Blackstocks.com: In the Know

DOD to Limit High-Interest Loans

According to the AP, Servicemembers and their dependents could pay no more than 36 percent annual interest on payday loans, vehicle title loans and refund anticipation loans under a preliminary draft of a law intended to stop high-interest loans to the military.

The U.S. Department of Defense's draft proposal, a copy of which was obtained by The Associated Press on Tuesday, was a blessing for banking and consumer lending groups that had feared the law would be interpreted so broadly that it would include many common practices such as credit cards, overdraft protection on checking accounts and direct bill payment.

The draft will be published Wednesday in the Federal Registrar, and the public will have 60 days to comment before it is finalized and goes into effect Oct. 1.

"I think we're both on the same wavelength that we want the bad practices to end and we don't want military families to become second-class financial customers," said Wayne A. Abernathy, executive director of financial institutions policy and regulatory affairs for the American Bankers Association.

Congress placed the APR cap on all consumer credit loans last year, giving the Department of Defense the job of deciding what practices fell under Congress' definition of "consumer credit."

Most of the debate before Congress focused on payday lenders, which offer small-scale, short-term loans for a fee that customers must repay when they receive their next paycheck. Borrowers who cannot settle up at payday often "roll over" the loan repeatedly, leading to more charges that quickly add up.

Most payday lenders charge around $15 per $100 borrowed, pushing annual interest rates on two-week loans close to 400 percent. A 36 percent cap would limit fees to $1.38 for each $100 borrowed.

"We're not going to make loans at $1.38, so on the effective date there won't be payday loans available to military people," said Steven Schlein, a spokesman for the Community Financial Services Association, an industry trade group.

"Military personnel deserve the same financial choices as any other citizens."

Several groups, including the National Military Family Association, say credit cards, overdraft protection charges and other high cost lending practices are also detrimental and should be included.

The draft left open the option for Congress to go back and add other lending practices.

Show Me The Money

Make Your Savings Earn More For You

According to a study, Americans keep more than $1 trillion in low-interest rate savings accounts, often for convenience and a desire for easy access to their cash. 

But by shifting that money into safe, higher-yielding accounts, you could reap $30 billion to $50 billion in additional interest yearly, says the Consumer Federation of America and Providian Financial Corp. that commissioned the study. 

Low-yielding savings accounts that are earning on average 2.1 percent are widely held by consumers, no matter the age, income or education, the groups said. But Americans 65 and older may be losing out more than other age groups because they are more likely to hold accounts with $25,000 or more. 

One of the dangers is in keeping money this way is that for the things they want in life you come up short. The other danger is that, failing to see any kind of satisfying return on your money, just might not excite you about saving. In other words if you are not growing your money, then why should you save?

How can we put our money in proper places? 

Here are several options: 

1) Money market mutual funds, now paying 5.5 percent to 6.5 percent in taxable funds. They invest in Treasury bills, commercial paper and other short-term obligations, and though not FDIC insured, are widely considered safe. One can write checks, although many funds require a check to be a minimum amount.

What can be Learned from Warren Buffett, the world's second-richest man

According to the Associate Press, Warren Buffett, the world's second-richest man, wowed the world last summer when he announced that he plans to give away most of his $48.4 billion fortune, and now he wants to make sure those donations are spent quickly.

Most of Buffett's shares of his holding company, Berkshire Hathaway Inc., will go to five charitable foundations over time, but the billionaire plans to eventually give all of his shares away.

Here's what can be learned:

1. Obviously this Warren Buffet has a well though out plan.
2. It's clear he's considered the tax consequences of his will by giving to foundations.
3. He also has outlined a game plan to avoid the instituionalization of the waelth he has created by distributing it within speciofic persiod of times.
4. Most important he's come to grips with his "life Bank" which is outlined in "The 10 principles of Wealth for Black Folks and Other People Too!" Mr. Buffet understands that his "Life Bank" is running and he's come to grips with that by undertsanding that statitics says; he has about 12 more years - give or take a few- on this earth
5. Much more than can meet the eye.

Buffett said in his annual letter to shareholders Thursday that he stipulated in his will that the proceeds from all Berkshire shares he owns at death must be used for "philanthropic purposes within 10 years after my estate is closed." He estimated his estate should be settled within three years of his death.

Learning About Finances - Give Your Child an Allowance

Most financial experts agree that children should be given an allowance in order to learn financial skills at an early age.

Janet Bodnar, deputy editor at Kiplinger's Personal Finance, defines an allowance as a fixed amount of money that children get at regular intervals in exchange for certain financial responsibilities that they take on.

"Giving your kids an allowance is the best money management tool you can use with your children," Bodnar says.

Have you ever noticed that children will spend unlimited amounts of money as long as it's yours?

"When it's their money on the line, children make more informed purchasing decisions," Bodnar says.

The problem is that most parents resist giving children an allowance and, if they do, they usually give the children too little. If the allowance isn't large enough for children to experiment with -- to make mistakes with -- it won't have the learning effect you'd like it to have.

How young is too young?
As soon as your child begins to express a sincere interest in material wants (as in, "I want that!"), it's time for an allowance. Depending upon the child, that's probably around the ages of 3 to 5.

Who makes the big bucks?

CEOs, chief operating officers, top executives and surgeons top the list of jobs with the highest salaries, according to recent figures from Salary.com.

CEOs' paychecks dwarf all others, according to the Salary.com numbers. The average CEO takes home $688,572 per year in salary alone. The figure jumps to $1.18 million with bonuses, according to the data.

"The thing that's interesting about CEOs is that there is the biggest variance in pay," says Lena Bottos, director of compensation for Salary.com. "There are so many factors that affect it. You can go from very small numbers to very large numbers."

And the numbers on the check don't always tell the whole story. "It's less about salary and more about the mix" of things such as bonuses and stock options, she says. With CEO pay, "different things become hot over time."

Michael Strahan - of New York Giants Talks About Money and Investing

Michael Strahan - of New York Giants Talks About Money and Investing - video

Michael Strahan - of New York Giants Talks About Money and Investing

In the investment contest with two other athletics he is behind. So he's shares his strategy on how he will get out of his investment hole.

Michael Strahan - of New York Giants Talks About Money and Investing - Video

Technorati tags: Alton Perkins, www.blackstocks.com, investing, Micheal Strahan, New York Giants, videos, African Americans, money, video

Consuelo Mack Wealthtrack - Where can you find value in 2007?

Where can you find value in 2007?

Get your retirement portfolio on track for the new year with Consuelo Mack Wealthtrack.

Conselo discusses what happened in the different markets in 20006 clearly showing that investor diversification is where is at.

Conselo specifically talks about stocks, bonds, real estate, art, and collectibles. Only two stock funds lost money last year, those investing in Japan; and those going short. betting stocks would go down. Also, for an unprecedented 7th time real estate funds went up nearly 34%.

To get notable trends and find out where the value will be found this year check out Consuelo Mack Wealthtrack - Video.

Technorati tags: Alton Perkins, www.blackstocks.com, stocks, investments, Asset Allocation, Time Horizon, Diversification, risk, African Americans, Diverisfication, Consuelo Mack

Payday Loans = Costly Cash FTC Consumer Alert

Payday Loans = Costly Cash

According to the Federal Trade Commission, pay day loans are certainly not the way to go.

"I just need enough cash to tide me over until payday."

"GET CASH UNTIL PAYDAY! . . . $100 OR MORE . . . FAST."

The ads are on the radio, television, the Internet, even in the mail. They refer to payday loans - which come at a very high price.

Check cashers, finance companies and others are making small, short-term, high-rate loans that go by a variety of names: payday loans, cash advance loans, check advance loans, post-dated check loans or deferred deposit check loans.

Usually, a borrower writes a personal check payable to the lender for the amount he or she wishes to borrow plus a fee. The company gives the borrower the amount of the check minus the fee. Fees charged for payday loans are usually a percentage of the face value of the check or a fee charged per amount borrowed - say, for every $50 or $100 loaned. And, if you extend or "roll-over" the loan - say for another two weeks - you will pay the fees for each extension.

Under the Truth in Lending Act, the cost of payday loans - like other types of credit - must be disclosed. Among other information, you must receive, in writing, the finance charge (a dollar amount) and the annual percentage rate or APR (the cost of credit on a yearly basis).

Ok Did Your Service S......?

If you purchased some holiday goodies on-line this year, how was your experience?

According to Amazon.com had the ' Best Ever' Sales in 2006. I wonder if they matched their sales with immaculate service?

If You Brought Something from Amazon.com you contributed to Amazon 2006 holiday season being the best ever. The Company reported peaking with more than 4 million orders placed on Dec. 11 breaking last year's single-day record of more than 3.6 million orders set on Dec. 12.

In its 12th holiday season, Amazon.com said it again had its "best ever" sales and that it shipped more than 99 percent of orders in time to meet holiday deadlines around the globe. As many as 3.4 million units went out in a single day.

The company said it sold 1,000 Xbox 360 game consoles in 29 seconds as part of a promotion that slashed two-thirds off the regular retail price. Demand for the Microsoft Corp. machines was so high that Amazon.com's site bogged down briefly on Thanksgiving Day, generating bitter complaints from shoppers and forcing the retailer to change procedures for subsequent promotions.

Amazon.com also said customers ordered enough orange-flavored Airborne cold-fighting supplements to supply every passenger on 192 Boeing 747 planes.

Apple Computer Inc.'s iPods, Canon Inc.'s Powershot Digital Elph cameras and Garmin Ltd.'s navigational devices using Global Positioning System technology were among the best-selling consumer electronics items. Amazon.com also sold the most expensive digital music player to date, for $19,999.

Among the top-selling DVD titles was "Pirates of the Caribbean: Dead Man's Chest," starring Johnny Depp. Best-selling books included Barack Obama's "The Audacity of Hope: Thoughts on Reclaiming the American Dream" and "You: On a Diet" by Mehmet C. Oz and Michael F. Roizen.

Shares of Amazon.com dipped 56 cents to $39.68 in midday trading on the Nasdaq Stock Market.

It will be interesting to see how other on-line retailers faired. I know I unexpectedly experienced major challenges with Victoria Secrets. I can't complain too much though. In the past they've provided super service and on-time delivery. This year they slipped.

Technorati tags: Shopping, Blackstocks.com, Alton Perkins, Amazon.com, Apple Computer Inc.'s iPods, Canon Inc.'s Powershot Digital Elph cameras, Garmin Ltd., Nasdaq Stock Market, Xbox, African American

Where's The Money? You Ought to Know

 Can A Debt Collector Collect A Debt That is More Than Seven Years Old?

According to reviewing Nance Kelly of Your Guide to Credit / Debt Management over at about.com, one of the most frequently asked questions she receives is whether a debt collector can try to collect on a debt that is more than seven years old. The short answer is "yes", but the answer doesn't stop here.

In reviewing the Fair Debt Collection Practices Act (FDCPA) which governs Collections, the Act does not place any limits on how long a collection agency may attempt to collect on a debt; it does prevent a debt collector from threatening to sue you to collect the debt if the statute of limitations has run.

The statute of limitations - the time during which a lawsuit may be filed against a debtor regarding the debt - differs from state to state, and depends on the type of underlying transaction that gave rise to the debt (i.e. a check, credit card debt, auto loan, etc.). The seven year period refers only to how long a debt may be reported on your credit report. Check the laws in your state to determine the applicable statute of limitations for your particular debt.

One person wrote in and wanted to know if collectors could collect on a debt over 14 years old. Here's the answer:

Although a debt collector may continue to try to collect on an old debt, even if the statute of limitations has run, a debt collector may not:

• Threaten to sue on the debt.
• Report the debt to a credit reporting agency if the date of delinquency is more than 7 years ago.
• Continue to collect on the debt after you request, in writing, that they "cease and desist" further collection activity.
• Continue to collect on the debt after you inform them, in writing, that you refuse to pay the debt.

 

Technorati tags: Fair Debt Collection Practices Act (FDCPA), Credit Report, Credit, Loan, Money, Blackstocks.com, Alton Perkins, African American, African American