Bury The Debt Monster: Part One

In this series of articles to turn it all around!

Lesson One: Opening Your Eyes

Many people don????????t know how much debt they have, and whether or not they have a good balance of ???????good??????? and ???????bad??????? debts. Most people who have the most debt try to ignore the extent of debt they are in- in other words, they avoid reality because what you don????????t know doesn????????t hurt you, right? In this case, unfortunately, debt always hurts you over the long term!

The first lesson on the road to self-debt reduction or elimination is to understand how much debt you actually have, and what type of debt it is.

Make a List

Let????????s start with the ???????bad debts???????, since these are the ones we will want to pay off as soon as possible. Bad debts include store credit cards, car loans, and charge cards- any purchase that loses value instead of offering you potential earnings.

On a piece of paper or on a computer spreadsheet, set up your list like this:

Name of Card/Loan     Amount Owed     Interest Rate     Estimated annual interest

Ex: Citibank     $2,123     18.36%     2123 x .1836 = $389.78

Next, do the same thing for good debts. Good debts are things like school loans, mortgages, second mortgages, and other investments that may earn money. We will use your good debt list in a future lesson, but for now, let????????s take inventory of everything you owe on two separate lists: ???????bad??????? and ???????good???????.

Analyze Debt to Income Ratio

Once you have both your lists completed, you????????ll want to analyze the amount of bad debt you have. Get a total amount of the ???????amount owed??????? column of your bad debt list and compare it to your annual after-tax income. The bad debt total should not be a large chunk of your income. You can find your debt to income ratio (and we????????re just dealing with bad debt at this time) with a simple formula:

Total Bad Debt / After-tax income = bad-debt-to-income ratio

If you????????re total bad debt is $5,770 and your after-tax income is 36,000, you would have a bad-debt-to-income ratio of 16%. The goal is 15% or less in order to keep your payments manageable.

How Much You Actually Flush Down the Drain

Think about what you could do with that extra money on an annual basis! While student loans or mortgages are considered debt worth paying interest for, look at how much money you are flushing down the drain each year on your credit card and car loan payments. WOW! Now, for a real eye opener, add up the amount of estimated interest you pay annually on your bad debt accounts.

The next lesson will lay the foundation for eliminating the worst of our debts: credit card debt. The first step for people looking to get out of debt is to face the debt monster and see exactly how much money they owe. Lesson one has probably been an eye opening experience overall for the majority of you.

Texas Medicare Supplement

Texas Medicare Supplements

As you search for the best possible options for Texas Medicare Supplement insurance, we can prove to be a valued asset in understanding your options and finding the best pricing from several trusted Medicare Supplement providers. Choosing the right policy can be a very important part of your retirement plan. Therefore, it becomes wise on our part to opt for suitable Medicare Supplement policies well in time.

Nevertheless, we cannot deny the very inevitable. It is true that we hate to think that way. Every day we are slowly but steadily progressing towards that older age. It is the most natural thing.

It is inevitable that everyone among us will age. Those who do not plan their health/medical insurances in due time know it too well. Still, there are numerous instances in our lives that lead us to the ever new realizations of this old maxim. Yes, it is an oft-repeated quote and perhaps overused to some extent too.

?teeth are valued when they are gone?. There is an age-old saying ?

It is true that these days we are increasingly becoming conscious about our health and all other things associated to health. Simultaneously, it is also an undeniable fact that healthcare costs are always hinting north ward. Therefore, a detailed research becomes all the more important so that you can come up with the best-suited policy Texas Medicare Supplement policy with the most reasonable premium. Because there seems to be an overwhelmingly number of companies offering Medicare Supplements in Texas it often gets a little difficult for one to discern and choose the most favorable deal. Because Medicare follows Federal guidelines things are no different in the state of Texas as well.

There are a great number of providers of Texas Medicare supplements. They also vary greatly in terms of the policies offered, financial stability, modes of premium, etc. However varied the Texas medicare supplements offerings might be there is at least one good thing about them. All the companies that offer Texas Medicare supplements have identical plans (by federal mandate). As a result, it is comparatively easier to choose the quote with the best price from any of the A-rated companies.

As you search through the available offerings, you need to keep in mind several important considerations. The entire process becomes rather easy if you qualify for guaranteed issue. That is always a privilege to have. Another very important thing is the factor of premiums. It is not always a great idea to consider just the initial price in mind. Experience shows that there are several companies offering an attractive rate for the first couple of years or so and then have a fairly significant increase in premium price once that two-year term is over. Therefore, do not consider the initial premium price alone. It may lead you down the wrong road.

As you go through the process take your time, consider multiple offerings, and use a good independent agent who represents several companies to walk you through the process. plan, pricing (initial and at older ages), financial stability, etc. All in all there are so many considerations when searching for the best plan for your situation and preferences ? These two plans do not cover the Part B premium but they are available at lower rates.

There are also many people who opt for the Plan G or Plan D. These plans cover all the gaps in Medicare (deductibles and coinsurance) for Medicare-covered expenses. However, the most popular plans seem to be Plan F or Plan J. As you carry on your search, you will come across several variations of Texas Medicare supplements.

To learn more about Texas Medicare Supplements please visit: http://www.texashealthandlife.com/texas-medicare-supplement-insurance.html

Treating BetterTrades as Business

What I found was truly amazing, if not totally refreshing! I'm not a CEO or CFO type and I certainly have no training or expertise in those areas, but I have spent a lot of time talking to folks whose job it is to run large and medium sized companies in an effort to understand how to better run my own, comparatively tiny business. It is just mind boggling to think about the millions of little details which have to be handled just to keep the doors of such complex corporations open!

Have you ever wondered how in the world large businesses or corporations such as GM or IBM just manage the small day to day tasks of operating and managing such huge concerns?

Let 's take a quick look at all three of these areas. have the same needs in the same areas, no matter the size of the concern. in fact ALL businesses ...

I describe this a 'encouraging' in that my small business ... The details are a bit different to be sure, but they all depend primarily on effective management and sound decisions in three areas; cash flow (or income), a source for stabilization of that income, and long term growth. What my searching uncovered was really encouraging in that it showed me that their businesses, no matter how large or complex, all have basically the SAME three requirements.

The first and most important of the three is the need for consistent, sometimes daily CASH FLOW. This area is prioritized above the others because it is here where the money is made to meet expenses of continuing in business. Face it .. business have bills to pay. General Electric must meet it 's obligations just as surely as we must in our family 's daily existence. AT&T; has daily obligations ... IBM and Microsoft face an overwhelming amount of daily expenses ... YOU and I are no different! We just operate on a different scale ... thankfully! To the extent that a business is able to meet it 's expenses - pay it 's bills, if you will, it should, all things being equal, remain a viable business concern. The instant a business fails to generate these very short term funds is the instant it begins to go out of existence!

STABILITY in cash flow generation is almost as important but is prioritized down a notch. The main reason for the 'downgrade' if you will is the nature of the need for cash flow. The expenses must be met, even if on a 'hit or miss' basis. Consistently generating that money is 's tability', crucial in need but behind the actual 'generation' in position. It is important to be sure as stabilizing at a level LOWER than necessary to meet expenses is unacceptable, for obvious reasons!

This stability is achieved in most business by keeping a 'pipeline' full of forthcoming business, designed to provide regular cash infusions periodically. In other companies, stability can be achieved by ... well, just having a ton of cash on hand! Perhaps one of the best examples of this is Microsoft. During the recent onslaught of government or regulatory attacks accusing the software giant of monopolistic practices, fines in the millions of dollars were tossed about as potential 'punishment' for these alleged violations. Can you imagine how LITTLE would be the impact of a $10 million "fine" on a company that has $50 BILLION 'unattached' in the bank??!

The final area of consideration is long term GROWTH. Once a company has developed it 's business plan to the point that it can remain a financially viable entity, it must then concern itself with the concept of getting bigger. While specific growth is different for everyone the fact remains that you can't just 's tand still' in business. You're either growing or dying! The easiest way to grasp this QUICKLY is to think back to the first job you had. Focus on the INCOME that job provided and now try to imagine existing today on that income. The same principles exist for businesses as well. You can't stand still there either! They must meet (and beat) the competition, so research and development are necessary. Technological advances come along and the number of employees must be increased to handle the new jobs these advances create. We could spend volumes on this aspect, but I think you probably get the picture!

So, all businesses, large or small have these same three areas of concern; cash flow generation, stability and growth. Now, let 's try to pull these concepts down to a level where we might be able to see a direct connection to our trading businesses.

We are traders. Trading is our business. Let 's agree that we have needs for cash flow, stability and growth in order to manage our trading business more effectively. Trading is not just throwing money at the stock market in some 'willy-nilly' fashion. We have to define our trading business in such a way that we can apply sound business principles to insure that we truly have a 'going concern'. Here 's how I do that in my business and how I teach others in the trading labs to do the same thing. Lacking both the time and room for a detailed description let me summarize what we do...

First, my cash flow is a function of my daily, short term trading. This is not day trading by design. Rather, I use one of several strategies designed to get into a trade and then back to cash in a 1-5 day period. Trade only the journey the stock normally takes each day, being content with SMALL (daily) profits. Here are some givens:
You will NOT be profitable on every trade.


Your business does NOT depend on the success of your next (or your last) trade, so EMOTION has no place on the trading floor!
Stability in trading comes from the same place for us as for any other business; either a full pipeline of pending business or CASH in the bank. We can overcome a shortfall in COH (cash on hand) with successful medium term trades (30-90 days in length). I like to use covered calls and/or spreads to provide that regular cash infusion providing a leveling effect in the short term account.

Growth comes from successful long term (greater than 90 days) trading. For this, my favorite strategy is selling naked puts on high quality Blue Chip stock (however you define 'blue chip'). A quick trip down this lane shows us picking out 'chippers' on weakness, selling puts having strike prices just below earlier PEAK values. The operative here is that we don't really care if the stock regain these earlier values ... just moving toward them will give us most of the profit we seek!

Make it a great day! Treat your trading like a business and it will treat you like royalty! So there we have all three management aspects of any successful business; cash flow, stability and growth.


Bob