Ten Income Stock for Your IRA Portfolio

Investopedia explains Income Stock as “an equity security that pays regular, often steadily increasing dividends, and offers a high yield that may generate the majority of overall returns. While there is no specific breakpoint for classification, most income stocks have lower levels of volatility than the overall stock market, and offer higher-than-market dividend yields. Income stocks may have limited future growth options, thereby requiring a lower level of ongoing capital investment. The excess cash flow from profits can therefore be directed back toward investors on a regular basis.”“Income stocks can come from any industry, but are most commonly found as companies operating within real estate (through real estate investment trusts, or REITs), energy sectors, utilities, natural resources and financial institutions.”

These stocks are good for use in an IRA because the speculator can reinvest the dividends into other securities. Here are 10 to watch;

1. Main Street Capital Corporation (Computer Symbol: MAIN) is a principal investment firm that primarily provides long-term debt and equity capital to lower middle market companies. Main Street's investments are made to support management buyouts, recapitalizations, growth financings and acquisitions of companies that operate in diverse industry sectors and generally have annual revenues ranging from $10 million to $100 million. Main Street seeks to partner with entrepreneurs, business owners and management teams and generally provides "one-stop" financing alternatives to its portfolio companies. Moving to the NYSE. May be given new computer symbol. Sold recently for $16.67, yielding 8.82%.

2. Universal Insurance Holdings (Computer Symbol: UVE) has an operating margin of 31.4% on trailing 12 months sales of $210.9 million and sales growth of 17.4%. Sold recently for $4.68, yielding 8.00%.

3. Gladstone commercial Corporation (Computer Symbol: GOOD) is a real estate investment trust (REIT) that is engaged in the business of investing in and owning net leased industrial and commercial real property and making long term industrial and commercial mortgage loans.

4. Commonwealth REIT (CWH) formerly HRPT Properties Trust, is a real estate investment trust that invests in office and industrial properties. At December 31, 2009, the trust owned 518 properties with 66.8 million square feet, including 17.9 million square feet of leased industrial and commercial space in Oahu, HI. In addition, CWH owned 46.3% of the shares of Government Properties Income Trust, a former subsidiary now traded on the New York Stock Exchange under the symbol GOV.

5. Compass Diversified Holdings (CODI) reported widening margin, which is the difference between yield on earning assets and rate paid on funds, can indicate more successful management of assets and liabilities, lead to greater contribution to net interest income from a given level of loan growth.

6. Gladstone Capital Corp. (GLAD), a specialty finance company, operates as a closed-end, non-diversified management investment company. As of September 30, 2009, the company had about $364 million invested in 48 portfolio companies. As of that same date, around 66% of the aggregate value of the investment portfolio was senior debt, about 33% was senior subordinated debt (no investments in junior subordinated debt) and approximately 1% was in equity securities.

7. Gladstone Investment Corporation (GAIN) operates as a closed-end, non-diversified management investment company. The company has elected to be treated as a business development company under the Investment Company Act of 1940, as amended. In addition, for tax purposes, GAIN has elected to be treated as a regulated investment company (RIC) under the Internal Revenue Code of 1986, as amended. Gladstone Management Corporation serves as the investment adviser to the company.

8. ING Clarion Global Real Estate Income Fund (IGR) current distribution rate represents an annualized yield of 7.1% based on the closing market price of $7.61 on October 7, 2010 and a 6.4% yield on a closing NAV of $8.42 as of the same date. Future earnings of the Fund cannot be guaranteed and the Fund's dividend policy is subject to change. For more information on the Fund, please visit our website at www.ingclarionres.com.

9. Western Asset Managed Municipals Fund Inc., formerly Managed Municipals Portfolio Inc. is a non-diversified, closed-end management investment company. The fund's investment objective is to seek as high a level of current income exempt from federal income tax as is consistent with the preservation of principal. The fund seeks to achieve its objective by investing primarily in investment grade municipal debt securities issued by state and local governments, political subdivisions, agencies and public authorities (municipal obligations).

10. LTC Properties, Inc. (LTC) operates as a healthcare real estate investment trust (REIT). The company invests primarily in long-term care and other health care related properties through mortgage loans, property lease transactions and other investments.

Using the Sharebuilders Plan or another account that allows you to buy full and fractions of shares, you can accumulated a lot of money quickly using these 10 securities. Review the Williams Plan in my earlier blogs for more details.

You can see more information about these investments on my Facebook Account. Place in your Google Search “Facebook Darnell Williams bond investments”. Next time, we will explain how to look for the income stocks that has the best chance for appreciation while they pay you high dividends.

How Well is Darnell Doing?

As of October 28, 2010, my IRA has increased 25% Year to Date and for the end of the last 21 months, my portfolio has increased 76.84%. At the same time, the market, measured by the DJIA has increased 6.7% Year to Date.

The Convertible and Preferred Test

1) A _____________________ is a bond that can be converted into a predetermined amount of the company's equity (stock) at certain times during its life, usually at the discretion of the bondholder.”

A) Convertible Preferred
B) Common Bond
C) Convertible Bond
D) None of these

2) ________________ are sometimes called "CVs".

A) Convertibles
B) Cumberland Valley
C) Preferred Stocks
D) None of these

3) Preferred shareholders have priority over common stockholders on earnings and assets in the event of liquidation and they have a fixed dividend (paid before common stockholders).

True or False


4) Preferred shareholders have higher risk than common stockholders when looking at earnings and assets in the event of liquidation.

True or False


5) Preferred Stock is a hybrid between a stock and a bond.

True or False


6) Preferred Stock gives you higher dividends than common stock.

True or False

7) Preferred Stocks are more volatile than common stocks.

True or False

8) ____________ stocks gives higher dividends than _____________ stocks.

9) A ___________ Preferred Stock is a type of preferred stock that carries the provision that the issuer has the right to call in the stock at a certain price and retire it.

10) If the company of this ________________ Preferred Stock gets through the trouble and starts paying out dividends again, it will first have to pay back all of the dividends that are owed to _______________ Preferred share holders.”

Answers;

1) Convertible Bond
2) Convertibles
3) True
4) False
5) True
6) True
7) False
8) Preferred; common
9) Callable
10) Cumulative; Cumulative

If you got 0 or 1 wrong then you know what you are doing with convertible and preferred securities.

If you got 2 wrong then you have knowledge of convertible and preferred securities.

If you got 3 wrong then you have the average investor’s knowledge of convertible and preferred securities.

If you got 4 wrong you better look over convertible and preferred securities blogs again.

If you got 5 or more wrong then you are putting me on!

Would You Like to Buy Preferred Stock? Part 3

We are going to finish our conversation on Preferred Stock by looking at Prior Preferred Stock and a few other definitions in the world of preferred. Prior Preferred Stock is a type of preferred stock with a higher claim on assets and dividends than other issues of preferred stock. If a firm did not generate enough money to fulfill its full dividend schedule requirements, those holding prior preferred stocks have first priority.

Investopedia explains Prior Preferred Stock this way. “Since prior preferred stock holders have a higher claim on the dividends of a company during normal operations and a higher claim on assets during bankruptcy, these shareholders are subject to less risk than other preferred or common shareholders. As with many other lower risk investments, these stocks normally offer a lower rate of return relative to other forms of stock because they are subject to less risk.”

A Callable Preferred Stock is a type of preferred stock that carries the provision that the issuer has the right to call in the stock at a certain price and retire it. This is also known as "redeemable preferred stock". This can be good or bad depending on the price you bought it and the callable price.

According to Investopedia, Participating Preferred Stock is “a type of preferred stock that gives the holder the right to receive dividends equal to the normally specified rate that preferred dividends receive as well as an additional dividend based on some predetermined condition.”

“The additional dividend paid to preferred shareholders is commonly structured to be paid only if the amount of dividends that common shareholders receive exceeds a specified per-share amount.”

“Furthermore, in the event of liquidation, participating preferred shareholders can also have the right to receive the stock's purchasing price back as well as a pro-rata share of any remaining proceeds that the common shareholders receive.”

“For example, suppose “Company A” issues participating preferred shares with a dividend rate of $1 per share. The preferred shares also carry a clause on extra dividends for participating preferred stock, which is triggered whenever the dividend for common shares exceeds that of the preferred shares.”

“If during its current quarter, Company A announces that it will release a dividend of $1.05 per share for its common shares, the participating preferred shareholders will receive a total dividend of $1.05 per share ($1.00 + 0.05) as well.”

“Participating preferred stock is rarely issued, but one way in which it is used is as a poison pill. In this case, current shareholders are issued stock that gives them the right to new common shares at a bargain price in the event of an unwanted takeover bid.”

Investopedia explains Contingent Voting Power as “a provision granting voting rights to preferred shareholders when the company cannot uphold the obligations outlined in the preferred shareholder arrangement. Contingent voting powers offer the shareholders additional security for holding preferred instruments.”

“With preferred stock, the primary source of income is generated from dividends because capital appreciation is minimal. Contingent voting powers may come into effect when the firm fails to make the dividend, eliminating the revenue of the preferred group. Armed with the power to vote, preferred shareholders may seek to remedy the financial difficulties that are restricting dividends by voting in new directors.”

If you are interested in investing or speculating in Preferred Stock, you may have to check the financial newspaper’s stock market listings, the websites of the corporations that you might be interested in, or call your brokerage firm for information.

THE END

Who is reading the Blog?

I am happy to welcome the people from Hungary and our first South American Country Chile to our Investment Community. In order from our greatest number of readers to the lowest in our top 10 countries to date:
1) United States; 2) South Korea; 3) Canada; 4)Russia; Chile and Hungary is tied for 5th place; 7) Denmark; 8) China; 9) Bulgaria: 10) United Kingdom.

Would You Like to Buy Preferred Stock? Part 2

This is taken from the Ford Motor Company Capital Trust II 6.50% Cumulative Convertible Trust Preferred Securities (liquidation preference $50 per preferred security) Prospectus Supplement to Prospectus dated January 24, 2002. This Preferred Stock Computer Symbol from ZionsDirect Online: “F/PS”.

This information explains the Preferred Stocks “Distributions on each preferred security is payable at the annual rate of 6.50% of the liquidation preference of $50 per preferred security.

Distributions will accrue from and including the date on which the preferred securities are first issued (anticipated to be January 30, 2002) and are payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, commencing April 15, 2002. The amount of distributions payable for any period is computed on the basis of a 360-day year of twelve 30-day months.”

“So long as no indenture event of default has occurred and is continuing, Ford has the right under the indenture governing the debentures to defer the payment of interest on the debentures at any time or from time to time for a period not to exceed 20 consecutive quarters with respect to each deferral period, provided that Ford may not defer the payment of interest beyond the stated maturity of the debentures. If Ford defers the payment of interest on the debentures, the trust will defer the quarterly distributions on the preferred securities for a corresponding period. In this case, distributions on the preferred securities will continue to accrue and will accumulate additional distributions thereon at an annual rate of 6.50%, compounded quarterly from the relevant payment date for such distributions. “

This is a Ford Cumulative Convertible Preferred Stock. It give 6.5% of $50 or ($50 times 6.5% = $3.25 per share) on a $50 per share of Ford Cumulative Convertible Preferred Stock.

What is Cumulative?

Investopedia explains Cumulative Preferred Stock this way; “A preferred stock will typically have a fixed dividend yield based on the par value of the stock. This dividend is paid out at set intervals, usually quarterly, to preferred holders. If a company runs into some financial problems and is unable to meet all of its obligations, it will likely suspend its dividend payments and focus on paying the business-specific expenses. If the company gets through the trouble and starts paying out dividends again, it will first have to pay back all of the dividends that are owed to preferred share holders.”

Ford Motor Company is recovering from bad times where they had to suspend dividend payments. They will have to pay dividends on this issue since April 2009. They can defer dividend payments up to 20 quarters. It has been deferred 6 quarters to date. So they owe whoever owns a share of this preferred, $4.88. If they pay in the next quarter and you buy the stock at the current price of $48.66 per share, your current yield will be 6.67% and your extra onetime yield would be 10.02%. In any event, they must pay within the next 14 quarters or 3.5 years.

What is Convertible?

Investopedia explains Convertible Preferred Stock this way; “Preferred stock that includes an option for the holder to convert the preferred shares into a fixed number of common shares, usually anytime after a predetermined date. Most convertible preferred stock is exchanged at the request of the shareholder, but sometimes there is a provision that allows the company (or issuer) to force conversion. The value of convertible common stock is ultimately based on the performance (or lack thereof) of the common stock.

This Preferred Stock is also convertible into Ford Common Stock. According to the prospectus, you can convert one share of Preferred Stock into 2.8249 Shares of common stock anytime you want. The formula for this is: 2.8249 Ford Motor Company Common Stock Shares Times $17.70 = $50.000073. In our example, Ford 6.65% Preferred Stock was selling at $48.66. By buying the preferred stock then converting, you would make about $1.34073 per share. This must be done before the close of business on January 15, 2032, at which time the speculator cannot convert preferred stock into common stock. The common stock closed at $12.49 on Sept. 17, 2010. 2.8249 times $12.49 is only $35.283001. That is $13.376999 less than what the preferred stock is worth now. So a conversion at this time would be “out of the question.”

Looking at Your Options!

But hold it! Remember we said that there is $4.88 in dividends in arrears. So the preferred stock at the moment is really worth $53.54. That is $3.539927 more than the conversion price. To get that, all you have to do is buy the preferred stock and wait. Then hope to sell it at $50 one day. Even if you sell it at the price you bought it after the dividend is paid, you may come out ahead (provided that you can cover your commissions.)

You can read the Ford Motor Company Capital Trust II 6.50% Cumulative Convertible Trust Preferred Securities (liquidation preference $50 per preferred security) Prospectus. Just click on the link below;

http://www.sec.gov/Archives/edgar/data/37996/000095012402000142/s66289b4e424b4.htm#025

After reading all of this, do you think this would be a good long term speculation?

Our World Community is Growing

I want to welcome Israel and Poland to our Bond Investment Community. The countries reading this blog is as follows from largest readership to smallest (Top 10); 1) United States, 2) South Korea, 3) Canada, 4) Denmark, tied for 5th place China and Russia, 7) Bulgaria, 8) United Kingdom, tied for 9th place is Germany and France.

Would You Like to Buy Preferred Stock?

We are going to start a three part series on Preferred Stocks. Over the past 20 months, I have been telling you to limit your purchases of Common Stock. Some of you are saying, “What is Common Stock? Investopedia explains it this way. It is “A security that represents ownership in a corporation. Holders of common stock exercise control by electing a board of directors and voting on corporate policy.”

In June 2009, I suggested that you buy FORD MOTOR COMPANY Common Stock (Symbol: F) for a price under $7.00. As of Oct. 15, 2010, the price is $13.91 and got as high as $14.57 in the past 52 weeks. The stock sold as low as $6.61 on Oct. 2, 2009.

Now we are going to talk about investing in Preferred Stock. Investopedia says that it is “A class of ownership in a corporation that has a higher claim on the assets and earnings than common stock. Preferred stock generally has a dividend that must be paid out before dividends to common stockholders and the shares usually do not have voting rights. “

“The precise details as to the structure of preferred stock are specific to each corporation. However, the best way to think of preferred stock is as a financial instrument that has characteristics of both debt (fixed dividends) and equity (potential appreciation).” Preferred Stock is also known as "preferred shares.”

Investopedia goes on to explain Preferred Stock, “There are certainly pros and cons when looking at preferred shares. Preferred shareholders have priority over common stockholders on earnings and assets in the event of liquidation and they have a fixed dividend (paid before common stockholders), but investors must weigh these positives against the negatives, including giving up their voting rights and less potential for appreciation.”

Before you jump into Preferred Stock, I think you should know what you are getting into. The positive about Preferreds are; it gives higher dividends than common stock, it is not as volatile as common stock. The negatives are that they do not mature like bonds; dividends generally do not increase; most do not increase in value like common. You can think of Preferred Stock as a hybrid between a stock and a bond.

They are more complicated than they may seem. That is why we are going to do a series on Preferred Stocks. Next time we will look at Convertible Preferred Stock.

How is Darnell’s IRA doing?

On Sept. 13, 2010, the market is up 6.42% YTD as measured by the Dow Jones Industrial Average. My IRA is up 24.20% YTD and since the end of January 2009, I am up 76.33%. My short term objective is to make 100% by January 2012.

Here is How to Save Your Family: Part 7

In this last part, I am going to tell you about the future of the US and the world economy. How are things going to change for you? What should you get ready for? This issue is about the future. I would appreciate it if all of you around the world tell your countrymen what is going on. The more we educate the world’s population about this, the better off we all will be in the future.

In 1983, my oldest daughter was born. That same year I created the Darnell L Williams Foundation. The objective of that foundation is to create funding for my Grand children’s education and the education of their descendants. The foundation by-laws spell out the rules for getting funding for college and technical school education for my descendants by their parents. I also expect my descendants to help with funding for future descendants.

One of the rules of my foundation is that no member can discriminate against another on race, color, or national origin. That same daughter went to Jamaica and brought back a husband. In 2005, my oldest daughter who married that Jamaican asked me how I knew that members of my family will start marrying people from other countries. I knew because I know the objectives of the 2% of the world population that run the world. These people are working toward a one world government and have been doing so since the 16th Century.

These people are Industrialist, Financiers, and heads of Utility Companies around the world. They are members of organizations such as the New World Order. The Bush Family is one of the leading families in this organization. The New World Order is just one world organization with such objectives.

The Coming World Government

I can envision a three part government that looks very much like the one in Washington DC. We already have a World Court and I expect it to continue to evolve. The United Nations will evolve into the World’s Legislative Body with the ability to invade and bring into line any nation that “Goes Rogue.” The Executive branch will have two chambers; East and West. Each chamber represents 5 common markets. Each common market will be made up of nations. They will elect the World Manager who takes care of the day to day operations of the planet. Someone is going to have to manage our world resources, the Internet, and the use of outer space.

We already had several nations going “Rogue” in the past 100 years. They are: Hitler’s Germany, Togo’s Japan, and Mussolini’s Italy in World War II; Iraq that caused the Gulf War in the 1990’s: North Korea and Iran who wants to build nuclear weapons today.

Looking at the Past 500 years

The history of Western Europe since 1500 has been to expand westward to America and Southward consuming Africa. They also wanted to expand into Asia and monopolize the China Trade. But then came 13 Rogue Colonies that Great Britain could not get under control. The objective of these 13 colonies which formed a country called the “United States of America” took up some of the objectives of Western Europe. First they expanded westward, taking over all the Native American nations and inseminated them, using most as cheap or free labor. (Sound like the Borg in Star Trek the Next Generation) They imported slaves from Africa for labor. The country welcomed European immigrants to come to America to help build a nation. They expanded in the Pacific where they took over Hawaii and several other islands. The US collided with Japan and later China. In the past 50 years they expanded into the Middle East to control oil and other natural resources in that area.

The United States and its European Allies are trying to put down rebellions all over the world. People now understand that world organizations are trying to create a world government and that their way of life is threatened. This is why we have such worldwide terrorist organizations as the Egyptian Islamic Jihad; al-Qa'ida, Al-Badr, and the al-Haramain Foundation.

http://en.wikipedia.org/wiki/List_of_designated_terrorist_organizations

See the list of Designated Terrorist Organizations around the world.

The Future

As the world comes to except world government, you will see great changes coming about.

The world will speak a universal language.

However that is far in the future and who knows what language that will be. The business language around the world today is English. You should brush up on speaking Spanish and Chinese because these will be the people that the US will be trading with the most outside Canada.

Be mobile and willing to move anywhere

If you are willing to move where the corporations need you, you will have no trouble making money and being employed.

Be willing to live and work with all peoples around the world. Threat them as you want to be treated. Someone from China or India maybe your boss some day. You don’t want someone to prove that you don’t like your new masters. This can hurt you.

Economic Trends and Trade

Be on the look out for new trading partners coming into your country. Be on the lookout for new product or services that the world needs and see how you can use this to your advantage.

Dealing with Denial in the Future

When I was a teenager to my late 20s, I talked about the end of steel production in the West Mifflin, Duquesne, and Homestead areas near Pittsburgh, Pa. The people in the Pittsburgh area were in denial. After all, I was talking about the discontinuation of the longest continuous steel mill in the free world. Twenty five years later, the land that the mill sat on now holds shopping centers, restaurants, and a water park. The people who did not hear my warnings and continued like that era would never end, lost economically. This all happened because the people did not want to believe that things change and other people and economies can come into play.

Dealing With the Visitor’s

Now I am telling you about the greatest change in our economy since Europeans colonized America. It will not happen today, next year, or even in ten years. That is trade with people from other worlds. All you have to do is look at the evidents.

http://www.ufoevidence.org/documents/doc823.htm

50 years ago, unidentified flying objects (UFO) from way beyond the beltway seized the capital's imagination. Feature article by the Washington Post.

http://ufos.about.com/od/visualproofphotosvideo/p/washingtondc.htm

The statement that UFOs normally only appear in desolate areas is definitely not true. Especially considering the 1952 buzzing of the White House, Capitol building, and the Pentagon. There were basically two separate waves of UFOs over the US Capitol.

http://news.blogs.cnn.com/2010/09/27/ufos-showed-interest-in-nukes-ex-air-force-personnel-say/

Seven former U.S. Air Force personnel gathered in Washington Monday Sept. 27, 2010 to recount UFO sightings over nuclear weapons facilities in decades past. “This planet is being visited by beings from another world, which for whatever reason has taken an interest in the nuclear arms race which began at the end of World War II,” said UFO researcher and author Robert Hastings. He added that more than 120 former military personnel have told him about UFOs visiting nuclear sites.

http://www.zuko.com/Inexplicable/US_Navy_USO_Encounters.asp

US Navy USO UFO Encounters

http://www.ufoevidence.org/documents/doc1743.htm

UFO-related quotes from military officials.

Here are witnesses from the US Military telling us that UFOs and people from other worlds are here as visitors. The US and the world have enough evidence to show that UFOs are part of our way of life.

Here's a link to the full video of the 2010 UFO Conference in D.C.

http://ireport.cnn.com/docs/DOC-496408

Interesting List of Respected People who Affirm the Existence of UFOs

http://www.pubsub.com/Interesting-List-of-Respected-People-who-Affirm-the-Existence-of-UFOs_CNN-ufo-coverup-4y8bRnS2nPB,4HBCwBcewZME

Just looking at the facts, people from places other than Earth are visiting this planet. These people arrive in machines that we on Earth are not capable of building. They must have manufacturing plants and people who can build such machines. These same people must live someplace and have an organized society. They must have a policy with dealing in human affairs on Earth.

The US Government and other governments must know that they exist. But for now, the world governments must deny the existence of these people. Just like with the Steel Industry workers, the people of this planet will carry out the world policy of denial of their governments.

Preparing the World for Contact

Governments are slowly preparing the people for the day the visitors land. It was reported that a rock was found from Mars that may have a Martian fossil in it. The Vatican has told its Catholic members that they believe there are other creatures in the Universe. In September 2010, scientist announced that they found a planet that can sustain life. It is becoming more popular among scientist that the “seeds of life” are common in the universe.

Alien/Earth Policy toward You

The elite leaders of Earth must form policies to deal with these “off world” people through the United Nations. Once everything is in place, an Alien outpost on Earth can be established and trade can begin between Earth and the visitors. That trade will be controlled and regulated by the one world government and the visitors.

How This Affects You and Your Family

I do not know if there are 57 different species visiting Earth as many people have suggested. But what you want to do is this. Keep your eyes and ears open. Be ready to take advantage of any opportunities that might come your way. Don’t be one of the people who do not want to believe that things change and other people and economies can come into play. Don’t believe that because it never happened before that it can’t happen now. Don’t be a 1970s Pittsburgh Steel Worker in denial and in reality end up with a 21st Century family crisis!

THE END

Here is How to Save Your Family: Part 6

You might be asking; what is going on now in society that I should be concerned with?
Where should I live?

With the collapse of the housing market, it may look like a good time to buy a house. But with the changing labor market, a house may be a rope around your neck. There was a time when you bought a home and you lived in the same area most of your life. Now, you may live in Harrisburg, Pa. then get laid off. The next job you take may be in Richmond, Va. You might live there for a few years before you are transferred to New York City. With the way houses sell today and the movement of employees; you may have to rethink that idea of a house as a status symbol.

If your spouse agrees, one of you may have to stay at home and raise the children in one location. You can work in several Cities while your spouse stays at home. If that is the case, then buying a home in a good school district may work for you.

Another way of living that you might want to think about is communal living with your extended family. You can buy a large house. Your sisters, brothers, or cousins can form a non-profit corporation. With houses cheap, you may buy a 6 bedroom home in the name of the corporation.

You also may want to consider buying two or three houses. You as members own the house(s) through the corporation. You all set up rules for paying expenses, maintenance, mortgage, and etc. This may solve the problem of a baby sitter and house sitter.

Living on Credit

In a deflationary period and let know one tell you different, we are in a deflationary period, you don’t want to create debt. Credit cards are the number one problem when it comes to consumers becoming critical debtors. Even with today’s relatively low interest rates, it is not a good idea to live on credit. Credit Card interest is not low.

Interest rates vary widely. Banks make money on many other fees that interrelate with interest charges in complex ways (since they make a profit from the whole combination), including transactions fees paid by merchants and cardholders, and penalty fees. Banks make money if customers borrow over the established credit limit, or for failing to make a minimum payment on time.

Using 2005 figures, credit card loans that are secured by real estate can be as low as 6% to 12% in the U.S. Typical unsecured credit cards have interest rates between 7% and 36% in the U.S., depending largely upon the bank's risk evaluation methods and the borrower's credit history. I have found that most middle and lower class consumers use credit cards with rates between 12% and 36%. Most of the time, it is knowledge of the credit card market and the condition of the consumer that creates the high consumers credit card rate.

Visa and Mastercard often offer a grace period with no interest until the due date, which makes them more popular for use as liquidity accounts, which means that the majority of consumers use them only for convenience to make purchases within the monthly budget, and then (usually) pay them off in full each month. So you can use these credit cards to keep track of your purchases and use this to help in making your budget plan. I would only spend money using a credit card that I know can be paid back in total when the bill comes.

Budgeting Yourself

Corporations, Governments, and people like you have several things in common. They have an income and create expenses. You have assets such as a cars, bank accounts, and clothing. Most people have liabilities such as credit card debt, mortgages, and Utility Bills.

If you want to increase your chances of being homeless in this depression, live from paycheck to paycheck. In this depression, it is likely that one day someone will come to your workplace and tell you that you no longer have a paycheck coming in. If that is the case then what will happen with the ongoing expenses that the mailman brings you that continues to come into your home? I had seen people that have never been without a job for more than 3 months, go without jobs for years. I was without a job for 2 years then got into a labor job for 6 months just because I needed something to do. From 2001 to 2008, I did not have a steady job in my field of work.

My budgeting goal from 1971 to 2008 when I was planning and managing a family was to: 1) get out of debt, 2) pay cash for everything, 3) pay off the house, put money away for my children’s education, and 4) save 10% of my paycheck. No, I did not have money to travel around the world, go out every week, and buy a bunch of junk. But later in my life, my way of life saved me from bankruptcy. It put one daughter through college graduating with no debt. The last time I had a mortgage was 1992 and the last time I had a car payments was 1981.

In these times where no one’s job or income is safe, you have to have something to fall back on. Without a budget with built in savings accounts, you will have nothing to fall back on when the real bad times come.

http://www.ehow.com/how_2046135_create-household-budgetcreate-household-budgetcreate-household-budgetcreate-household-budget.html

Here is a website to get you started on budgeting.

Here is How to Save Your Family: Part 5

Now you have a job, do you know how to keep it? A job is 10% competency and 90% politics. The "politics" of your job are often bigger than the politics of the political arena. If you have a local, state, or federal job then you are dealing with politics within politics.

"Politics" is present in all situations in our society. Your job in the business world is no exception. What can cripple you in a hurry on your job are three things;

1. Gossip – Everyone wants to hear gossip but no one wants someone who gossips around. A person that gossips exposes themselves to attack by other employees. Gossip makes enemies for the gossiper.

2. Unwanted advice – You know the saying, “They know it all!” You may know what you are talking about but they have been on the job longer and they resent people coming in and telling them what to do. “Know it all” people make enemies.

3. Put your business in the street! – As you know, I write this blog, I have written and published two books. People read my blog (from most read to least read countries); (1)United States, (2)South Korea, (3)Canada, (4)Denmark, (5)China, (6)Russia , (7)Bulgaria, three way tie (8)France, (8)United Kingdom, and (8)Iran. I have been interviewed by foreign news media. I have been on local TV, radio, and in newspapers for the past 20 years. But few people that I work with know it. I never talk about it at work. Many people would say that this should make me go up the corporate latter fast. No it will not. I was not hired to work on blogs. I seen it in so many businesses where good people who knew a lot of stuff was escorted to the door because they showed people how smart they are.

4. I am so sexy -- Don’t talk about how many women or men that you have. Don’t talk about how you and your friends get drunk. Keep family matters out of the office and away from the job. Don’t start a bunch of confusion in the office or on the job.

5. Company Activities -- Your company might have picnics or Christmas Parties. If you can skip them. This is when you are in the best position to mess yourself up. The company has an opportunity to find out about your private life and the only plus you have in this operation is that you get free food and toys.

6. The Internet -- You have a Face Book Account or some other social internet site, great! Don’t talk about your employer, fellow employees, or admit to any crimes. Your employer and future employers search the internet looking for things that will tell them about their employees or future employees. Your social site can get you fired or stop you from getting a job. You can put nude pictures and a story about your great weekend with some rock star on the internet in 2010. When you go for a new job in the year 2028, HR in their applicant investigation pull your personal story up off the internet, they ask you about it. What can you say to take the negative image out of their minds about you then?

To keep your job and to move up, you want to watch, listen and learn, but don't participate. Knowledge is power. Listen and take it all in, but take it with a grain of salt as well.

Judge people on one thing only - how they treat you. Do not adopt other people's enemies. You choose your own friends.

Do your job and don't let it do you. You were hired for your skills, knowledge, and abilities. Use them to the best of your ability. Go home to your own life at the end of the day.