Daily Investment Tips

Even after being sent to Jail, it seems Bernie Madoff will not go away easily. The man has given an interview to New York Magazine. In the telephone interview Bernie Madoff warned that the federal government is a Ponzi scheme.

Bernie is right, Governments are large Ponzi schemes. This is how the government works : Governments borrows new money to retire old debts.So long as there will be people willing enough to lend the government money this scheme will continue rolling. But if creditors pull the plug, governments go bankrupt. It has happened before in Argentina and other South American countries.

In a Ponzi scheme Early investors are paid out of money put in by later investors and when there are no new investors, the Ponzi scheme collapses.

A detailed explanation as to how US Government is a large Ponzi Scheme is at Seeking Alpha website.

I think during his case with the government Bernie Madoff should have declared to the court that his “investment” scheme was modeled directly after Social Security.

Read the whole interview at NY Magazine

written by Constantine Njeru \\ tags: Argentina, Bernie madoff, Creditors, Debts, Detailed Explanation, Federal Government, Government Money, Governments, Interview Magazine, Investment Scheme, Investors, Magazine Interview, New Money, Ponzi scheme, Ponzi Schemes, Seeking Alpha, Social Security, South American Countries, Telephone Interview

The best way to get credit or loan from the mainstream lenders is to have a good FICO score. FICO credit scale runs from 300 points to 850 points; the higher the score, the better your credit standing.

FICO credit scores of under 620 is considered poor and it means obtaining loans and credit cards with reasonable terms difficult.

While a FICO credit score above 760 means you can get the best and lowest interest rates.

Tips to Improve Your FICO Credit Score

Get a free copy of your credit score from the three major credit bureaus. Read the reports thoroughly and find if they have outdated information. If there is incorrect information, file a dispute with the credit bureaus.

Start paying your debts on time. Credit bureaus report late payments every month. Every time they report your late payment the lower your FICO credit score gets. Start paying your debt on time and you will see gradual rise in your FICO credit score.

Focus on paying off the credit card debt. Call your creditors and try to renegotiate the debt. If you call them and tell them your problems and offer a realistic repayment plan they will be glad to listen to you and make accommodations.

written by Constantine Njeru \\ tags: Credit Bureaus Report, Credit Card Debt, Credit Cards, Credit Debt, Credit Report, Creditors, Debts, Fico Credit Score, Fico Credit Scores, Focus, Good Fico Score, Interest Rates, Late Payments, Lenders, Loans, Mainstream, Major Credit Bureaus, Repayment Plan, Three Major Credit Bureaus, Time Credit

Debt settlement negotiation can be made easy if you prepare yourself thoroughly before approaching creditors.

Before initiating negotiation with your creditor note, in general, the credit card company will only deal with a consumer when the consumer is behind on payments but capable of making a lump sum payment.

The following ideas may help you negotiate with you creditors to reduce your outstanding debt.

Raise money for a lump sum payment

Before picking up that phone and calling the company’s customer representative know where you will get money to pay off the lump sum because that is the first question they will ask. One idea could be selling off your car or some of your household goods.

Know the questions they will ask you

Knowing the questions they will ask will help you prepare your answers. You dont want to advertise your ignorance. Some of questions will be like, your monthly budget?

Write down your ideas

Make your ideas precise, avoid lengthy explanation. Reading and re-reading your ideas will give you more confidence.

Know your rights as a borrower

Make sure you know your rights as a consumer. It’ll make you aware of what creditors shouldn’t do when they’re collecting your payments. If in case the creditor violates the laws, you can take suitable legal action against them.

Be nice with your creditors

When you finally meet your creditors face to face be polite and understanding while dealing with them, it will make it easier for you to get an agreement on debt settlement.

Explain how your creditors will gain if you settle the dues

When you’re negotiating with creditors, make sure you explain how the creditors will benefit from a settlement. Make them understand that they won’t have to approach Collection agency to collect your dues and they need not go to courts to sue you.

Try again if the creditor refuses to settle the first time

Never give up be persistence.

written by Constantine Njeru \\ tags: Advertise, Confidence, Credit Card Company, Creditor, Creditors, Customer Representative, Debt Negotiation, Debt Settlement, Face To Face, Free Debt, Household Goods, Lengthy Explanation, Lump Sum Payment, Monthly Budget, Negotiating With Creditors, Negotiation Tips, Persistence, Raise Money, Reduce Debt, Settlement Negotiation

The following factors are used in determining a credit score. Payment history, your outstanding debt, experience in borrowing and number of recent new accounts.

How Payment History affects your credit score

35 percent of a credit score is determined by your payment history. They check whether you regularly pay your bills or fines on time to your creditors.

How Your Outstanding Debt Affects your credit score

30 percent of a credit score is based on the amounts you owe each of your creditors. The more the more your credit score will suffer.

How much experience you have in borrowing and repaying money.

15 percent of credit score  is based on the length of your credit history. The older you have been a borrower the better (assuming you’ve made timely payments).

How The Number of New Accounts Affect Your Credit Score

Finally 10 percent of your credit score is based on how many accounts you’ve recently opened. 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

written by Constantine Njeru \\ tags: Credit History, Credit Score, Creditors, Financial Trouble, Money, New Accounts, Payment History, Timely Payments

Credit protection is essential in any form of financial planning. If you wind up on the wrong side of a damage awards you creditors naturally will want to seize your assets. As a business man, a tax deferred retirement plan may be your most valuable asset or among the most valuable.

Under ERISA, which is Federal law, defined contribution and defined benefit plans are protected from creditors in bankruptcy actions. Almost all US states extend this protection to their own courts in civil actions.

In one case, a California physician who operated his practice as a corporation filed for bankruptcy. The physician had accumulated nearly $2 million in a retirment plan. California like many other states exempts assets in a retirement plan from liquadation.

The physician’s creditors challenged the $ 2 million exemption on the grounds that it was unfair. The court agreed with the creditors that the exemption was unfair but the court found it was powerless to ignore the exemption. As a result the physician eliminated all of his debts and walked away from bankruptcy with $ 2 million. Had he withdrawn that $ 2 million from the corporation and invested it in a personal portfolio outside of a retirement plan, he would have lost the $ 2 million.

A word of note not all retirement plans are protected from creditors. A retirement plan is not protected under ERISA if it covers only owners and spouses. You need other participating employees.

Participants should include you, your secretary, accountant, even your janitor and almost everyone working for you.

written by Constantine Njeru \\ tags: Accountant, Bankruptcy, Benefit Plans, Business Man, California Physician, Carlifornia, Civil Actions, Creditors, Damage Awards, Debts, Erisa, Financial Planning, Janitor, Participants, Personal Portfolio, Protect Assets, Retirement Assets, Retirement Plan, Retirement Plans, Tax Deferred, Wrong Side