Tax refund loans are TOXIC!

According to "Things you should know about tax refund loans," courtesy of the Financial Industry Regulatory Authority (FINRA), tax refund loans are a nightmare!
1. "You’re paying to borrow your own money. RALs are short-term loans issued by non-bank lenders—usually with terms of only 7 to 14 days—that are secured by your expected refund. Taxpayers who take out RALs receive cash, typically right away, in the amount of their anticipated refund, minus fees. In exchange, they agree to pay an interest rate that could, when expressed as an annual percentage rate (APR), add up to a triple-digit rate.
2. "You’re taking on risk. Like all loans, RALs come with risk, including an increased debt burden if your refund is denied, delayed or lower than expected. As costly as RALs can be in the short-term, they can be devastatingly expensive over the long-term should anything go wrong with your refund. Significant debt can pile up over time and hurt your credit score."
3. "RALs are expensive. RALs come with a number of fees, which may include a loan application fee as high as $100; a tax-preparation fee (around $40); a check-processing fee (around $20); a "peace of mind" guarantee from your tax preparer that you’ll get the refund cited on your tax form ($100 or more); and a refund account fee for services involved in setting up a temporary account (a minimum of $30). In addition to fees, RALs come with high rates of interest—generally starting at 36 percent and going up from there. Bottom line? Expect to pay a minimum of $200 on a $2,000 “fast” tax refund."
4. "You might encounter RALs in unexpected places. Businesses that prepare and file tax returns... aren't the only places that may pitch a RAL to you. Car dealerships, boat showrooms and furniture and electronics stores are among the many businesses that offer these loans."
5. "There are better alternatives. There are better, less expensive alternatives to RALs. The best move is to be patient and have the IRS send your tax refund free of charge. If you e-file and have your refund directly deposited, the IRS refund cycle can be as short as 8 days. In many cases, waiting only a few days or weeks can save hundreds of dollars."
Source:  http://www.finra.org/investors/5-things-you-should-know-about-tax-refund-loans?utm_source=MM&utm_medium=email&utm_campaign=Investor_News_032615_FINAL

As tax season speeds into high gear, put the brakes on "fast refunds" that come in the form of refund anticipation loans, or RALs. They’re a costly option thousands of taxpayers take, often without realizing just how expensive—and probably unnecessary—they really are.
Here are five things you should know about RALs, including alternatives that are cheaper and less risky.
- See more at: http://www.finra.org/investors/5-things-you-should-know-about-tax-refund-loans?utm_source=MM&utm_medium=email&utm_campaign=Investor%5FNews%5F032615%5FFINAL#sthash.ZTlgyL1i.dpuf

As tax season speeds into high gear, put the brakes on "fast refunds" that come in the form of refund anticipation loans, or RALs. They’re a costly option thousands of taxpayers take, often without realizing just how expensive—and probably unnecessary—they really are.
Here are five things you should know about RALs, including alternatives that are cheaper and less risky.
- See more at: http://www.finra.org/investors/5-things-you-should-know-about-tax-refund-loans?utm_source=MM&utm_medium=email&utm_campaign=Investor%5FNews%5F032615%5FFINAL#sthash.ZTlgyL1i.dpuf

As tax season speeds into high gear, put the brakes on "fast refunds" that come in the form of refund anticipation loans, or RALs. They’re a costly option thousands of taxpayers take, often without realizing just how expensive—and probably unnecessary—they really are.
Here are five things you should know about RALs, including alternatives that are cheaper and less risky.
- See more at: http://www.finra.org/investors/5-things-you-should-know-about-tax-refund-loans?utm_source=MM&utm_medium=email&utm_campaign=Investor%5FNews%5F032615%5FFINAL#sthash.ZTlgyL1i.dpuf

Annuities provide security against living too long

Harold Evensky, a certified financial planner (CFP) who is considered the father of the financial planning industry, used to oppose the use of immediate annuities. But he has changed his mind and now recommends immediate annuities. Evensky considers the immediate annuity "a powerful vehicle that’s virtually the only strategy to ensure maintaining one’s standard of living in retirement." He says: My change of thinking came with the advent of lower cost annuities from firms like Vanguard, TIAA-CREF and others. They’re offering immediate annuities — also known as payout annuities, income annuities, longevity annuities and longevity insurance" as "the only way that investors can manage their mortality risk — living longer — and maintain the income they need for the rest of their lives."
http://www.thinkadvisor.com/2015/03/24/evensky-in-reversal-sees-annuities-as-vital-for-re

The Opposite of Spoiled: Raising kids who are grounded, generous, and smart about money

Worried about the money values your children are absorbing from TV, social media and their peers? New York Tines Money Columnist Ron Lieber's book about raising kids with solid money values is highly recommended. Read reviews at:
http://ronlieber.com/books/the-opposite-of-spoiled/#
Logan Library has a copy but at last check the wait time is 46 days!

Health Websites are NOT Confidential!

Beware of using health websites as a new study (reported in Money, April, p. 20) reports that many health websites "leak information about your health concerns."  The study was conducted by a doctoral student at the University of Pennsylvania who found that on 91% of the websites third parties could access information on users! 70% of the websites revealed information that could be used by data brokers who sell information to marketers. To thwart this breach of confidentiality, use browser extensions such as Ghostery and Adblock Plus.

Save on medical bills

According to research by the Commonwealth Fund, employee share of medical expenses is 9.6% of income due to higher premiums, deductibles, and coinsurance. This is up from 5.3% in 2003. Maybe it's time to invest in health insurance companies that are making these profits.
Ways to save:
if you can't get to your doctor, go to an urgent care clinic rather than a hospital ER. Try phone or telemedicine if your insurer provides this service.
Comparison shop for services such as imaging; don't just go to the local hospital.
Challenge bills! Many hospital bills contain numerous errors. Need help disputing bills? Try Medical Billing Advocates of America at: http://billadvocates.com
Most billing dispute services take a % of the amount they save you on your bill. Thanks to Money magazine, April 2015, p. 19.

How to lower your credit card interest rates

The market for credit cards is saturated. Most Americans have multiple cards. It is very costly for banks that issue credit cards to attract new customers; they will often go to great lengths to retain current customers. You can use this leverage in your favor to lower your interest rate if you carry a balance. Trent Hamm explains how: http://www.thesimpledollar.com/a-step-by-step-guide-to-getting-your-credit-card-interest-rates-reduced/

What if investors had an independent second opinion?

A Radical Proposal for Investors: What if investors had an independent second opinion? By Daniel Solin (3/18/15). Selectively quoted from his article in US News & World Report. Read his full article at: http://money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2015/03/18/a-radical-proposal-for-investors

“I have a radical proposal for you to consider. Stop making investment decisions for yourself.” Here’s why:

·         You’re not good at it.

·         You’re not prepared for retirement.

·         You follow bad advice.

·         Why you need a new decision model. There is a wealth of evidence indicating that people are better at making decisions for others than they are at making those same decisions for themselves.

For whatever reason, individual investors make awful decisions and are likely to continue doing so.

Daniel Solin’s proposal: In a perfect world, investors would rely exclusively on registered investment advisors (RIAs) who have a fiduciary duty to place the interest of the investor above their own. Unfortunately, we don't live in a perfect world. Investors, it seems, will continue to rely on financial planners who have a lower standard of duty and whose advice is both conflicted and contrary to the weight of academic support.

“To surmount these formidable obstacles, I propose introducing a new disruption to the financial services industry. It involves the creation of advisory firms whose sole purpose is to give a second opinion on the portfolios of their clients. These firms would charge an hourly or project fee. They would be contractually prohibited from converting the consulting arrangement into an advisory one. Their advice would be totally independent. They would offer no other products or services.”

Money Market Fund Changes Coming

The Securities and Exchange Commission recently passed new rules for money market funds effective in October 2016. “One requirement under the new rules is that the shares of money-market funds that cater to institutional investors and invest in corporate or municipal debt must float in value, like the shares of most other mutual funds. That’s a change from the stable $1-a-share value traditionally maintained by all money-market funds.”  “Another big change is that all money-market funds that invest in corporate or municipal debt will be allowed to charge investors a fee to redeem shares when the funds are under pressure or temporarily block investors from withdrawing cash.”

“Money funds can be divided into three categories according to their investments: prime funds; ‘government’ funds, which invest in U.S. government and federal agency debt; and municipal funds, which invest in the debt of state and local governments.” Source: Prepare for New Money-Fund Rules by Kirsten Grind, The Wall Street Journal, March 8, 2015.

Money funds currently pay an average of 0.03% a year, or $3 on a $10,000 investment, not enough to keep up with inflation. The last time they paid more than 2% was in 2008. Money funds are best used as a temporary holding place for cash, but even then most online savings accounts pay more, but still less than 1%.

Free, web-based health insurance calculator

"The www.puttingpatientsfirst.net calculator was created by the National Health Council to help people gain a better understanding of their options in the health insurance marketplace and to find coverage that meets their individual health care and budget needs. The calculator illustrates how an individual’s total annual health care spending can vary based on plan selection."

"This is the only free, web-based calculator where people can enter their unique health usage information – including estimated number of doctor/specialist visits, hospital stays, and surgeries, and their prescription medications (both generics and brand drugs) – to see how their costs will vary depending on the different types of plans sold in their state."

"The premiums in a person’s cost report are based on actual 2015 marketplace premiums in the state. For people reporting household size and income details between 100% and 400% of the federal poverty level, the premiums are reduced to reflect the application of possible tax credits."