The Financial Aspects of Unemployment

Good things happen over time; however, bad things happen immediately. This is the way life is. Your graduation, wedding, and first child are things that you dream and imagine for years. However, catastrophic events in your life come out of nowhere. Getting laid off from your job is one of those life events that occur immediately. You may have worked for the company all your life and imagined that you would retire from this job. Feelings of self-worth are closely tied to your job. A job can identify who you are. It means that you are breaking away from the past and facing an uncertain future. Not only do you have all the emotional feelings of losing your job but also the financial challenges that you and your family will face. This paper discusses how to survive financially when you are unemployed. It will look at developing a plan, developing a survival budget, and options when you cannot meet your financial obligations.

Developing a Plan

When you lose your job, you may have to put yourself on a financial diet. It is difficult to know how long you will be unemployed. Depending on your job skills, it may take a few weeks to months to find a job. During this time you need to have a plan on how to keep paying your bills.

When you have come up with a financial plan that will get you through, you must have the discipline to stick to it. You will be tempted to cheat from time to time. However, it is imperative that you stick to your plan as closely as possible. You want to make a plan that is flexible and can be changed when your circumstances change. But, you must have the discipline to stick as closely as possible to the financial plan you have created.

Adjust your expectations

Finding a job in this financial environment is not going to be easy. Even if you have a profession that is in high demand, it could take weeks. Your job search plan may look like this (Forefield Advisor (2009): Week One. Send out ten resumes and wait for a phone call. Week Two. Send out ten more resumes and wait some more. Week Three. Send out five resumes for jobs you want and five resumes for jobs that you really don’t want. The phone rings but not for a job interview. Week Four. The phone finally rings twice and you have two job interviews. You still should send out three more resumes. Week Five. You have two more interviews and send out five more resumes. You get a call for a second interview for one of the jobs. Week Six. You are hired! Bad news: You can’t start for three weeks. As you can see, it can take a few months even if you have developed a successful job searching plan. This is why it is important to develop your financial plan as soon as possible after losing your job.

If you are only out of work a short time, your lifestyle may not have to change drastically. However, if you are unemployed for months, you may have to take drastic measures to survive. Some of the measures might be selling your house, a second car, or take a temporary job. You need to prepare yourself mentally for this.

Preparing a Survival Budget

It is important to remember that losing your job is temporary. The budget you are creating is not going to last forever. When you get a new job, the survival budget can be changed to a more realistic long term lifestyle. Therefore, you need to be careful and make decisions that are not shortsighted. You need to do what you can to survive, but only do what you really have. Do not make decisions out of fear and then regret them later when you get a new job and things are easier.

Start a budget by listing all of your post-employment income and necessary expenses. A survival budget is a bare-bones version of a regular budget. You will want to end up with is an idea of how much income you will need to survive. Eliminate all luxuries expenses and things that you can do without (i.e. movies, eating out, trips, etc.).

Ways to increase your income

One of the first places you should look for income is through unemployment benefits. You will have to meet certain eligibility requirements. You must be involuntarily unemployed, which means that if you quit your job you have no chance of receiving unemployment. However, if you have been laid off or fired (without cause) then you may be able to draw some unemployment benefits. The amount and duration of your check will vary from state to state (Forefield Advisor 2009).

Are you eligible for any severance pay if you were laid off? The amount of the severance will be determined by company policy. You may have the option of receiving a lump-sum payment or a continuation of salary for a set period of time.

If you have planned ahead, you may have an emergency fund set aside with three to six months of your net salary which can help pay your living expenses. Many people are amazed at how fast savings can be depleted; however, it is a great source to help pay for your daily expenses.

You may have credit insurance that will make your bill payments when you are unemployed. This can help with your car and mortgage. If you have any doubt, check with your creditors to see if you have it. However, keep in mind that it may take time to fill out the paperwork and get this benefit started.

If you have been out of work for a longer period of time, you have to resort to taking a part-time or temporary job to supplement your income. This may benefit you in two ways. First, it will ease some of the stress of trying to make your monthly financial obligations. Second, your temporary or part-time job may become permanent. Also, you may be getting additional experience that will help you in your job search.

You may want to have a yard sale. If you look around your house, you will be surprise at how much you own that you really don’t need. Make a list of things that you want to sell and list them in order of priority. If you are really desperate, you may want to price things accordingly. However, there may be items that you only want to sell if you get a good price. You may want to use a consignment shop for certain items such as clothing.

If things really become critical, you may want to consider selling your home. It could be a good idea of because you can raise a lot of cash in this way and reduce your monthly payments. It isn’t a good short-term solution to raising money because it takes time to sell a house. Any decisions you make should be carefully thought out. You need to consider the true cost of your decision and how much you can actually get out of the deal (Forefield Advisor 2009).

As the very last resort, you can withdraw money from your retirement accounts. This step should be considered only if you are facing bankruptcy. Any money that you withdraw from a tax-deferred retirement will be taxed as ordinary income for the year you take the withdrawal. In addition, you may have to pay a 10% penalty for early withdrawal if you are under the age of 59 1/2. Also, you will lose the advantage of compound interest on the money you withdraw. If you do not replenish the money in your retirement account, you may not be able to retire at the age when you planned to.

Reducing your expenses

You may be able reduce your monthly automobile insurance payment by increasing your deductible. However, if you have an accident, you will have to pay the higher deductible out of your pocket. You should try to keep the amount of the deductible in your savings account. If you cannot put aside this money, you should balance the risk with the benefits of this action.

If you have more than one vehicle, you may want to consider selling one. When you take into account, the monthly payment, gasoline, insurance, and maintenance, you could drastically cut your monthly expenses. If you owe more on the car than it is worth, this option will not work because you will still have to get a loan to make up the difference. Make this decision carefully. Weigh the benefits and risks carefully.

If you are out of work for a long time, consider negotiating with your creditors. If you have good credit, you may find it relatively easy to reduce the interest rates on your credit cards, skip a payment or two on your car loan, or reduce monthly payments temporarily. Remember, you will be in a better negotiating position if you call your creditors before you get behind in your payments. If the creditors are calling you, they may not be as inclined to work with you if you call them and explain your situation. Creditors may or may not work with you; however, it is worth a try. If you need help negotiating with your creditors, you may want to talk with a nonprofit credit counseling organization.

You may be paying for things that you can do without. Consider canceling magazine subscriptions, extra phone services, credit cards you don’t use that have an annual fee, health club membership, auto club memberships, cable television, and internet service.

Now that you have drafted a bare-bones budget, post it somewhere where you can use it on a daily basis. It is important that you chart your progress so you can keep on track with expenses.

Options When You Cannot Meet Your Financial Obligations

If you are unable to make your monthly expenses, you have options. However, it is important that you act immediately. Delaying action can make things worse. You could damage your credit history or lose your home.

How You Can Help Yourself

As we have discussed earlier, one way to ease your financial distress is to increase your income. Both you and your spouse should consider increasing your hours or taking a second job.

If you cannot meet your financial obligations, you must cut out every nonessential expenses such as eating out and entertainment expenses. Look for ways to save at the grocery store by buying food on sale and clipping coupons.

You may also consider consolidating debts. This is a great way to catch up on overdue accounts and start fresh with a single creditor. If may can extend the repayment period and lower the monthly payment.

Chapter 7 Bankruptcy

If you income is less than a certain amount, you may be able to file bankruptcy under Chapter 7. When filing Chapter 7, you can keep exempt assets, but non-exempt property is sold and the proceeds are distributed to pay creditors. The remaining debts are discharged. This gives you a chance to start over fresh. To find out if you qualify, contact a bankruptcy attorney in the city where you live. Keep in mind that a bankruptcy stays on your credit for a number of years and will have an impact on you be able to borrow money and the interest rate that you will be charged.

When Spending is an addiction

Some people’s problem with money comes from a compulsive addiction behavior. They have a controllable urge to spend money. Compulsive debtors can seek help through Debt Anonymous, which is a twelve step problem modeled after Alcoholics Anonymous. If you have a problem spending money and are ready to admit that you are powerless over your problems, you may want to attend an open meeting and learn more about it (Forefield 2009).

Summary

Because of these economic times, many people are dealing with the trauma of unemployment. Although this experience can be painful, knowing what to expect and using proactive behavior can make unemployment easier. Having a plan, making a survival budget, and planning for the what ifs of running out of money can help you survive. However, planning for the unexpected before it happens, it the best way of handling any financial pitfalls that come along. Developing a financial plan where you are saving for emergencies and setting financial goals is the best way of getting through any financial pitfalls.

Article Marketing Works Like This

Writing an article is a relatively simple task. You just go find a reasonably popular keyword phrase and write about it. Our article marketing example is How to Make Organic Soap. This will be your title and the specific topic of the article will be organic soap. A recognized word count for articles and blogs is a minimum of 400 words. When looking for a percentage to use for keyword density look at 1% to 2%. That is for every 100 words you can have the main keyword phrase in it once. So for 400 words this means that you shouldn’t have it more than 8 times. The topic of the article is organic soap so it is advisable to go and find closely related phrases say four. These go a long way in helping to lend weight to your main phrase.

These closely related phrases fall under the terminology latent semantic indexing (LSI). Google is the number one heavy weight search engine and this is what they are looking for now days. Create articles that are on topic and have specific related keywords in them. The reader has to be captured by what is written and this in turn keeps the reader on your site longer and Google takes this into consideration and measures the length of time of each visitor to your site. This translates into a great user experience and Google loves stuff like that and in turn ranks your site higher in their algorithm.

In our example we will stick to everything that specifically relates to the making of organic soap. Do not veer off on a tangent like the history of soap the stores you can buy soap from etc stick to topic on hand the making of organic soap. In the article itself you may link to other sites or articles about these things. I went and searched with the Google keyword tool which by the way is free and found quite a few related on topic phrases to incorporate into the How to Make Organic Soap article. I saved these search results into a excel spread sheet. Then I can go back to them whenever I want to and select another phrase that I wish to use.

When it comes to keyword tools there are a thousand and one of these things on the market place that will give results at varying degrees. But the first one that I recommend that you start out with is the Google keyword tool which is free to use. As they are the most popular search engine the results that they return is sufficient for our needs. The way I use it is to sign in to my AdWords account first off and this gives me a stack more keywords to peruse over. I then tick the check box on the left hand side to exact match and we also want all locations chosen. I only use local monthly searches as my search number guide.

Now to help with choosing you article marketing keyword phrases we work on the basis of minimum search 600 per month up to 30,000 searches. Higher than 30,000 is too much competition when your site is first starting out. These are no set in stone rules. The main thing to work with is that your content is of high value to your visitors and if you notice that they keep coming back to your article you know you are on the right track. Great original content wins out every time when it comes to article marketing.

Seven Mainstream Fallacies About Investing With Self Directed IRAs

With the current downturn in the stock market and the likelihood that interest rates will remain low in the long term, there has been considerable interest in investing self directed 401(k) or IRA funds in real estate.

Ironically, there seems to be a direct correlation between the surge of interest in this area and the lack of accurate information about it. There are several fallacies promoted as fact about this kind of investment. I would like to address each of them in turn.

Fallacy #1 – This kind of investment is not considered appropriate by the IRS

This is flatly untrue. It has been perfectly legal to purchase real estate with your IRA funds since 1974 and to direct any profits, whether rental or capital, back to your IRA. You can also use your IRA funds to pay for the maintenance fees and development, decorative and other upgrade or modernization work on your real estate holdings.

Where the confusion lies is that any real estate investments you make may not be used by yourself or your immediate family, otherwise the ‘profit’ you make from their use would be regarded as a withdrawal from your IRA and subjected to the usual taxes and penalties.

While the IRS is sometimes accused of not reading its own code, what this actually means is that your parents, grandparents, children and grandchildren may not use the property for any purpose. Yet your brother or sister and their family may. So, if, for example, you invested in a holiday property in Mexico, your brother, sister in law and their children can use it for their holidays and pay you the rental but you couldn’t go and stay with them during their vacation.

Fallacy #2 – If it’s legal, why haven’t I heard of it until now?

Who would tell you, your current financial advisor? They will only let you invest your IRA in investments that their firm offers because they earn a commission off what they sell you. At a bank you will be limited to CDs. At a brokerage firm you will be limited to stocks and bonds.

There are any number of companies that help investors take their IRA cash and use it to purchase real estate for investment purposes or for any other legal investment purpose. The company’s representatives who do this are called ‘IRA Custodians’ or ‘Self Directed IRA Custodians’ – depending on the exact financial arrangements you have made.

Third-party IRA custodians look after your investments and will advise you on the kinds of choices – stocks, shares, bonds, mutual funds, CDs, business opportunities or real estate – you can make. They retain a degree of control over the disposition of funds and over the writing of checks.

Self directed IRA custodians are not allowed to advise you on your investment choices. They are mainly there to help you properly and legally administer your funds and to avoid accidentally making withdrawals or incurring penalties and taxes.

Both types of custodian take fees – and there is considerable variation in the rates charged and the services offered. So it pays to shop around.

This contrasts with the behavior of traditional investment community which has control over 97% of retirement accounts and has been making considerable profit from it for over 30 years. They have no motivation to inform you of alternatives that would be of no benefit to them.

As investors become ever more depressed and disappointed with poor investment returns in traditional funds, they want to take control of their own investments and to make more tangible investments such as real estate or more profitable ones such as business ventures.

But the response of their current custodians is that such investments are either illegal, over complex, too expensive or simply un-doable – advice which is neither objective, impartial or factual.

So in order to take advantage of these opportunities, investors have to take their business elsewhere.

Fallacy #3 – It is prohibitively expensive to invest in real estate

In Publication 590, ” Traditional IRAs”, you are prohibited from taking the following actions with your IRA -

* borrowing money from it
* selling property to it
* receiving unreasonable compensation for managing it
* using your IRA as security for a loan
* buying property for personal use (present or future)

These regulations do not prevent you from using your IRA funds to purchase investment property outright. Nor does it prevent you borrowing money (through a non-recourse loan) or using other people’s IRA in partnership in order to part fund the investment.

(An alternative route is to take a low-cost option to buy a property within 60 days and, if you manage to find a buyer at a higher price, you can make an immediate profit for with little up-front cash.)

Neither of these routes makes it prohibitive to procure real estate. Real estate investments should not eat up all your cash, particularly if you partner with others.

Not being permitted to receive unreasonable compensation for managing your IRA is not the same as not being permitted to receive reasonable compensation. If you check out the fees charged for administration as long as you stay within the current price range available on the market you cannot be accused of being ‘unreasonable’.

I have already covered the restrictions on buying property. But it should clarified that ‘future’ use does not preclude you taking your property out of your IRA after you have reached 70 ½ when you are forced to take distributions and using it as a retirement home or vacation property.

Fallacy #4 – Real estate investment is trouble with a capital T

Real estate prices have been undergoing a considerable boom in prices over the past few years, but, despite the obvious gains, it is often considered a risky and troublesome form of investment with at least as many headaches as owning your own home. You may have to find tenants, or improve the property before selling it, or just maintain it.

All of this is true, but there are people and companies who will do this for you. Arguments that this will eat away at your profit leading to a poor final return on your investment are also fallacious as fees are charged for all investments you make. The difference is that you can see where the fees are applied and what you are getting for your money.

In addition, you gain some advantages over the stock market – lower risks, less market volatility, property insurance. While mutual funds and corporate stock have both been subjected to sudden and sharp nosedives over the past few years and slow and uninspiring recoveries. Nobody insures you against the loss of investment funds in the stock market. Ask Enron’s investors!

Fallacy #5 – Real estate funds are not liquid investments

It’s difficult to see why this argument is put forward in what has been a seller’s market for several years. Besides when has liquidity been the only benefit on a losing proposition in the stock market? And, at least until IRA funds are available for withdrawal, liquidity is not going to benefit most investors.

Fallacy #6 – Real estate investment is riskier than the stock market

It is difficult to comprehend how anyone could believe that real estate is more risky than the stock market. While it is true that in the long run the stock market returns a solid 10% per year overall, the danger in the short term is that any gains can be wiped out by a sudden drop in the market or in individual stock. Companies can afford this risk, individuals on the other hand cannot.

It is true that real estate prices can also drop, but this normally happens only in very unusual circumstances. Prices do not fluctuate the same way they do on the stock market.

So when given the choice be it owning and managing investment property or taking the cash from your IRA and investing it in an S&P 500 index fund, you are being given the choice between sticking all your eggs in one shaky basket or properly diversifying your holdings and increasing your money earning opportunities. The choice is obvious. Nor is the advice ever to put all your funds into real estate either. About 25 to 40 % of your portfolio should go into real estate and the rest into other more traditional investments. The percentage will depend of course on the level of risk, the investment’s profit potential, and on your individual financial position.

Nor are property returns less than those in the stock market. On average the stock market returns 10%; property returns in recent years have been as high as 23 % a year. Ideally, when you self direct your IRA if you can locate pre-construction projects, lend your IRA funds and participate in an equity position you can compound the rate of return. Your return on investment therefore can be much higher without turning a wrench, fixing a leaky faucet or swinging a hammer. Best of all, all the gain goes into the IRA either tax free or tax deferred.

By diversifying your holdings you can invest in several different kinds of assets so that you can weather any investment climate from a bear market to a real estate crash.

Real estate deals are therefore no more and can be a lot less risky than other forms of investment. However, as with any financial deal, you should do your homework first and run the numbers with your financial advisor.

Fallacy #7 – My CPA, my financial planner and Family Lawyer understand all there is to know about self directed IRAs

Your family attorney, financial planner, and CPA are unlikely to be experts in self directed IRA regulations and self directed IRA investing market. For specialized expert advice, you should add a self directed IRA advisor to your advisory team, in the end their advice will save you both time and money. Of course, you should check out the company the Better Business Bureau, your state’s Attorney General’s office and make sure they comply with any state licensing requirements.

Some Conclusions
* With poor stock market performance likely to continue now is the time to think about diversifying your holdings
* Real estate IRA investment is legal and need not be overly expensive, complicated or inconvenient
* You should take the time to thoroughly investigate the process, the self directed IRA custodian and his or her company before you sign any documents
* You should run the numbers with an independent financial advisor
* Remember signing with a self directed IRA custodian does not oblige you to buy real estate – you can make any of the traditional investment choices as well as considering other lucrative business or property ventures
* You don’t have to buy real estate solely from cash in your funds you can borrow money or work in partnership with others
* All investments carry risk but using real estate to diversify your holdings can also give you protection against stock market vagaries

To find out more, simply go to Google.com and type in “use IRA cash to invest in real estate.”

Investing For Beginners “Stocks and Bonds”

Why does investing seem so complicated?

The number of ways you can invest is mind boggling. The worst part is that investment world uses a different terminology. If you are new to investing it won’t be long before you encounter words like “accretion, moving averages,amortization,average weighted price, open interest, futures and option, book closure” etc. Let me stop before I put you to sleep. All you really want to do is to put your money in something where it will be safe and grow. Is that too much to ask for?

Why are there so many different investing alternatives?

Are they really different! If you have ever been to a grocery store you will see boxes of different detergents, most of which will be labeled “new!” “Improved!” or even better “New and Improved!” But no matter what they call it, when its all said and done these boxes are filled with nothing more than SOAP, same as they have always been.

Investments are no different. At first glance it may appear that all these mutual funds, unit trust, REIT’s, options, futures are unique and require encyclopedic knowledge to understand the technicalities. But more often than not what you are looking at is nothing more than just an old way of investing in a new box.

Understanding investing in simple terms:

In a family tree you will have a male and a female at top of the list from where all the other branches came out. Similarly in investments at the top you have stock and bond. All other forms of investments are some form or other of these two. And their differences can be spotted just as easily as you can distinguish a man from a woman.

What are stocks and bonds and what is the difference between the two?

I will compare stocks to a racing car; all powerful snazzy, attractive, dangerous, accident prone and bonds to the family car; nothing much to look at, slow, always takes you where you are going, always there for you.

Some basic traits of the two:

People investing in stocks want to see a return on their money, bond holders want to make sure the return of their money.

Stocks are about taking risk and bonds are about avoiding risk.

Stocks offer unlimited upside potential, bonds offer limited downside potential.

Stocks mean ownership and bonds denote loaning. So we can say one is an ownership investment and the other is a loan investment.

The difference between an ownership investment and a loan investment is not too hard to understand. The differences are obvious once you know what to look for.

An ownership investment does not have an ending date. (When you buy a stock it never becomes due, you have to sell it to get cash)

Loan investments almost always have a due date (e.g. your fixed deposits with the bank)
Ownership investments rarely promise a specific return. A stock price can go up 10 times or remain static for years.

Loan investments nearly always promise a fixed return. A six month deposit certificate promises 4% return.

Third major distinction is whether you will get your money back.

In ownership investment there might be no such guaranty. A stock’s price can go to zero.
The loan investments are usually backed by the guaranty of the bank or the government.
With the above distinctions in your mind try to figure out what you are invested in.
Few examples: your checking account or Government bonds: loan investment
stock or mutual fund: ownership investment

What should I invest in?

Having too much investment in one type can be bad for the investor. Loan investments are unable to keep pace with inflation, you might have your money safe but the purchasing power goes down. Too much risk avoidance will result in less return. Similarly Ownership investments can leave you without a penny in your pocket. Idea is to keep a balance between the two. Neither is in a category of good or bad or one better than the other investment rather they serve different needs. Needs which can vary from one person to the other depending on ones investment time horizon and risk appetite. Stocks and bonds complement each other.

In case you are new to investing first check your risk appetite, needs and time horizon of investments to decide where you should put your money. I would suggest that you read more about stocks, mutual funds and bonds in following articles.

Network Marketing Recruiting – Every Top Industry Leader Knows This Secret

If you are struggling trying to recruit people into your network marketing company with little to no results then you must be wondering how and what are the industry leaders doing for network marketing recruiting that you aren’t.

Why the heck when you are trying so hard to recruit people into your network marketing company people are turning you down and don’t even want to know you, what is the secret that these top industry leaders like Mike Dillard, Deagan Smith, Frank Kern, Jonathan Budd, etc know that enables them to be network marketing recruiting basically on auto pilot?

WARNING! This SECRET that I am about to share with you about network marketing recruiting will leave you with people chasing you wanting to join you in your network marketing company, this secret will have people jumping at the chance to get on your mailing list, this secret will have people wanting to buy products from you over and over.

“When this secret is done right your network marketing recruiting days will become blissful and when you apply this secret you will be on the right track to a successful business online!”

I warned you!

So what is the secret for recruiting like the pros???

It’s really quiet simple! You have to lead with VALUE! and what this means is that you have to switch your whole focus from pitching your business to adding VALUE to other peoples business and by doing this people see you in a different light!

They see you as a valuable person, as someone who can help them grow their business so they opt in into your list,connect with you on social media, read your blog, etc and if they aren’t already in a network marketing company that is making them money then they will want to know what you are doing!

Do you get the secret?! You have to lead with value! Be valuable!

I know what you are saying… How can I be valuable I just started in this industry or I haven’t been in this industry long I have nothing of value…

Well it is your job to build value with in yourself, you have to buy every marketing course, every piece of information that you can get your hands on and by doing this you will become highly valuable to the other people who haven’t got the knowledge you have yet and know you are highly valuable…

So what do you do now that you have built the VALUE with in yourself? How can you use it for network marketing recruiting?

Like I said before LEAD with VALUE and people will magnetically be attracted to you.

Action Plan:

Write VALUABLE articles.

Write VALUABLE press releases

My favorite and the most powerful is the create a blog, this is where you can become the true leader that you have waiting inside of you! Create a wordpress blog!!!

Create valuable videos

Post valuable information on social media site

The list just keeps going but I’m sure you get the idea… Offer VALUE and you will be a magnet!

So now you know the top industry leaders secret for recruiting like the pros!

Build the value with in yourself.

Then share it with this industry! When you apply this network marketing secret your business will explode!