Money is emotional

Pathfinder operates on 10 principles originating from books “Money Mastery” by Alan Williams and Peter Jeppson and “The Richest man of Babylon” by George Clason as well as information I’ve learned over the years. Principle No. 1: money is emotional. When we make and spend money, it’s an emotional event. When we get a raise, we celebrate. When we get laid off, our routine and activities are often derailed because of it. Most of our spending patterns are emotional. For example, we don’t plan ahead of time to buy a car. Daily, we’re barraged with ads and commercials that tug at our emotions. Even if you deserve the new item and you’ve been working hard, you still bought the item emotionally. The point: If we can acknowledge money is emotional, we can then plan and master its power over us. We’ll never change the fact that money is emotional, but we can change our spending behavior. Student testimonials say tracking their spending helps them realize how much they actually spend. Tips from those who have curbed their spending are helpful: >Paying with cash helps some people spend less (compared to paying with credit cards or by check) >Shop with a plan or list and stick to it > Get an accountability partner, someone who you can share what you purchased during the week. >Instead of ordering two full meals when they go out to dinner with someone (taking home leftovers), split a meal and order an appetizer or dessert instead.

Bankrupt but still receiving credit card offers

Those who have bad credit or who have recently filed for bankruptcy may be surprised to find that they are still receiving numerous credit card offers. This has become a well known issue, and it is apparent that banks either don't know or don't care that the people they are sending offers to already have bad credit. In most cases, banks and credit card companies don't take the time to research people they send offers to. While most credit card companies are partial to consumers who have excellent credit, some companies have programs that are directed towards those who have little or no credit. Despite this, credit card companies should still not be sending offers to consumers who have filed for bankruptcy or defaulted on their credit cards in the past. In most cases, banks are either intentionally sending offers or just don't know about the credit history of those they mail offers to. Traditionally, credit card companies have used a business strategy that is very profitable. They would charge consumers 19% interest on the money that was borrowed, and they would also charge an annual fee that could be a high as $20bine this with the money the received from retailers who accepted their cards, and you are looking at an industry which generates billions of dollars each year. During this time, banks were cautious about who they gave cards to, because they couldn't afford to suffer heavy losses. By the 1990s, banks begin to have access to detailed credit information about their customers. Institutions like Equifax, TransUnion, and Experian allowed banks to make specific decisions about customers who applied for credit cards. With this technology, you have to wander why credit card companies would send offers to anyone, including those who have filed for bankruptcy. The answer is because it is cheaper to mass mail cards to thousands of consumers rather than look for specific individuals who qualify. It is best for those who have bad credit to avoid applying for these offers. If you get denied, you can be hurt even more, and you should want to repair you credit. If you want to avoid all credit cards, it may be a good idea to look at prepaid debit cards, which can be used like credit cards without the problems often seen with them. The use of credit cards is important in the US, and if you can't apply for one there will always be other options.

Develop a savings plan

There are so many things that we teach our children that keep them on the right path throughout life. How to save money is one of the most important lessons that parents teach their children. Teach your children about finances by opening an account and setting money aside. They'll learn about patience, interest and saving. It's easy to forget, or ignore, the need to save. We all too often are saying that there isn't enough money to put into savings and we'll do it later. But if there isn't enough money to put into savings, is there enough money if there is an emergency. By having a savings plan, you can keep an emergency from destroying your finances. Savings can be anything from a simple savings account to bonds and retirement plans. You may be saving for emergencies, college, a new home or for retirement. Or even for all of the above! No matter what your goal is, there is a savings plan that will fit your needs. Not all types of savings are going to work for you. You have to find the plan that fits your own personal financial needs. What makes saving money just a wonderful experience is interest. You aren't just saving your money, your actually letting it grow. Your money is making more money. How does this work? When you put money in a savings account, certificate of deposit (CD) or money market account, you are basically lending the money to the bank. The bank will use your money to make loans to other customers. They are borrowing money from you and paying you interest, while someone pays them interest on the money they have borrowed from the bank. Banks charge higher interest rates on loans so that they can pay your interest, plus make their own profits. Interest can seem like a complicated math problem, but it isn't hard to understand. Most banks will talk about both "rate" and "yield." For example, a $10,000 CD with a 5% annual interest rate (APR) will also have an annual percentage yield number (APY) that is a higher number. The difference between the APR and the APY depends on how frequently the interest is paid, and in what form. If the interest is paid annually at a rate of 5%, the $10,000 investment with earn $500. Simply multiply the investment amount by the APR to determine the interest paid. When the interest is paid annually, the rate and yield are the same. The yield goes up as interest is paid more frequently. The interest begins to earn interest along with the original investment. When the 5% CD is paid twice a year, in six months the interest payment is $250. We figure this by multiplying the original investment by the interest rate for half a year, or 2.5%. The $250 in interest will earn $6.25 in interest over the next six months, adding $256.25 at the next six month markpound interest is starting to take over. In the first scenario, the CD earned $500 in interest in one year. The rate and yield is at 5%. The second CD earned $506.25. The rate is still at 5%, but the yield has increased to 5.06%. It may not seem like a lot, but over time it keeps building up. When shopping around for savings plans, look at both rates and yields.

Margin trading dangers highlighted by real cases

Margin Trading Dangers Highlighted by Real Cases Several recent high profile company share price collapses on the Australian Stock Exchange highlight the danger posed to ordinary shareholders from large scale margin trading of shares by directors of listed firms. So dramatic have been the consequences that no equities investor can afford to ignore the lessons. Significant shareholdings by directors in a listed company have traditionally been viewed favourably as an alignment of executives' and other private shareholders' interests, but this ideal can be dramatically compromised in cases where those large shareholdings have been aggregated through, and remain security for, margin loans. Directors leveraging into positions well beyond their capacity to meet margin calls may create a known and acceptable risk for themselves but their actions inescapably also create a significant but hidden and usually unsuspected risk for other shareholders. On exposure in a falling market, the consequences can be devastating to all concerned. Basically margin trading involves borrowing through a brokerage to purchase shares on deposit with the shares purchased being held as collateral for the loan. As with all leveraged investments the potential for both amplified profits and losses exists, but particular additional risks attach to margin trading of shares. Depending on the particular share being purchased and subject to other margin account criteria such as maintenance of a minimum balance, a private investor may be able to borrow, say, 50 loan to collateral value must be maintained at all times - hence a 50, owing to the director's perceived influence on the company and the scale of business such a purchase will bring to the margin broker. Thus the director's margin is only 20 of the purchase price of one million $10 shares through a margin broker. Borrowings amount to $8 million with $2 million "equity" being put up by the director to complete the $10 million purchase. Furthermore, the margin trading agreement states that a minimum 80 to a market value of $9 per share will reduce the director's holding of 1 million shares to a value of $9 million, but still carrying the $8 million debt and therefore breaching the 80 loss) will then be served with a "margin call" for a further $1 million to re-establish the original loan/asset ratio. Failure to meet the call will invoke conditions allowing the margin broker to sell some of the holding to re-establish the required 80 in the $10 share price to $8 would see the director's initial $2 million equity wiped out altogether and, in the absence of any margin call being met, the broker would very likely dump the entire holding at best price to minimise losses. Apart from sheer pressure of volume, attendant negative publicity through stock exchange disclosure requirements would probably see the company's share price devastated even though the company may remain as a viable enterprise. Any shortfall in recovery by the broker through sale of shares held as collateral would remain a liability against the director. In this situation private shareholders become unsuspecting victims of a risk they didn't even know existed. This scenario is far from academic. In a number of now salient Australian cases, dumping of directors', executives' and related party holdings have indeed seen share prices slashed, stock exchange listings suspended, directors and executives lose their jobs with their entire company shareholdings wiped out. Residual personal liabilities are suspected of being huge in some cases. Consequently, private investors have also suffered massive write downs in the value of their own holdings. Needless to say, any company subject to such a fate will find it nearly impossible to raise fresh equity capital and will pay heavily for debt - particularly in today's credit crunched world. Assuming the enterprise can remain solvent, aggressive sale of assets becomes the most logical choice to fund a restructuring program. Private investors engaged in margin trading the same company may well suffer a similar fate to the directors, albeit without a loss of employment. A more detailed case study is available through the resource link. As the case study points out, effects of a major margin call default can be widespread and devastating, seriously affecting even secured investors in related companies. So how should the private investor guard against such an unwelcome outcome to a seemingly quite reasonable investment? As we have discussed, potentially damaging margin trading by directors and executives can be difficult to detect, but some clues may be available through stock exchange announcements. Better still, just ask the Company Chairman through private correspondence or at the Shareholder's Annual General Meetingpanies able to report a clean slate in respect of such activities are likely to be happy to do so. Investigate the others. In one recent case it turns out that not only were directors purchasing shares on margin for their own accounts but were also margin trading other listed shares with shareholders' funds in the Company's name. Needless to say the Company and its shareholders soon lost many millions of dollars once markets suffered a modest reversal. For the private investor, good advice is to avoid margin trading through a margin broker altogether. This, however, does not completely exclude the leveraged purchase of shares which remains a valid investment strategy under certain circumstances. It does, however, place vital separation between financier, sharebroker and shareholder. In one recent Australian margin trading case, some private investors reportedly had their entire nominee-held share portfolios seized and sold to recompense the margin financier, a major bank. When the margin brokerage house collapsed, private investors were left as unsecured creditors of the failed broker. Prospects of recovery from this position would be dim indeed. At a time when ever more complex means of trading traditional share markets are being developed, such as options, short selling, stock borrowing and margin trading, investors need to recognise that new opportunities for exceptional profit also bring exceptional new risks. Some may well be hidden behind a cloak of "immateriality" even though potential consequences could be disastrous. In summary, private investors can minimise exposure to margin trading risk by taking a few precautions: " Treat very fast growing companies with caution. These companies and their high profile directors seem most susceptible to the allure of big rewards offered by serious margin trading while overlooking the exceptional risks posed to both themselves and others. " Examine available stock exchange announcements and news to unearth margin trading practices relating to major shareholdings, including those of directors, executives and related parties. These may be difficult to find and interpret, but they do exist. " Simply ask the Company Chairman if Directors and Executives or even the Company itself, is involved in margin trading the company's own shares - if the answer is yes, stay away. " Also ask if shareholders' funds are being used to margin trade any other company's shares - hidden danger lurks there too. " Avoid personal use of margin share trading accounts altogether - borrow elsewhere if you intend to use leverage for share purchases. " Ensure any shares you purchase on leverage are registered in your own name to avoid the possibility of seizure by a higher ranking creditor should your sharebroker's business collapse. Eventually disclosure of margin trading by company directors, executives and related parties may become mandatory under stock exchange listing rules, but until that time equity investors will need to include "margin trading risk" as yet another factor for their own determination.

Cash advance industry standards

Cash advance industry standards have been defined by the Community Financial Services Association, or CFSA, an appropriate task for this industry trade association considering the explosive growth of the cash advance industry. Standards are listed on CFSA’s website which has been designed as a one-stop source for all types of cash advance issues. The site is so helpful that it’s visited regularly by lenders as well as the general public. Among its many services, by far the most important is the establishment of industry standards for cash advance companies, also known as payday loan lenders. Before a cash advance business can become a member of this respected organization, the business operator has to agree to abide by the association’s Best Practices. It’s not an exhaustive list; in fact the Best Practices consists of only 11 core standards. Sampling of Cash Advance Industry Standards One of the cash advance industry standards states that, “A member will not advertise the payday advance service in any false, misleading or deceptive manner.” A simple standard, but it’s one that offers the consumer much assurance. With competition so fierce, it’s tempting to make all sorts of promises. When you work with members of CFSA, however, you don’t have to worry about the company promising you one thing and then ending up with something different than what you were led to expect. Another of the important cash advance industry standards requires that members fully disclose all aspects of the cash advance including the service fee that is being charged. Besides mentioning the fee scale, members of the CFSA must convert their fees into an Annual Percentage Rate (APR). Important again so that borrowers know exactly how much the cash advance is going to cost. The Best Practices also ensure that members abide by each state’s laws as they pertain to loan rollovers, or extensions. Some states prohibit rolling over a cash advance loan, while other states limit the number of times the borrower can rollover the advance. In states where they’re allowed, a rollover is an option in the event that the borrower does not have sufficient funds to repay the cash advance on the due date. That cash advance can be rolled over, along with a new fee, until the borrower’s next pay date. One of the more impressive cash advance industry standards is the one in which members of CFSA agree to self-enforce the industry. Basically, this means members will voluntarily report all known violations of the Best Practices Guidelines. Each agrees to operate a toll-free phone number for reporting such violations. Several more cash advance industry standards are outlined in CFSA’s Best Practices including an important one regarding the collections process. From time to time borrowers default on their cash advance obligations. When this happens, members promise to proceed with collection activities professionally and in a non-threatening manner. These cash advance industry standards were designed to protect you, the consumer. Make sure that you’re doing business with only those businesses that promise to uphold these cash advance industry standards.

Credit repair charging orders in the county court

DEFINITION OF A CHARGING ORDER Charging orders are filed at the courts by a creditor in order to secure a money judgement ordering the debtor to repay what he owes. Whenever a charging order is filed, it automatically acts as a safeguard for the debt. That is to say, it becomes a “security” for the debt, much as a mortgage acts as a security for the house or the land. Before a charging order can be issued, a hearing must take place in court. There are several ways to can prevent a charging order from coming into being. In this report, you will find a description of country court procedures on charging orders, and the steps you can take when creditors file a petition to serve you with a charging order after suing you in High Court. This report will tell you what to do if you suspect a charging order has been filed against you and you are unsure of the next move you should make. A CREDITOR CAN PETITION THE COURTS FOR A CHARGING ORDER WHEN… There are two instances when a creditor can request the court to issue a charging order. One of these is when they already have a county court decision against the you, the debtor, where you are compelled by the court to pay the debt in what is known as a “forthwith” judgement. This means payment of the debt must be made in full straight away, or at a particular date set by the court. Another case is when there is a previous judgement against you for payment of the debt in instalments, and you have defaulted on one or more of them. However, if you are currently paying your debt in instalments as ordered by the court, and you have not missed a single one, the court cannot issue a charging order. This is based on the decision in the 1997 landmark case of Mercantile Credit Co Ltd versus Ellis involving debt payments and charging orders. THE PROCEDURE FOR FILING A CHARGING ORDER APPLICATION There are two stages in the filing of an application for a charging order: FIRST STAGE: THE INTERIM CHARGING ORDER Whenever a creditor applies for the issuance of a charging order against you, the court shall first establish that you partly own or have an interest in the property that is the subject of the charging order. After ascertaining this fact, the court shall release an interim charging order. Please note that this is NOT the final charging order itself. The court can give this order, with a duplicate sent to you, even without a hearing. A date is then set for a full hearing after the interim order has been issued. After approximately 21 days, the District Judge should be able to set the hearing to decide on the the issue of whether to make the interim charging order permanent or final. This hearing normally takes place within the private rooms of the District Judge. Apart from this, the Land Registry will be furnished with a copy of the interim charging order against you. This will serve as a “caution” on your property preventing you from disposing of it prior to the hearing. The Land Registry will likewise inform you of this “caution” in writing. SECOND STAGE: WHEN THE CHARGING ORDER BECOMES FINAL At this point, a hearing is set before the District Judge, and the court is tasked to decide whether or not the interim charging order should be made final on the property in question. This is also known as the final charging order. Any objections you might have against the final charging order should be set in writing and sent to both the court and the creditor at least 7 days before the hearing. The objection letter must be sent through registered mail and should state all of your reasons and present evidence of why a final charging order should not be issued against you and your property. Sending a letter of objection to the creditor and the courts will allow your explanation to be taken into consideration during the hearing presided over by the District Judge. It is important that you attend the hearing, even if you have sent a written objection. It is even more important for you to be present if you have not submitted any written evidence at all. The court has the discretion to withhold the charging order, which is why it is necessary for you to serve notice that you will be attending the hearing. If the hearing date is inconvenient for you, you must immediately inform the court so another date can be set. Absenting yourself from the hearing may have a negative impact on your case, as the court can rule in favour of the creditor by making the charging order final and irrevocable. If the reason you cannot attend a hearing is because it has been filed in another court, you have every right to request that it be heard at a court within your area. There is a form required for this called the N244 application which, for a fee, allows you to fill out your reasons for the transfer, be it the travel time involved, the considerable distance, or the costs you are likely to incur for childcare. HALTING A CHARGING ORDER IN ITS TRACKS The court has the responsibility to decide whether or not to issue the charging order. Based on The Charging Orders Act of 1979, there are several considerations that the court has to look into before making its final decision. Among these conditions are: 1.) The “debtor's” personal situation The court has to take into consideration that you may have other creditors whose rights may be prejudiced with the issuance of a charging order. This means the court will have to look into your personal circumstances - your other outstanding debts, your mortgage, any equity on your house, and if you have sole or joint ownership of your home – before making its decision. Assuming you have quite a number of outstanding debts with several creditors, issuing a charging order in favour of one creditor will unduly prejudice the rights of the others. It may be a good idea to show evidence that you already have a payment schedule in place with your other creditors to forestall the charging order from being released. It would be an advantage on your part to present a summary of your debts, including the amount of each, and whether some of the creditors have held out on interest charges. In like manner, one of the requirements of the creditor in the filing of a charging order is to include a list of all the other creditors that he is aware you have. Although creditors may be furnished a copy of the interim order to give them a chance to protest its issuance during the hearing, the court is not obligated to supply them with one. This means that your other creditors are unlikely to be aware of the interim order hearing. If you feel that one or more of them may be “unduly prejudiced” by the charging order, you may include this argument in your written objections, as well. Loan security can also be used as an argument. Whether or not your creditor offered you a secured or an unsecured loan may have an impact on the rights of your other unsecured creditors if a charging order is issued. You can also request the court for an instalment order to enable you to pay the debt in affordable monthly instalments. This is one other way the court can order as settlement of the debt. If you are employed, you can petition the court to have the payments taken directly from your salary, as long as your employment is not put at risk. Examine the type of debt that you have and determine if it has been made under the Consumer Credit Act. This may be a factor you can use in filing an application for a Time Order, which can be more advantageous on your part compared to a charging order. The court may consider looking into this to amend your monthly payment schedule and stretch out the paying period. Part of your argument may also include appealing for an administration order instead of a charging order. This is only applicable if the sum of your debts to all your creditors comes to less than Ј5,000.00 If bankruptcy is just around the corner, point out that your other creditors will be disadvantaged by a charging order which will secure debt payment for only one creditor. Your mortgage can also be used as a condition to parry the creditor’s application for a charging order. This is particularly true if you have negative equity, that is to say, your home is worth less than your mortgage and would not satisfy the your debt to the creditor even if it is sold off or placed on auction. On the other hand, if your debt is a paltry sum compared to the market value or equity of your home, you can use this argument to emphasize the unfairness of a charging order. Call attention to the difficult family situation that may arise if your home is sold off to pay your debt. The debt may singularly be in your name, but your home is owned jointly by you and your partner, which means that the issuance of a charging order would prejudice your family’s rights, as well. 2.) Serious ailments or disability in the family If there is anyone in your immediate family who is need of special medical care, or who is terminally ill, point out to the court that disposing of your home to pay off your creditor will prejudice the rights of these disadvantaged family members. There may be a possibility that all the arguments you use will find no grounds and the court decides to issue a final charging order. You may still petition the court not to have your house sold off, as long as you satisfy the debt by paying monthly instalments. Should the court not take into account this request at the hearing, secure an application called N245 which will allow you to pay your debt in instalments. SINGULAR DEBT, JOINTLY OWNED HOME The situation in which you have a debt solely under your name while your home is owned jointly by you and another person, can also be used to your advantage. State this fact in your written argument and bring it forward during the hearing, as well. The co-owner of your home must also be furnished with a copy of the interim order to give them a chance to present their own objections during the hearing. Some of the considerations that may be looked into include: 1.) Determining who put down the deposit to purchase the home 2.) Identifying the person who pays the mortgage instalments 3.) Presence of minor children – you can petition the court to amend the conditions of the charging order to state that the home cannot be sold until the children have reached legal adult age. To add ground to this argument, have your home’s co-owner submit their own written objections to the court at least 7 days before date of the hearing. In the end, if the court does decide to issue a charging order, then it can only be enforced against your share of the property. WHERE THERE IS A PREVIOUS INSTALMENT ORDER AND YOU ARE NOT IN DEFAULT In a 1987 landmark case of Mercantile Credit Co Ltd vs. Ellis, it was decided that if a debtor pays his monthly instalments on time and does not miss a single one, the court should not issue a charging order. Charging orders should only be made if the debtor has already been ordered by the court to pay in monthly instalments or the whole amount in a “forthwith” judgement, but fails to do so. If you find yourself in the situation where you were already issued an instalment order and are up-to-date in making payments, remember to bring up this landmark case during the hearing. SEPARATION OR DIVORCE When you are in the middle of divorce proceedings, which may include division of the home or property, it will be a good idea to consult your solicitor for legal advice. Depending on which stage you are at in the divorce proceedings, you may be able to halt the issuance of a charging order. INTEREST A creditor may actually include extra interest for the debt provided he files his claim for a charging order with the county court. However, interest cannot be added for the following conditions: 1.) The debt has been secured under the Consumer Credit Act. Debts of this type include ordinary credit agreements and bank overdrafts. 2.) Debt comes to a total of only Ј5,000, even if not covered by the Consumer Credit Act. If the two conditions stated above are not present and the debt is over Ј5,000, the court may set the interest based on the standard rate. Interest may also be charged only after the county court’s final decision depending on the creditor’s arguments.