This month, I see that I was charged a $39.00 late fee. Oops! The minimum payment must have gone up again by $1. Yep. Exactly. But this time, there was a CASH BACK CREDIT ON MY ACCOUNT. For a minimum payment of $67, I actually had a $20+ credit as well as a $65 payment that I had sent in. Why was I charged a late fee? The reply was a lot of mumbo jumbo which I translate as: “We really have to find a way to make up lost revenue for these NEW credit card regulations.”

I spoke to Jennifer E. She was unhelpful and could only think to spew the company line.

“From a company standpoint, we cannot continue to give you credits,” she said. “This just happened two months ago.”

“How long have I been with your company?” I asked.

“Since 2006,” she said.

“How many times have I asked for an exception on a late payment?”

“This just happened two months ago.”

“Right. Once.”

Jennifer basically indicated that she cares more about $78.00 in fees than a four year customer. How much money in interest has American Express made off of me in four years? A lot more than $78.00. But I wasn’t upset about the fee. It’s my responsibility to know when my payment increases.

I’m upset because there was a $20 cash back credit on my account, which would more than cover the $2.00 “delinquency.”

Say, can I get that cash back in…well, cash? That way, I could make up the difference — the $2 difference — that you just charged me $39.00 for. And could you please, please PLEASE not raise my interest rates because I was $2.00 short on my minimum payment?

This practice is unethical.

I’m sure it’s legal, though.

Mr. Chenault, in the interest of ethics, I would like to have my $39.00 back OR I would like for you to remove the $20 you credited to my account and send me a check. You can’t have it both ways.

And I would like to keep my current interest rate, which is astronomically high. An adjustment that your folks told me “had nothing to do with my excellent history with the company, but that was `standard, due to the economy.’”

And, I would like to keep my reduced credit line, which you told me “had nothing to do with my excellent history with the company, but that was `standard, due to the economy.’”

And I would like for someone to contact me, if it’s not too much trouble.

Oh, and you might want to help Jennifer with her customer service skills.

That is all.

Thank you.

How many times have you gone to meet with a financial advisor and they offer you an annuity? How many times have you heard about how awful annuities are? The truth is annuities very rarely make good investment vehicles.

In light of the recent market volatility, variable annuities are being reintroduced to a broader audience. Pre-retirees and retirees are giving annuities a second look because of the tax-deferred features and income guarantees. Is an annuity right for you? Let’s take a look at a few of the basics:

What is an annuity?

An annuity is a contract between you and a life insurance company that promises you lifelong income in exchange for a lump sum payment or series of payments to the insurer. The income arrives in periodic payments, either at once (an immediate annuity) or in the future (a deferred annuity, which also offers you tax-deferred growth of the assets inside it).

A look at the Pros and Cons of Annuities

As an independent financial advisor who gets paid a fee only rather than commission, I am always looking at the pros and cons of various investments. Let’s take that same approach with an annuity. There generally are two types of annuities – fixed or variable annuities. Fixed are tied to interest rates or indexed annuities tied to various indexes and variable are tied to the investment performance of the mutual funds within the policy. Let us look at the good, bad, and ugly features of the most popular type of annuities- variable.

The Good

Annuity ownership does come with some attractive benefits such as:

1. Flexibility and investment choices – Variable annuities have sub-accounts with various mutual funds to select from. This makes it easy to change investment direction or your allocations with little or no costs.

2. Tax deferral for your investment gains – Just like your 401k or IRA, your contributions and earnings can grow tax-deferred until you withdraw funds. If this is in a non-qualified account (non IRA or retirement), you do not have to make mandatory withdrawals at age 70 ½.

3. Income for life – I will concede that no other investment allows for the creation of income for life. Once you select monthly payments (or annuitize) your annuity contract, the insurance company will guarantee you (and your spouse, should you desire) the income payment for the rest of your life. This is like creating your very own pension!

4. Asset protection – In certain states, annuities are a shelter from creditors. If you work in a field prone to lawsuits or even if you are in a car accident, protecting your assets is important. Annuities typically provide this type of protection.

5. Potential protection from market losses. Many variable annuities let you benefit from stock market gains while shielding you against stock market losses. In the past, many have offered the annuity holder at least a minimum rate of return (a GMIB, or Guaranteed Minimum Income Benefit). Many have also offered guarantees that the annuity value will not dip below the value of the initial principal (a GMAB, or Guaranteed Minimum Accumulation Benefit). However keep in mind these guarantees are expensive and come with many strings attached. So buyers beware.

The Bad

1. Irreversible consequences. The idea of income for life sounds enticing but here are a few cavots. For example, once you annuitize (create income for life or a period of time), it often becomes irreversible. You often give up the ability to get your lump sum back or even pass it to “other beneficiaries”. So say you put $250,000 into an annuity at age 60 and accept the insurance company’s offer to pay you a monthly income for the rest of your life. It could take 20 to 25 for you to break even on that investment.

2. Locked up until 59 ½. Another downside is that once you put funds into an annuity contract you cannot touch those funds until you reach age 59.5. Otherwise you have to pay a 10% penalty for early withdrawals.

3. Poor tax planning. A withdrawal from an annuity is treated as ordinary income rather than qualifying for the often more favorable long-term capital gains treatment. When you do start to take funds from the contract, the portion of your payments that are considered investment gains are taxed at your ordinary income tax rate instead of the long-term capital rates. This rate could be higher than the current capital gains rate.

4. Insurance company financial health. You can’t judge a book by its cover, but you can judge an insurance company by its Comdex ranking. This is a useful place to start. As the name implies, the Comdex is a composite index: an average percentile ranking of credit ratings provided for life and health insurance companies by firms such as Moody’s Investors Service, A.M. Best Company and Standard & Poor’s Corporation.

The Comdex ranks insurers using a weighted average on a scale of 1 to 100, 100 being best. If an insurer has a Comdex rating of 85, for example, that means the Comdex has ranked its strength and solvency as superior to 85% of the insurance companies in the index. If you want to see the actual ranking/opinion of Moody’s or Best or another credit firm rather than an average, visitwww.iii.org/individuals/life/buying/strength – this is the website of the Insurance Information Institute, a longstanding information source for media and the public about the insurance industry. Or find your state insurance department viawww.naic.org.

5. Inability to screen for your moral and social preferences. Most annuities have no choice for morally or socially conscious investors. Your investments may be supporting companies involved in abortion, pornography, embryonic stem cell research, gambling, tobacco, alcohol, or other issues important to you.

The Ugly

1. Surrender charges – If it’s not bad enough that your funds are tied up until age 59 ½, you also have to be careful because most insurance companies also charge a surrender fee (usually on a five to seven year scale). These fees often start at around 8% in the first year down to 0% in year seven. So, a $100,000 investment could cost you $8,000 (8%) in surrender fees if you take your money out in the first year. It will usually go down 1% per year until reaching 0% at the end of the surrender period.

2. Up-front commissions. Annuities are still primarily a commission-based product. They can pay commissions of 5% or more to the agent who sells them to you. That’s $5,000 or more in commissions for each $100,000! Don’t be afraid to ask about the commission he or she collects by selling you the annuity before you invest. Not that it always influences a recommendation, but you have to be careful as some agents are glorified salespeople looking for their next commission check.

3. Annual fees, administrative charges, mortality expenses, and other charges - With so many layers of fees, how will you make money? I have seen investors who have been in annuities for 10 years or more make very little money because of these high fees. It will affect your investment performance. These charges are often buried into the cost of your annuity. Reading a prospectus is often eye-opening!

As you can see, everything is not what it appears with an annuity. You need to read all of the fine print before investing a dime.

Five questions I would ask before investing include:

1. Where is your money going and what values are you supporting?
2. How much risk are you taking?
3. Is your money liquid and easily accessible?
4. What rate of return should you expect in this low rate environment?
5. How do you protect yourself from taxes and inflation?

If the investment you are considering doesn’t answer these five questions in a way that you feel satisfied, go with your gut instinct, and look elsewhere. Annuities are certainly not a fit for everyone!

This article is printed with permission from ChristianPF. Jay Peroni, CFP is the founder and editor of FaithBasedInvestor.com, a Christian stock investing newsletter. He is an author, speaker, and financial advisor. He’s been featured on Crosswalk.com, TheStreet.com, and here at ChristianPF.com. Jay started FaithBasedInvestor.com to help investors find investments they can be ?”proud to own”. For a FREE report on how to screen your investments and build a winning portfolio, go to FaithBasedInvestor.com.

The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation.

ChristianPF was one of the very first personal finance blogs I started following and it’s an honor to be writing here. I’m very grateful to Bob for giving me an opportunity to be a regular contributor at ChristianPF and I look forward to interacting with all of you along the way!

My wife and I just recently built a new home and moved in a couple weeks ago.  It feels good to be done, although we probably won’t be settled for a while yet. There are some good financial lessons to be learned from building a home.  If any of you have done it, you know what I’m talking about.

There’s a lot that goes into building and each step needs to be done in a certain order otherwise nothing will get accomplished!

The same can be said for our personal finances.  We need to have a good plan and make sure things get done correctly, otherwise we’ll be spinning our wheels. So, here are some lessons learned from the building process and a blueprint for all of us to build our financial house:

Footings

Under every house is a foundation, and under most foundations are footings. Footings are extremely important because they are the basis on which the foundation is laid. Improper footings will not allow the foundation to withstand the give and take of the soil. So what are the footings in personal finance?

Giving

A heart of generosity and a willingness to let go of our own stuff to meet the needs of others is one of the footings on which we build our financial house.  Why? Because God was so generous to us – therefore that characteristic should flow through us as well.

I know what some of you are thinking, “But I don’t have enough money to give” – well certainly there are other things you can give, like time.  But let me ask you – how much have you prayed about your giving?  Have you considered selling things you do have to help meet the needs of others? Giving is a critical footing that we must not simply ignore.

Proper Attitude

An attitude of stewardship - not ownership – should be a key footing as well. In other words, as stewards we should desire to make more money, get out of debt, and get our spending under control because we are handling God’s money – not ours.

When we realize that we are to be responsible managers for God’s currency and that our money is simply a conduit of grace, we can begin to have the proper motivation to get a handle on our money.

Foundation

The foundation is the next crucial piece to building a house.  The foundation for constructing a well-built financial house are things like cash flow, emergency fundsand a commitment to getting rid of non-mortgage debt!

Cash Flow

This is simply your income minus expenses. Why is this so important?  Because the secret to getting ahead financially is that there is no secret – spend less than you make.  Everything else hinges on this very point.

Emergency Funds

This also is extremely important because inevitably things come up.  Cars break down, roofs leak, furnaces go out.  So you must have the ability to pay for the emergencies without racking up credit card debt.

Paying off non-mortgage debt

Credit cards, car loans and the like are mole hills in a garden.  Working hard at getting rid of those types of debts will help free you to give more, save more and invest for your future.

Framework

Framing is one of the exciting parts of building a house.  You finally get an idea of what the house will be like.  It’s also key because you need the proper beams in the right places to support the house.

Insurance

Proper insurance coverage is your support beam for your financial house.  This includes reviewing and acquiring proper health, home/auto, disability and life insurance.

Let’s take for example life insurance.  Unfortunatley, there are a lot of misconceptions when purchasing these policies, so you need to make sure you ask the right questions before you buy life insurance.

Exterior Shell – Roof, Brick and Windows

Now this is where building really gets fun and the house begins to take on the character of what you were envisioning when you began the process.

In personal finance the exterior shell would be things like:

Saving for Retirement

Funding your 401k plan, IRA, or Roth IRA is a big step toward getting your financial house in order.  This is the fun pat!  Seeing these accounts build up and realizing that you are saving toward a long-term goal is exciting.

Saving for Other Goals

This could be college savings for your kids, saving for a rental home or even your first house.  Having the ability to sock some cash away for these things is a great feeling.

Final Touches

Getting the drywall in and painted, the flooring and carpet in and making some final touches on the inside is when the house comes together and you’re just about ready to move in.

From a financial standpoint some of these final touches may include things like:

Tax Diversification

This simply means utilizing your investment accounts from the best tax perspective so that you’re not left holding a huge tax time-bomb in retirement. You may want to consider shifting your savings around to help diversify yourself from a tax stand point.

Investment Strategies

At the beginning, it’s good to just get saving.  But as you progress and your account balances begin to grow, you may want to re-evaluate your portfolios to determine if you should employ more sophisticated investment strategies to help maximize your returns and minimize losses.

Something to Remember

Building a house is a process that takes time, effort and energy – and things don’t always go as planned.  Don’t get discouraged, and keep plugging away.  The end result will be well worth it!

The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation.

Many of these examples I have personally used to add extra income to my household when needed. I am not going to focus on starting an online business in this post (although, for the diligent there is money to be made in blogging, Adsense, creating your own products, selling on Ebay, and affiliate sales.) Instead, I want to introduce to you a few reputable work-from-home companies that will pay you for your work. All of these will send 1099’s for tax purposes.

5 legit opportunities to work from home

1. Demand Studios

They have many different employment opportunities that range from Writers, Editors, Title Editors, Filmmakers, and more. They are usually hiring for certain positions at certain times so you have to keep your eyes peeled. I have made several thousand dollars in article writing and title editing. I even got my wife into doing title editing and earning extra spending money. As a writer you can make between $7.50-$20.00 per 150-500 word article. I usually write about two articles an hour (that’s $30.00 an hour at $15.00 an article). You do not have to be a prolific writer or have a background in writing to get accepted. Most articles are in a “How to” format. So, if you are the type that enjoys learning something new and then explaining it to someone else then this could be a fun work for you. Most of their content goes on eHow.com or LiveStrong.com.

Let’s say you have a trip you want to take in a month. Just decide how many articles you would have to write a day to reach your goal. They pay by Paypal every Wednesday and Friday. There is no payment threshold that you have to meet either. If you have money in your account, you will get paid. They currently have thousands of titles to choose from in the system and you can reserve up to ten at a time. if this interests you, feel free to contact me on some tips for the application process.

2. Live Work

This is mostly like a running projects board for a company called LiveOps (which I will discuss later on). Live Work has many different projects that you can bid on. Many are data entry and task-oriented. You work as much as you want. I once worked on a Dictonary.com project and was paid for every definition and source that I put in the system. There really is a wide-variety of work available there.

3. Leapforce

They are a vendor for Google. Once you are accepted in the program you log-in to the Google interface and rate websites. Google wants their searches to be relevant. They use human raters to rate whether the content is worthy or spam. At the time of this writing, they pay $11.50 an hour.

4. Textbroker

This is a great place to earn extra income if you want to write on simple projects. They pay is much less, but the projects are easy to write on. I once wrote several 150 word articles for someone that was creating an Extreme Sports website. The work was fun. I simply wrote a short bio about different professional athletes.

5. Liveops

If you want more human interaction, then you might want to consider LiveOps. LiveOps is an at home call service that you dial into while in the comfort of your own home. You will have to make a weekly schedule, but you will never have to commute anywhere. All calls are inbound from people responding to infomercials and you basically take their ordering information while being logged into the LiveOps system. They pay is around $9.50 but you do earn commission for different products sold.

Wrapping it up

Hopefully, this list will get you started thinking about ways to supplement your income. This resource is also good for Stay-at-home moms that are looking for ways to earn so money without being on a tight schedule. There are many more work-from-home companies out there, but these are all ones I have had personal interaction with and can recommend that they are legitimate. If you have additional questions, please feel free to ask in the comments and I would be happy to answer any questions.

This article is printed with permission from ChristianPF.

Jonathan Milligan is a full-time blogger and Career Coach. He dedicates his time to teaching others how to form simple life habits in the area of money, relationships, faith, career and time management. He is the author of The Simple Life Habits Formula which can be downloaded for free on his blogSimpleLifeHabits.com.

The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation.

1. You Haven’t Faced Your Own Worst Enemy: You.

Look at yourself in the mirror, because that’s the person that’s hindering your plan to get and stay out of debt. You must have a revelatory change about debt if you ever want to conquer it for good. Treat it like any other goal you’ve ever set out to accomplish, and be willing to make sacrifices to accomplish getting out of debt. You’ll never get and stay out of debt unless you tame the face in the mirror first.

2. You Don’t Have A Written Plan To Get Out Of Debt.

Getting out of debt is serious business, and you need to have a carefully crafted plan for accomplishing the goal. One of the more famous plans for getting out of debt isDave Ramsey’s plan. Using the Debt Snowball Method, he teaches to list all of your debts from smallest to largest. Then, attack the smallest debt first, and once that’s paid off, put the money you were using to pay off the previous debt towards the next debt. There is some controversy as to whether this is the best way to get out of debt, but Ramsey focuses more on behavior, rather than numbers. He is more concerned with helping you build momentum, which will ultimately motivate you to finish your “get out of debt” plan.

3. You Haven’t Broken The Car Financing Cycle.

The moment you buy a new car or a newer car and you finance it, you’ve begun a vicious cycle of constantly relying on a car payment while owning a car. The average car payment in North America is over $350 a month! I don’t think you should drive a clunker your whole life, but if you can resist the urge to buy a new car, you can gradually move up in car by buying with cash when you have the money saved up and can afford the expense.

4. You Aren’t In Control Of Your Variable Expenses.

A variable expense would be any monthly expense that is controlled by your daily decisions and habits. Eating out, entertainment, dry cleaning, small vacations, gifts, and life’s little luxuries are all variable expenses that you can control. All of these types of expenses should be a part of your written budget, and you should put a reasonable dollar amount value on these expenses. Once you’ve hit the limit for the month, you stop spending in that category.

5. Your Fixed Expenses Are Too High.

It’s really tough to get out of debt if you don’t have any extra income to put towards it after all of your monthly bills are paid. If this is the case, you either have an income problem and you need to brainstorm ways to increase your monthly income, or your fixed expenses are too high. Are you house poor? If you’re monthly mortgage/rent exceeds 30% of your monthly income, then you may need to consider downsizing in house. Utility bills, insurance premiums, and auto expenses are more fixed expenses that can easily drain your monthly income if they are too high.

This article isn’t meant to put you down. It’s meant to help you realize the roadblocks in your financial life that could keep you from getting out of debt and staying out of debt. Getting out of debt is so important to good financial health, because monthly debt payments drain your monthly income, and it keeps you fromsaving for retirement, children’s education, and large purchases. It’s the first step to building wealth, but it’s also one of the hardest thing to do. Are you ready to start lifting the roadblocks that keep you from getting out of debt?

This article is printed with permission from ChristianPF.  This is a guest post written by Erik Folgate, writer and editor for the Money Crashers personal finance blog. Money Crashers provide useful tips and tricks for related topics like investing, credit and debt, financial education, frugality, and more.

The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation.

I had my grumpy pants on.  I had been late getting to work and the emails were starting to pile up in my inbox. I tried to convince myself that I couldn’t be troubled to walk down one flight of stairs to the Investments and Insurance office. I was oblivious when it came to my retirement plan and I was afraid to deal with it. I was full of regret for squandering money in my youth, failing to contribute anything to my 401k for 12 years, and dragging my feet on an old rollover for the last two years. For me, my retirement was out of site, out of mind.

One hour and a stack of signed papers later, I had a plan for retirement. This is how I got on the path.

Rollover Your Old 401k

The first piece of business was for me to rollover my old 401k. My planner and I decided to go with a moderate allocation for my existing funds: 60% stocks and 40% bonds. Once the allocation was decided, all we had to do was initiate the rollover process, which we were able to do with Vanguard by phone, and sign the paperwork to open my new account. We calculated that by the time I reach retirement at 65, the money that I rolled over today will have grown from just over $50,000 to a little over $400,000. The sooner that you rollover that “old” money, the better.

Quick Tips

• Most companies offer a free rollover, but then charge 5% of the total amount of the lump sum contribution. Be sure to read the fine print before initiating a rollover.
• The average rate of inflation is just over 3%, so your funds have to make at least 3% in order for you to break even.
• Most people make yearly withdrawals from their 401k once they reach retirement. I always assumed that you got to retirement and then withdrew a lump sum. Since the withdrawals are taxable, it’s easier to think of this money as replacing your yearly salary.

Open a Roth IRA

The beauty of the Roth IRA? You’re saving after-tax dollars that you can access at any time before or during retirement. The contributions are post-tax, but the earnings are NEVER taxed. With my investment company, I could set up automatic withdrawals from my checking account. I also would have the option to purchase and trade stocks that I was interested in.

Quick Tips

• You should think of your 401k retirement funds as money for your “living” expenses, while you should think of your IRA money as your “spending” money
• You can think of your IRA money as your “back-up” plan
• You can contribute $5,000 per year to your IRA

Set Up a 401k Automatic Allocation

In 12 years, the company I worked for gave me over $50,000 in 401k contributions. I never contributed one dime. Now, lucky for me, when I started to hear rumblings about the stock market having trouble in 2007, I pulled all of my money out of the market and placed it into bonds. Although I didn’t make any money, I didn’t lose any money in the stock market crash of 2009. However, I wasted precious dollars by not investing while I was single and making a great salary. This is the quintessential example of “pay yourself first.” You can afford to invest 1% of your salary starting out, even if your company does not match your contribution. Not contributing money when your company has a matching program is just giving free money away.

Quick Tips

• In some companies, you can’t change/increase your contribution whenever you want, you have to wait until “open enrollment.”

Read More

Don’t Eliminate Spending Altogether

Dr. Alena Johnson of Utah State University identified the step-down principle. You can think about it like this: the more expensive an item, the higher it is on the staircase. The less expensive an item, the lower it is on the staircase. Instead of the unacceptable dichotomy of either buying the most expensive version of an item or nothing at all, you can choose to step down.

For instance, Suzy wants the latest iPhone 3Gs, but $200 for a phone is not in her budget. Conversely, she’s not interested in a cheaper phone that AT&T offers; an LG Neon for $4.99 is really not ringing her bell either. Instead of going home angry and depressed, patting herself on the back for being a miser, she can step down – she can buy the $99 iPhone, which isn’t on the 3G network. She’ll sacrifice speed and memory size, but she’ll have more of the features that she wants. What’s better – no features, or mostly what you want?

You can apply the same theory to clothing. Instead of a higher-end store like Macy’s, you could take a step down to JC Penny’s. Take another step down and you hit an outlet mall, then another step: a consignment shop. This way, you can still be fashionable, just within your means. The idea is age old: you can have everything you want, just not at the same time.

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