Ryan's Blog: October 2005

Monday, October 31, 2005

How A Bad Credit Report Affects Your Life by Sintilia Miecevole

A low credit rating or bad credit report can negatively affect virtually every aspect of your life. Whether you are consistently late on your mortgage or utility bills or you are over your limit on your credit cards, bad credit can make purchasing on credit virtually impossible, and it can limit your lifestyle in many different ways. Though over time you can recover from a bad report, there are still many aspects of your life that can suffer from poor financial management and low credit scores.

For instance, if you are planning to purchase a new or used car, it may be virtually impossible to secure a financing loan if you have a low credit report rating. Even if you can obtain a loan, you interest rate may be up to one hundred percent higher than it would if you had excellent credit. Rather than paying six or seven percent interest, you could end up with a fifteen or sixteen percent interest rate. Having bad credit can cost you thousands of dollars over the course of paying back your car loan. Not only will you not be able to get that new car you want, but you will also end up paying much more for the old car that you have to choose instead.

If you are interested in purchasing your own home, you will have to take out a mortgage. If you have perfect credit, you can secure a low interest rate of around five percent or even less. This will make your monthly payments rather low. However, if you have bad credit, you might only be able to secure a loan that charges nine or ten percent interest, making your monthly payments much higher, and costing your thousands upon thousands of dollars over time.

Credit card debt is one of the causes of poor credit, and it is also one of the ways poor credit can cost you the most. If you have several thousand dollars in credit card debt, and you are paying up to twenty percent in interest, it will be virtually impossible for you to ever pay off your debt within your lifetime. One the other hand, if you have excellent credit, you may be charged rates as low as eight percent, or possibly even lower still.

Poor credit report ratings can affect not only your loan and credit card situations, but they can also affect your car insurance premiums! Though it seems unfair, automobile insurance companies sometimes consider people with bad credit as high-risk drivers. Having poor credit can cost your hundreds of dollars per year in car insurance premiums.

If you are renter rather than a homeowner, some landlords and property management companies run credit checks before allowing you to rent from them. If your credit report shows a low score, you can be denied housing. If you do end up being able to rent, you might not be able to turn on utilities in your name, especially if you have been negligent in paying your bills in the past.

Bad credit report ratings can affect virtually every aspect of your life, from your car to your house to your insurance premiums. Because of this, it can certainly also affect your health. Financial worries are a leading cause of personal and relationship stress, and this stress can lead to mental and physical health problems. There are many consumer credit counseling services that can help you gain control of your finances and get you on the right track toward good credit. Many of these companies are non-profits with their sole purposes of existing being to help people get back their financial and mental health.

Friday, October 28, 2005

How loands can improve credit...

Individuals who have had credit problems in the past know how much of a hassle it can be to try and get a loan with bad credit. It can be worth all of the trouble, though… after all, not only are you getting the loan that you need but you're also being given an excellent opportunity to improve your credit rating for the future!

What many people don't realize is that by making regular payments on a loan, they're doing a lot to set up an improved credit score down the line… after all, each loan payment that's made on time can be a positive report to credit agencies from your lender.

To better understand exactly how the process of a loan improving your credit score works, it's important to make sure that you understand exactly how your credit score is figured in the first place.

Credit Reporting and Your Credit Score

Every time a payment due date arrives, there is the potential for either a positive report or a negative report being sent in from the lender or business to the various credit reporting agencies. If you've made your payments on time and everything else is in order, then the creditor sends a positive report and the value of it is added to your credit score.

On the other hand, if you fail to make your required payments on time then a negative report will be sent and the value of it will be subtracted from your credit score.

While one individual report usually isn't enough to make a major change in your credit score, having multiple positive or negative reports sent in consecutive months can begin to have an effect on your score.

Effects of Time

As time goes by, individual reports on your credit record expire and are removed… this prevents old negative reports dragging down the credit score of someone who's had nothing but positive reports in the years following the initial payment problems.

The amount of time that passes before a negative report expires can vary depending upon the credit reporting agency as well as other factors. If you've obtained a loan while you have bad credit and you make all of your payments on time, you might not notice a sudden drastic improvement in your credit score… though by the end of the loan term you may begin to notice at least some improvement.

Once a bit more time has passed and your older negative reports have started to expire, though, you may begin to notice unexpected jumps in your score; this is due to your score being recalculated without the old negative reports to drag it down, and with all of the newer positive reports increasing the total score.

Credit Improvement

Obviously, getting a loan and making all of your payments on time can serve to improve your credit rating… it's simply a matter of understanding the process of computing your credit score.

Your score is recalculated every time a new report is made or when an old report expires, meaning that if the lender you've chosen for your loan reports monthly then you could have an updated credit score every month.

As you continue to get positive reports and they begin to outnumber the negative, your score will begin to rise… and you will be on your way to a bright future with a good credit rating.

Sunday, October 23, 2005

Have you been considering a new business of your own? And you just you could have invented that killer tiny iPod players? Well here is a quick thought on the comment of the new digital video slim-line iPod:

Indeed. What I have observed is that people spend on the Maslow Hierarchy of needs;

1.) Preventing Death; I.E. military defense and health care

2.) Respect from fellow man; I.E. things that make them look good

3.) Sex; I.E. things that make them look, feel or attract a sexual partner

4.) Personal Entertainment and prevention of Boredom

5.) Seeking Knowledge; I.E. Exploration

For proper marketing should hit a few of these, the more you hit the better, even better if you hit all six and then simply stand in the way of the money flow to get whatever you need. Charge a fair price if it is an item or service that you wish to get repeat customers and all their referrals, this is the best type of business indeed.

It might be wiser in the developing of your business to hit heavy on number one of the first few items if you can. Hurricane safety kits for the home; I.E. if you do not have a Hurricane preparedness kit in your home for the next Hurricane well, you and all your family could die. Whatever business you decide as the best for you always remember to keep it simple. Interesting question indeed and thanks for asking, but do think on it before you take the plunge into entrepreneurship.

"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; http://www.WorldThinkTank.net/wttbbs
Is a known fact that every time you open a browser to view a web page, order something online, or read your email in a web based viewer that information is stored on your computer for later use. Whether you are viewing the weather online, reading sports, catching up on the latest world news or viewing something a little more private, all that information is stored in your computer. Windows operating systems store all this material in what are called Temporary Internet Files or cache. Web pages may store bits of information about who you are when you visit web sites in files called cookies on your computer. Your web browser will store a list of web sites you've visited and places you've gone in a history file in your computer. Even if you are not online, programs will store histories of the files you've opened, played, or viewed.

Generally there might not be any reason to worry about all these files in your computer, but what if you sell your computer and all that information is left for someone else to see. Maybe friends and relatives visit and use your computer and you dont want everyone to know what files you are running on your computer. Then you are going to want to know how to delete these files.

Even if you are not worried about privacy on your computer, you may be surprised to realize how much hard drive space all this information takes up. If you are running out of drive space, you may want to delete these files.

How can I delete these files?

For Internet Explorer 5 and above, you can follow these directions to clear out temporary files and delete cookies.

1) Open Internet Explorer and click on Tools

2) Click on Internet Options

3) On the General Tab, in the middle of the screen, click on Delete Files

4) You may also want to check the box "Delete all offline content"

5) Click on OK and wait for the hourglass icon to stop after it deletes the temporary internet files

6) You can now click on Delete Cookies and click OK to delete cookies that websites have placed on your hard drive.

To clear the Internet History in IE:

1) Open Internet Explorer and click on Tools

2) Click on Internet Options

3) On the General Tab, in the middle of the screen,click on Clear History

4) Click OK

To clean up other temporary files on your computer in Windows 98 or higher:

1) Click Start, Programs (or All Programs), Accessories, System Tools, Disk Cleanup

2) Choose the correct drive usually C:
3) Check the boxes in the list and delete the files

This deleting method is only good if you want to free space, because normal file deletion only removes a file's directory entry, and leaves the data contained in the file on your hard drive, which can be easily recovered by any average computer user using a undelete utility. If you delete cookies or if you delete history using conventional methods anyone can recover them! Even after a hard drive format, files can be recovered using expensive hardware and software which use forensic latency track analysis algorithms.

Friday, October 21, 2005

Thursday, October 20, 2005

Wednesday, October 19, 2005

Make Or Break Home Business Tips (And Home Based Residual Incomes That Work)

As our divine world drives furiously into this new ?Information Age? a new type of millionaire is fast emerging from the incredible changes that have been driven by the internet ? the ?Work From Home Millionaire?. This article probes into the questions that you have about the benefits of starting a home business, avoiding the scams that seem to attract any prosperous industry and (the bit that you?ll want to gobble up) the drop dead simple ways that you can implement today for instant home wealth.

Ready? Let?s delve now into the benefits of starting a home-based business. Do you know that this new breed of Work From Home Millionaire has it much better than most wealthy people? A home-business affords it?s owners a lifestyle that even traditional millionaires would envy (no need to commute or play dirty office politics as you watch the cash splosh into your Paypal account).

Not started yet? Don?t fret ? every thriving home business started off as a mere conception. An idea in someone?s head. Working from home is a dream for many ? but actually going ahead and starting a home business can be very difficult. So what makes so many people want to do it, and why would you ever try such a crazy thing? Here are some common reasons, and some things to consider:

Doing What You Love (Yes, You CAN Turn Your Hobby Into Your Job). Most people have something that they?re really passionate about, and would spend the rest of their life doing if they could, just for the enjoyment of it. Whether that means football, travel or hand-made sock puppets for you it?s wonderful to get paid for doing what you love!

Make sure, though, that you?d be able to take it if you had to make a living from your passion. It?s the things we?re closest to that hurt us the most ? think of how you might feel if no-one buys what you?ve made, or if they send it back and with a note saying ?what rubbish, I demand a refund!? Can you cope with your hobby becoming commercial? As you?ll learn with time and experience there is always a small percentage of customers who are downright nasty and will take a swipe at your feelings (I know of webmasters who have even received correspondence touching upon hate-mail before). You always have to take the rough with the smooth.

Your Boss Is A Dirty, Backstabbing Little Pig. It seems like everyone hates their boss. In an increasingly commercial and profit conscious world the ?boss? is the guy who will deliver corporate riches at any expense. You may be a model employee, work more hours than there are in the day yet when it?s time for your loyalty to be repaid you?re left with a barely inflation matching pay-rise and hardly any gratitude for your slog. Is this really the way you imagined spending your life? Wouldn?t it be far nicer to do your own thing from your own space?

What you might not realise is that ?being your own boss? requires quite a lot of willpower. If there was no-one to make you get up in the morning and do any work, would you be able to motivate yourself? Your home is supposed to be a place of rest and entertainment ? and when it?s full of the equipment and temptation to do anything but work, working there can be hard (shall I do some work or watch that Simpsons DVD?).

You?re Over 30, Have A Wonderful Family?But Barely See Them For A Half Hour In The Day. You feel like all you do is go to work, come home, and then sit around, too tired to do anything fun with your family. Well without doubt I can tell you that with a successful home business you?ll have far more time and energy to enjoy with your partner, your children, your relatives and friends. And when you?re boss, you can set your own holidays. How cool would it be to turn up to your home office, find things smoother than smooth and call Bob up for a round of golf (of course if you don?t know Bob you can ask one of your own friends : )

The flipside here is that you might just end up spending too much time with your family, while you?re trying to work. When everyone knows you?ll be in the house all day, they?ll probably ask you to do all sorts of unimportant things, just because you?re available. It?s hard to say no, and before you know it, you?re doing the job of a full-time ?housewife? instead of what you set out to do. Discipline is required, and if you feel you struggle with this then perhaps a home business isn?t for you after all.

The Commute, The Stress, The Overpriced Sandwiches?It?s All Too Much. There is a very wise old saying that goes something like this: ?No-one on their death-bed has ever reflected on their life and said?I wish I spent more time in the office!?

Offices are dreary environments, and terrible to work in ? travelling for hours there and back and spending a significant proportion of your wages to do it seems completely pointless (especially if you live in the middle of nowhere). If you could work from home, think of the time you?d save? and time is money, isn?t it? To make things worse, if you happen to work in some of the larger cities in the world such as London, the amount you spend on basics like food and drink can be shockingly high.

Isn?t it time you started earning more and spending less (both money and energy)? Once set-up, a home business affords you the enjoyment of working based around your time, schedule and requirements (with the only commute from the bedroom to the home office via kitchen).

You Want To Work Smarter And Benefit From Residual Income Streams. When you have a job, usually the pattern is that you work to accomplish a task and you get paid once. When you have a smart home business (such as creating and selling information products) you do the work once and then for years into the future you will receive payment for the very same work. That?s residual income and it?s one of the most powerful concepts you?ll ever take on board (congratulations ? this one tip alone is worth hundreds of dollars).

A home business can not only be highly enticing because of the advantages it offers by way of work-life-balance, but when you get it right it will pay many multiples of any job. That?s the trick to setting up a really successful home based business.

Home Income Streams That WORK. Pay close attention to this short paragraph. You?re about to discover multiple ways of creating powerful home income streams that are seductively residual. Here are some income streams that have worked very well for me - I?ll leave it to you to research into and profit from them.

As mentioned above, resale rights and information products are superb residual income generators. These days you can purchase premium products with rights for the price of an ice-cream ? and profit from it for years into the future.

Google Adsense has been established as a viable and highly profitable business model for the home business publisher. It?s an awesome way of setting up income streams that do not require you to sell a thing (and continue to make money from them long after forgetting about them).

Knowing the basics behind importing & exporting is another explosively profitable home business model. Once you find a profit source here, again, it will continue to deliver cash for you for years into the future.

A Call For Action. Now that you?re aware of the pros and cons of starting your very own home based business (and some highly powerful tips to nudge you towards early profits) you need to take action. The next five minutes are vital ? if you walk away and take no action you may never start on the most important and worthwhile journeys of your life. It?s totally up to you. Who knows, perhaps you?ll end up being the next new Work From Home Millionaire.

Tuesday, October 18, 2005

Get Google Indexed FREE In A Matter Of Hours!

The #1 Way To Get Targeted Motivated Traffic To See Your Product On The Internet By using Search Engines, you can increase your chances of making sales and gaining exposure for your web site or affiliate site by as much as 46%.


Keep this one small thing in mind and you'll be light-years ahead of the others when it comes to understanding Search Engine Optimization...

...The Google search engine is perhaps the most popular search engine on the internet. Over 68% of all searches on the internet are performed using Google.

Above "Meta Tags" "Site Titles" "Site Descriptions" or anything else... The Most Popular Pages On Google are the ones that have the most relevant Income and Outgoing links... (Period).

Get Listed in Google, the #1 search engine on the internet, within 24 hours or less.

Here is a simple but very effective to get your Optimized web pages (or any web page you choose) listed in Google within just a few hours or less.

Using Search Engine Submission programs is about as obsolete as the keystroke typewriter.

Submission is not necessary and does not guarantee inclusion into Google.

These days most web pages are found and indexed automatically, when one of Googles greedy little spiders crawl the web looking for fresh new content to devour.

Once the Google spider crawls your web site, instantly it is listed into Google according to the Rank it gives you and the way in which your pages have been Keyword Optimized.

How It Works

The way you can call one of the little Google spiders to come to dinner is to do a search using the Google Toolbar.

This will require that you first download and install the Google toolbar.

To download the Google Toolbar go to http://toolbar.google.com/ .

To learn all more about the various functions of the Google Toolbar go to: http://toolbar.google.com/help.html

The Google toolbar works with Internet Explorer and this is why this Indexing Strategy is not Mac compatible. However Mac users may use the Strategy below and achieve astounding success as well.

Monday, October 17, 2005

Web Surfers - StormPay.com has launched a new feature that pays you for link clicking. The great thing about this is that it doesn't cost anything to join and you can start getting paid to your StormPay account on the same day you click the links. No waiting around to see if you're really going to get paid or not. Easy same day pay. No gimmicks!

Advertisers - If you've got something to advertise or you want to promote a program, you'll be able to do it at StormPay.com for as little as $1.10. Stop spending a ton of money trying to reach a useless audience. StormPay.com has exactly the audience you're trying to reach. Got a dollar? Get traffic! You can set your own advertising budget to reach all the prospects you can handle.

If you don't already have a StormPay.com account, please use my link to sign up because StormPay.com also has an awesome affiliate program that pays 6 levels deep!

How To Improve Page Relevancy...
by: Manish Patel

You need to do enough exercise to keep your site properly indexed with search engine.i am providing some tricks that can help you in improving page relevancy.as perhaps you know that only Google page rank is not important for search engine ranking-Page relevancy also important.if you can do some exercise than you can improve your traffic.

1. Your Web pages with content should be interested in reading.

As content is king for search engines content in your site should be both unique and interesting.this can improve your impression.

2. Content should be highly focused with keyword phrases. rather than phrases that are too general and competitive

Specially when there is more competition.

3. Optimize your Web pages for at least three to five keywords at a time

You should optimize your page for minimum three keywords-for three keywords your page should be highly relevant.for that you need to choose better keywords,choosing keywords is not a game of guessing.it is one science.Write your site's content using the keywords for which users search, and you'll literally be speaking the same language as your visitors.

Useful sites:-Nichebot.com and Wordtracker.com

4. Use regionally specific keywords, when applicable.

if your target is regional than try to choose keywords that are regional.

Example:-you can choose 'loans in new york' rather than just 'loan in USA' that's why you will get highly targeted visitors and improve your visitor to sales ratio

5. Use the most commonly used variations of your keywords, with keyword research

Don't choose keywords that are highly competitive(specially when your page rank is low.) You can choose their synonyms etc.as per i said you need to do some research work for that.also consider some variation that can occur due to typing mistake etc..

6. Each optimized page should contain a unique title.

It will some time meaningless if you will choose same title pages more than one.title tags are very important and perhaps you know that searcg engine give lots of weight to title if title of your page will different. than you can get more traffic for more keywords.this is important.

7.Use multiple keywords in your title tags when appropriate.

Choose better title for every page using synonyms etc..so that you will probably also get traffic for that keywords too.but don't go overboard.

8.Most important keywords appearing above the fold and throughout each optimized page.

First few lines are very important for search engine page relevancy.so write that with special care and using your all main keywords.also include your keywords in other part of page too.

9. Using keywords in hypertext links, whenever possible.

if you will use keywords in hypertext links than your page which you link will improve its page relevancy automatically

10. Each optimized page contain a unique meta-tag description.

Some search engines still give more weight to meta tags so like title meta tag should be different for each page if possible.

11. Each optimized page contain a unique meta-tag keyword list.

Like meta tags you should also change meta tags wherever possible.and that keywords should also include in page body.

Sunday, October 16, 2005

Does that make sense? Yet, that is what I hear from a lot of prospective clients.

What that is saying is, “My Marketing Doesn’t Work So I’ll Never Do That Again!” (I’ve actually heard that statement).

Most small businesses don’t understand how to make it work, so they dip their toe in, try it, and when they don’t get what they expect, they leave to never try it again. Yet, generating exactly the number of leads you need every week is not only achievable but rather easy if you understand the principles and failure to understand them results in an 80% failure rate among most small businesses.

Critical Goals (The Keys: Guaranteed success, vs. Highly Probable Failure)

There are a few critical goals and measurements we track in a business. These typically are:
• The number of leads generated weekly (comes from our marketing plan, advertising, networking, referrals, etc.)
• The number of closed sales, and dollars in closed sales every week
• Number of completed jobs (customers, projects, etc), total dollars generated, and profit (gross profit) generated per job every week.

And finally the bottom line generated by the key measurement results above.
• Total dollars sold for the year, profit generated for the year.
• Does the profit generated by your sales pay your overhead.
• After overhead is paid how much extra is generated that goes in your pocket as “net profit.”

The definition of “critical” goals: a goal that IF accomplished will result in
• The total dollars of revenue for the year, the overhead is paid, and having a specific defined number of dollars to put in your pocket. And IF these goals ARE NOT achieved the consequences will be:
• The total dollars of revenue WILL NOT be reached
• You will likely not be paying overhead and the money will be SUCKED out of your pocket instead of putting it into the pocket.
• AND the biggest consequence, you just entered the high probability that your entire business will fail.

Now that we’ve set the ground work for what critical goals will do for you if you achieve them, and what will be the consequences if you don’t, this leaves us with a rule I give all of my clients: Critical goals are something that YOU WILL do no matter what.

It's likely that there are 50-60 other things pulling on you to get done, but since these 5-6 things are SO CRITICAL (success on one side, failure on the other), then NOTHING else is more important. Stop doing the trivial many and focus on the 5-6 critical things that WILL deliver results, guaranteed.

When it comes to a critical goal that appears difficult, our response to that will not be “CAN’T” but rather “HOW?”

Now back to our original statement that

My Ads Don’t Work, So I don’t Do Them Any More

Isn’t lead generation, the leads that come from our ads, one of our critical goals To generate X number of leads EVERY WEEK.

And our rule was Make it happen no matter what, it’s not CAN’T but HOW?

If our ads are not delivering what we expected, shouldn’t we be figuring out HOW to make them work instead of saying “they don’t work so I’ll never do that again.” We just said CAN’T instead of How. The opposite of our ground rule.

Is business really that simple? Just deliver the Critical Goals? You bet!

How to fix the ad response rates

For most ads I find these are the critical factors:
1) Who we are communicating to
2) What we are saying
3) How we are saying it (and How must be about the benefit of the product, not the name, specifications, features, and especially not about WHO WE ARE.)

I’ve seen ad response rates jump 10 times on the very next advertisement just from following these ground rules and developing the answers to these questions.

Alan Boyer, CEO of The Leader’s Perspective, LLC is considered one of the world’s leading breakthrough specialists.

With over 35 years of business experience, he has catapulted businesses lightyears ahead in weeks. Some double, some jump 10 times.

He helps companies worldwide reach further than they EVER thought possible….FASTER


Wednesday, October 12, 2005

Rafik Patel, of FSP Search, in conversation with James Cullen about the growth in the hedge fund industry.

Q1: As an introduction, can you give us a broad brush description of the hedge fund universe?

The hedge fund industry consists of around 6,000 funds globally, and manages around $900 billion in assets. Many hedge funds are relatively young (less than five years old) and relatively small (less than $25 million under management), which emphasises the fact that hedge funds have only recently become popular with more mainstream investors.

Q2: We understand that the hedge fund market is no longer the special province of US-based operators, and that other areas – notably Asia and Europe – have seen amazing growth in terms of asset size and startups over the last five years. How has this happened?

This is primarily a matter of supply and demand. With strong investor demand and no signs of fees coming down, it simply makes a lot of sense for experienced portfolio managers, proprietary traders, marketer, etc, to start up a hedge fund operation. With an average fee of 2 per cent flat plus 20 per cent of the profit, these people can do a lot better on their own than working for a large bank or asset manager, even if they manage to raise only $100 million or so.

Q3: Given the sort of exponential growth we’ve been talking about, is there a likelihood that returns will be driven down as hedge funds are flooded with capital? After all, it is the role of managers and arbitrageurs to normalise and provide liquidity to the marketplace?

It is clear that the heydays of hedge funds are a thing of the past – every succeeding year having shown a worse performance than the previous one. Much depends on the specific strategy followed, though. Global macro funds will probably last longest, as many of them operate in liquid markets. More specialised funds, such as convertible arbitrage, are already suffering. There just aren’t enough convertibles in the world to support the assets under management by this type of funds.

Q4: Is it fair to say that the European theatre is best suited to the single-manager fund operation?

No. Most European investors use funds of funds, that is multi-manager funds. For investors who do not have the necessary skills to select funds themselves, who do not have the size to allow them to select their own funds, or who just do not want to take the responsibility for fund selection (as is often the case with institutional investors), funds of funds are basically the only available alternative.

Q5: In relation to single-manager funds, the fund’s manager has total trading authority. It has been inferred that using a single manager can lead to a lack of diversification and higher risk. From an empirical point of view, do these inferences have any validity?

Yes. Individual hedge funds have a high degree of idiosyncratic risk because you are basically building on the ideas of just one or two people. In addition, about 15 per cent of all hedge funds closes every year, because of lack of size or lack of performance. This makes it is almost a necessity to hold a portfolio of funds instead of a single fund.

Q6: With thousands of hedge funds to choose from, each claiming to have an “edge”, where does the novice investor start?

The novice investor should not try to do the fund selection him- or herself. The whole due diligence process and the portfolio building that comes afterwards is just far too complex for DIY.

Q7: Pension funds and hedge funds – will the twain ever meet?

Yes, because pension funds tend to imitate each other. If the big ones go for hedge funds, the smaller ones will follow. With interest rates at a historical low, uncertainty about the future of the stock market, and institutional investors eagerly looking for something to make up for recent losses (or to be seen doing at least something), hedge funds have been welcomed with open arms by the top pension funds. It is only a matter of time before many smaller funds follow suit. The only thing that can prevent this is lack of performance. Hedge funds need to convince pension funds that they are worth the hassle and the relatively high fees. If performance stays out, however, the hedge fund idea will become harder and harder to sell.

Q8: How are investments in hedge funds affected by current market conditions?

Much of the interest in hedge funds is driven by a lack of alternatives. Many investors do not know where to put their money and are struggling to recover from serious losses in the stock market. They are therefore very much open to alternatives at the moment. It is exactly at that point that hedge fund marketers start knocking on your door. What do you expect?
7 Simples Steps to Financial Freedom and Wealth Building -
By William Tan

STEP 1: Make up Your Mind and Setting Your Goals

The first step to any form of planning is to determine your objectives and to set your goals. Although it's the easiest to do, most people do not do it. So, in this case, please take a piece of paper and write down your financial objectives and goals.

Keep it sweet and simple. And constantly refer back to remind yourself of the goals that you have set. Trust me - you will forget your objectives and sway off course if you do not have your goals documented.

Decide on what you would like to achieve financially; develop a plan to achieve it; stick to it to make sure that you stay on track with your objectives. Put your mind, soul, and determination to achieving these goals and you will arrive in time.

Your goals should contain:

- Your Targeted Net Worth
- Your Targeted Monthly Residual Income
- Your Starting Capital
- The time (in years and months) to achieve these goals
- How much time per day would you allocate to achieve the above goals?

For starting capital, it's best to only use risk capital because when you are using your live savings to achieve this, you would normally be too fearful to lose, that is when you make emotional, instead of rational, decisions. As we know, in any business, emotional decisions will, most of the time, turn to bad decisions. We are talking about your financial future - so please make only rational decisions - consider all possibilities when things don't go your way.

Now that we have decided on your goals and your starting capital to achieve these objectives, we are now ready for Step 2 - Achieving Financial Freedom.

CASHFLOW AVENUE is established to provide Low-Risk Options Trading Recommendations to the common traders in their pursuit of financial freedom and a better lifestyle. http://www.cashflowavenue.com

STEP 2: Achieve Financial Freedom – Choosing Your Escape Vehicle

Do you want to achieve financial freedom? For most people, this is constantly on their mind. If you are reading CashFlow Avenue’s 7 Simple Steps to Financial Freedom and Wealth Building, chances you are looking for ways to get out of the rat race and to achieve financial freedom. Unfortunately, it isn't always as easy as it sounds.

With your Financial Goals firmly defined in Step 1, you would now have to choose your “escape” investment vehicle. There are plenty of investment vehicles in the world. Let’s name a few most common form of investment – fixed deposits, gold, bonds, real estate, stocks, stock options, mutual funds, starting a business on your own, etc.

From experience, you might probably be able to tell that every one of the above contains risk, except for fixed deposits. Profit, simply defined, is your reward for placing taking risk on your assets.

On surface, fixed deposits, look the safest form of investment but are probably the most risky because inflation rates are consistently higher that what the bank would pay you – slowly eating away your purchasing power in years to come. So, in truth, while your bank account is growing in numbers, you are actually becoming poorer. If there is no inflation (which will never happen in the long run), fixed deposits are still not the best escape vehicle because it takes just too long to appreciate. Who would want to wait 30 years before they can be rich?

Without getting involved into too much detail, let’s jump straight into action. When choosing an escape vehicle, you probably would want to set a few criterions to screen out what will and will not work for you. The ideal escape vehicle or business should provide:

Liquidity – allows you to cash out within a few days.

Leverage on Your Capital – using only your capital can be slow. Select a vehicle that provides leverage that magnifies only returns but not losses.

Fast Results – should see return on investment within the 1 st month.

Easy to Set Up – should take no longer than 1 month to start.

Predictable Monthly Return on Investment (ROI) – be able to forecast accurately your monthly

Low Risk – consistent and provides a high percentage for success

Profit with Time – with each tick of the clock, you should be making money.

Utilizes The Power of Compound Interest – snowball your returns to accelerate your wealth building process.

After running these criterions over the choices of investment available, most vehicles don’t make the cut. Of all, only 2 investment vehicles would make the cut.

Stay tuned for Step 3 for the Best Escape Vehicle.

CASHFLOW AVENUE is established to provide Low-Risk Options Trading Recommendations to the common traders in their pursuit of financial freedom and a better lifestyle. http://www.cashflowavenue.com

Tuesday, October 11, 2005

Home insurance, or homeowners insurance, is an insurance policy that combines insurance on the home, its contents, loss of use (additional living expenses) and, often, the other personal possessions of the homeowner, as well as liability insurance for accidents that may happen at the home.

The cost of homeowners insurance scales upward depending on what it would cost to replace the house, and which additional "riders", meaning additional items to be insured, are attached to the policy. The insurance policy itself is a lengthy contract, and names what will and what will not be paid in the case of various events. Typically, claims are not paid due to earthquakes, floods, "Acts of God", or war (whose definition typically includes a nuclear explosion from any source). Special insurance can be purchased for these possibilities, including flood insurance and earthquake insurance.

The home insurance policy is usually a term contract, which is a contract that is in effect for a fixed period of time. The payment the insured makes to the insurer is called the premium. The insured must pay the insurer the premium each term. Most insurers charge a lower premium if it appears less likely the home will be damaged or destroyed: for example, if the house is situated next to a fire station, or if the house is equipped with fire sprinklers and fire alarms. Perpetual insurance, which is type of home insurance without a fixed term, can also be obtained in certain areas.

In the United States, most home buyers borrow money in the form of a mortgage, and the mortgage lender always requires that the buyer purchase homeowners insurance as a condition of the loan, in order to protect the bank if the home were to be destroyed. Anyone with an insurable interest in the property should be listed on the policy.

Types of Homeowners Insurance

There are six kinds of homeowners insurance in general and consistent use. Of these HO-3 is the most common policy followed by HO-4 and HO-6. Others that are less used, though still significant, are HO-1, HO-2 and HO-5. Each is summarized below:


A limited policy that offers varying degrees of coverage but only for items specifically outlined in the policy. These might be used to cover a valuable object found in the home, such as a painting.


Similar to HO-1, HO-2 is a limited policy in that it covers specific portions of a house against damage. The coverage is usually a "named perils" policy, which lists the events that would be covered. As above, these factors must be spelled out in the policy.


This policy is the most common written for a homeowner and is designed to cover all aspects of the home, structure and it contents as well as any liability that may arise from daily use as well as any visitors who may encounter accident or injury on the premises. Covered aspects as well as limits of liability must be clearly spelled out in the policy to insure proper coverage. The coverage is usually called "all risk".


This is commonly referrened to as renters insurance. Similar to HO-6, this policy covers those aspects of the apartment and its contents not specifically covered in the blanket policy written for the complex. This policy can also cover liabilities arising from accidents and intentional injuries for guests as well as passers-by up to 150' of the domicile.

Very low in cost and high in coverage, this is a highly recommend policy for anyone renting an apartment.


This policy, similar to HO-3, covers a home (not a condo or apartment), the homeowner and its possessions as well as any liability that might arise from visitors or passers-by. This coverage is differentiated in that it covers a wider breadth and depth of incidents and losses than an HO-3.


As a form of supplemental homeowner's insurance, HO-6, also known as a Condominium Coverage, is designed especially for the owners of condos. It includes coverage for the part of the building owned by the insured and for the property housed therein of the insured.

Designed to span the gap between what the homeowner's association might cover in a blanket policy written for an entire neighborhood and those items of importance to the insured, typically the HO-6 covers liability for residents and guests of the insured in addition to personal property. The liability coverage, depending on the underwriter, premium paid, and other factors of the policy, can cover incidents up to 150' from the insured property, all valuables within the home from theft, fire or water damage or other forms of loss.

It is important to read the Associations By-laws to determine the total amount of insurance needed on your dwelling.

Very low in cost and high in coverage, this is a highly recommend policy for anyone owning a condo.

Why wait until after a disaster to discover your homeowners insurance doesn't really have you covered? Here are 10 things to do so you can have peace of mind -- and full protection -- right now:

1. Buy the right insurance. "You should know what you have, and you should know ahead of time that you are covered," says Jeanne Salvatore, vice president for consumer affairs with the Insurance Information Institute, a nonprofit industry trade group. She recommends looking at your insurance coverage in four key areas: the structure of your house, your belongings, your liability to others and your living expenses if you're forced out. "If there's a disaster, you want to be able to rebuild your house and replace everything in it. And you need enough liability coverage to protect you in case you do get sued." Living expenses would cover the cost of making the house livable or living elsewhere while your home is being repaired or rebuilt.

2. Get replacement value insurance. Face it, this is an insurance policy, not a garage sale. You don't really care how much your possessions would fetch on the open market, the so-called "cash value" or "fair market value." You want to be able to replace everything you lost with similar, new items. And make sure that your policy spells out that both your home and its contents are covered by replacement-value insurance.

When it comes to replacing the home itself, look for extended or guaranteed-replacement-value coverage. Guaranteed replacement, which covers rebuilding no matter what the cost, is not offered much any more, says Don Griffin, assistant vice president of commercial lines for the Property Casualty Insurers Association of America (PCI). Many companies offer extended-replacement-value insurance, which will cover up to 100 percent of the value of the home, plus a certain percentage to cover rebuilding the home in today's market.

3. Understand the claims process. Two policies can promise the same amount of coverage, but they can be vastly different when it comes to making you whole after a loss. Have the agent explain exactly how claims are handled, especially when it comes to writing you a check. Do you receive your entire claim upfront, or just a fraction? Does the company pay you for all the things you've lost, or only those things that you replace?

Some policies will give you the cash value of your possessions right after a loss, but wait to cover the replacement value until after you've replaced your items -- and have the receipts to prove it. This could be a problem if you're wiped out and have no cash reserves.

Equally important is the timetable on replacement. If you go from living in a five-bedroom home to sleeping in a motel room with four kids and a dog, you might not want to go on a shopping spree right away. How long do you have to replace your things?

4. Take inventory. Filing a claim involves two steps -- proving you owned certain items and verifying their worth. This is a lot easier to do when you still have your things. Go through your home with a video camera (rent one if you don't already have one.) Walk through each room, do a quick sweep and get everything you own on tape. Don't forget the attic, basement, closets and offsite storage locker, if you have one. Or take the low-tech method: make a list and shoot a few rolls of film. Stash your video or photos in a safety deposit box with a copy of your policy. If you keep your inventory at home, make a second copy to give to a friend or keep at the office.

5. Buy floaters. Many times, homeowners and renter's policies limit the amount you can collect on some big-ticket items -- usually things like computer equipment, jewelry, furs and fine collectibles -- to a fraction of the replacement value. If this is the case, you need to pick up a special policy known as a "floater" or "endorsement" for each of those items. A floater will also reimburse you if you simply lose the article. In the case of something new, save the bill of sale with your inventory, and fax a copy to your insurance agent. If the item is older, have an appraisal done. Again, save one copy and send another to your agent. That way, you'll never have to worry about proving you owned an item, and there will never be a dispute over what it's really worth.

6. Keep pace with inflation. This is especially important with a homeowners policy. It may have cost you $100,000 to build your home 10 years ago, but it might cost $120,000 to replace it today. "Many companies have inflation guard, which covers the increasing cost of rebuilding," Salvatore says. When your policy comes up for renewal, talk to your agent to verify that your coverage amounts are still realistic. And when you make an improvement, add it to the total.

7. If you own a condo or co-op, protect your property. Make sure that the condo board or association has a policy that covers the common areas, and get a copy. Also look at the association bylaws to find out what portions of the home you must cover. "It's usually from the drywall in," Griffin says.

Since condo owners need their contents policy to cover things like cabinets and fixtures, they need a bit more insurance than the typical renter. Sometimes you get a price break if you go with the same company that wrote the policy for the condo association.

"Plus they are familiar with what they cover, so they know what to sell you," Griffin says.

You also may want to consider assessment coverage. If the condo association's policy is not large enough to cover a loss, or if there is a hefty deductible, the association will split the additional costs among the members in the form of an assessment. With assessment coverage, your insurance company pays the tab.

8. Consider flood and earthquake insurance. Granted, this is not for everyone. But if you live in an area prone to floods or earthquakes, it pays to know that most property policies do not cover these disasters. Some independent carriers offer both. For flood insurance, you can also contact the National Flood Insurance Program. In California, you can get earthquake insurance through the California Earthquake Authority.

9. Think about buying an umbrella policy. Liability insurance, which picks up the tab if someone gets hurt on your property or through the actions of your family members, tops out at $300,000 on most homeowners policies, according to Griffin. "But nobody sues for $300,000," he says. "That usually starts at $1 million." His recommendation: if you have assets, pick up an umbrella policy that would add extra liability coverage to your home and auto policy. "Umbrellas are cheap -- usually starting at about $200 to $350 a year."

10. After a life-changing event, call your agent. Getting married or divorced? Are the kids moving out -- or back in? The amount of insurance you need -- and the items you want to cover -- change over the years. Be sure you keep your policies and inventories up to date.
Who are we kidding? Nobody really wants to buy car insurance. It's like raising a child: socially responsible but invariably complicated, costly, and boring. There's even a chance that your "premiums" (the insurance industry's way of saying "exorbitant yearly fee you pay us for the privilege of being completely at our mercy") will exceed the value of the clunker you're looking to insure. After hearing all those negatives, you may be thinking that you don't want to get car insurance after all. So, just for you, we've compiled a list of ways to avoid it altogether:

* Don't own a car. Or drive one. Ever.

* Borrow a friend's insured car. Then appear on Judge Judy to settle the score after you wreck it.

* Work for an insurance company in some department that doesn't deal with car insurance. Befriend somebody in the car insurance department using lascivious methods.

* Consider a change of lifestyle. The Amish do not need car insurance, nor do prison inmates, Eskimos, or contestants on Survivor!.

If these options don't seem particularly appealing, then you'd better read on. Soon you'll be informed enough to understand why your insurance agent looks away and giggles every time you mention your deductible.

1. Find out why you need it

Car insurance? That's for wusses! Maybe so, but there are many good reasons to be a proud car-insurance-owning wuss:

1. It's the law. Almost every state government requires that car owners have car insurance. The fascists. And even the states that don't require it by law insist that you provide evidence that you have the financial resources to pay a judgment against you if you should injure another person. So getting insurance is a good idea, even if you consider yourself a perfect driver.

2. Car insurance protects unlucky people that are the victims of accidents. Surprisingly, car insurance is guided by sound principles: if you put your car through someone's fence, your insurance pays to fix the fence and your car; if you hurt someone with your car, your insurance pays for the injured person's medical bills. And the same holds in reverse if someone puts their car through your fence, car, or part of your body. Now imagine that you got hit by a car, and the driver didn't have insurance… you'd have to pay for the medical bills out of your own pocket, even though it was completely somebody else's fault! So requiring people to have car insurance protects innocent people with bad luck. (We all agree that getting smooshed by a car is bad luck, right?)

3. Insurance companies can handle huge bills. Insurance companies work by charging customers periodic fees and then footing the big bills if any huge catastrophes arise. These big bills come from one group of people: lawyers. When someone gets in an accident, he immediately hires a lawyer who demands that his client receive compensation for "pain and suffering." So a car accident can potentially cost hundreds of thousands (or even millions) of dollars. Who has that kind of cash sitting around? If you have insurance, the company will pay. Then how do insurance companies make money? Because for every 1000 people that pay monthly fees, only a few will need huge amounts of money. The premiums that customers pay every month more than make up for the rare big bill.

Though insurance regulations can (and do) vary considerably from state to state, there are certain universal terms you'll need to know. These can be broken into two categories:

Types of coverage
General terms and phrases

Types of coverage

When you get in a car accident, there are tons of things that could happen: you hit someone, someone hits you, you hit a tree, a rock falls on you, someone breaks a window and steals your radio… As such, you might only want protection from certain types of disasters, preferring to have lower monthly premiums. Listed below are the five most popular types of coverage that people get.
Liability This protects you if you are found at fault in an accident by paying for damage to other people's cars and property, any medical bills they might have incurred as a result, as well as any "pain and suffering" the accident may have caused them. Far and away, liability coverage is by far the most important component of your insurance, as it is the only type of coverage required by law.
Collision Pays for your repairs up to the book value of your car regardless of who was at fault in the accident. Whether you were rear-ended or did some rear-ending yourself, collision coverage will pay to have your dents hammered out and the bumper put back on. If you are leasing or financing a new car, dealers will often require that you have this type of insurance.
Comprehensive Protects your pocketbook from wrathful acts of God by paying for the repairs of any physical damage caused to your car by anything other than a collision, such as fire, vandalism, theft, or hitting an animal (which, in our opinion, seems like a collision, but those crazy insurance guys don't see it that way).
Medical Unlike liability (which pays for the hospital bills of those in the other car) this coverage pays for the bills of you and your passengers. This is also known as "Personal Injury Protection."
Uninsured and Underinsured Driver Covers damages done to you, your passengers, and your car caused by uninsured or underinsured drivers as well as "hit and run" or other accidents caused by unidentifiable vehicles.

General terms and phrases
Deductible The amount of money you're willing to shell out before the insurance kicks in. The higher your deductible, the lower your monthly insurance bill. Here's how deductibles work: Say you have comprehensive collision insurance with a deductible of $500. You're driving along and you see a stunning man/woman sauntering on the sidewalk. Your eyes meet and he/she smiles, obviously intrigued by your evident charm, right as you drive smack into a telephone pole. Fortunately, the damage to the car is minimal: $600. You will now have to pay $500 of the damages and your insurance will kick in the last $100.
No Fault A type of insurance (currently only in 13 states) created to thwart wily lawyers, and consequently lower insurance premiums, by requiring each driver's insurance to pay only for repairs to his own car, regardless of who was at fault in an accident. It didn't exactly work as intended, though, and most states still require that your insurance pay for the damage you do to another car in an accident where you are found at fault.
At Fault This means you are responsible for an accident in the eyes of the law. Fault is described in percentages established according to certain arcane standards that are part of your state's traffic code. If you have 51% or more of the blame, you're at fault.
Umbrella Policy

An insurance metaphor for a general insurance policy that covers all of your property (car, home, etc.).

You are now equipped with the vocabulary to understand the intensely fascinating process of acquiring an auto insurance policy. Creating a policy that's right for you is similar to deciding what options you want to purchase when buying a car. If you can live without a leather interior, then it would be silly to spend money on it when what you really want is a CD player. Similarly, when buying insurance you need to establish your priorities. To help you, we've broken down the process into the following easy steps:

1. Select your mandatory coverages
2. Select your optional coverages
3. Set your deductible

1. Select your mandatory coverages

We're assuming that you already own a car or will shortly. After registering your car with the state and getting your personalized license plates (LV NSYNC), you must familiarize yourself with your state's auto insurance regulations. Whooh-hooh! We're assuming that you already own a car or will shortly. After registering your car with the state and getting your personalized license plates (LV NSYNC), you must familiarize yourself with your state's auto insurance regulations. Whooh-hooh! When an accident occurs, an insurance company must be willing to pay up to a certain amount of money to foot the bills -- this is called the minimum liability coverage. Why is minimum liability coverage important? Let's say you get hit by a car. If the driver's liability coverage is for $7, his/her insurance company will cover your bills up to $7.

Most debilitating accidents will set you back more than $7. So each state requires that all drivers have liability insurance that at least goes up to a reasonable number (though it can be more if you want). New York, for example, requires a minimum liability of 25/50/10:

* The first number is the maximum amount (in thousands of dollars) the insurance company will pay for any one person (in the other car) injured in an accident.
Ex.: $25,000

* The second number is the maximum amount (in thousands of dollars) the insurance company will pay for all parties (in the other car) injured in an accident.
Ex.: $50,000

* The third number is the maximum amount (in thousands of dollars) the insurance company will pay for any car/property damage (again, done to the other car) due to an accident.
Ex.: $10,000

Insure.com offers a handy guide that outlines the minimum coverages required by law for each state. You can also contact your state insurance department to get this info.

While many drivers elect to go with their states' minimum liability requirements, insurers often recommend going with a higher amount, especially for customers with a substantial net worth. Remember, other people's pain and suffering are costly propositions, especially in the hands of a talented lawyer.

Also, it's important to remember that if you're leasing or financing your car, it's likely that the dealership will require you to get higher liability coverages than the state minimum. This, of course, will cost you.

2. Select your optional coverages

Here are some optional coverages that you might not need:

* Collision/comprehensive. As we discussed earlier, these coverages pay to repair your car. Paring down your collision/comprehensive coverage (or skipping it altogether) is a surefire way to save money, as these coverages tend to be quite expensive, but we don't recommend this if you've just purchased a spanking new car. Also, if you're leasing or financing a car, then you must get comprehensive and collision as required by the dealership. If you're driving a coughing Pinto that can barely make it around the corner, then you should completely forego collision insurance and use the money to buy another car after the Pinto spontaneously combusts.

* Medical insurance for your passengers or drivers that aren't listed on your policy. Not buying medical coverage for yourself if you already have health insurance that will pay for your hospital bills in case of an accident is a good way to lower your premium.

* Extension of your coverage to rental cars.

* Extension of your coverage out-of-state.

* Substitute transportation coverage. This coverage pays up to a certain amount per day towards a rental car if your car is in some way incapacitated (up on cinder blocks in the front yard is unfortunately an invalid criterion).

* Towing and labor coverage. This pays a certain amount towards the cost of having your car towed if it breaks down. If you own a new Mercedes convertible that purrs like a kitten and never breaks down, chances are you're wasting your money on this.

3. Set your deductible

Like we said before, lower deductibles mean higher premiums (the insurance company has to pay more if you have an accident), so weigh your options carefully. If an expenditure of $500 will break the bank, then stay low, but if you can muster that amount at short notice without too much trouble, consider higher deductibles.

Car insurance premiums are affected by various factors:

* Your age, sex, marital status (insurance for single folks is higher than for married ones), and where you live. Unless you know a really good surgeon or are willing to get married or move, there's not a whole lot you can do about these criteria.

* The year, make, and model of your car. Driving a luxury, "classic" (a '76 Pinto doesn't count) or sports car-all favorites among auto thieves-will hike up your premium.

* The intended use of the car (business, commuting, travel, or personal; insurance agents get annoyed when you say "driving") and the yearly mileage you expect to put on it. The less you drive your car, the less you'll be likely to have an accident, the less your insurance company will charge you to insure it.

* Where you keep your car. If you park your car in a covered lot, your insurance will be lower than if you park it on the street. We recommend not calling behind the gravel pile in the yard a "garage," as insurance companies can refuse to pay your claims if they find that you have lied to them in any way.

* Passive restraint. Safety features like automatic seatbelts and airbags make insurers happy, and when they're happy, they charge you less.

* Car alarm. The louder and more obnoxious, the less you'll pay. Keep in mind that alarms that set themselves automatically offer a higher discount than those that must be physically turned on by the driver. Some companies offer discounts if you have "The Club."

And because we're so nice, we're going to offer you a few lesser-known "insider" tips that may help you save money:

* Consolidate insurance policies. If you have health insurance, home insurance, and car insurance, chances are that if you buy them all from one company, they'll offer you a good deal.

* If you're a teenager, successful completion of drivers' ed can save you 10% or more.

* If you're over 65 or 70 (exact age depends on the state), successful completion of a defensive driving course could save you a bundle. In certain states, drivers of all ages are eligible for the defensive driving discount.

* If you're a student, get good grades. Conscientious students make conscientious drivers (so the reasoning goes).

* Maintain good credit. Insurance companies like proven responsibility.

* If you commute to a metropolitan area, use public transportation. Less rush hour driving lowers your premium.

* Maintain a good driving record. Many states "award" surcharge points for every moving violation. These points go into an algorithm most likely designed by those pesky actuaries that helps determine your premium.

* Try to avoid filing claims. If you knock off a bumper or bend someone's fender, it's usually better to pay for these minor repairs than to involve your insurance company, which with the least provocation will deem you an unsafe driver and hike up your premium.

Now that you've envisioned your ideal policy, write it down and scour the Yellow Pages and the Internet for insurance companies to contact. Make a list and start getting quotes over the phone and/or off their web pages. The web boasts insurance search engines like InsWeb that will let you compare quotes from various companies in one fell swoop. However, speaking to representatives on the phone is always preferable filling out online forms.

When talking to insurance agents, don't be afraid to ask about options they don't mention. Also feel free to ignore some of their suggestions if they contradict your financial priorities. Remember that they are SALESPEOPLE; the more you spend, the better they do. There are two objectives you should keep in mind when shopping for car insurance:

1. Make sure it's affordable
2. Make sure it's dependable

1. Make sure it's affordable

News flash: Different insurance companies have been known to charge very different rates for the exact same coverages. These variations in price are often the result of the way in which a particular company actually sells their insurance. Insurance companies sell coverage in one of three ways:

1. Directly to the consumer over the phone or the web. This method is the cheapest, but the companies that use it, like GEICO and Amica Mutual, tend to only accept drivers with near perfect driving records. Sometimes these companies have divisions that cater to not-so-good drivers, but these rates tend to be much higher.

2. Through agents of the company itself. State Farm, Allstate, and Farmers all use this method to sell insurance, which falls in the middle range on the price scale. This is a good option for those with average driving records.

3. Through independent agents who act as intermediaries between various companies and the consumer. They generally provide the most thorough information regarding possible options, but - being middlemen - they tend to be the most expensive. You can find agents in your area through the Independent Insurance Agents of America.

2. Make sure it's dependable

What good is a $200-a-year policy if after you pay your premium you never hear from the company again, and every time you call their toll-free number you get a recording of a woman panting and whispering things that have very little to do with insurance? Absolutely none. Shopping around for car insurance involves finding a happy balance between the service you'll receive and the price you'll pay.

Once you've narrowed down your list of possible providers, check up on their track records with consumers. Consumer Reports, SafeTnet, and Insure.com do extensive research on consumer relations with insurance companies, so giving them a visit would be a good start. Besides that, just use common sense. If an insurance company is unhelpful and unfriendly on the phone when you call for a quote, chances are they won't be much friendlier when you file a claim with blood gushing out of your skull.

So you should now be set! And if you happen to get a "huge cash settlement," please remember to give us a cut of the action.
Having life insurance, such as term life insurance, is a good 'investment'.

How life insurance works

There are three parties in a life insurance transaction: the insurer, the insured, and the owner of the policy, although the owner and the insured are often the same person. For example, if John Smith buys a policy on his own life, he is both the owner and the insured. But if Mary Smith, his wife, buys a policy on John's life, she is the owner and he is the insured.

Another important person involved is the beneficiary. The beneficiary is the person or persons who will receive the policy proceeds upon the death of the insured. The beneficiary is not a party to the policy, but is designated by the owner, who may change the beneficiary unless the policy has an irrevocable beneficiary designation. With an irrevocable beneficiary, that beneficiary must agree to changes in beneficiary, policy assignment, or borrowing of cash value.

The policy, like all insurance policies, is a legal contract specifying the terms and conditions of the risk assumed. Special provisions apply, including a suicide clause wherein the policy becomes null if the insured commits suicide within a specified time for the policy date (usually two years). Any misrepresentation by the owner or insured on the application is also grounds for nullification. Most contracts have a contestability period, also usually a two-year period; if the insured dies within this period, the insurer has a legal right to contest the claim and request additional information before deciding to either pay or deny the claim for proceeds.

The face amount of the policy is normally the amount paid when the policy matures, although policies can provide for greater or lesser amounts. The policy matures when the insured dies or reaches a specified age. The most common reason to buy a life insurance policy is to protect the financial interests of the owner of the policy in the event of the insured's demise. The insurance proceeds would pay for funeral and other death costs or be invested to provide income replacing the deceased's wages. Other reasons include estate planning and retirement. Because the insured's death will be to the financial betterment of the policy owner, the owner, by law, must have an insurable interest (i.e., a legitimate reason for insuring another person’s life.)

The insurer (i.e., life insurance company) prices the policies with an intent to recover claims to be paid and administrative costs, and to make a profit.

Claims to be paid are determined by actuaries using mortality tables. Actuaries are professionals who use actuarial science which is based in mathematics (primarily probability and statistics). Mortality tables are statistically based tables showing average life expectancies. Normally, the only three considerations in a mortality table are the insured's age, gender, and whether or not they use tobacco. The current mortality table being used by life insurance companies in the United States and their regulators was calculated during the 1980s. There is currently a measure being pushed to update the mortality tables by 2006.

The current mortality table assumes that roughly 2 in 1000 people aged 25 will die and rises roughly quadratically to about 25 in 1000 people for those aged 65. So in a group of one thousand 25 year old males with a $100,000 policy, a life insurance company would have to, at the minimum, collect $200 a year from each of the thousand people to cover the expected claims.

The insurance company receives the premiums from the policy owner and invests them, using the time value of money and compound return principles to create a pool of money from which to invest, pay claims, and finance the insurance company's operations. Despite popular belief, the majority of the money that insurance companies make come directly from premiums paid, as money gained through investment of premiums will never, in even the most ideal market conditions, vest enough money per year to pay out claims. Rates charged for life insurance are sensitive to the insured's age because statistically, an insured person is more likely to pass away and trigger a claim as they get older.

Since adverse selection can have a negative impact on the financial results of the insurer, the insurer investigates each proposed insured (unless the policy is below a company-established de minimis amount) beginning with the application, which becomes part of the policy. Group Insurance policies are an exception.

This investigation and resulting evaluation of the risk is called underwriting. Health and life style questions are asked, answered, and dutifully recorded. Certain responses by the insured will be given further investigation. Life insurance companies in the United States support The Medical Information Bureau, which is a clearinghouse of medical information on all persons who have ever applied for life insurance. As part of the application, the insurer receives permission to obtain information from the proposed insured's physicians.

Life insurance companies are never required by law to underwrite or to provide coverage on anyone. They alone determine insurability, and some people, for their own health or lifestyle reasons, are uninsurable. The policy can be declined (turned down) or rated. Rating means increasing the premiums to provide for additional risks relative to that particular insured discovered in the underwriting process.

Many companies use four general health categories for those evaluated for a life insurance policy. A proposed insured can move down the scale easily, but moving up the scale is difficult if at all possible. These categories are Preferred Best, Preferred, Standard, and Tobacco. Preferred Best means that the proposed insured has no adverse medical history, are not under medication for any condition, and his family (immediate and extended) have no history of early cancer, diabetes, or other conditions. Preferred is like Preferred Best, but it allows that the proposed insured is currently under medication for the condition and may have some family history. Standard is where most people fall, allowing for everybody who doesn't fall under the previous tiers. Profession, travel, and lifestyle also factor into not only which category the proposed insured falls, but also whether or not the proposed insured will be denied a policy. For example, a person who would otherwise fall under the Preferred Best category will be denied a policy if he or she is employed in or makes regular travel to a high risk country.

Upon the death of the insured, the insurer will require acceptable proof of death before paying the claim. The normal minimum proof is a death certificate and the insurer's claim form completed, signed, and often notarized. If the insured's death was suspicious and the policy amount warrants it, the insurer may investigate if there is evidence of its legal obligation to pay the claim.

Proceeds from the policy may be paid in a lump sum or paid over time as regular recurring payments for either for the life of a specified person or a specified time period.

Insurance vs. assurance

The world of finance is extremely complicated, and there are many factors to consider when choosing any financial protection product.

When looking for a policy you need to know what you are looking for and what is on offer in order that you get the right cover for your needs.

One thing that many people find confusing is the specific use of the term "insurance" and the use of "assurance". What are the differences between them?

In general, the term insurance refers to providing cover for an event that might happen while assurance is the provision of cover for an event that is certain to happen.

For the purposes of financial provisions, a life insurance policy provides cover for a set period of time. If the worst were to happen during that time (and there are no complications), then the insurance company will be required to pay out the agreed sum to the beneficiary. The only time the policy has any real monetary value, is if there is a claim made for payment as a result of an event triggering that claim, such as the death of the person covered. If the person outlives the term of the policy, then the insurance policy will cease and no payment will be made.

Life assurance is different from insurance, and will always result in a payment. This is achieved by combining an investment element along with an insured sum. This means that over time the value of the policy can increase as the investment bonuses are added. If the life covered were to die, then the insured sum would be paid out, along with the investment bonuses that have accrued over time. If it is necessary to cancel the policy prior to the end of any designated term period, or the death of the life being covered, then once an investment bonus has been added, the life assurance policy will have an encashment value. It is therefore possible to cash in a policy earlier than its usual termination date, in order to collect on the investment portion. It should be noted that many insurance companies place penalties for cashing in policies early.

During recent years, the distinction between the two terms has become largely blurred. This is principally due to many companies offering both types of policy, and rather than refer to themselves using both insurance and assurance titles, they instead use just the one.

"Most life insurance companies offer a wide range of insurance and investment services – for example pension, investment funds, investment bonds, car insurance, home & contents insurance, life assurance, and even loans. Sometimes a life insurance company will call itself a life assurance company but they mean one and the same."(Reference: Richard Brown CEO of Moneynet, a UK financial information site.)

ypes of life insurance

Life insurance may be divided into two basic classes – term and permanent.


Term life insurance provides for life insurance coverage for a specified term of years for a specified premium. The policy does not accumulate cash value. Term is generally considered "pure" insurance, where the premium buys protection in the event of death and nothing else. See Theory of Decreasing responsibility and Buy term and invest the difference.

The three key factors to be considered in term insurance are: face amount (protection), premium to be paid (cost to the insured), and length of coverage (term).

Various insurance companies sell term insurance with many different combinations of these three parameters. The face amount can remain constant or decline. The term can be for one or more years. The premium can remain level or increase. A common type of term is called annual renewable term. It is a one year policy but the insurance company guarantees it will issue a policy of equal or lesser amount without regard to the insurability of the insured and with a premium set for the insured's age at that time. Another common type of term insurance is mortgage insurance, which is usually a level premium, declining face value policy. The face amount is intended to equal the amount of the mortgage on the policy owner’s residence so the mortgage will be paid if the insured dies.

Guaranteed renewability is an important policy feature for any prospective owner or insured to consider because it allows the insured to acquire life insurance even if they become uninsurable.


Permanent life insurance is life insurance that remains in force until the policy matures, unless the owner fails to pay the premium when due. The policy cannot be cancelled by the insurer for any reason except fraud in the application, and that cancellation must occur within a period of time defined by law (usually two years). Permanent insurance builds cash value, providing a type of savings account that the policy owner can access if needed either by borrowing against the policy or surrendering the policy and receiving the surrender value.

The three basic types of permanent insurance are whole life, universal life, and endowment.


Whole life insurance provides for a set face amount, a level premium, and a cash value table included in the policy guaranteed by the company. The primary advantages of whole life are guaranteed death benefits, guaranteed cash values, fixed and known annual premiums, and mortality and expense charges will not reduce the cash value shown in the policy. The primary disadvantages of whole life are premium inflexibility, death benefit inflexibility, cash value accessibility is limited, and the internal rate of return in the policy may not be competitive in with other savings alternatives.


Universal life insurance is a relatively new insurance product intended to provide permanent insurance coverage with greater flexibility in premium payment and the potential for a higher internal rate of return. A universal life policy includes a cash account. Premiums increase the cash account. Interest is paid within the policy (credited) on the account at a rate specified by the company. This rate has a guaranteed minimum but usually is higher than that minimum. Mortality charges and administrative costs are charged against (reduce) the cash account. The surrender value of the policy is the amount remaining in the cash account less applicable surrender charges, if any.

The universal life policy addresses the perceived disadvantages of whole life. Premiums are flexible. The internal rate of return is usually higher because it moves with the financial markets. Mortality costs and administrative charges are known. And cash value may be considered more easily attainable because the owner can discontinue premiums if the cash value allows it. And universal life has a more flexible death benefit because the owner can select one of two death benefit options. Option A pays the face amount at death and Option B pays the face amount plus the cash value.

But universal life has its own disadvantages which stem primarily from this flexibility. The policy lacks the fundamental guarantee that the policy will be in force unless sufficient premiums have been paid and cash values are not guaranteed.

A type of universal life is called Variable universal life Insurance in which the rate of return on the cash account is related to stock or bond market fluctuations.


Another type of permanent insurance is Limited-pay life insurance, in which all the premiums are paid over a specified period after which no additional premiums are due to keep the policy in force. The most common kind of limited pay is twenty-year limited pay. Another kind is paid-up when the insured is sixty-five.


Endowments are policies which mature (endow) before the normal endowment age. Endowments are considerably more expensive (in terms of annual premiums) than either whole life or universal life because the premium paying period is shortened and the endowment date is earlier. Annuities are a financial product issued by life insurance companies but are not life insurance policies. They are discussed in annuities.

Accidental death

Accidental death is a limited life insurance that is designed to cover the insured if they pass away due to an accident. Accidents include anything from an injury, but do not typically cover any deaths resulting from health problems or suicide. These policies are much less expensive than other life insurances because they only cover accidents. Often, it does not cover an insured who puts themselves at risk in activities such as: parachuting, flying an airplane, professional sports or involvement in a war (military or not). To be aware of what coverage they have, an insured should always review their policy for what it covers and what it excludes. It is also very commonly offered as a accidental death and dismemberment policy, known as an AD&D policy. In an AD&D policy benefits are available not only for accidental death, but also for loss of limbs or bodily functions such as sight and hearing, etc. Accidental death and AD&D policies very rarely ever pay a benefit because either the cause of death is not covered, or the coverage is not maintained until death occurs.

Taxation of life insurance in the United States

Premiums paid by the policy owner are normally not deductible for federal and state income tax purposes.

Proceeds paid by the insurer upon death of the insured are not includable in taxable income for federal and state income tax purposes but may be includable in the estate of the deceased and, therefore, subject to federal and state estate and inheritance (death) tax.

Cash value increases within the policy are not subject to income taxes unless certain events occur. For this reason, insurance policies can be a legal and legitimate tax shelter wherein savings can increase without taxation until the owner withdraws the money from the policy.

The tax ramifications of life insurance are complex. The policy owner would be well advised to carefully consider them. As always, Congress or the state legislatures can change the tax laws at any time.

Related life insurance products

Riders are modifications to the insurance policy added at the same the policy is issued. These riders change the basic policy to provide some feature desired by the policy owner. A common rider is double indemnity, which pays twice the amount of the policy face value if death results from accidental causes, as if both a full coverage policy and an accidental death policy were in effect on the insured. Another common rider is premium waiver, which waives future premiums if the insured becomes disabled.

Joint life insurance is either a term or permanent policy insuring two or more lives with the proceeds payable on the first death.

Survivorship life is a whole life policy insuring two lives with the proceeds payable on the second (later) death.

Single premium whole life is a policy with only one premium which is payable at the time the policy is issued.

Modified whole life is a whole life policy that charges smaller premiums for a specified period of time after which the premiums increase for the remainder of the policy.

Group life insurance is term insurance covering a group of people, usually employees of a company or members of a union or association. Individual proof of insurability is not normally a consideration in the underwriting. Rather, the underwriter considers the size and turnover of the group, and the financial strength of the group. Contract provisions will attempt to exclude the possibility of adverse selection. Group life insurance often has a provision that a member exiting the group has the right to buy individual insurance coverage.

Insurance companies have in recent years developed products to offer to niche markets, most notably targeting the senior market to address needs of an aging population. Many companies offer policies tailored to the needs of senior applicants. These are often low to moderate face value whole life insurance policies, to allow a senior citizen purchasing insurance at an older issue age an opportunity to buy affordable insurance. This may also be marketed as final expense insurance, and an agent or company may suggest (but not require) that the policy proceeds could be used for end-of-life expenses.

Preneed (or prepaid) insurance policies are whole life policies that, although available at any age, are usually offered to older applicants as well. This type of insurance is designed specifically to cover funeral expenses when the insured person dies. In many cases, the applicant signs a prefunded funeral arrangement with a funeral home at the time the policy is applied for. The death proceeds are then guaranteed to be directed first to the funeral services provider for payment of services rendered. Most contracts dictate that any excess proceeds will go either to the insured's estate or a designated beneficiary.

Mistake #1
Don't forget to update the beneficiaries on your life insurance policies regularly. Update it every few years or when there's a major life event such as marriage, divorce, new babies, death of beneficiary, etc. I hear sad stories all the time from people who's husband, father, or wife forgot to update the beneficiary on their policy. Instead of the deceased's family getting the money it's some ex-wife, ex-husband, cousin, distant relative, ex-girlfriend and the current family and kids are left penniless. That's tragic.

Mistake #2
It's important to not let your life insurance lapse when you're switching bank checking accounts. Most people have their life insurance premiums taken out by EFT (Electronic Funds Transfer) every month and forget to notify the insurance company of this change. And guess what? Murphy's law strikes when you least expect it and can't afford it. It's a high chance that something will happen when you've been paying 20 years for insurance and then when it has lapsed for 3 months there's a car accident. Notify the insurance company when closing and switching bank checking accounts.

Mistake #3
When requesting life insurance quotes most people aren't aware that they don't have to set up an appointment with the first agent that calls to give them a quote. You can receive a quote over the phone or through email. And you don't have to buy life insurance from the first Insurance Agent you talk to. It's ok to shop around, but please be polite when you turn down the other agents. Selecting an Insurance Broker is often easier than working with an agent that only represents one life insurance company. A broker will try to find the lowest rate for you and the best policy to fit your situation. An agent that only works for one company called a "captive agent" can only offer you the products from that one company.

Mistake #4
Buying life insurance that does not require a medical exam. It's often 2-3 times the price of normal life insurance and not worth it if you are perfectly healthy. A medical exam can be inconvenient but it can save you several hundred of dollars a year. Now think of how much you can save if you multiply that by 30 years or whatever length you plan to keep that life insurance policy.

Mistake #5
Buying the life insurance policy with the intent to commit suicide. Ok, this is silly but there are people that face depression and have suicidal thoughts. First, this idea isn't going to pay because most insurance company and policies have this suicide clause that states if you commit suicide within the first 2 years the company won't pay the death claim. Don't do it, please get help if you are thinking this.

Mistake #6
Canceling your old life insurance policy when you're purchasing a new life insurance policy with another company but the new policy hasn't been issued yet. Wait until you have received the new policy before canceling your old one. You don't want a few months where you don't have life insurance. You don't know what can happen during that time.

Mistake #7
Not getting enough life insurance coverage. It's hard to understand why some people would spend money to buy $10,000-50,000 of life insurance. That is such a small amount, certainly not enough to pay off a mortgage, send a kid to college, pay off loans or debts, and can't support someone for a few years. At least find out how much it cost for $250,000-300,000 of coverage. It may be cheaper than you think.

Mistake #8
Lying on the life insurance application. The insurance companies have a way of finding things out. If you lie on the application then insurance company may not pay the death claim and just refund the premiums if they find out. Be honest about all medical conditions and list all the medication you're taking.
Internet Advertising Options

Your online business will likely require more advertising than a contemporary business downtown, yet some new to the world of online business do not spend the time and money to advertise their business appropriately and are, in turn, loosing money. Your online business is crammed into the world wide web along with thousands of others selling the same product or service as yourself. Consider this scenario: In your hometown you want to open an art supply store. In that same town there are thousands of art supply stores. In order for your business to be successful, it will have to stand out in some way from the others. This is exactly what is happening when a business is opened online. There is so much competition, that you must take drastic measures to ensure that you are getting noticed. Advertising can be done in so many ways online. These are some of the most successful ways that you can promote your online business.

Advertising in e-zines is a popular way to promote your online business. Ezines are the magazines of the internet; they written on a particular subject and read by those interested in that subject. Therefore, ezine readers are already potential customers and advertising your site in ezines that are related to your business is almost guaranteed to help drive traffic to your site and increase sales for your product. You should be sure when advertising in ezines that you are not advertising along side competitors. Ask the ezine producer if there is a policy concerning posting competing ads. It is also a good idea to subscribe to the ezine before making a decision about whether or not to advertise in it. An ezine that runs fewer ads is a better choice than one that runs many ads. You can look at the online Directory of Ezines to find publications that are relevant to your company.

Pay-per-click programs are an excellent way to advertise your business without taking a risk that you have advertised in the wrong place. With pay-per-click, you can advertise you site and only pay for those who click the link and go to your site. Another popular pay-per program is the pay-per-lead program that allows you to only pay for leads. Usually this means that you pay for only those who download a trail, fill out a form or enter a sweepstakes; whatever you choose. Lastly you can display pay-per-click banner ads in which your company would be allowed to place a banner on their site and you will be charged for every click that your banner receives.

Opt-In email is a great way to advertise your business, however it is expensive and it can be misused very easily. Using opt-in emails, you would submit your sales copy to the company that will in turn email it to those on their mailing list. You should be very careful since some of the companies that advertise their mailing lists as opt-in email service is sometimes really SPAM. It is essential that you have a perfect and effective sales letter when using opt-in mailing lists. Without and effective sales copy your money and time have been wasted.