tax. In order to claim the capital gain exclusion, the qualified small business stock must be:
1. Acquired after September 27, 2010, and before Jan. 1, 2011, and
2. Held for at least five years before the stock is sold.
Under current law, the earliest tax year for which this 100% capital gain exclusion can be claimed is 2015. Additional limitations, qualifications and requirements may apply.
General business credits of eligible small businesses for 2010 carried back 5 years
New provisions now allow an eligible small business to carry back general business credits five years. Previously, the credits could only be carried back one year. The carry back is for credits determined in the first taxable year beginning after December 31, 2009. An “eligible small business” in general is defined as follows:
1. A corporation whose stock is not publicly traded, a partnership, or a sole proprietorship, and
2. The taxpayer must have $50,000,000 or less in average annual gross receipts over the three preceding tax years.
General business credits of eligible small businesses in 2010 not subject to alternative minimum tax
The new laws allow general business credits to offset both regular income tax and alternative minimum tax of eligible small businesses (defined above). The provision is effective for any general business credits determined in the first taxable year beginning after December 31, 2009, and to any carry back of such credits.
Temporary reduction in S-Corporation built-in gain recognition period
Under the Small Business Jobs Act, if the fifth year of an S Corporation’s recognition period ends before their 2011 taxable year begins, then no tax is imposed on the net recognized built-in gain for the 2011 tax year. Built-in Gains are recognized on Form 1120S Schedule D, Capital Gains and Losses and Built-in Gains. The 2011 Instructions for Schedule D, Form 1120S, will be revised and made available shortly.
Increased expensing limitations for 2010 and 2011; certain real property treated as Code section 179 property.
An expense deduction is allowed for businesses which choose to treat the cost of certain qualified property, called section 179 property, as an expense rather than a capital expenditure. For qualifying property placed in service during the taxable years 2010 and 2011, the new law increases both the maximum amount of the deductible expense, as well as the statutory phase-out amount. The provision also allows an election by a taxpayer to exclude qualified real property from the definition of IRC Section 179 property.
Generally, businesses are allowed to recover the cost of capital expenditures over time through depreciation expense. IRC Section 168(k) allows for additional first-year depreciation, for 50% of the basis, of certain qualified property placed in service after December 31, 2009. The new law extends the additional first-year depreciation deduction to qualified property acquired and placed in service during 2010. A taxpayer must use Form 4562, Depreciation and Amortization, to report depreciation on a tax return.
Increase in amount allowed as deduction for start-up expenditures in 2010
For taxpayers starting an active trade or business, the new law increases the amount the taxpayer is allowed to elect as a deduction for start-up expenditures under section 195(b) for taxable years beginning after December 31, 2009. Section 2031 allows up to $10,000 as a deduction for start-up expenditures and provides for a dollar-for-dollar reduction of the $10,000 deduction if start-up expenditures exceed $60,000. This expense should be claimed as an “Other Deduction” on business returns, such as the Form 1120, 1120S or Form 1065, or as an “Other Expense” on the related Form 1040 Schedules C or F, beginning with the 2010 tax year. The remaining balance of start-up expenditures is deducted on a prorated basis over 180 months on Form 4562, Depreciation and Amortization.
Deduction for health insurance costs in computing self-employment taxes in 2010
Generally, small business owners may not deduct the cost of health insurance when calculating self-employment tax. Under the Small Business Jobs Act, and subject to specific statutory limitations (i.e. deduction is not available if self-employed individual is eligible to participate in an employer-subsidized health plan maintained by the employer of the taxpayer or the taxpayer’s spouse), business owners can deduct the cost of health insurance for themselves and their family in the calculation of their 2010 self-employment tax.

FOREX 101 – How Foreign Exchange Currency Market Trading Works

You may know about stock markets but how about the foreign exchange market (FOREX)? If you’ve never heard of it, you should because it’s substantially larger than any single stock market. The New York Stock Exchange (NYSE), for example, handles $153 billion a day in volume, but the foreign exchange market has a daily volume of $4 trillion, or about 25 times as much as the NYSE! This market is huge.
What is it?
Let’s assume that you took a fist full of dollars on an overseas trip to Japan. You can’t pay in dollars so you exchange your dollars for Yen. At that specific time, one of your dollars got you 82.53 Japanese Yen. Later, that day you exchanged more of your dollars and the rate was 82.56 Yen. This means that while you were out shopping in Japan, the value of your dollar rose and you just profited from your foreign exchange trade. Although that .03 Yen may not seem like much, if you’re exchanging a lot of dollars, it can add up fast. Also you don’t need to go overseas to trade foreign currencies, you can do it all online from the comfort of your home – just like the stock market.
If you know how to make money in the stock market, your half way there to understanding the foreign exchange market. The goal is to buy low and sell high. Again, just like the stock market the FOREX market has second by second fluctuations that are controlled by a variety of factors including trader sentiment, interest rates, economic and geopolitical news, interest rate, central bank policies, time of day, the weather, and just about any other variable possible.
Because FOREX trading is done in an international market, the number of variables is even larger than country specific stock exchanges who are more levered to domestic issues. That’s not to say that stock markets don’t respond heavily to world events, but the 24×7 nature of FOREX markets makes the stock markets look slow.
Basic Strategy
All FOREX trades are done by trading pairs. That is, if a trader is trading a currency pair, they are simultaneously buying the Euro and selling the U.S. Dollar. All currencies have a three letter code. The United States dollar is USD while the Euro is EUR, the Brittish Pound is GBP, the Canadian Dollar is CAD, and the Japanese Yen is JPY. All good FOREX trading sites can provide the code if you know the country.
The most commonly traded currency pairs are EUR/USD, the GBP/USD, the USD/ CAD, the USD/JPY, the CHF/USD (CHF is the Swiss franc), and AUD/USD which is the Australian dollar. Although there are many others, these pairs produce the largest amount of trading volume on the foreign exchange market and given the stability of the underlying countries are probably the best trading option for non-professional investors.
Order Types
If you have ever traded stocks, you already know about the various order types available to the FOREX trader. Market orders are used to purchase a currency pair at the current market value. Limit orders allow the trader to set their maximum purchase price or minimum sell price. Stop orders trigger a sell order if a currency pair reaches or goes below the stop price.
In addition, there are numerous advanced order types depending on the FOREX broker you use. Traders use various order types to remove all emotion from the buy and sell process, protecting themselves both on the up and downside.
In Depth Trading Strategies
Again, if you’re comfortable with stock trading strategies, you will have a much easier time learning FOREX trading strategies. Momentum trading, swing trading, strategies based on news events, and purely technical trading are all common strategies used. But, these are for more advanced traders and unless you have a lot of free time, I suggest you stick to simple buy and sell strategies using the most common currencies.
Virtual Accounts – Learn For Free

It is highly advisable that if you are new to FOREX trading, then begin trading using a virtual money account. This type of account allows for trading of virtual currency in order to test strategies and get familiar with the FOREX trading platform of the applicable broker. Once you show a track record of making money in the virtual FOREX market, you can start using real money. Popular FOREX trading sites like Zecco offer free accounts with $50,000 of virtual money, that I recommend new traders start with.
Caution
Like equity markets, it is estimated that only 25%-30% of all FOREX traders actually make money on a consistent basis; and there are reasons for this. First, no investment should be used to make fast, easy money (FOREX trading is not gambling!). If you’re trying to make money without advanced knowledge, you will most likely lose.
The secret to doing well in the FOREX or any market is education. It will take time gain enough knowledge and experience to make money so make sure you trade virtual funds for a long time until you know what you are doing. If you’re serious about making money in the FOREX market, see it as a long term strategy or as one part of your overall investing approach. But the goods news is that if you invest the time to learn, you can make some big money quickly.

Webbot silver prediction w/ $200 wager,Pilot boats explained,2011 outlook & Cancer cure

 Wish I could say things are gonna get better but I'd be lying to you if I did. The only folks who will be somewhat happier will be those of us who were informed and wise enough to invest into PM's ...especially silver!!

I suspect silver will blow the doors off $65/oz by July or earlier if these darn limitations and other rules by the CFTC can ever be implemented as promised.

Personally, I will continue purchasing physical silver until we reach $200/oz...I'll sit on the side lines until we reach $550-$595 before I sell off a portion of my invest only to turn around and LOAD UP on supplies...food,guns,bullets.more bullets and water,with a few more boxes of bullets.
being a natural hygienist i can back dots up on this..if you eat what nature intended us to eat then we would always have a akaline body. my studies show that we are really frugivores , fruit being our main source of food. an akaline diet with solve most if not all health problems , so get some pawpaws, melons ,avacadoe,pineapples, ets etc and start eating your way back to health. all health problems start with a acidic blood. just look at teeth , akaline saliva wont let tooth decay grow In it for a "quick buck"? Who are they trying to kid? Perhaps some scamster may be looking for a "quick buck". But the majority of us, I am sure, have seen the light and realize that the way to build wealth, generational wealth, is to accumulate hard assets. And there is no better hard asset as precious metals. Real estate is okay, but if you are in for the long run, it needs maintenance and its not portable. Unless an asteroid made of silver hits our planet, all we have is what we have. 

Sprott Asset Management and PFS Group

Ted Butler 's work is followed by many institutions, such as Sprott Asset Management and PFS Group. He has researched the commodity markets actively for 3 decades. Internationally well known for his writings on silver, gold, commodities and the COT (commitment of traders) report. In this interview Ted discusses the gold and silver markets and the underlying commitment of traders report.
buy Silver now while it's still cheap,USA geologist society have predicted it would be the first element of the periodic table to run out by 2020...HENCE why China is now offering it's residents Silver bullion bars directly from in their bank branch!..the first time in over fifty years have they been allowed to own gold and silver.The money we use everyday is based on NOTHING,we are witnessing the collapse of the Fiat system and a return to real money based on something!