Online Financial Tips

Archive for February, 2010

Recently, the UK suffered its biggest earthquake for nearly 25 years. It was centred in Lincolnshire, and had a magnitude measuring 5.2 on the Richter scale, causing varying levels of damage across the country. But it wasn’t just property that was affected – one South Yorkshire man even suffered a broken pelvis when his chimney collapsed!

The shocks from the earthquake were felt across the UK – emergency services received numerous calls from panicked citizens who had been affected by the earthquake, and fire brigades were called out to a number of fires and incidents as a result of the tremble. One man in the Lincolnshire town where it was centred reported being thrown from his bed, while thousands of others were woken by their homes shaking during the 10 second quake.

Affected houses were afflicted with structural damage, cracks, collapsed chimneys, and dislodged roof tiles. Dr Brian Baptie, a seismologist and spokesperson from the British Geological Survey, told the BBC that an earthquake of this size – moderate to significant – happens on average every 10 to 20 years; so while they are few and far between, they are a statistical reality; the potentially damaging effects of which should be taken into account by homeowners.

Earthquakes of slightly lesser significance have been a regular occurrence in Britain. One hit the West Midlands in 2002, and another shook Folkestone, Kent, last year, so they are not as rare in this country as one might think. Other freak events such as adverse weather conditions in the form of tornadoes have also been known to hit British shores, so it is wise to be prepared for any eventuality.

Many homeowners are failing to get the home insurance they need to protect themselves against such events. Most are not thoroughly checking the market to make sure they are getting the best deal, or checking that they know exactly what is covered by their policy. So, if you find that your home is not fully insured, this could add considerably to your stress levels and cause great financial hardship if you were to suddenly find the chimney in the living room!

As a result of the severe flooding last summer, there have been in the region of 27,500 domestic claims, with an average value of

In the current competitive banking market deciding to open a high interest rate savings account is the sign of you being a savvy investor. Whether you are saving money for a home, your family, an education, or for unexpected expenses, this type of savings account is a great way to grow your money over time, while earning high interest rates and keeping your money safe.

In contrast to standard big bank savings accounts that pay close to nothing, now you will find available an expanding category of saving accounts that offer high interest from on line banks, brick and mortar banks, credit unions and other institutions that are paying interest hovering around 5 percent and better, many fee-free. Essentially these accounts offer a higher annual yield than standard savings accounts. This translates into higher earnings for you.

So, how can banks offer these great rates? Well, many especially the online banks offer high interest rate savings accounts because they do not have the overhead that brick and mortar banks have. The savings is then passed along to you in the form of higher interest. In response to stiff competition for depositors some of the traditional banks have entered the fray by developing online savings products of their own, this allows them to offer high yield savings accounts.

This is good news for you, the competitive nature of the market makes it this an ideal time to consider shopping for a savings account with the best interest rate. You can compare high interest savings accounts fast and conveniently on line. You can find out the rates offered, limitations and terms of multiple financial intuitions accounts being offered with a click of the mouse.

In some cases you may also find that you have to have another account with the bank you are involved with, such as a checking account or even another savings account. So always

Because of stiff competition though high interest rate savings accounts now come in many more attractive forms. Some now offer no minimum balance fee, easy online access, direct deposit, free on line banking that allows you to view your balance, transfer funds,convenient fee free ATM transactions and checking account options. The ability to setup external banking that allows you to transfer to and from accounts that you have at different financial institutions is now becoming common practice or some banks.

It is very important that you understand the terms of any savings account that you are considering. Some may have limitations or restrictions that do not meet your needs. With the high interest savings arena now so competitive, there really is no longer any excuse for you to let your money gain low interest rates or give your business to just any bank. To protect and grow the deposits you invest quickly and conveniently do some research. You may find that it is prudent to move your money into a high interest rate savings account online or offline that yields better financial results.

Debt settlement with the assistance of some financial settlement company and the filing bankruptcy are the two options for getting rid of the large amounts of debts. Financial settlement is always considered a better option than filing bankruptcy. Bankruptcy is a hard decision that can ruin your business badly. Previously, bankruptcy was adopted by the consumers in large numbers.

Debt settlement programs under the new devised laws enable the consumer to consider the settlement program than to go for bankruptcy. If you are deep in debts, it is better to sell your financial reserves like some vehicle, some land and other reserves like this to settle the debt. Otherwise, under new laws implemented by the FTC, there are many legitimate settlement companies which help to settle the debt without charging any advance fee.

Debt relief companies now help to reduce the debt by almost 70 percent. Consumers are satisfied with this new law and applying for the a settlement increasingly. These new rules and regulations are highly appreciated by the legitimate relief companies. These new financial settlement programs are helping consumers evade the option of bankruptcy.

Filing bankruptcy gives you a very bad credit card score and hurt the business of your family.This is not the alternative to eliminate all your unsecured debts and you cannot apply for bankruptcy for the five or six years in the future if you have recently applied for it.

Even though, financial settlement programs are always a better option to select over filing bankruptcy. A debt relief company is difficult to find now with the help of legitimate rules and regulations passed in 2010. If you want to secure your financial life and future, it is always better to select a debt settlement company and reduce your unsecured debts.

Commercial loan rates are essentially the combination of the underlying index and the margin that the funding bank or lender charges. Borrowers should be careful on the way that their term sheets are written in regards to quoted rates. Below are a few suggestions on how you can protect yourself against having your commercial loan rate increased (bait and switch) while in process.

First of all, an indexes commonly used in the commercial mortgage industry includes Prime and the 10 Year Treasury. Less well known indexes such as the 5 Year Swap or the FHLB indexes are becoming more popular.

The margin is where the bank makes its spread. It is a very complicated process for banks to figure out what to charge as they basically have to predict the future and take into account the probability of default, adequately cover their costs, and of course try to make a profit. At the same time the industry is highly competitive and they have to price out their loans “skinny” enough to be able to bring in new borrowers.

The combination of the margin and index is commonly referred to as the Effective Rate. It’s what the borrower will use to calculate their payments and what they normally think of when they ask for rate quotes. For example if a bank quoted you Prime plus 1% your Effective Rate would be 6% as prime right now is at 5%.

The main suggestion regarding not having your rate bumped up on you while your loan is in process is to have both the margin and index clearly written on the term sheet. The opposite is to just have the effective rate quoted with no mention as to either the margin or the index. If either or both go down for example, you would not know, and would not know that your rate should be lower. The lender could simply keep your rate the same and you would have no recourse or really any way of knowing.

A worse scenario would be to have your rate increase during process. Rate locks are rare in the commercial mortgage industry so it is possible for the funding bank to call you with the bad news that your rate will be higher. In fact, as of this writing 5/8/8, it’s not that uncommon at all, as banks are constantly rethinking what they can and what they want to lend on – due to the credit crisis. And many will have the attitude of, take it or leave it. More to the point though if the margin and index are not clearly known the lender could mention any margin or index when challenge to “cover” his story.

Get it in writing or assume they will try the bait and switch on your commercial loan rate.

Internet business banking is a convenient method for your company to accept credit cards and provide financial services to your clients and customers. There are many different providers to select from for processing payments and conducting all of your business banking needs. The wonderful feature of this type of banking is that it is available all of the time. You can bank from your PDA, your laptop, your business computer or even from your home.

Changes in technology have made it possible to conduct all your banking needs on the Internet. You can check on the status of your account any time of the day or night from anywhere in the world that you have Internet access. This means that if you are traveling overseas and would like to know if a deposit came through, you simply connect to the Internet, log into your account and find out all the information that you need. It is a very simple, yet handy process.

Many consumers new to business banking on the Internet ask the question if they have to use an Internet banking provider. The answer to this is no. The majority of banking institutions from around the world are primarily electronic. This means that you can talk to your banking service provider and find out how to set up your account to have Internet access to it on continual basis. They will traditionally offer you a temporary Internet password and permanent sign-in name and Internet account number. From there you will change the password to a permanent one of your choosing. Once this step has been completed you will be able to access your loans, savings accounts, business accounts, checking accounts, IRA’s, certificate of deposits, money market accounts and any other type of business account you have with that particular institution.

If you run a business that accepts and receive payments such as credit cards, you can use Internet business banking to process these payments. There many different payment services online such as Google checkout, PayPal, StormPay, WorldPay and Paydotcom are but a few of the services available. The advantage to these Internet processing centers is that you can accept money from all around the world. For example, if you have a customer that lives in Spain and has a Spanish Credit Card but you live in the United States you can accept payment from this customer and have the funds automatically converted to the United States currency.

There are many accounting services you can use with the online banking options such as sending your customers an electronic invoice. You can set up to have a minimum withdrawal limit and have funds received automatically transferred to your offline bank account. You can set up to have a virtual credit card with these companies so that your card numbers are always protected. The virtual cards are a onetime use only and cannot be used by computer hackers. Additionally, you can set up to have a debit card and have electronic access to your money at any time. You simply use the debit card as a regular card and withdraw funds as you need them. This makes it extremely handy to have these types of accounts.

Many realize that you want to make a return on your money and offer money market options for funds left in your online account. There are many options to select from and you should review all of their banking products when you set up your account.

The old adage holds true: a person who represents himself/herself in a legal battle has a fool for a client. The same applies to medical malpractice insurance. Unless you want to spend years learning insurance brokering, it is best to consult an expert malpractice broker. The brokers are paid the same commission, which is typically 10% (in some cases 15% to 20%). This is built into the price of the insurance, thus it costs you nothing directly. Also, if you go directly to the insurer, skipping the broker, the insurer will not reduce the premium by the broker commission since it is built into the price. Again, having a broker will not cost you anything.

A good broker also can shop your insurance to make sure you have the best deal. They can be an advocate with your insurer if you have issues with them. They also can explain how your coverage works.

The challenge is how to find an expert broker in medical malpractice insurance in the California market. You need to find someone who is ethical and will look out for your interests. I wish a prospect for insurance could sit in our office for a week and see how hard all of us work to do the right thing, because there are many competitors who do not.

Finding a good broker:

o Ask a colleague who he/she uses

o Respond to a mailer asking the company for the name and number of their Norcal or Medical Protective representative. Call the company marketing representatives at Norcal and Medical Protective to confirm that the company is appointed with both insurers. This is a good indication that the broker does a lot of medical malpractice work and that they have been vetted by these insurers.

Note: I do not mention The Doctors Company (TDC); since they appoint very few agents and those they do appoint are often direct writers (can only place with TDC). So the fact that the agent does not have an appointment with the TDC does not indicate that he/she is not an expert in medical malpractice. Also, a non appointed broker can give you a TDC quote through an intermediary.

o Once you have spoken with Medical Protective and Norcal, ask the broker how many clients he/she has currently. You want someone with 50 or more clients, which indicates his/her expertise. Then ask for access to a list of all his/her insurers that he/she can go to on your behalf.

How do I know my broker is doing the right thing by me?

o If you are in the standard market (TDC, Norcal and Med Pro), you have the cheapest deals. These standard insurers are the lowest cost insurers and have the best terms, so in most cases there is no reason for the broker to shop for your insurance coverage since you have the best deal. If you are in the non standard insurance market, then your broker should shop for your insurance coverage every year, as well as try to help you re-apply into the standard market with the hope that it will accept you.

o Assuming you are in the expensive, non standard market, you want your broker to go to at least 5 to 8 insurers. You want a list of the responses and quotes if applicable. Also, if you want proof of inquiries, ask for evidence like emails or letters the broker received from the underwriter or intermediary.

o Check all quotes to ensure your specialty is listed and your retro date is included. Sometimes underhanded sales people will sell coverage with no retro date. We had a client who left us for a cheaper deal, which he received as a result of his new broker dropping his retro back to 2004. So any person who was harmed prior to the effective date of his cheaper policy, sues the doctor today, for a past event, the doctor will not be covered.

o Look at the fees that you are charged. Brokers are permitted to charge fees, but they must identify them as a broker fees. Most range from $350 to $500. There is a broker who we have encountered, who charges not only the usual fee, but also numerous other fees calling them processing fees, policy fees et al. Inquire about these fees and if the broker does not give you valid reasons for the charges, find a new broker. This broker received the normal 10% commission plus broker fees disguised as something else, running away with 30%-50% on a deal which is obscene and disgraceful to our profession.

o Watch out for brokers offering Risk Retention Groups (RRG’S). These are deals where you are part of a self insured deal. They will say they have reinsurance and other items of security. But in reality if they run into financial problems they can come back and ask for more money, more than the premium that you paid, and you have to pay as mush as they need. We had a client who joined RRG’s, before coming to us, who went bankrupt and had to pay over $250,000, including legal fees, to pay what he owed the RRG. If you come across brokers who offer this option and do not tell you the truth about the downside of an RRG – RUN! Buy from a real insurance company where you pay your premiums and that is all you owe.

Do I need more than one broker?

o If the above criteria are met, then no you do not need more than one broker. Allow the person, who is doing the right thing to do his/her job and you will develop a relationship with that broker. If he/she does not meet these criteria, then find a new broker. If you want more than one broker to bid for your insurance, then choose two. Have this outside broker shop 30 days prior to your renewal date and not any sooner.If your current broker is truly shopping your insurance, then he/she should have started 30 days prior to your renewal date. The insurance companies release quotes to the first person who submits his/her risk to them. Those who come later are denied access. If your broker is doing his/her job, this outside broker should be denied a quote. When this happens the outside broker may call you asking for a broker of record letter, which is a signed document from the insured stating that a broker or agent is representing the insured. Do not grant this! Conversely, if the current broker finds he cannot access all his insurers that he/she went to, and if he/she comes asking for a broker of record letter, do not grant this either! If your current broker did his/her job properly, then he/she should have submitted your risk to all the insurers prior to the 30 days. You may also receive a call by either broker saying that it’s bad to have another broker (all sales talk). You will get calls saying, “I am blocked” (not a lack of fiber). It means your current broker or the outside one did the job properly, therefore do not undermine him/her by issuing a broker of record letter.

o If a broker brings you his/her bid that he/she put hours of work into obtaining without any compensation (since brokers do not get paid till they get your order to place the coverage), then please do not give his/her medical malpractice quote to someone else. This is not a good business practice, nor is it ethical. We all have families to support and businesses to run. This is a small market thus you will get a bad reputation for doing this, and no reputable brokers will work with you again.