401(k) Rollover Options

There are so many money questions we have to answer every day, thinking about what to do with your old 401(k) account now that you’ve changed jobs probably feels like an easy question to ignore. But ignore it at your peril. I know that sounds dramatic, but what you do with your old 401(k) matters.

There are basically three 401(K) rollover options and it’s important to avoid mistakes. Here are the options: 1. Leave the money where it is. 2. Rollover it over to your new job’s 401(k) plan. Or 3. Roll it to an Individual Retirement Account (IRA for short). There are a few benefits with each of them.

1. Leave the money where it is. You can leave the money right where it is. It will grow, slowly. Like a fruit tree that doesn’t get much water or sunlight, your old account will limp along, but since it’s not getting fed new cash each month, it’s never going to be healthy. The real benefit to doing nothing is that you’ll forget about this old 401(k) account and never be tempted to cash it out.

2. Rollover 401(k) to your new plan at your new job. This is the option that I’d recommend. Why? Because it’s the simplest. You fill out a simple form and the money, since it’s going from one trustee plan to another, never has to be held in escrow. Once the money is in your new job’s plan, it can really start to grow. You’ll be adding to the fund every month and, with any luck, your new employer matches a percentage of the contribution which makes your money grow that much quicker.

3. Roll the money into an IRA. This is not a bad option. It beats leaving the money in the old account and it certainly beats cashing out the 401(k). That’s never a good idea, by the way. What’s nice about an IRA is that you can divert a little bit of money to it each month, too. So the original amount from your old job gets help in growing as you add an extra $500 or $1,00 each year. The idea of saving $500 a year might sound crazy, but it’s just $40 a month. What’s $40? It’s just about $1.50 a day. So you skip the vending machine snack every afternoon. Your wallet and your waistline will thank you.

If you’re like most people, you tend to put off dealing with money questions. Spending money is easy, too easy. Deciding how to save it, what the best course of action is, that seems harder. I hope, however, that this article has made you see that deciding what to do with that old 401(k) account is a lot easier than you thought.

Types of Heloc Mortgage Loans

Home equity line of credit, or heloc loans are becoming very popular in today’s market of homeowners, as the equity, which is in your home, is used to approve the loan. If you are a buyer who is interested in obtaining a heloc loan, you should be aware of the many options, which are available to you when applying.

One of the most popular forms of the heloc mortgage loan is the stated loan. This simply means the borrower is able to state their income on the loan application. This is popular for many contract or self-employed workers, as it can be hard to prove what your income stream is when the job is not considered steady. With stated heloc loans, self-employed people are able to get loan approval just as well as someone with a steady nine to five job.

If you are interested in getting a heloc loan, the first thing you should consider is your lender. There are thousands of lenders available on the market and with the recent collapse of several of the nation’s banks; they are being more scrutinizing than ever when it comes to their applicants. If you do choose to go with a stated heloc loan, you’ll find that your interest rates will be higher than a regular loan, since the risk to the lender is greater as they have no way of verifying if you’ll have the ability to pay your loan off.

Before deciding on a specific lender for your heloc loan, you should do research online concerning the company and other possible candidates. Are they financially stable? Have they been in the business for a number of years? What do online forums have to say about them? Often times, many people will post their opinions on forums, which can be a valuable feedback avenue, since you know the posts are paid for by the company, but rather made by genuine people who have dealt with them in the past.

Practice Stock Trading Does Not Prepare You For Real Money Trades

There is a major difference between clicking the mouse and buying ten thousand shares of IBM with a virtual money account, and clicking that same mouse to buy stock with your own hard earned money.  Trading in the stock market is an exercise in discipline, there are many things that people consider before actually putting their money into a company.  Almost everyone has the same goal when trading stocks, and that goal is simply to make money.  Whether you are a day trader or a long term stock investor, that goal remains the same.  The idea of making money by having money is an attractive thought to most people, but for day traders it is a way of life.  To become profitable trading stocks you have to develop that skill.  What better way to develop a skill than to practice, right?  It’s not quite that simple.

There is no substitute for the real thing when it comes to trading stocks.  If you have ever used a practice stock trading account, then I’m sure you’ve made trades that you would never make if your own money is on the line.  The reason you can’t replicate the results you may have seen in your paper money account is a psychological one.  It is human nature to become attached to your possessions, and that includes your money.  For most people it is almost like a game when they are trading on an account with play money.  The thought process behind buying and selling stocks is just different.  The simple reason for this is that trading with your own money has consequences.  There are many techniques to make your practice stock trading more beneficial, but just be aware of the differences between virtual money and your own.  If you want to learn to trade stocks, you need to treat your practice more like the real thing.

Easy Steps to Fix Credit!

Sometimes when your credit has been destroyed, it can seem like there is no way to rectify the situation.  Rather than give up, follow these easy steps to fix credit fast!

• The easiest way to fix credit fast is to disputed errors and negative information that is in your credit file.  Once negative information is removed from your credit file your score will go up dramatically. To do this you will need to get a copy of your credit report and review it carefully.  Make note of any errors (no matter how small) and dispute these with each of the three credit bureaus.  Be careful not to dispute too many things at once as this can raise a red flag with the credit bureaus and they will consider your disputes frivolous.
• Another easy way to improve your credit score fast is to have a parent or spouse add you as an authorized user to an existing credit card account.  You get the benefit of their entire history of on-time payments. An easy solution if your parent or spouse is concerned about you being on their account is just to add you without actually giving you a card. That way they never have to be concerned about using their credit.
• If your credit is very limited and you’re having trouble getting an unsecured credit card, a secured credit card can help you reestablish good credit can start you on the path to credit repair.
• If you have accounts with a single late payment that have otherwise been managed well, a good way to clean up your credit report is to call the company and see if they would consider deleting the late payment from your credit is a sign of goodwill.   There’s no guarantee that they will do this but if you’re polite, professional and take responsibility for what happened very often they will help you.

Fixing bad credit isn’t easy, but it can be done!  It just takes time, patience and persistence.

Twitter Weekly Updates for 2009-04-19

• MindOnYourMoney.com’s Twitter page is now activated #
• April 16th – Where’s my return check? #

Top 5 Work at Home Scams

The offers cram your in box “Work from Home: Rebate Processors Needed” or “Earn $50,000+ Processing Medical Claims from Home.” The offers sound tempting, maybe you’re tired of the 9 to 5 rat race or you’ve been unemployed for 6 months and getting desperate. Maybe you even posted a resume on Monster.com or CareerBuilder.com and had a work at home opportunity sent to you. But are they legit? No, chances are they are a scam whether the offer comes as spam in your inbox or comes from a career site like HotJobs.com. Here is our list of Top 5 work at home scams to avoid. Read more

Top 5 Smartest Ways to Use Your Tax Refund

 The average tax refund in 2008 was $2429 with predications the average 2009 refund will be higher.  We could all use the extra cash in these tough economic times to pay off our debt and save as much as we can, but what is the best way to use your surprise windfall in our cash-strapped economy?  Read our top 5 tips and find out.

Save, Save, Save

With the world economy locked in a recession and unemployment at a 25 year high, your best bet is to save it.  In good times, financial experts were advising a cash reserve of 3-6 months of living expenses, but since it is taking the average job seeker longer to find a job, a cushion of 6 to 9 months is now recommended.   Living pay check to pay check is especially dangerous these days since the credit market has dried up even for people with good credit.  Stop all frivolous spending and place your refund and extra monthly income in an easily accessible account like an FDIC-insured money market account.

Pay Off Credit Card Debt

If you are carrying any high-interest credit card debt pay it down or pay it off with your tax refund.  Start with your highest percentage cards (usually department stores which charge a mammoth 22% or higher) and work your way down.  Confused on whether you should pay off debt or build up a cash reserve?  Financial advisors recommend any card charging more than 10% interest needs to be paid off first before starting on your emergency fund.

Invest

Stocks are slowly starting to climb after their 40% nose dive last year and now is the time to take advantage of their low prices.  If you have no credit card debt, a good emergency fund, and money you won’t need to touch for at least 5 years then look at getting into the market.  There are many different theories on investing but a basic starting point is buying an index fund.  It protects you from volatility and gives you diversification at a low cost. Remember you don’t need tens of thousands of dollars to invest.  Even starting with a few hundred dollars can reap a big reward over time, but you have to start somewhere.

Refinance Your Mortgage

With 30-year mortgage rates hovering below 5% this spring, it may be a good move to use you tax refund to pay for part or all of your closing costs and refinance.  To make it worth your while, make sure you’re able to knock off at least 1 percentage point. You’ll also need to have a bit of home equity and a good credit score (720 or higher) to qualify for the lowest rate. Anyone with an adjustable-rate mortgage (ARM) should definitely try to switch to a fixed rate mortgage.

Invest in Yourself

Polishing up interviewing skills, learning a new computer program or meeting with a career coach maybe a good investment of your tax refund if you are currently job hunting or think you will be soon.  With high unemployment rates, job competition is fierce so standing out from the crowd with a top-notch resume or sharp interview skills means you’ll land a job faster.

Twitter Updates for 2009-04-16

• MindOnYourMoney.com’s Twitter page is now activated #
• April 16th – Where’s my return check? #

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