The Dirty Little Secrets Behind Life Insurance Fees

The Dirty Little Secrets Behind Life Insurance Fees
Many Financial Advisors tout the benefits of using life
insurance as a savings or investment tool to help you
accumulate wealth for your future goals, but what about the
internal costs associated with life insurance? You may
wonder is this a cost prohibitive strategy? After all how
much of your money is going to pay for that large death
benefit pay out and what about the fees you have to pay the
insurance company to manage your money?

Surly all of these fees and charges do add up at the end of
the day but there are many things to consider if you want
to find accurate answers to these questions. The first
thing you have to understand when considering life
insurance as an investment tool is there are many ways to
structure a life insurance policy. The most common way the
typical life insurance agent goes about setting up your
plan is to first determine how much life insurance you
need. Then he or she tries to calculate, what is the
largest amount of insurance they can give you for the
smallest amount of money out of your pocket?

When a life insurance policy is structured using that
method a good portion of your premium dollars ends up going
back to the life insurance company in fees and insurance
charges. You will most likely be disappointed in the growth
of your cash value.

On the other hand there is an alternative way to structure
a life insurance plan that tends to go against the
conventional wisdom of trying to get as much death benefit
"bang for your buck" as possible. In this alternative
scenario the agent or advisor structures the plan to give
you the least amount of death benefit that the IRS requires
so that you can stuff your plan with the highest allowable
amount of cash that the law permits. Why would anyone want
less death benefit you ask? Because the lower the death
benefit in relation to your premium the less you pay in
insurance charges and the more cost effective your plan
becomes.

But you are probably wondering why go through all of that
trouble to calculate the correct proportions? How does that
benefit you? Well there are certain tax-benefits that only
properly structured life insurance contracts enjoy that are
difficult if not impossible to duplicate in other
investments. For example not only will the money you put in
your life insurance plan grow tax-deferred but if you do
this correctly often times you can access this money
tax-free.

Even with the added cost of insurance that you would pay
inside a life insurance plan vs. another type of investment
vehicle in many instances the tax-breaks alone can more
than make up for the added cost.

But let's look at those added fees for a moment. If your
contract is put together properly as mentioned above, it
most often works out that your costs are about 1% to 1.5%
over the life of the contract. Is this cost prohibitive?

Well, where would you put the money if you did not use a
life insurance contract? How can you really know if you are
getting a fair value unless you make an accurate comparison
to your other choices?

If you are like most people your first choice would
probably be investing in some sort of a mutual fund. But
what kind of fees does the average mutual fund charge?
According to the Chicago Tribune, Feb. 26th 2006 "The
industry average for mutual fund expense ratios or annual
costs is 1.3%" So the cost to invest in a mutual fund is
about the same as the insurance contract. But what do you
get for your 1.3% in a mutual fund? Advice, period. What do
you get for your 1.5% in a properly structured life
insurance contract?

You get an income tax free death benefit for your family
and tax-favored growth with tax-free access to our money.
If you choose the life insurance contract you are basically
trading the mutual fund expense charge (you would have paid
anyway) for life insurance charges. If you don't need the
insurance and you live to a ripe old age then good for you.
If you do need it, your family will be forever grateful you
chose to forego the mutual fund investment choice.

By the way so far we have only looked at mutual funds
obvious expenses but we did not even consider the many
hidden costs to owning mutual funds. For example most
mutual funds today have turnover rates in excess of 90%.
That means that they rarely follow a buy and hold
philosophy, and instead tend to sell about 90% of their
portfolios in a given year in order to buy different
stocks. Each time they buy and sell they incur transaction
fees that are passed on to you. We can only estimate how
much the funds pay in transaction cost because the funds
themselves do not even know that amount. In addition all of
this trading, costs the share holder additional expenses in
capital gains taxes and this is really just the tip of the
iceberg.

When you add up all of the fees inside a mutual fund the
average investor looses 3.1% of his investment returns to
these costs each year. John Bogle, the creator of the
Vanguard 500 mutual fund had this to say about the 3.1%
average fee of today's mutual funds, "That may not seem
like much but such costs would consume 31% of a 10% market
return. Add in the 1.5% capital gains tax bill the average
fund investor pays each year, and that figure shoots up to
46%, nearly half of a potential 10% return".

As you can see the fees inside of your average mutual fund
are twice as likely to eat away at your potential returns
than the modest fees in a properly structured life
insurance contract.

So what is the bottom line answer to the question, is life
insurance a cost prohibitive way to invest? Plain and
simple, it depends! Depends on what you ask? Is the
insurance plan structured properly? And where would you put
the money if it did not go into an insurance contract?

No matter where you invest your money there are sure to be
fees that go along with that investment. Life Insurance is
no different. However in the life insurance plan the cost
of the insurance is basically absorbed by avoiding mutual
fund management fees and otherwise payable income taxes.
That being said if you do decide to use life insurance as
an investment tool make sure that you are talking with a
qualified advisor who fully understands not only its cost
but also its potential.

----------------------------------------------------
Antonio Filippone is a respected speaker on a wide range of
subjects. He has been published in the official journal of
the IARFC as well as interviewed on the Radio about his out
side the box financial strategies.Readers who are
interested in gaining more information on how to live debt
free and truly wealthy can request a complimentary copy of
Mr. Filippone's booklet by visiting his website at
http://www.tonyfilippone.com

What Does it Mean to be a Real Estate Professional?

What Does it Mean to be a Real Estate Professional?
If you own rental real estate, there are three different
ways to treat your rental losses depending on your status.
One of these is "Real Estate Professional."

First, let's dispense with one myth: Real Estate
Professional status does not mean you have to hold a real
estate license. Rather, it is a designation you obtain by
meeting certain specific requirements. The first
requirement is that you spend more than 750 hours in real
property trades or businesses in which you materially
participate. The second requirement is that you spend more
time in your real property trades or businesses than in ALL
OTHER trades or businesses combined. Time spent as an
employee in real property activities is counted only if you
are a more than a 5% owner in that business. If you
qualify as a real estate professional you can deduct all
your current year rental real estate losses against other
income without limitations.

What is a real property trade or business? A real property
trade or business is defined as ANY real property
development, redevelopment, construction, reconstruction,
acquisition, conversion, rental, operation, management,
leasing, or brokerage trade or business.

You have to meet the above requirements each year. So, you
could be a real estate professional one year but not the
next. Only one spouse needs to meet the requirements in
order for a married couple to take advantage of the
benefits provided by the real estate professional status.

The 750 hours test must be met for each activity. So for
example, say you have three rental properties. The general
rule is that you have to perform at least 750 hours on
activities related to EACH of those three properties.
Fortunately, there is an exception to this rule. If you
make the election to aggregate all of your rental real
estate activities into one activity, you only have to meet
the 750 hours requirement once for the tax year.

What types of activities qualify as real estate
professional activities? Activities such as:

- Searching for possible rental properties
- Attending real estate seminars or reading real estate
books
- Meeting with real estate agents and viewing properties
- Meeting with mortgage brokers with regards to getting
loans on properties
- Travel time to and from the seminars and your property
searches
- Preparing your bookkeeping and tax information for your
rental properties
- Time spend buying or selling properties (i.e. signing the
closing documents)
- Studying and reviewing financial reports (Investor-type)
- Preparing summaries or analyses for personal use
(Investor-type)
- Monitoring finances or operation in a non-managerial
capacity (Investor-type)

An important note to the investor-type activities mentioned
above is that these activities can only be counted towards
real estate professional time if you are involved in the
day-to-day operations or management of the activity for
which you perform those tasks. Essentially, this means
that if you have an independent property manager and your
only real estate business is your rental properties, you
probably will not qualify as a real estate professional.

The extent of an individual's participation in an activity
may be established by any reasonable means. Contemporaneous
daily time reports, logs, or similar documents are not
required if the extent of such participation may be
established by other reasonable means. Documentation
required includes the identification of services performed
over a period of time and the approximate number of hours
spent performing such services during such period, based on
appointment books, calendars, or narrative statements.
Documentation is the key when claiming real estate
professional status. Most taxpayers who lose in the tax
courts lose because of poor documentation. Although
documentation through a reasonable means is pretty vague,
the tax regulations are clear that post-event "ballpark
guesstimates" are not permitted and will not hold up in the
tax courts.

Real Estate Professional status is such an important
designation for a high-income real estate investor that we
strongly recommend you spend time with your Tax Coach to
determine if and how you can become a Real Estate
Professional and deduct all of your rental losses.

Are you ready to permanently reduce your taxes?

Warmest Regards,

Tom

----------------------------------------------------
Tom Wheelwright is not only the founder and CEO of
Provision, but he is the creative force behind Provision
Wealth Strategists. In addition to his management
responsibilities, Tom likes to coach clients on wealth,
business, and tax strategies. Along with his frequent
seminars on such strategies, Tom is an adjunct professor in
the Masters of Tax program at Arizona State University. For
more information, please visit
http://www.provisionwealth.com

What You Need To Know About Investing In Gold

What You Need To Know About Investing In Gold
People like the look of gold, and they'll do what they can
to get it. Even though it costs more now, people still
want it. If you're interested in investing in gold, do
some research before you shell out the money for it.

Here's some things you should know before you take that
big, financial leap:

In addition to gold coins, there are different ways that
you can you can invest. You can use metals, mutual funds,
mining company stock, or futures, as additional ways to
make investments with gold. You can also invest in gold
using bars, if you wish.

You can get more information by going to a metal dealer.
Or you can search online to find some reputable ones. If
you are a first time investor, it might be better for you
to visit a facility to speak with a dealer in person.

If you have a lot of questions, you should write them down.
Find out how long the dealer has been established. If
they've been there a while, chances are they are very
knowledgeable about what they do.

You'll want to educate yourself before you visit with a
dealer. That way, you'll have an idea of how investing in
gold really works. You'll also find out if what the dealer
is telling you lines up with your research.

If you do decide to pursue this, you should also think
about investing in gold stocks and funds. It's been proven
that gold funds are a reliable choice to invest in.
However, when you're dealing with stocks, you're dealing
with a single entity. That means the gold stocks are not
diversified and your investment isn't as reliable as gold
funds.

When you're trying to decide what you're going to purchase,
don't be in a hurry to make a decision. Don't buy the
first thing you see because you may regret the purchase
later. All gold pieces are not easy to sell if you want to
get rid of them.

You can also purchase certificates as an alternate option.
This for you, would solidify that you own a piece of gold.

When researching about gold, find out how much it would be
worth if it was kept polished and free of nicks and
scrapes? What about if it's not so polished? More than
likely, it won't be as much as the former. The better you
maintain your gold, the better price you can get for it.

Investing in gold futures is for those who can afford to
take the risk. If you're just starting out and don't have
the money to risk for it, then you should pass on this for
now. With futures, you have to be certain that you can
handle the volatility of this segment.

Futures is considered a financial risk because you have to
constantly figure out whether the price of gold will go up
or down. Sometimes you may hit it on the head, other times
you may not. If you get involved in this, you will have to
either buy or sell for a certain price. The dependence on
how much the gold is worth during that time determines how
much money you will make.

Investing in gold can be lucrative, but you have to know
what you're doing when you get involved in it.

----------------------------------------------------
Gary Giardina
For additional information:
http://goldinvestingsite.com

Subprime Crash Affects Minority Neighborhoods

Subprime Crash Affects Minority Neighborhoods
The subprime market crash has affected minority
neighborhoods all over the U.S. Why? The reason is because
they were heavily targeted for risky high cost loans. With
millions of Americans who are suffering from inflating
mortgage payments due to adjustable rates, balloon payments
and other unscrupulous sub-prime programs, many people are
now in panic mode, having recently lost their homes or
living in constant fear that their homes will be lost.

United for a Fair Economy, a Boston-based economic policy
group minorities put out a study about subprime mortgage
situation. In the "State of the Dream 2008: Foreclosed"
report, which evaluated subprime lending during the past
eight years, a direct loss from defaulted subprime loans to
range between $365 billion and $605 billion is projected.

Whites hold 55 percent of the bad subprime loans are held
by whites, while minorities hold the other 45 percent,
according to estimates. Borrowers who are African-Americans
are projected to lose between $71 billion and $122 billion
- or about 20 percent of the total projected losses.
Latinos are projected to lose $76 billion to $129 billion
for the same period. This would be about 21 percent of the
burden from subprime defaults.

"It is bad here in New York, and especially in places like
Brooklyn which has a higher number of minorities," said
Rocco Basile, product manager for New York-based Basile
Builder's Group. "Our company's goal is to help answer
questions and provide the community here with guidance and
advice."

According to a January 26, 2008 Bloomberg subprime article,
the communities of Bedford-Stuyvesant and Crown Heights in
New York had a foreclosure rate of almost four times the
national subprime figure of 6.89 percent in October of
2007. One ion four owners who had subprime mortgages in the
11233 zip code areas lost their homes. This was the highest
number since March of 2003 according to the Mortgage
Bankers Association in Washington. Bedford Stuyvesant and
Crown Heights is mostly black, there were 194 foreclosures
out of 770 subprime borrowers, according to Federal data.

It appears that many of these minority families had credit
scores that led them to predatory loans with extremely high
interest. According to a 2006 study of 50,000 mortgages by
the Center for Responsible Lending in Durham, North
Carolina, blacks and Latinos are 30 percent more likely to
be charged a higher rate for a home loan than whites with
credit histories that are similar. What's more, subprime
loans were available to those borrowers with incomplete or
bad credit and these loans carry higher interest rates than
loans to people with good credit histories.

Sharp increases in subprime mortgage loan delinquencies and
also the number of homes entering foreclosure raise
important economic and social questions.

----------------------------------------------------
Kristin Gabriel is an author and social media marketing
professional with clients including Rocco Basile of the the
Basile Builders Group based in New York. Basile is involved
with several charities including Children of the City and
the Joe DiMaggio Committee
(http://www.joedimmagioaward.com)for Xaverian High School

LANDLORDS: Make your rental(s) work for you!

LANDLORDS: Make your rental(s) work for you!
If you ever mailed an envelope containing a monthly payment
to a landlord, you qualify as a rent payer. What you might
not realize is that the owner of that real estate is
getting lots of deductions for expenses related to owning
property.

When you own rental property, you may spend money on
advertising. Promoting the vacant site, whether in small
print ads in newsletters, newspapers, magazines and the
Web, or in big signs and billboards, can be a necessary
expense. It's also a deductible one. So are the expenses
you incur to maintain your property in good condition.

Remember that because you are a rental property owner, the
fees you pay related to that property can also be written
off. For instance, if you pay a management company to
collect rents and take care of your property, that cost can
be subtracted on your tax return. Of course, every savvy
real estate investor knows about the magic of depreciation.
This is an expense that is really just a gift from the IRS
to real estate investors. There is no out of pocket expense
and everyone expects the property to increase in value. But
the IRS still gives investors a deduction as if the
property were decreasing in value. That's about the best
kind of deduction you can get.

"Magic?" you're asking. "Isn't depreciation just a loss in
value of my property? So how is this a good thing?" Simply
put, depreciation is the biggest tax break for real estate
investors - money in your pocket for things you already buy
and there is minimum effort needed to collect on it. How
does depreciation work? It is the distribution of the cost
of a long-lived asset over the estimated life of that
asset. In the case of a residential rental the time period
is 27.5 years. You may deduct 3.636% (1/27.5) of the
purchase price each year. This will be a steady deduction
over the life of this property.

Sometimes we desire to speed up the process of depreciation
to put more money in our pockets. In the case of land
improvements or personal property also called "chattels"
the life span can be as short as 15 all the way down to 5
years. Appliances, cabinets and carpets are all examples of
things that depreciate over 5 years. A $1,000 refrigerator
yields roughly 20% or $200 in depreciation each year. Total
this up over all your personal property and just like magic
money comes rolling back to you.

Now that you know what depreciation can do for you, I'm
sure you'd like to know how to do it. Chattel Appraisal is
a strategy to separate out land improvements and personal
property components from the real property owned. You must
be careful not to value the land too high or too low, make
sure you are depreciating the property over the right
period of time, and verify you are utilizing the right
foundation for depreciation (many will use a basis that is
too low, missing out on $$$.) These are all things you can
do yourself - simple, but time consuming. Now that you know
the wonders depreciation can do for you, get out there and
make some magic!

Now if you are a business owner, the rental fees you pay to
support your business should be recognized. Your business
may work out of rented space. If so, the cost of the
location is deductible. So are any property taxes you may
pay for the landlord as part of the lease. Maybe your
business has a parking facility that you rent. If so, the
same rule applies.

Perhaps your business requires storage of goods. If you are
renting warehouse space don't forget to deduct the fee.
Even storage of a much smaller kind—a safety deposit
box that contains business-related papers—qualifies.

Paying rent is usually a part of being both a real estate
and a business owner. Make it work for you.

Warmest Regards,

Tom

----------------------------------------------------
Tom Wheelwright is not only the founder and CEO of
Provision, but he is the creative force behind Provision
Wealth Strategists. In addition to his management
responsibilities, Tom likes to coach clients on wealth,
business, and tax strategies. Along with his frequent
seminars on such strategies, Tom is an adjunct professor in
the Masters of Tax program at Arizona State University.
For more information, please visit
http://www.provisionwealth.com

The Top 10 Best Credit Cards On The Market

The Top 10 Best Credit Cards On The Market
If you're looking for the top 10 best credit cards, look no
further. I have the list. For the lowest interest, best
introductory offers and highest rewards, these credit cards
top the charts. Want to make sure you're carrying the best
of the best? Here's the cards to look for...

1. Blue from American Express

Topping the list of our top 10 best credit cards is Blue
from American Express. Not only is this one of the only
American Express cards available without an annual fee, but
it also offers a 0% intro APR for 15 months, a lifetime
balance transfer APR of 4.99% and rewards points redeemable
for travel, merchandise and more. 2. Discover More Card

Discover cards have usually been associated with higher
interest rates, but not the Discover More card. Not only do
you get a 6-month 0% intro APR, when the intro period is
over your rate can be as low as 10.99%. Add that to the
fact that you get up to 20 percent cash back from
participating retailers and it's not hard to see why the
Discover More card is one of the top 10 best credit cards
out there.

3. Fidelity Investments 529 College Rewards Card

How would you like a credit card that helps pay for your
kids' college education? That's exactly what this card will
do. You get 1.5 percent of every dollar you spend on the
card placed into a 529 plan. With the increasing cost of
college, we couldn't help but add this one to the list of
the top 10 best credit cards out there.

4. Orchard Bank Platinum MasterCard

If you have great credit, the orchard bank card probably
isn't anything special. However, if your credit isn't the
best then this is definitely the best of the top 10 best
credit cards out there. The Orchard Bank card is easier to
qualify for than most other credit cards and for a bad
credit credit card, the interest rate and fees are very
reasonable.

5. Simmons First Platinum Visa

If you're looking for a no-frills credit card with an
unbeatable fixed rate, you'll see why the Simmons First
Visa Platinum makes our list of the top 10 best credit
cards. The low fixed rate is just 7.25% and there's no
annual fee, which is rare when it comes to fixed-rate
low-interest cards.

6. Chase Freedom Cash Visa Signature

When it comes to rewards cards, the Chase Freedom Cash Visa
Signature is hard to beat. When you make your first
purchase, you get $50 and then you get 1% to 3% cash back
for all of your other purchases. When you earn $200 in
rewards, you get another $50 bonus. With such generous
rebates, this card is definitely one of the top 10 best
credit cards on the market.

7. Pulaski Bank Visa

When it comes to a low fixed rate, you can't beat this
card. Pulaski Bank Visa makes it to our list of the top 10
best credit cards because of its generous 0% 6-month intro
rate and its unbelievably low fixed rate of just 6.5%.

8. The GM Business Card from Chase

If you're looking for a great business credit card this one
just might fit the bill. The GM Business Card from Chase
offers 3% earnings on all fuel purchases and 1% on all
other purchases. You also get a $600 credit on your card
each time your company leases or purchases a GM vehicle
through the GM Business Choice program.

9. Chase Amazon.com Platinum Visa Card

Are you a frequent Amazon.com shopper? If so this card is a
must. You earn 3 points for every dollar spent at
Amazon.com and 1 point for every other dollar spent with
the card. When you earn 2500 points, you get a $25
Amazon.com gift certificate.

10. Citi mtvU Platinum Select Visa

If you're looking for the best student credit card in this
top 10 best credit cards list, you've found it. The Citi
mtvU Platinum Select Visa doesn't just offer no annual fee,
a competitive interest rate and rewards points for every
purchase you make, but it also offers bonus rewards points
for paying your bills on time, staying within your credit
limit and keeping your grades up.

When it comes to credit cards, there are the good, the bad
and the ugly. Using the above list of the top 10 best
credit cards available, you can avoid the bad and the ugly
and have nothing but the best in your wallet.

----------------------------------------------------
For more tips on the best credit cards, saving money and
avoiding getting taken, check out the best credit card
section at CreditCardTipsEtc.com, a website that
specializes in providing credit card tips, advice and
resources.
http://www.creditcardtipsetc.com/best_credit_cards