Are You Part of the $150 Billion Stimulus Package?

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The proposed $150 billion “economic stimulus package” by President Bush is promising rebates of between $300 and $1200 or more to the low and middle class people of the United States to help kickstart the economy by giving money to those who are most likely to spend it. Why don’t you go against the current and actually save it instead of spending it?

Here are the quick facts on the proposed plan:

1. Most single taxpayers will receive a $600 check
2. Dual-income households will receive $1200.
3. For each child (dependent) you will receive $300 each.
4. Workers who made at least $3,000 but didn’t pay taxes will receive $300 ($600 for those married and filing jointly).
5. Income limitations are $75,000 for single taxpayers and $150,000 for couples.
6. Apparently all of this is based on your 2006 tax return.

The legislation has not passed yet, although it most likely will and is being pushed strongly by President Bush. But if and when it does pass, you can expect your rebate checks to come in May or June of this year (2008). Just file your 2007 taxes just like normal.

All I can say is to not act like you’ve already got the money and spend an extra $600 on something you don’t need! I’ll probably get $600 as a single taxpayer and I’ll most likely just boost my emergency savings or pay down debt or both. All I know is that I’m not going to act like I have it and spend it before I get it. It will be a welcome surprise in my budget come May or June!

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Sharebuilder/ING Direct New Changes

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Since ING Direct purchased and acquired ShareBuilder on November 19, 2007 for $220 million, everyone was wondering what changes would come about. Well, there’s good news! Not only did they change the color scheme, but the price for real-time trades has gone down to $9.95 per trade rather than the old $15.95. That’s a 35% discount! This price brings ShareBuilder in line with other discount online brokers, but it still does not beat free stock trades with Zecco. Contact me if you want to open a Zecco account for a FREE $25 bonus!

ING Direct is the country’s largest direct bank with assets of $77 billion with about six million customers. I contacted media relations for ING regarding the changes that would come about due to the acquisition but they have not gotten back to me yet. I’m interested to see if there will be more changes since I am a customer for both ShareBuilder and ING Direct. It would be great if there were instant transfers from ING accounts to/from ShareBuilder just like the transfers between Electric Orange (checking) and Orange Savings.

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ING, WaMu Drop Online Savings Rates

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ING Direct recently dropped their Orange Savings rate from 4.30% to 4.20% due to the recent Fed rate cut. You can still get their $25 for opening an account. If you’re interested, send me an email!

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WaMu’s online savings account also dropped recently from 5.00% to 4.75%. It’s still a great rate from a reputable bank with the advantage of having local branches.

As of this post, FNBO is still at 5.05% and HSBC’s at 4.50%.

If you have a life insurance or a car insurance, you know about the way pet insurance as well as other insurance deals work. Even the homeowners insurance policies cover in a similar fashion.

FNBO, Others Lower Online Savings Interest Rates

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Since the Fed lowered the discount rate (the rate at which it lends money to banks), many online savings accounts have followed and have lowered their rates. FNBO Direct was offering a 6% promotion but is now offering a still-respectable 5.05%. Here is an interest rate round-up from around the web:

ING Direct: 4.5% to 4.3%

ING Electric Orange: 4% to 3.5%

HSBC Direct: 5.05% to 4.5%

FNBO Direct: 6% to 5.05%

Emigrant Direct: 5.05% to 4.75%.

Bankrate has some more interest rates from online savings accounts and more. Check it out.

Expect other banks to follow. Also as of right now, Washington Mutual’s online savings is still at 5%. So your emergency funds will be earning a little less interest but loans should be cheaper. Money market accounts may seem like a better alternative if you want higher rates but some aren’t FDIC-insured. I’m still not quite sure what I going to do with my emergency fund right now. I may keep it at FNBO but I’ll keep my options open. I’m going to wait a little bit while all the banks catch up and lower rates and then see who has the best rate.

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The Dow Takes a Hit (And How to Survive It)

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The Dow took a huge hit today! It was the second largest point drop so far this year (-311). The biggest was -416 on February 27, 2007. The largest point drop in history was when the market opened back up on September 17, 2001 after September 11th (-685).

The thing about any drops (or gains) in the market are that they’re just paper losses (or gains). They are unrealized losses (or gains) “on paper” and they don’t really matter until you sell your investments. It’s always wise to keep things in perspective. People tend to get emotional and scared when the Dow drops. It’s never wise to be emotional when investing. That’s why many people buy high, and sell low. I had a co-worker who stopped his contributions to his 401k after a big drop a few years back. That’s also not wise. You’ll miss out on the the employer match as well as any gains that usually come after a big drop.

Remember that investing is for the long term. It’s never good to look at the short term when investing (unless you’re a day trader). Just leave your 401k or IRA’s alone and review them quarterly.

So what can you do to survive a market crash? (From a CNN Money article):

Amp up your 401(k). It is true that a down market can be a time when stocks are on sale.

Adjust your risk. If your mutual funds went down more than you’re comfortable with, you may need to adjust your risk.

Determine your deadlines. As you near retirement, you need to adjust your stock/bond allocation so that there’s less risk as you near retirement. The common method is to subtract your age from 120 to figure out what percentage you should have in stocks (some say 100 if you’re more conservative). So if you’re 30 years old you should have approximately 90% of your investments in stocks.

Spread your bets. Owning an international or overseas fund can be a hedge against big drops here in the U.S. Often when the U.S. market suffers, the international markets are doing well. Being diversified is the key!

Source: CNN Money