Tag: finance tips

Personal Finance for Seniors Be Careful of Investment Scams

Studies have shown senior citizens are frequently the target of various investment scams, with many losing money and property to dishonest and predatory operators. The good news is that armed with the following information – seniors will know what to look for and can identify and avoid such scams.

Here is a list of the common scams that target the elderly, and how each operates.

Pyramid schemes
Investment seminars
“Compensation” Scams
Equipment leases
Gift annuities

Pyramid schemes

An old favorite for the scamsters, Pyramid schemes assure high returns to investors, but the only people who systematically get rich from these schemes are the promoters themselves. These investment opportunities generally promise large profits based on the investors’ ability to enlist other people to join the programs. Because the scheme uses the money from new investors to make payments to the old ones, some initial investors make money, but sooner or later, these schemes collapse and most of the investors lose all their money. Pyramid schemes often have no other source of revenue except for money put in by the new investors.

Investment seminars

Investment seminars do help to make money, but the ones who are consistently laughing their way to the bank are the advice peddlers. They are the ones making money from the admission charges, books, posters and audiotapes/ CDs sales. You should be very wary whenever you are offered any such get-rich-quick schemes.

“Compensation” Scams

These scams bring to mind the old adage, “Fool me once, shame on you; fool me twice, shame on me”. Investment scam victims often let the scamsters take them for a ride repeatedly. This is because the scammers promise to compensate the previous losses and bring in fresh gains. After losing some funds, seniors who have been duped once often go along with the new schemes with the hope of recouping their losses. Instead, they compound the damage and let the con artists take away more from their savings.

Equipment leases

It is true that most of the equipment lease deals are genuine, but there are quite a few tricksters operating who try to take advantage of the seniors by selling interests in ATMs, pay phones and Internet kiosks. What generally happens in such a scam is that companies sell equipment through intermediaries and then agree to lease back the equipment for a fee. Investors are promised huge profits with no risk. But the unrealistically high commissions and returns that they claim to pay are not feasible, and would doom any project.

Gift annuities

Gift annuities are basically cash/ property transfers to charitable organizations. A charitable gift annuity is just like a normal fixed annuity – except that a charity benefits from your investment. There is no problem with gift annuities per se, but many small organizations have jumped into the fray, promising high returns but giving only vague information about themselves. These are generally designed to relieve you of your funds or property, and it’s best to steer clear of such schemes.

While there is no shortage of con artists, most of them operate in very predictive ways, as outlined above. Seniors citizens can easily recognize these scams from the descriptions and methodologies mentioned here, and steer clear of the scammers before they are taken advantage of.

Use These Tips To Avoid Personal Finance Mistakes

You are interested in learning more about personal finance. With so much information available on the Internet, it is hard to narrow down what is legitimate and what is trash. In this article we will provide you with high quality tips and tricks that may just work for you.

Have a set amount of funds automatically transferred from your checking to your savings account every month. This is a great technique which forces you to put aside a little bit of money each month. It can also help you save for a future event, like a vacation or wedding.

Make concrete financial plans to ensure your personal finances are managed effectively. Having a concrete plan is effective as a motivational tool, because it gives you a specific reason to work harder or curtail other forms of spending.

A great tip for anyone interested in finding extra money each month to put toward existing debts is to make a habit each day of emptying your pockets or purse of change received during cash transactions. It may seem like a small thing, but you will be amazed by how much money actually accumulates over time, and you may find yourself paying down that stubborn credit card balance faster than you ever thought possible.

Find out what your credit score is. It will cost you money to get your credit score from the big three agencies but the knowledge is invaluable. Knowing your credit score will save you money in buying a car, refinancing your home, even buying life insurance. Make sure to get a new one on a yearly basis to stay up to date.

To maximize the money in your wallet, try not to shop on an empty stomach. When you are hungry, you are more prone to an impulse purchase, given your higher levels of stress and anxiety. Additionally, you will usually spend money on fast food, which will add up over time.

Smoking and drinking are two things that you will want to avoid if you want to put yourself in the best position financially. These habits not only hurt your health, but can take a great toll on your wallet as well. Take the steps necessary to reduce or quit smoking and drinking.

In regards to your personal finances, one of the worst things that you can do is gamble a lot of money at a casino. Casinos are geared to have an advantage, as you can lose your life savings on a bad day. If you do go to the casino, bring a couple hundred dollars in and leave your credit and debit cards behind.

Make sure you’re not overspending on luxury items that you can’t actually afford. The most common problem people have is that they’re spending more than they’re bringing in. If you don’t have the money for a luxury item, don’t buy it. Instead of putting in on the credit card, put a bit of money aside toward the item each week. It’ll save you more in the long run.

If you are planning to adopt a child, do it this year. The government has created a larger tax break for those people who choose to adopt. It is not just for special cases, but all adoptions. This tax break can even be refunded if you don’t owe any taxes.

Signing up for direct deposits eliminates the hassle of making a special trip to the bank every payday. It also helps you to avoid lost or stolen paychecks and will reduce impulse purchases that are made between the time your check is cashed and the time that it is deposited into your account.

If you are saving for your retirement it is recommended that you save 10-15% of your annual income when your are just starting out. Obviously, if you are older you will need to save more. You also need to save more if you will not retire with an mortgage free home. The sooner you get started the more you will have when you need it most.

Get a savings account with a higher yield. The idea is to be liquid and safe while receiving some interest. Chances are that you’ll get better rates from online banks, so start searching the web for the higher-yielding, FDIC-insured savings accounts. Bankrate.com may help. You will periodically transfer money from your emergency savings or checking into this account.

Be aware of your family’s bills and income. This is especially important for women, as they often leave the financial management up to their husbands. If your spouse should pass away, or even just become incapacitated for a time by an illness, this will be extremely important. You need to know what money you have coming in and where it is going.

Use your debit card instead of writing a check. Paper checks cost money. Even when you mail order the cheapest variety, there is still a per-check cost that is not duplicated when you use your debit card. Do make sure however, that the merchant doesn’t charge you a fee for using a debit card.

Make sure you automate your payments instead of handling them manually if you really want to ensure you always know what’s going on. It’s more convenient to handle things with computers these days, and records are automatically saved and very easy for you to access and print out for safe keeping.

Set objectives for your money management. Rather than setting up one tremendous goal, such as “retire comfortably”, map out the steps you will need to take to get there. By establishing what you need to do and the order you need to do it in, you will be giving yourself a clear path to your goal as well as providing yourself with small opportunities for success along the way.

In summary, there is a lot of information on the Internet to sort through and determine what is legitimate. Hopefully you found this resource useful and learned something new about personal finance. With the tips that we provided and some self motivation, you should not be far off from being an expert.