Viewing posts categorised under: Financial Advice

Top 10 Broke Celebrities and How They Got There

by texas in Financial Advice

iStock_000077377591_Large (1)Being rich and famous doesn’t last forever. History has shown that celebrities – whether they are loved or hated – are extremely likely to blow through all of their cash very quickly. Making bad investments, being scammed, giving away large amounts of money to friends and family…there are many different ways this can happen. Here are the top 10 broke celebrities and how they got there.

#1. Burt Reynolds

He was reported to have owed over $10 million from making massive purchases. It got to a point where he had to sell away all of his movie memorabilia to stay afloat.

#2. Wayne Newton

In the 80’s, he was proclaimed the highest paid entertainer in the world. Even still, he ended up declaring bankruptcy after racking up nearly $20 million in debt.

#3. Toni Braxton

She may have jumped the gun with her spending after having a couple of top-charting hits in the 90’s. The “Unbreak My Heart” singer ended up filing for bankruptcy in both 2010 and 2013, just 3 years apart. It was said that at one point she had racked up over $50 million in debt.

#4. Sinbad

He was a prominent actor in the 90’s, although not exactly known for appearing in the best quality movies. He has had to file for bankruptcy on 2 separate occasions – the 2nd bankruptcy was apparently for over $8 million in debt.

#5. Pamela Anderson

Pam was mainly known as a “Baywatch” beauty, and as the wife of both Kid Rock and Tommy Lee. The actress had been spending millions in plastic surgery and home improvements, and…evading taxes. This eventually caught up to her, as she had to file for bankruptcy and sell her home – luckily for her, breast implants can’t be repossessed.

#6. Courtney Love

She was the main singer of the group “Hole”, but more notably known as being the girlfriend of the late Kurt Cobain. After Cobain’s death, she developed a serious drug addiction that ended up spiraling her into bankruptcy. She ended up having to sell off her home amongst other belongings.

#7. Wesley Snipes

While Snipes was busy hunting vampires in the “Blade” trilogy of films, the IRS was hunting Snipes for evading his taxes. His multiple movie roles didn’t stop him from racking up over $12 million in back taxes, and having to go to jail for a couple of years for tax evasion. Also, filing for bankruptcy.

#8. Brendan Fraser

Back in the 90’s and 2000’s, Fraser was raking in a cool $2 million per year from his acting roles. He was also paying $75,000 in alimony monthly, which paired with excessive spending quickly drained his bank account.

#9. Gary Coleman

A child actor from the 1980’s sitcom “Diff’rent Strokes”, who made around $8 million from that show alone. Little did he realize that his parents were spending all of his earnings, and that $8 million turned into $200,000 by the time he was able to claim it at 18 years old. He ended up having to file for bankruptcy as well.

#10. Lindsay Lohan

Lohan enjoyed much success from her roles in multiple different successful films like “The Parent Trap” and “Mean Girls”. As she got older, she quickly spiraled into a life of constant drug and alcohol problems, arrests, and court appearances. Her party-hard lifestyle caused her to file for bankruptcy – she hasn’t really recovered financially since.

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How Does Financial Aid Work

by texas in Financial Advice

How Does Financial Aid Work

College is not cheap, not by any means.  For those who choose an instate-college education or even a community college, the price of tuition has drastically risen over the last few decades causing students to wonder of “How will I pay for all of this?”   This question is more prominent than ever before, regrettably.  For the fortunate, there is either a college fund already set in place by parents or a family member or mom and dad have taken out a loan to pay for college, but not everyone comes from such prosperous households.  For those who haven’t saved or planned for college tuition and aren’t as lucky as the aforementioned group–well, the options can be very slim, but there are options.      

And it’s not just the college tuition, but everything that surrounds college life that can be so expensive.  From the books and binders to registration fees and food, college is more than a pretty penny these days.  Just thinking about how much it all costs creates headaches, now imagine wondering where the money will come from –that causes stress-levels to skyrocket.  Thankfully, the government has already created a solution; the government wants you to go to college, therefore they give you options so that you can pay for it –later.  Under the umbrella of financial aid, the government’s solution to the high prices we have pay to in order to be educated at the university level, are a few subcategories, namely Work-Study, Scholarships, Need-based Awards, Federal Pell Grants, and Student Loans.

To learn about how each financial aid works, read below.

Work-Study

This program offers students in need, of both undergraduate and graduate levels as well as full and part-time, the opportunity to work  while studying.  Of course, there is a limit on the hours permitted and that will be determined by the school’s funding and the programs in which the student is enrolled.  Students will not be paid more than the state’s minimum wage and in some cases, more likely for graduate programs, students can earn a salary rather than an hourly wage.  Some jobs will be on-campus while others are off-campus, this will depend on what is available at the time the student registers.  Not every institution is involved with work-study programs, so it’s best to consult the Financial Aid office on campus; inquire within.    

Scholarships

While the list is lengthy and can be overwhelming, there appears to be a scholarship for every type of student out there today.  From sports to the arts and from academic to ethnic –there is a scholarship for everyone.  The only problem is the rest of the world is also applying for the same scholarships.  Not only are the scholarships highly competitive, but they do not come in large quantities meaning under each category scholarships are limited.  However, this should not discourage students from applying to as many scholarship as they’d like; one student can apply for multiple scholarships at the same time.  Scholarships can cover a student’s entire college career, a few years, or a portion of the tuition –all of that will be determined by the governing distributors.  Most students begin looking into scholarships in the third and fourth years of high school.

Need-Based Awards:

For students who believe that either they don’t earn enough to pay for college or that their families’ salaries are not substantial enough to cover the cost, there is the need-based aid.  There are two types of applications for need-based aid, the FAFSA and the PROFILE –both can be filled out online or in hard-copy format.  Some institutions require the FASFA, others the PROFILE application, whereas others require both.  Students must do their homework and inquire about which application suits the institution.  All need-based awards will demand copies of tax returns and/or W-2s; therefore, students should either have their own documentation or that of their parents.  How a student applies varies –if a student is claimed by his/her parents on tax returns –the students is dependent, if not –the student is independent.

Federal Pell Grants

Grants are money awarded to students –and students do not have to pay them back.  It is gifted money straight from the government.  While the grants have a cap, in many cases no more than $5,000 per year, they are helpful for students who have a great need.  Also, students cannot receive such grants for more than six years or 12 semesters; when the time grows close to running out, the government will send a notice.  Factors that will affect the amount granted include the following: the student’s need, the program cost, if the student is full or part-time, the amount of time the student plans on studying (more than a year).

Student Loans

Like any other loan, this is money borrowed that must be paid back.  There are government-funded student loans and private-funded student loans; students should investigate which type of student loan suits them best.  The lender will determine the rates, the policies, and the payment schedule, but there is no shortage of student loans on the market; therefore, students should shop around and educate themselves about the details pertaining to student loans.  Each loan institution has a particular set of rules regarding payment plans, defaults, and deferments –students are advised to inquire about such issues prior to signing any contract.  Student loans do not have to be paid back while the student is studying or if the student, after graduation or a hiatus, returns to his/her studies.

Conclusion

These are the most popular forms of financial aid available, of course there are other options and students should inquire either at the university or the current institution where they are enrolled.  Paying for college is no easy task, therefore making a decision should be done with plenty of knowledge and patience.  There is no rushing here, students should plan ahead, ask questions, and learn how each type of financial aid functions prior to making any decision.  In some cases, consulting a money expert, school counselor, and/or financial aid professional are all highly recommended.    

 

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Best Credit Cards for Bad Credit

by texas in Financial Advice

The Best Credit Cards in 2016

Credit cards are an important thing to have. They not only give you a line of credit, they also show on your credit report, which means that a good card has the power to help raise your credit. Finding the right card can be tricky, though. Are you looking to help build your credit? Are you in it for the rewards? Do you want the highest credit limit, the lowest interest rates, or are you looking for a happy medium?

No matter what you need from a card, there is one out there that can help you. The trick is just finding the right one. That’s why we’ve complied this handy list of the best new credit cards to hit the market in 2016 and tell you about the uses and perks of each one.

Best Rewards Card: Chase Sapphire Preferred Card

This card is a loaded rewards card. It’s good for travel, it’s good for bonus points, and it has a pretty good signing bonus. Tie it to your Ultimate Rewards account and you’ll get even more bang for your buck. The Chase Sapphire Preferred Card lets you make the most of your bonuses, allowing you to use your rewards a cent at a time.

2016 new cardholders can get 50,000 Ultimate Rewards points just for signing, which can get you $625 in Travel Rewards when you spend $4,000 on purchases in the first three months of opening your account.

Double rewards on travel and dining help you get the most out of the things for which you use your card, and your rewards can count for credit on your statement, not just for travel. Other highlights include:

  • 1:1 ratio for use at hotel and airline partners when you use their loyalty programs
  • 1.25 – 2.5% rewards rates
  • Rewards usable on credit card statements

Best Secured Credit Card: Discover It Secured Credit Card

Secured cards work wonders for those with bad or no credit history. They’re not great for overall use, but they allow those with less than perfect credit to get a card by putting down a deposit to help cover issuer’s losses should you default on your payments.

The Discover It Secured Credit Card works with you actively to help you with everything a secured card should do. There is no penalty for the first time you pay late, and it will give you access to your FICO score on each monthly statement.

Other highlights include:

  • No expiration and no minimum redemption amount for rewards
  • The card reports to all three credit bureaus
  • After 12 months, you are automatically evaluated on a monthly basis to see if qualify for a regular, unsecured card

Best Credit Card for Air Miles: Capital One Venture Rewards Card

If you’re a frequent flyer, the Capital One Venture Rewards Card will get you up and in the air faster than any non-loyalty card out there. Start with a signing bonus of 40,000 miles when you spend $3,000 on purchases in the first three months of opening an account.

After that, you get double miles per dollar on every purchase every day. Where the Capital One Venture Rewards Card does better than many of its competitors is that isn’t just tied to partner airlines and hotels. You can use it for any airline and any hotel, with no blackout dates.

Miles don’t expire and there is no limit to how many you can earn, so you don’t have to worry about losing your rewards. What is better, if you decide to use your card abroad there are no foreign transaction fees.

Check out some of the other highlights of the card:

  • No annual fee for the first year
  • No limit on travel locations

Best Student Credit Card: Discover it for Students

There’s a reason the Discover it cards appear in more than one place – they are great at specializing to help cardholders get the most out of their cards. The student card doubles down, helping students new to the credit card game build their credit history while still maximizing benefits. It even provides some incentive to study.

The card rewards student for good grades by getting cardholders $20 cash back each year for a GPA of 3.0 or higher, and it is perfectly usable on a study abroad trip with no foreign transaction fees.

Compared to other student cards, it keeps interest relatively low, with no APR on purchases for the first six months, and APR as low as 13.24% after that. And, if you ever misplace the card, you can prevent new activity on the card instantly with the Freeze It feature available online and on the Discover mobile app.

Additional highlights:

  • No annual fee or overlimit fee
  • No fee on first late payment
  • Earn 5% cashback on categories like gas, food, and Amazon purchases
  • FICO score on your monthly statement to track your credit

Best Credit Card for Balance Transfer: Chase Slate

If you are looking to ditch your current card, the Chase Slate card will help you bring your balance over. Named the best balance transfer option by MONEY Magazine for three years running, the Chase Slate card offers a $0 introductory balance fee for transfers made in the first 60 days of account opening.

On top of that, the card will also get you 0% APR for the first 15 months on any balance transferred, and no annual fee. You’ll even get to see your FICO Score free to see if your balance transfer is impacting your credit. Add onto that no penalty on your APR for paying late, and the Chase Slate card is enough to make anyone transfer over.

The Slate card does not come loaded with the same rewards as other Chase cards – you won’t get any points for your daily spending. If you’re looking for an easy, affordable tool to pay down other balances, though, the Slate card really outshines all others.

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Best New Credit Cards in 2016

by texas in Financial Advice

The Best Credit Cards in 2016

Credit cards are an important thing to have. They not only give you a line of credit, they also show on your credit report, which means that a good card has the power to help raise your credit. Finding the right card can be tricky, though. Are you looking to help build your credit? Are you in it for the rewards? Do you want the highest credit limit, the lowest interest rates, or are you looking for a happy medium?

No matter what you need from a card, there is one out there that can help you. The trick is just finding the right one. That’s why we’ve complied this handy list of the best new credit cards to hit the market in 2016 and tell you about the uses and perks of each one.

Best Rewards Card: Chase Sapphire Preferred Card

This card is a loaded rewards card. It’s good for travel, it’s good for bonus points, and it has a pretty good signing bonus. Tie it to your Ultimate Rewards account and you’ll get even more bang for your buck. The Chase Sapphire Preferred Card lets you make the most of your bonuses, allowing you to use your rewards a cent at a time.

2016 new cardholders can get 50,000 Ultimate Rewards points just for signing, which can get you $625 in Travel Rewards when you spend $4,000 on purchases in the first three months of opening your account.

Double rewards on travel and dining help you get the most out of the things for which you use your card, and your rewards can count for credit on your statement, not just for travel. Other highlights include:

  • 1:1 ratio for use at hotel and airline partners when you use their loyalty programs
  • 1.25 – 2.5% rewards rates
  • Rewards usable on credit card statements

Best Secured Credit Card: Discover It Secured Credit Card

Secured cards work wonders for those with bad or no credit history. They’re not great for overall use, but they allow those with less than perfect credit to get a card by putting down a deposit to help cover issuer’s losses should you default on your payments.

The Discover It Secured Credit Card works with you actively to help you with everything a secured card should do. There is no penalty for the first time you pay late, and it will give you access to your FICO score on each monthly statement.

Other highlights include:

  • No expiration and no minimum redemption amount for rewards
  • The card reports to all three credit bureaus
  • After 12 months, you are automatically evaluated on a monthly basis to see if qualify for a regular, unsecured card

Best Credit Card for Air Miles: Capital One Venture Rewards Card

If you’re a frequent flyer, the Capital One Venture Rewards Card will get you up and in the air faster than any non-loyalty card out there. Start with a signing bonus of 40,000 miles when you spend $3,000 on purchases in the first three months of opening an account.

After that, you get double miles per dollar on every purchase every day. Where the Capital One Venture Rewards Card does better than many of its competitors is that isn’t just tied to partner airlines and hotels. You can use it for any airline and any hotel, with no blackout dates.

Miles don’t expire and there is no limit to how many you can earn, so you don’t have to worry about losing your rewards. What is better, if you decide to use your card abroad there are no foreign transaction fees.

Check out some of the other highlights of the card:

  • No annual fee for the first year
  • No limit on travel locations

Best Student Credit Card: Discover it for Students

There’s a reason the Discover it cards appear in more than one place – they are great at specializing to help cardholders get the most out of their cards. The student card doubles down, helping students new to the credit card game build their credit history while still maximizing benefits. It even provides some incentive to study.

The card rewards student for good grades by getting cardholders $20 cash back each year for a GPA of 3.0 or higher, and it is perfectly usable on a study abroad trip with no foreign transaction fees.

Compared to other student cards, it keeps interest relatively low, with no APR on purchases for the first six months, and APR as low as 13.24% after that. And, if you ever misplace the card, you can prevent new activity on the card instantly with the Freeze It feature available online and on the Discover mobile app.

Additional highlights:

  • No annual fee or overlimit fee
  • No fee on first late payment
  • Earn 5% cashback on categories like gas, food, and Amazon purchases
  • FICO score on your monthly statement to track your credit

Best Credit Card for Balance Transfer: Chase Slate

If you are looking to ditch your current card, the Chase Slate card will help you bring your balance over. Named the best balance transfer option by MONEY Magazine for three years running, the Chase Slate card offers a $0 introductory balance fee for transfers made in the first 60 days of account opening.

On top of that, the card will also get you 0% APR for the first 15 months on any balance transferred, and no annual fee. You’ll even get to see your FICO Score free to see if your balance transfer is impacting your credit. Add onto that no penalty on your APR for paying late, and the Chase Slate card is enough to make anyone transfer over.

The Slate card does not come loaded with the same rewards as other Chase cards – you won’t get any points for your daily spending. If you’re looking for an easy, affordable tool to pay down other balances, though, the Slate card really outshines all others.

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What Happens When You Default on a Title Loan?

by texas in Financial Advice, Industry News

What Happens When You Default on a Title Loan?

Getting an emergency loan without going through a lengthy approval process was like a dream until the emergence of a title loan as an effective alternative source of money. It is now an easily accessible financial tool for most of the Americans living on paycheck to paycheck.

A title loan also known as auto title loan is a short-term secured loan approved within just a few minutes. The unique feature of this loan as compared to a traditional loan is that its lenders never check your credit score, financial history, bank account details, or job status while granting a loan. In order to obtain a loan, you just need to produce a lien-free vehicle title and an ID proof. The loan estimation is done based on the value of the vehicle. In the US, some title lenders offer more than 70% of the value of your vehicle, while allowing you to drive your dream car. However, you have to surrender the title of your vehicle till the repayment of a loaned amount.

Title Loan Default

Loan default is a situation, when a borrower fails to repay a loan as per the terms agreed to in a promissory note. Where the constitutional provisions allow a lender to take necessary legal actions against the borrower to recover the loaned, the lenders are barred from taking extreme measures like physical attacks, forcefully takeover of assets or any such measures that may spoil the dignity of a borrower for recovering the loan.

It is a myth that most of the lenders charge interest rates so high that the borrowers find it quite difficult to repay the loan and ultimately end up defaulting a loan. The title loan industry in the US has undergone major positive transformations over the years. The number of title loan companies has increased considerably in the past few years. The loan market is now highly competitive. The companies come up with lower interest rates and multiple repayment options in order to win the hearts and minds of the customers by enabling them to repay the loans in affordable installments and avoid defaulting.  Some lenders even allow customers to renew it for a fee in case they are unable to pay off.

Currently the vehicle title loan market enjoys legal status in more than 20 states in the country. Over the years the federal and state governments have made meaningful amendments in their financial laws, so as to protect the rights and interests of the customers.

  • The military APR (annual percentage rate) for car title loans bearing a tenure of 181 days or less should not be more than 36% as per the federal law.
  • In Illinois, the state government has imposed restrictions on lenders in providing loans with balloon payments, so that the customers can repay the loan in equal installments, similar to conventional vehicle loans.  Further the loans can be refinanced, but only if the customer has paid up to 20% of the principal on the loan.
  • In several states, the title lenders cannot charge interest rates arbitrarily.  The Federal Truth In Lending Act legally binds the lenders to disclose all cost of the loan amount.
  • The Federal Trade Commission declares that a lender cannot make threats of physical force against a customer under any circumstances.

How to Avoid Title Loan Default?

Proper Planning – The first and foremost step to be taken to avoid a loan default is proper planning.  You should make wise use of money and avoid unnecessary expenses.

Don’t Take New Loan – How tempted the new loan offers maybe, you should voluntarily refrain from taking it since you are already having a loan due. You should always try to clear the previously taken loan amount, or else the financial burden will be increased.

Focus on Small Saving – Just as a proverb goes: ‘little drop of water makes a mighty ocean’. Similarly,  your modest saving will really help you a lot at the time of debt repayment.

Opt for a reliable lender – You must select a credible lender, who has years of existence in this business.  This is because a reliable lender will never mislead its customers.

Critically analyze loan terms – You should minutely review all terms and conditions of a title loan. In case you face any trouble in understanding, it is always better to take the help of an expert, who can easily guide you.

Payment Options: You should explore various payment options so that you can make your monthly payment on time.

Roll over Option: In some case, opting for the rollover option is better if you fail to pay the installment. The lender will allow you ‘rollover’ the loan into a new loan.

On the whole, it can be said that there are certain exceptional circumstances, which may compel a customer to default a title loan, in actuality he/she always wants to avoid such situations. However, with the emergence of title loan and its hassle-free process along with the flexible payment options offered by the lenders, being financially secure at the time of financial straits has become extremely easier. It is only by virtue of the amazing quality of this amazing and quick cash facility people are now able to make proper management of their unexpected expenses.

 

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Money Tips for Young Adults

by texas in Financial Advice

Texas TL Blog: Money Tips for Young Adults

Money Tips for Young Adults

It is unfortunate that personal finance is not offered in most high schools across the United States. It is safe to say, then that most high school students don’t have a clue about money management. For that reason, by the time, they reach to the college level; they may find themselves in financial trouble, not being able to distinguish the wisdom of using money wisely. Instead, with a precarious mentality, especially if parents pick up the tab while students are in college, there will be disparity of the seriousness of maintaining control of their finances.

Ease of Understanding

If you consider personal finance as something easy to understand, you are not living in the real world. Even adults have a hard time doing so, let alone young adults. If parents don’t set an example for their children, teaching them how money can work for them and not against them, then later on in life, those young adults won’t know what to do. Most adults spend their money shopping and going out to parties. Saving and being cautious about their spending is not something that they take seriously. For help to get started in finally understanding how to save money and be on a safe path to financial freedom, below are several essential things to consider.   

1. Financial Self Control

If you are one of the lucky ones, your conscientious parents may have taught you financial skills when you were younger. If your parents did not, then it is not too late to learn, but you have to delay the gratification of shopping and buying things that you may not even need and switch to keeping a good financial head. Even though, credit card purchases allow you to obtain an item exactly when you want it, you still have to pay for it in the long run and it will usually cost you more than the real price of the item. Why? You have to consider the finance charges that the credit card companies charge. This will go towards your purchase, adding on to the actual balance. For example, let’s say you bought an item of clothing for $45 with your credit card. When the monthly statement arrives, the creditor is going to assess a monthly payment to pay off the $45, but the creditor will also adds on some finance charges. If you pay the minimum monthly payment on your credit card statement, you could end up paying three times $45 – $135 for the same item of clothing.

2. No Minimum Payment

One of the main money tips for young adults is learning NOT to pay just the minimum credit payment each month, but pay more than the amount so you can pay the balance off in less time. It will save you in the long run. If you continue to purchase insignificant items with your credit card, it could take you into a spiral of debt. Stay away from this as much as you can. Most debit cards work like credit cards, except that you must have the money in your bank account to pay for anything. So, start using your debit card instead of your credit card so that if there is not enough money in the bank, you will refrain from making the purchase.

3. Automatic Savings

Another one of the wisest money saving tips is to initiate automatic savings. That means, you should go to your employer and ask that your paycheck be directly deposited into your account. You could also authorize the bank to put some of that money into your saving accounts automatically. Many of the banks in the United States have special saving accounts for young adults. Each time that you make a purchase with your debit card, you earn money that goes into a savings account.

4. Read Books

If you want to know more about personal finance, the Internet is readily available with information. Conduct your research online. However, you can also purchase books that give professional advice on how to best save money. It is your responsibility to educate yourself.

5. Where is the Money?

For everyone, not only young adults, it is unwise to be spending more than you make. If there is an expense that you can eliminate from your budget, by all means do so. You should always know where your money is going, even if it is one dollar. Do you know how much money you can rack up by buying coffee every morning while on the way to work? Or the amounts of money you calculate each month that you spend on lunch?  Buy a small notebook or journal and start writing down all your spending. With today’s technology, you may be able to download a mobile app that helps you to keep track of your spending.

6. Emergency Fund and Budget

As a young adult, you don’t know when an emergency may occur, so it is best to set up an emergency fund and to maintain a strict budget. Pay yourself first once you receive your paycheck. Use this money to put in your emergency fund, no matter how small the amount is. Keep a spreadsheet of how much money you make and how much you use for expenses. This will help you to be better able to maintain a budget.

7. Early Retirement Savings

While you may have a long way off to reach the age of retirement, you should not wait that long to start saving for retirement. The sooner you begin retirement savings, the better lifestyle you will enjoy when you retire. Solicit the help of a financial adviser to understand the complexities of a retirement plan. However, start by investing in an employer-sponsored 401K retirement plan.

The Bottom Line

It is a given that you will come in contact with money and that you will need it to pay for various things including your own expenses. For that reason, you should respect money and not abuse it

 

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