Getting Your IRA and Other Projects Started With No Money

People who have been investing in income securities for 30 years in their IRA can buy ten to twenty thousand dollars in new securities every year. In this case, when they retire, they can withdraw $10,000 to $20,000 from their IRA to live on without touching their principal. They can also receive Social Security, and some of them a pension or two. But you notice, I said that they started 30 years ago meaning that they started around 35 years old or younger? Here is the trick. They did the following;

1.       Started their IRA or company matching 401K early in life

2.       Moved their 401K to their rollover IRA when they left their old employer  

3.       Saved money from every pay and moved it into their IRA or Company Matching 401K.

Why Should You Care?

As I go around talking to people about investing with an objective like retirement, children’s college, or the next car 10 years from now. I usually find out these important facts.

1.       They never have any money to invest

2.       They don’t know anything about it and don’t really care to learn

3.       They believe that some government grant is going to take care of it
 

No Money to Invest!

When I was 14 years old, I asked my father why working two jobs, (16 hours a day, Monday through Friday and twelve hours on Saturday) he never invested any of his money in Stocks and Bonds. His answer was, he did not want to lose it like people did in the stock market crash of 1929.  Instead he spent it all on who knows what. He died at age 57 because for 25 years, he worked himself to death. In the end, he died broke. He never wanted to talk about money or plans dealing with money. After all, this was not done in the “depression people’s” society. This mentality has been passed on in many families to this day. My father did not know anything about investments, did not care about learning about investments, and he thought that the government will provide whatever he needed in life outside of home,  job, and a car.
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He did not have to worry about retirement because he died at age 57. But he left behind a 13 year old son (my younger brother) who had financial needs. A wife who had financial needs. You ask; did he have insurance? Yes but that policy was taken out in the 1950s. He died in the late 1970s. Inflation over time will and did destroy his life insurance policy. So by not talking about financial planning to anyone, his family suffered after his death. This is common and most people do not think about these consequences because the crisis may not come up this weekend. The crisis hits 20 years from now. What was wrong with paying himself $25.00 per pay into a “rainy day fund” to pay for emergencies, education, or other future expenses? That was not the mentality of the “Depression people.” The mentality was make it and spend it! If you did not do that, something was wrong with you.
 

The Government will take care of it!     

When my daughter Stephanie was a Senior in High School, I took her to a seminar on financing college. I wanted to see if they had an idea of how my daughter could finance her MBA without using her money. What I found out about the program was shocking to me. Most of the people in the room had children 16 years old and older. Many did not have a dime saved up. They were all looking for free money to send their children off to college. What further shocked me was that the people running the seminar had no knowledge of free college money except for what you can find from the school guidance counselor. You pay them to sit down with them and figure out the best school to go to so that the parent can pay their children’s way with the parent’s credit.   Here is the reason why we have young people walking around the street with debt of $100,000 or more but can’t find a job that pays them more than $35,000 per year. The parents are in debt and can no longer help them and the children can’t help themselves. Some can’t find a job after graduating from college.
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I just wanted to “mooch” off the government or get a state grants. But to my surprise, these so called grants to pay for college education are a myth. They are really college loans that must be paid back. So my investing for my daughters education starting when she was born paid for two of three college degrees. She elected to use the money for her MBA to buy a house. This is why she is in debt for $30,000 today. However, because of her three degrees and the financing of her two degrees, she makes enough money to easily pay off the $30,000 education debt.     

People of Color are at a disadvantage

Say nothing and no one will know that I am talking about you! After I wrote my first book on finance at age 25, I made friends with many well off people in industry. One man set me up with an interview with a National Brokerage Firm. The firm called me, telling me that one of their  largest customers wanted them to interview me for a brokerage position. But brokerage is not for me. I can’t sell things that I don’t believe in.
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I became friends with the CEO of Wilshire Oil of Texas. He was a Jewish immigrant born in Germany and placed in a NAZI death camp. He was liberated when the allies came in WW II. He and his family came to America and worked the oil fields in Texas. They formed an investment club with the objective of taking over the company by buying and voting their stock. It took a decade but they finally put people on the board then one day, they took over the board. He asked me why not do that with the people of color to give them employment and power in this corporate led world? 
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My answer: I have a hard time just getting people of color to focus on investments let alone using economic power to gain a place in the world. People of color are socialist because they never matured from having their masters care for them in colonial or slavery days (good or bad). They did not evolve trying to get away from their lords like people did in Europe after the dark ages. Therefore people of color are not capitalist.

I said all of that to say this!

If you are going to start your retirement program or any other program that needs to be funded such as children’s education or a new home, you do not need a large sum of money. All you need is to pay yourself first, $25 to $100 per pay will due. You will not be able to buy something with $25 but as time goes on, your small amount of money will grow into a large amount of money. My contribution to Stephanie’s account grew into enough money to buy bonds over time. These bonds where used to send her to college, $25 at a time.  
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You can take out a loan of say, $2,000 and place it in your IRA. Your interest paid to the bank is an expense taken off your taxes as part of doing business. This means that this interest money is tax deductible. You place the money into your IRA and buy bonds. The interest from the bonds is tax deferred. The contribution of $2,000 comes off your total annual income. So if you make for example, $40,000, you pay IRS taxes on $38,000. Now tell me, who can beat that?         

Investing in Ladders, a Defense Against Risk

I teach you things about making money in the financial markets that the big corporations don't want you to know about. I stand for financial justice and I can back that statement up with my own portfolio.

To Satisfy the People Who Want Me to Fail

Recently, I was giving a lecture on investing in bonds to a small group of people. Usually when I do that I get at least one person who wants to know about my failures. They just want to show people that I don’t know what I am talking about.

I have three bond accounts. I have one where I gamble in the junkiest of bonds, another I buy bonds that do not trade, and the largest account is my IRA.  For people who need to know about my failures, I talk about my gambling account. Over the past 5 years, I lost 60% of my investment. As you see, it does not pay to gamble. This account was created in 1983 to pass money to my grandchildren through my great great grandchildren, 100 years from now. So I can afford to gamble with that money. 

My bonds that I have that do not trade give high yields. I use that money to help finance the following years IRA Contribution.  

How have I Done Since 2009?

Now that we have the anti-success people out of the way, we can focus on what you have to do to be successful in corporate bond investing. After making my IRA contribution to my account, I buy my bond investments.

Since January 30, 2009, my account has increased in value 230.914%. That means that since January 30, 2009, my account has increased 5.248% per month or 0.1749% per day. From January 1, 2012 to Oct. 10, 2012, my IRA account increased in value 18.234%. That means so far this year, my IRA account has increased 1.8234% per month or 0.45585% per week. Most bank savings accounts are giving 0.45585% in a year. “Year to Date,” to Oct. 10, 2012, the Dow increased by 9.656%. From January 30, 2009, the Dow increased 68.401% or 1.555% per month. So I have continued to beat the Dow for the past 3 years. Some of you have been watching me beat the Dow since I started blogging in 2009. Experts will tell you that I cannot do that.

For the people who are in my Greedy Friends Investment Club, you have been educated in what you must do to buy corporate bonds. Now we are going to talk about managing your account over a 10 year period.

 

Using Ladders to Defend Against Risk

When portfolio managers talk about strategies for success, they will often refer to risk diversification and money management. These strategies separate those investors who are successful because of knowledge and skill from those who are merely lucky. Now, don't be mistaken, luck isn't a bad thing to have, but possessing foundational skills will ultimately lead to success. We are going to discuss the bond ladder strategy, a bond investing strategy that is based on a relatively simple concept that many investors (and professionals) fail to use or even understand.

A bond ladder is a strategy that attempts to minimize risks (inflation, interest rate, and business risks) associated with fixed-income securities while managing cash flows for the individual investor. Specifically, a bond ladder, which attempts to match cash flows with the demand for cash, is a multi-maturity investment strategy that diversifies bond holdings within a portfolio. It reduces the reinvestment risk associated with rolling over maturing bonds into similar fixed-income products all at once. It also helps manage the flow of money, ensuring a steady stream of cash flows throughout the year.



There are two main reasons to use the ladder approach. First, by staggering the maturity dates, you won't be locked into one particular bond for a long duration. A big problem with locking yourself into a bond for a long period of time is that you can't protect yourself from bull and bear bond markets. For example, if you invested your full $40,000 into one single bond with a yield of 5% for a term of 10 years, you wouldn't be able to capitalize on increasing or decreasing interest rates.



The second reason for using a bond ladder is that it provides investors with the ability to adjust cash flows according to their financial situation. For instance, going back to the $40,000 investment, you can guarantee a monthly income based upon the coupon payments from the laddered bonds by picking ones with different coupon dates.

This is important for people who want to build your IRA or any other account where you want to reinvest the interest into more bonds that will give more interest. By doing this, investors compound their interest every year.  

This is important for retired individuals because they depend on the cash flows from investments as a source of income. If you are not dependent on the income, by having steadily maturing bonds, you will have access to relatively liquid money. If you suddenly lose your job or unexpected expenses arise, then you will have a steady source of funds to use as required.
 

How Have I Used Ladders in my IRA?

I try to invest in bonds that are Standard and Poor’s BBB+ to BB-. I break my own rules. I have bonds in my IRA that range from BBB+ to CCC. Some bonds are not rated. One issue is in bankruptcy. This means that my IRA Portfolio is riskier (Business Risk) than the safest  junk bond Portfolio. 

2011(1)		0.00%

 Before the World Wide Web, I had to depend on my broker to give me a list of bonds that they had in their inventory. Since it was not in their interest to give me bonds that could give high interest and safety, they gave me access to bonds that were just staying ahead of bankruptcy. A&P was one such bond. In my IRA I had $2,000 worth and now they are worth $2.50. Here is the reason why I tell you not to use full brokerage firms. Use online firms with large Corporate Bond inventories.   

2012(1)

0.82%

I have one bond that will mature in 2012 and it is .82% of my portfolio. This bond will be reinvested with my 2013 contribution, probably in bonds that mature in the early 2020s.

2013(1)

26.97%

In 2013, I will have one oil bond issue coming due. This issue is 26.97% of my portfolio and gives very high interest. I bought it at the bottom of the stock and bond market crash. They give interest of about 36%. This money will be reinvested in several different bond issues in the med 2020s.

2014(7)

43.93%

In 2014, I will have seven bond issues coming due. About 43.93% of my portfolio will come due that gives around 20% interest in total. This money will be reinvested over the 2020s.

2015(6)

16.55%

In 2015, six bond issues will come due, which is about 16.55% of my portfolio. This money will be reinvested in many issues that mature in the late 2020s.

2018(5)

10.18%

In 2018, I have five issues coming due. That is about 10.18% of my portfolio. This money will be invested in bonds of the 2020s.

2019(1)

1.05%

In 2019, I have one bond coming due. That is 1.05% of my portfolio. This money will be reinvested maturing in the year 2030.

   

 In Summary

This is how I have my bond investments ladders over the next 18 years. I started investing in my IRA in 1982, investing in a few bonds at a time. The thing you have to do every pay is pay yourself first and put that money in your IRA.  I started placing serious money into my IRA since 2005. By that time most of my other obligations were over.

In 2031, I will be 80 years old. Investing only part of my investment money each year will help protect me from inflation that will come as sure as the coming winter.

Part 3: Looking at Future Expenses

Your next step is to look at your spending patterns in retirement and future inflation.  You will have to save enough money to deal with both situations.  You must look at your present expenses to see how they will change over time. You must project what inflation will be at the time you plan to retire, say in 10 years. Plus you must figure out how inflation will act over the next 30 years. Your savings and investment rate must at least match that figure.  You must figure out if the money you saved will be enough to last until you die.

 

You can’t control inflation over a period of time but you can control your spending.  Your expenses will change as you grow older.  When you retire, you will spend less on work related things like daily transportation and work clothing. You will spend more on traveling, hobbies, or other things that you always wanted to do.

As you age, more of your budget will go toward medical expenses. I just heard recently that medical expenses are increasing by 4% per year.  Retired people may find that recording their expenses will alter future spending patterns.

Write down your monthly expenses that you have today. You may want to use a spread sheet on your computer.  Avoid getting stuck on the details and giving up because you don’t have exact records of your spending. If you don’t know the exact amount you pay for car insurance, for example, use a guesstimate until you can look it up. You can always revise your data. Don’t include things like college tuition or other onetime cost.  For things like utility spending, take a yearly figure then divide by 12 to give you an average monthly figure. You must do the same analysis on anyone that is dependent on you such as your spouse.         

Inflation in its simplest terms means that dollar for dollar your money will not buy as much next year. This means that inflation is a major factor in determining how much money you will need in retirement. Inflation means that you will need more money every year because prices for goods and services go up every year.  So if your money is not earning more money than the rate of inflation, you will lose part of your retirement future buying power.

Because we are starting to recover from the first Great Depression of this 21^st Century, I would say that inflation will average about 3.5% over the next 10 years. From 10 to 30 year in my opinion it will be 6% inflation.  In the 1930s, we lived with deflation where prices fell and goods and services became cheaper.  In 1980, inflation ran at as high as 13.5%. In 2002, inflation was only 1.6%. So as you can see, inflation can vary widely.

I would project your inflation cost for medical expenses at 4% per year. You should project that 20% of income will be spent on health care.  Medicare does not cover all your expenses in retirement.  For example, Medicare Part B (Doctor Bills) today cost $96 per month.    You still have to pay for dental, prescription drug, and eye care.

If you are thinking about retiring early, you may pay for your total health care yourself or in conjunction with an insurance plan.

If you need help in figuring out your future financial needs, talk to a Certified Financial Planner.  The Certified Financial Planner Board of Standards Web site lets you look up a certified financial planner near you. The organization also distributes a free “Financial Planning Resource Kit.” 1-888-237-6275

www.cfp.net/learn

The National Association of Personal Financial Advisors is an organization of fee only comprehensive financial professionals. 1-800-366-2732.

www.napfa.org

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.

http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html

The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.



I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.

Part 2: Know What Money You Can Count On

If you haven’t started taking inventory of your assets by age 50 then you better start ASAP. You are going to have to shine a light on what you have so you can find out how much you need to support yourself in retirement. Most people do not have a clear cut idea of how much money they have. That means it is hard for people to figure out how much money they can count on when they no longer work.
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I met one woman, who was out of work for two years and did not know that she had almost $4,000 in her 401k. Finding out what part of today’s money can go toward retirement simply means adding up the value of all your current assets. Assets are things that can be converted to cash.

These things include;

1. Assets that is very liquid such as cash, investments, savings bonds, CDs, Mutual Funds, and Whole Life Insurance policies.    
2. Assets that is not so liquid such as your house, car, jewelry, and art.

You do not want to count emergency money, children’s college money, or vacation money. You want to count money that you do not want to touch for at least ten years. Women face the very real possibility of spending part of their retirement years without the support of a husband. The loss of a spouse can sometime mean the loss or reduction of benefits that can place spouses in financial jeopardy.  Because of this spouses will need to focus on their financial resources as a single person as well as half of a couple. You must figure out what happens to your Social Security and to retirement benefits if your spouse dies or you divorce. Know what assets you can count on.

Check Social Security benefits documents, retirement plan documents, and Wills. Wills are important but they may not provide the protection desired. Depending on the way assets are titled or the terms of a Will, the money that a spouse believe they can count on may not be passed to the surviving spouse.
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How much is your home worth? In some cases, a reverse mortgage may be the answer to keeping your home while living off the equity.  

If you subtract how much you own on credit cards, Lines of Credit, car loans, and home loans from your total assets, you will have your Net Worth.  That is how much you have to spend today on your retirement.

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.

http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html

The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.



I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.

Part 1: Back in the Day

 
Workers working on a B-17 Flying Fortress at the Boeing aircraft plant in Seattle, Washington. 

I can remember a time when people started working for an employer at age18. They worked for that employer until they reached 65. The company rewarded them for their service with a gold watch, a guaranteed pension, and health insurance for life. For many Americans at that time, they relied on the employer provided pensions and Social Security benefits. But things have changed. It is not going to be your parents’ retirement program anymore.  Retiring in this new century is a mystery. Today many workers will need to rely on their own work-related and personal savings plus Social Security benefits.  These savings have to last longer because Americans are living longer, into their eighties and nineties. A longer life will also mean more medical care, some of which will not be covered by the federal Medicare Program.    

Most people don’t know that the whole retirement scene has changed and many American workers have no clue that they are about to walk into a life with no income to live on in relation to their needs. They will also find out that their local, state, and federal government will not be in a position to help them. 

According to a 2007 survey by the Employee Benefit Research Institute (EBRI) suggest that only 43% of Americans have tried to calculate how much they need to save for retirement.  I am writing this to you so that you do not stay up until 3:00 AM worrying about how you are going to afford to retire. I am going to tell you how to plan for retirement.  The earlier in life you start, the better off you will be at age 62 and beyond.

You should be putting away money for your retirement as soon as you start working. Most people cannot put money away for retirement until they have their home, car, and children’s college fund started. OK, I can relate to that.  But by age 50 you should be placing retirement planning as your number one priority.

Your time line will look something like this;

1. At age 50, you will begin catching up with retirement contributions. People over 50 can add an extra amount to 401(k) and other retirement accounts.

2. At age 59.5, No more tax penalties on early withdrawals from retirement accounts. Leaving money in your account means that you have more time for your retirement money to grow.

3. At age 62, this is the minimum age to receive Social Security benefits. If you can delay getting these benefits then you can receive bigger monthly benefit later in life.

4. At age 65, you are eligible for Medicare.

5. At age 66, you are eligible for full Social Security benefits if born between 1943 and 1954.

6. At age 70.5, you must start taking minimum withdraws from most retirement accounts. If not, you may be charged a heavy tax penalty.      

According to statistics, the average American male can count on living past 65 years old for another 16 years. For woman, living after 65 year old, they last another 19 years.

You start by trying to figure out your financial future. 51% of people who tried to figure out their financial future ended up changing their retirement savings plans.

This is the beginning of a 3 part series on how to prepare for retirement. You may want to take notes because I am going to give you information so that you can do personal research into your own retirement situation.

A Special Note for all my reader’s around the world!  

Hi my loyal readers around the world. I just finished making my final plans of my life. I will be retiring in a few short years and moving into my luxury retirement home. I will spend most of my time getting my seven year old grandson ready for the 2028 Olympics. I have no idea what my younger grandson is going to do. As of now, I would say it has something to do with electrical engineering because at 1 years old, he knew how to operate an IPad. But whatever it is, I will be around to lend assistance to his education.


My plans also involves my readers. I am starting an online stock club design to give my loyal readers as much as one million dollars, maybe more depending on when you start my plans. That money will be to remember me by.


Please read the blog below and follow my instructions if you want a chance to get one million dollars.
http://bondinvestments.blogspot.com/2012/06/how-would-you-like-to-have-over-one.html
The younger you are; 35 and below, the greater the chance of getting over one million dollars. If you are starting at 60 years old, chances are you will only make it to $100,000.



I started out at age 23 and spent a lot of time laid off and giving money away to my children for cars. I bought 3 homes. One home was paid off in full. The other I bought in a partnership paid in cash. All my cars since 1971 were the current year and I have not had a car note since 1983. I even gave two girlfriends a car each. That is why I don’t have a million dollars today. But if you become one of my “Greedy Friends” I am sure with my instructions, you can get that million.

What is Your ChexSystems Consumer Report?

In most countries, the government keeps records on people. In the United States, people keep records on you as well as the government. Did you know that your bank reports information on you? This information can lead to you being dismissed from your job or being turn down for one. On place they report to are the credit unions such as Transunion. That is for reporting that you have good or bad credit.

ChexSystems is the company that keeps track of your bank checking activity. If I were you, I would order a free copy of this report today and see what they are saying about you.
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ChexSystems, Inc. provides account verification services to its financial institution members to aid them in identifying account applicants who may have a history of account mishandling (for example, people whose accounts were overdrawn and then closed by them or their bank).

You can order a report to learn what information, if any, is listed in your consumer file at ChexSystems. If you have been denied an account from a bank or credit union, and ChexSystems was used in the decision process, this information will help you understand what may have contributed to that decision.

Under the Fair and Accurate Credit Transaction Act (FACTA) amendments to the federal Fair Credit Reporting Act (FCRA), you are entitled to a free copy of your consumer report, at your request, once every 12 months. Each report submitted to ChexSystems remains on their files for five years, unless the source of the information requests its removal or ChexSystems becomes obligated to remove it under applicable law.

ChexSystems, Inc. is a consumer-reporting agency governed by the Federal Fair Credit Reporting Act (FCRA) and other laws. The Federal Trade Commission enforces the FCRA.

Here are the terms and Conditions;

• You may order only your own personal ChexSystems report.

• You understand that obtaining another person's consumer report is a violation of federal law punishable by fines and imprisonment.

YOU AGREE TO PROVIDE YOUR ACCURATE IDENTIFYING INFORMATION AND UNDERSTAND THAT CHEXSYSTEMS MAY ACCESS, STORE, AND USE THIS INFORMATION TO THE EXTENT PERMITTED BY LAW.

To request a free copy of your ChexSystems report, click below.

https://www.consumerdebit.com/consumerinfo/us/en/chexsystems/report/index.htm

Here are somethings to keep in mind about this report.


Let’s say your account was paid and you find that the problem was not removed from your report. Why not?

A reporting member is under no obligation to remove an accurate report of account mishandling due to payment of monies owed. However, the member is obligated to update the report with a paid in full or settled in full date when applicable.

You may wonder why my consumer report only shows the last 4 digits of my Social Security number, Driver's License number and/or account number. This information is masked to protect the privacy of your personal information. If you would like to receive a copy of your report with unmasked data, please submit your request in writing, with a clear indication of what information you would like to receive unmasked.

You have your report and you see something wrong. Now how do you dispute this information? ChexSystems will reinvestigate any item listed in your consumer report that you believe may be inaccurate or incomplete. Please select the following link to obtain information about how to submit your dispute. If you believe the information listed on your report under Driver’s License Verification is incorrect, please refer to State DMV Contact Information. These instructions are on your report. We ask for this information to ensure that we make a complete and accurate search and are able to identify all information that may pertain to you.

ChexSystems neither approves nor declines accounts. The decision depends on the policies of the institution you attempt to do business with. You may be entitled to add a brief statement to your consumer file describing the nature of your dispute of the information.

So you want to get a copy of your spouse’s report!


ChexSystems is required by law to deal directly with the individual to whom the information pertains. They strictly adhere to this to protect consumer privacy. To discuss the information with anyone else, they must receive a notarized Power of Attorney or specific written instructions, signed by the consumer whose information is being requested, authorizing them to disclose the information to the person named in the Power of Attorney.

Who has access to your consumer file?


ChexSystems is governed by the federal Fair Credit Reporting Act (FCRA). This consumer protection legislation is designed to ensure that the gathering and sharing of consumer information is done accurately, fairly, and with respect for the consumer's right to privacy. You can request a copy of your consumer report at any time. In accordance with the FCRA, your consumer report can only be disclosed to others having a permissible purpose (legal right) for that information. Examples of legitimate requests include:

• According to your written instructions

• A business transaction initiated by you

• Pursuant to a court order or federal grand jury subpoena

• Use of information for employment purposes, with your written permission

• Your application for a license or other benefit granted by the government, when consideration of financial responsibility is required by law

• A child support determination, under certain circumstances.








Teaching Financial Independence

                        My Daughter Stephanie when she attended Central Pennsylvania College

So your child is a high school senior and is going off to college next year. That is great that you are paying for their college experience. Now I have a question for you? Are you paying to give them a good start in the business world or are you paying for one big party? Some children have a good idea why they are going to college. However some think that they are going on a big adventure on your dime. Many don’t have a clue when it comes to budgeting, how to use checking/savings accounts, or how to use credit cards. 
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Many are shocked when they find out how much things cost.  In college many first find out how much taxes comes out of their small paychecks. So you better prepare them for what they have to deal with next year in college. 
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Help your child understand their personal financial situation.
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1.     After each semester, check your child’s grades before paying for the next semester. You don’t want to pay for 4 to 6 years of schooling just to find out that they never attended class. You be surprise how many parents I talked to, that worked two jobs just to put their children through college, find out that they never attended. Can you sing “Maggie”? In the end, they found out that all they did was pay for them to go to all night parties and play on the beach all day. 
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Some parents remortgaged their homes and practically told their children to have fun on the house. I can hear you now, “Not my good little child!” I want to see your face as your Home Line of Credit drives off to college and does not return. 
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2.     Set spending priorities for them and stick to them. Many children do not have experience managing their money. They have no idea how much living expenses are. Many think “so what! When I need money I will just go ask Mom or dad for it.” Your job is to teach them how to live independently. It is not to teach them to be dependent on you. In the very beginning, create a budget together with them. 

Start by discussing practical living costs with them. If they live in a dorm, let them know how much it cost. If they lives in an apartment, let them know how much it cost in rent, utilities, phone, internet, cable, and any other expenses. Make sure they know what bills they are responsible for and when they are due.
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3.     Teach your children checking and savings responsibilities early. Take them to a bank on campus and have them open an automatic checking/savings account. If you can, use a bank that has no ATM fees or has ATM access near campus to avoid fees. Show them the basics of maintaining a checking account register and reviewing a statement. With online banking, you both can monitor their account regularly. Show your child how to set up and use automatic bill paying whenever you can. 
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Your children will probably go on spring break with their friends so show them how to save up the money so that they can go without coming to you to foot the bill. Remember college is for education including financial education. It is not a vacation finance by you the parents.  Give your child a bi-weekly or monthly draw from their account rather than a large lump sum. It is easier to manage. 

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4.     Use a credit card only when absolutely necessary, such as for emergency roadside assistance. This is where most children do what they can do to destroy their future before they get out of college. Most businesses today will not hire you if you have several DUIs, criminal record, or have a bad credit history. You can be at the top of your class and come from the best college but if you have a bad credit rating, corporations will not hire you.  Make sure you tell your children this. 

Help them shop for the best credit card. Shop for a card that matches the needs of your child. Show them how important it is to create a high credit rating.   
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5.     Buy used books and keep them in good shape to resell. Your child can
reduce the cost of books for college by buying used books and selling them.
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6.     Take advantage of an on-campus meal plan. Colleges and Universities have meal programs. These programs may be easier to manage in your budget and more nutritionist than paying for junk food from fast food businesses. 
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7.     Use monthly discounted transportation passes, if available.  Most cities have discount transportation for students. Instead of using a car that is expensive to operate, use public transportation.

Diablo Valley College in Pleasant Hill, California

Also keep in mind that going to a local community college then going on to a local 4 year college or university is the least expensive way for your children to get an education. That is because they will still be living at home.  Here is where you have to decide, what is more important, a low budget education or a college living experience?