Archive for the ‘Financial Planning’ Category

Tis the Season of giving – But wait…

December 17th, 2009 Vijaianand

It is the time of joy and merriment. The festive season is all about fun family time, holiday parties, gift exchanges and giving gift. Gift giving has been a tradition for many decades. But how many of you really get the gifts which you really like and how many of you really know what you want to buy for your cousin this christmas.


According to Waldfogel, an economist at the Wharton School of the University of Pennsylvania,  gift giving is a Holiday waste.


He makes the case in his book, Scroogenomics: Why You Shouldn’t Buy Presents for the Holidays.  He says, when you buy something for yourself, you will only spend, say, $50, if you look it over and decide it’s worth at least $50 to me. When someone else sets out to spend $50 on me, they’re at a real disadvantage. They don’t know what I like unless they are real close to you. They don’t know what I have. There’s just no guarantee that what they buy will be worth at least $50 — or more — to me. So it real waste of money. And what the data show is that, on average, stuff that other people buy as gifts is worth 20 percent less per dollar than the stuff we buy for ourselves. And so, in that way, when we go out and spend money on gifts, we’re destroying a lot of value.


It’s not so much that people shouldn’t give gifts, period. It’s that you should give gifts when you have a fair shot at doing well. And so those are the people you know well and, frankly, the people you care about. He recommends, it’s often better (more efficient) to simply give cash or pre-paid gift cards. You can read more about this Holiday Gift waste in his book, Scroogenomics.

At the sametime, Holiday season is not just about giving gifts to friends and family, it is also about giving the gift of hope and happiness to most needed ones. Charitable giving  is a big aspect of the holiday season. Whether you make a difference in one’s life or just make one smile by showering gifts in this holiday season, it will surely piles up good karma in you.


“What you think about and thank about, we bring about” – Dr. John Martini in the book, “The Secret”.

An inspiring quote from an excellent book which I recently read and strongly recommend. It just reforces the fact that “Think and Do good things, it will bring good things to you“. This very thought is the prime reason for many millionairs who spend millions in philanthropy. By doing so, they continue to attract more money and become more rich while many of us are worrying about living pay check to pay check. That’s the difference in mind set. 

We worked hard and devoted all our attention in making money, saving money and investing money all this year for the future. It’s hard to think seriously about giving money away. It is even harder for many without job in this tough and challenging year 2009.  But the good news, the year is almost over and recession has come to an end at least in papers. That’s big sign of relief. We all can only hope for the next year to bring greater perspectives in both job and economic front through outall over the world.


While we wait to welcome the New year, many of us should be lucky and grateful to have a reasonable job and a decent life. Instead of cribbing about not enough money to donate or give way, we should open our heart and show our gratitude by giving and helping others in need.

How can you contribute?


Whether it is small or big, capacity doesn’t matter. What matters the most is the Charitable thought. There are lot of ways you can give especially suiting your life style, you life goals, your passion and more. If you are pet lover, you can give to Humane Society to protect animals. If you want to encourage kids education, you can donate to globalgivingeducation funds. If you care about developing nations, you can give gift to world relief. With webspace loaded with gift giving advices, you better do your research to find the right option and avenue to route your money to the right place. Here is some help to do some true gift giving.


Tools – Charity Finder


It’s easy to check on a charity’s business practices to make sure the bulk of your contribution is going toward the cause you select, instead of being spent on fund-raising expenses or salaries. There are web sites like www.CharityNavigator.comand www.GuideStar.org allow you to search for a charity by name or cause, as well as view and compare their annual IRS filings under Form 78, which details their expenses and costs.

 
Websites like http://www.goodsearch.com/and http://www.searchkindly.org/are search engines that donate a portion of their revenue to the charities and schools designated by its user.

We will see more about different ways of gift giving and possible Tax Implications in the next blog post.

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COBRA Subsidy – Is it helping?

July 1st, 2009 Vijaianand

It has been 4 months since Mr. Obama signed the Stimulus bill and made American Recovery and Reinvestment Act of 2009 in Feb 17, 2009. It encapsulates number of tax incentives, extension of unemployment benefits and more bail out options. Many of those incentives and benefits are still not properly adapted and implemented by the concerned parties due to the lack clarity in the process. I talked about the incentives in my previous blog post. In this blog post, I am interested just about the unemployment benefit extension, COBRA Subsidy program which I hear many unemployed people are having tough time getting credit. 

Like Home Mortgage Modification plan when many lenders were hesitant to signup because of the complex process which is creating borrower anxiety. COBRA subsidy also fall under same category where streamlined process is not in place and employers were still looking for more instructions the government to implement.

When  announced, it was meant to help unemployed workers by reducing their burden of paying health insurance upto 65%. Is it really helping? That’s a question to be answered by Obama office and we won’t go there. I did some research and collected details on COBRA subsidy to post this blog with facts and figures.

What is COBRA?

If you are laid off, you should be aware of COBRA. Employers are required to offer COBRA by federal law to let the employee keep their health insurance plan when they lay off. If you aren’t aware and don’t remember employer offering this option, please contact your employer immediately. The coverage typically is available for 18 months but employee will end up paying the full insurance premium(with no employer discount) plus 2% admin fee.

It is an expensive coverage but helps in great extent for individuals who may not be able to obtain new coverage due to preexisting conditions. If you paid for $300 as a health premium for your family, you will end up paying $1000 + 2% fee apx when accept the COBRA coverage after you are laid off.

COBRA Subsidy

Under the new ARRA 2009 act, the subsidy will cover 65 percent of premiums for nine months. There are some caveats as usual. The subsidy will apply to premiums paid for periods of COBRA coverage beginning on or after February 17, 2009. It doesn’t do any good for self employed who has their own individual health insurance plans.


For more details, check it out at irs.org

Does it really helps?

Many people are just getting by an average unemployment weekly benefit of merely $300- $350. With COBRA, people need to pay 100% of premium + 2% fee, cost comes around $900-$1200 per month for a reasonable plan. Under the new bill considering the subsidy, they’re still looking at spending close to $400 – $500 a month out of their pocket. It helps but not to a great extent. People are going to have to think long and hard about whether they can afford to extend their coverage under COBRA.

Loop Holes and Hassles

After reading comments from people on different sites, I summarized this section to bring to attention about some holes and hassles which is creating lot of frustration.

1. You might end up paying 35% of the premium from the day when you are laid off or lost your medical coverage not when you sign up for COBRA. If you lost the job in March and signed up COBRA in Jun 2009 because of process delay or any reasons. You still end up paying premium from the day you lost your medical coverage.

2. It can take months until you get information about COBRA subsidy from your employer. Be prepared to shell out 100% premium for those months which can be refunded or credit back as soon subsidy kicks in.

Help Available

I also found these information for people who are waiting for COBRA to kick in. If you don’t have COBRA yet, during emergency, a county hospital will take you in. You will get a bill, but once the subsidy comes in, you can submit the claim to your COBRA carrier to get it refunded. 

For prescription, You can try PPA – Partnership for Prescription Assistance. Go to their website, see if your Rx is on their formulary, if they are, download and fill out the form, have your Doctor complete the rest and mail it in to the address on the form. You should get an answer within 30-days for free or low-cost Rx drugs until you get your insurance.

Check out the lastest update about the COBRA subsidy posted on  U.S. Department of Labor website. For more questions, you can also call their hotline at 866.444.3272(no charge).


Families USA, a non-profit healthcare advocacy group, has posted a page with detailed information about the subsidy.

More Resources

8 questions about COBRA Subsidy
www.retirementrevised.com

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Sharebuilder helps to build your own portfolio

April 27th, 2009 Vijaianand

I started my sharebuilder account last year. I started one few years ago when they just came to the market. I didn’t really build any portfolio since I was new to stock trading and investing. Also I was more into short term trading at that time. No, I fell I should have done it.



 


Anyway, its never late than ever. Sharebuilder is now owned by ING. I like their professional and quality service. They also give good offers. I got an offer thru COSTCO for free $90 to open and fund the ING Sharebuilder account. I funded and bought few stocks. I got

Sharebuilder is not a quick rich trading platform or a online trading service. You can still do all those using their brokerage service but sharebuilder is mainly for a long term wealth building purpose. It works under dollar cost averaging methodology.

What is dollar cost averaging?

You do systematic funding to the account and setup an investment plan to buy equities for that amount in regular intervals. It just purchases those equities/stocks in the setup intervals. If the equity/stock is selling less, it will buy more shares. If its selling high, it will buy less shares for the amount. That way, your average cost of the shares will be average price spent for the stock. It works out well on a long term. Some investment experts really don’t agree with it but it is good way to start investing for longer term.

Here is my small current portfolio in sharebuilder which I started building for last 6 months and its already up 30%.

If you want to start investing and creating your own portfolio, you can do with a free $25 bonus from INGDIRECT.Click here to get the bonus. Hurry up, I only got 5 referrals remaining.

Happy investing!!!

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