by JR Rooney

What is the definition of debt?

Debt is something that is owed. An individual or business owing a debt is called a debtor. The entity to whom a debt is owed is called a creditor. Debt is used to borrow purchasing power with a promise to repay at some point in the future. Many businesses use debt as a part of their overall corporate finance strategy.

Types Of Debt

There are many types of debt obligations. They include but are not limited to mortgages, HELOC, bonds, credit cards and promissory notes. It is very common to borrow large sums for major purchases, such as a mortgage or car loan, and repay it with an agreed premium interest rate over time, or all at once at a later date (balloon payment).

The total amount of money outstanding is normally called a debt. The debt will increase via interest. In many systems of economics this effect is termed usury, in others, the term “usury” refers only to an excessive rate of interest, in excess of a reasonable profit for the risk accepted (think loan sharks).

Big organizations can issue debt in the form of securities, known as bonds. Each bond entitles the holder to interest and principal repayments. Bonds are traded in the bond markets, and depending on the rating are relatively safe investments.

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Tags: investing, stock market, wealth building

There are a lot of mortgages on the market and it can be an extremely difficult choice deciding which one is exactly right for you and your financial circumstances. Every single lender has many many different types of mortgage deals designed to suit every type of client so regardless of what type of mortgage client you are most lenders have a product to suit.

One type of mortgage that is offered to those looking to purchase their first home is a discount rate mortgage, where borrowers are offered a reduced interest rate on their loan for a set period of time. The interest rate typically stays reduced for a period of about one to three years, depending greatly on what the borrower would like to do.

Borrowers are getting a discount from this type of mortgage by paying low interest fees during their initial period, but will save more money overall when the discounted period is short. Once the discounted period ends, the borrower will have to pay the standard variable rate that is offered by the lender. With a variable rate mortgage, interest rates can frequently change and can cause monthly mortgage payments to increase or even decrease each month.

Re-mortgaging after the discounted period has ended is always a good option, but should always remember that some lenders do charge early repayment fees if mortgages are ended early that however not many lenders charge fees once the discount period has ended but is worth checking before you sign up for the deal in the first place. The main reason to refinance is to possible get another discounted deal for another set period of time and therefore save a bit more money.

Discount rate mortgages are very popular amongst young homeowners, since they are able to keep mortgage payments and interest fees low for the first couple of years, which as anyone who has got onto the property ladder for the first time will testify the more money they can save the better. The only problem is that many see themselves being able to afford a higher mortgage payment after the discount period has ended, and this does not always happen.

A lot of people who have arranged a discount rate mortgage find that they are in financial difficulties in the future as a result of not be able to pay the mortgage once the discount has finished and the mortgage has returned to the standard variable rate. These people can also find a re-mortgage is also difficult as rates may have increased and any deal on offer at that time may also be more than they can afford.

Discount mortgages are good for people getting on the property ladder and as such having a greater need for cash in the early years. That said even though the mortgage might be cheap at the beginning the mortgage will rise in the future and anyone not considering this is taking an enormous risk with their future.

When applying for a discounted rate mortgage, it is always important to know how much the mortgage payment will be after the introductory period has ended, and be able to afford the higher payments right off the bat. Hoping that you will get a raise or better job once the discount period has ended is not enough when applying for a discounted rate mortgage, because if you cannot afford the higher payments you can lose your home. Discounted rate mortgages are a great option for many looking to buy a home, but it is not the best option for everybody.

It is always important to save money and saving money at the beginning of any mortgage can never be far from anyones list of requirements. That said it is always important to take a long hard look at discount mortgages and particular the pitfalls of such a deal such as the variable rate and the time when the discount actually ends. This always means that getting a good mortgage broker is always the best advice so make sure you have one to hand when making this vital decision.

Tags: mutual funds, wealth building, banking

Buying penny stocks, although it can be highly profitable, can also be very risky. The amount of risk involved can be significantly lowered by thoroughly researching the stocks you are interested in, but the research can be very difficult and time consuming.

A new computerized system has finally been devised that uses cold, hard, mathematical analysis to greatly reduce the risks and increase the profitability of buying penny stocks, while eliminating most of the work involved. As you might have guessed, this technology comes at a rather steep price, but some creative minds have come up with a way to make it accessible to the small investor while making the process of buying penny stocks simple and easy for even the newest of penny stock traders.

Penny stock investing has big advantages when it comes to large, rapid returns on investment, and the fact that penny stocks are priced low enough for even very small investors to buy stocks and have the opportunity for a diversified portfolio. Because penny stocks have such low values, just a few cents change in the price of the stock can equate to a huge change percentage-wise, and potentially a huge profit to the investor, depending on the amount of the total investment, particularly in comparison to the profits possible with larger value stocks.

As an example, let’s say that you have $1000 you want to invest and you buy 10 shares of a stock selling at $100. If that stock goes up by $1 per share, you’ll have made $10. Now let’s look at a penny stock that you invest that same $1000 on 1000 shares selling initially for $1 each. If that stock increases by $1, you’ll have made $1000 – usually in the same or less time than it takes to make the $10 on the high-value stock!

Unfortunately, just as penny stock investing can provide very high profits very quickly, buying penny stocks can result in big losses quickly too. Besides the normal risks that occur just from normal market forces, penny stock investing is especially risky due to the relatively high rate of fraudulent practices by sellers of the stock. Corporations that issue penny stock are not required to submit financial statements to the SEC, so it can be hard to find good information that you can rely on when trying to evaluate the stock.

In some instances, hard-sell marketing tactics, such as email spam campaigns, paid promoters making cold calls, exaggerated press releases, and “boiler room” operations may be used to lure unwary investors into buying a stock to drive up the price and then the insiders suddenly sell off their stock at the inflated value, leaving the investors holding the bag as the price drops like a rock. As with any investment, the higher the potential return, the higher the risk, but in penny stocks, the relatively high potential for fraud drives the risk even higher than what is seen in other investments that are simply at the whim of market forces.

Until recently, buying penny stocks required a tremendous amount of research and evaluation of stocks to avoid scams and have a decent chance of getting a good return on investment. A prudent penny stock investor might need to spend hours of work just to evaluate one stock. Done right, this work would likely pay off, but the necessary time investment put the high profitability of penny stock investing out of the reach of casual part-time investors.

Recently, a penny stock buying robot, called “Marl” was created by computer programmers who also understood the intricacies of stock investing. Marl uses mathematical and statistical analysis of trends to predict stocks that will likely increase in value by large percentages. Marl has the obvious advantage that he can do in-depth analyses of many stocks in much less time than a human would take to study just one. Another big advantage of Marl is that he’s cold and calculating and maked his pics strictly on mathematical analysis – there’s no pesky emotion to get in the way of making sound investment decisions. Of course there’s no way to pick a winner every time, but Marl has a much better track record than any human and this greatly reduces the risk of penny stock investing.

The power of this system is amazing, and it has created vast fortunes for those fortunate enough to be able to afford the up-front $28,000 licensing fee that is charged for Marl. Obviously, this price tag puts Marl out of reach of the small investor, but there is an opportunity for small investors to also benefit from Marl. The inventors of Marl produce an extremely affordable e-newsletter with Marl’s top penny stock buy for each week. For new investors interested in buyng penny stocks, this might even be better than having their own license to Marl, as it cuts down the investment choices to just one stock per week, rather than having to choose from hundreds of options. This makes penny stock investing a very simple process for even novice investors.

Marl’s inventors have stated that they will be limiting the number of newletter subscribers that they allow, and the subscription option may not be available much longer. For the sake of small investors, hopefully they will reconsider and keep the subscriptions list open. For now though, small investors have a big opportunity for assistance in profitably buying penny stocks.

Tags: banking, mortgage, personal finance

A residual income is a highly desired commodity. The best type of residual income is free residual income. Getting free residual income has now become much easier due to the Internet.

What if you could make a realistic $200 to $2000 monthly in free residual income. Most people would jump at the chance. All you would have to do is exchange about 5 hours of your time weekly, and in a matter of a few months get that extra money to pay some of those nagging bills.

By using “paid to read email services”, you can aquire free residual income. This is made possible by the MLP program. Making money on the Internet is something you will be trained to do.

At MLP, they do not make crazy claims like, “Make $20,000 a week Online”. The ability to make a free residual income online is what they promise. This generally adds up to $200-$2000 monthly depending upon how hard you work.

Making your first $100 online is normally the toughest thing to do. The MLP program is designed to help you accomplish this task. Don’t chase after all those schemes and dreams that all over the Internet today.

Free residual income is being made today by literally thousands who use the MLM Program. It is a worldwide opportunity. Anybody can do this if they can read and have access to a computer. The paid to read email industry is part of the 12.5 Billion dollars being spent currently on Internet advertising. Why don’t you get your slice of this huge pie?

Making good use of your spare time to earn real extra money online you can take home every month is what MLP does for their members. Free programs can provide your first $100 online. Then without spending any extra out of pocket money, use that first $100 to expand your business.

Getting actual cash in your hands every month is much better than just dreaming about making thousands but not getting paid a single cent for all your efforts. It is now possible to earn free residual income from the Internet.

Tags: wealth building, structured settlements, insurance

Why should you pay car insurance? It’s often very expensive, and you’re a safe driver, right? You’re practically giving money away. And for what benefit?

Well, even if you are the world’s safest and most conscientious driver, you absolutely need car insurance. Going without it is irresponsible, dangerous, and it’s against the law. Every province in Canada have laws regarding car insurance, and the punishments for not having it are no joke. You can get an expensive fine, damage your driving record, lose your driver’s license, get your car impounded or even go to jail for driving without insurance. Coupled with another offense like speeding or running a stop-sign, it’s even worse.

But you’re a perfect driver, right? You don’t speed, run stop signs and red lights, park illegally, drive without a seatbelt or make illegal turns. You have nothing to worry about, right?

Wrong. Even if your driving is beyond impeccable, you are on the road with other people who might make poor decisions. Maybe they are distracted, intoxicated, over-tired, talking on a cell phone or just plain careless. Maybe they forget to check their rear-view mirrors before changing lanes or they neglect to use their turn signals.

As careful and vigilant you may be, every second you spend behind the wheel you are at the mercy of other drivers. Tens of thousands of automobile accidents happen every day. If you get into something as insignificant as a fender-bender and get caught without insurance, you will find yourself in a very difficult and expensive situation.

Also, insuring your car has never been easier. There are dozens of internet sites devoted to helping you find out what type of insurance is best for you. Many sites will even generate quotes from multiple companies to help you determine which one is best for you. Using the internet, it’s possible to find a good insurance policy and open it in less than an hour.

If you still think car insurance it too expensive, consider this: You can adjust your insurance coverage and drastically lower your monthly payments. You might consider using liability-only insurance. If you get this type of insurance, damages you do to another person’s car in an accident are covered, but your own vehicle is not. If you have an older-low cost car, this might be the best option for you. Or you could consider raising your deductible. Your deductible is the amount of money you would have to pay if you got into an accident. When you increase that amount, you reduce your monthly payments. If you have money saved up and are a safe driver, this is a great option. You could save a lot of money.

Ultimately, the decision to have car insurance is yours. The government can make rules that encourage you to get car insurance, but it cannot make you lift the phone or get on the computer and sign up. If you still think you don’t need auto insurance, think about what would happen to you if you got into an accident. Could you afford to not only lose your car but have to pay for damages to another person’s car as well? Could you afford to pay a stiff fine, lose your driver’s license, your car or spend time in jail? Give yourself peace of mind and get insured. You won’t regret it.

Tags: leasing, investing, personal finance