Life insurance

Looking at all these options, I feel just taking a term insurance and investing the rest of the money in long term dividend stocks like walmart, verizon, etc  of my sharebuilder account which gained 20 percent is a better idea. None of these universal or variable  can give me this kind of return. All of them have high administrative charges which eat up all the cash value. If you are looking for cash value just go for long term dividend stocks, because the money compounds.
1. The stock price risk is offset by the compounding of the dividend money. Suppose the stock price goes down 10 percent. That is off set by two year compounding of around 4 percent dividend money. So over a long time, it does not matter a 10 percent stock price.
2. Instead of giving the money like 400 dollars to Universal life which has high administrative charges and which equals you own money in 7 years, you can as well make a lot more money by just using Sharebuilder and putting the same kind of money there.
3. Take the term insurance you are really worried about Life insurance.

Tax advantage of 401k and real interest rate

I had ideas of pulling out of 401k and then figured out the advantage from a friend. When one takes out money from the 401 k after 65 years of age one is charged the tax rate that pertains to that fiscal year. That means that if one goes part time or does not earn much at 65 years of age then the tax would be naturally less then when one is making a lot of money at young age. This model works out good if the one thinks that one will make less money as one ages. What if one is going to make more money later in life? In that case one has to pay more for the 401 K when withdrawing. But saving money for the future is a good idea. Even if one loses all the bets on other things, something is left in the 401k to spend the rest of the life.

Then about Real and Nominal interest rates, I realized that Nominal interest rates are high and one thinks that banks give more money for deposits. I was thinking why should the banks give more money in India, i.e like 10 % rates for deposits. They give such high rates because of double digit inflation rates in India. Compared to United States, where the inflation has almost stabilized at 2%, inflation in India is very high. And depositing money in bank is no safe way of fighting inflation.

One good way to fight inflation on a long run is to invest in stable stocks that give good dividends and also beat the inflation.
This is the wisdom of the day

5 billionaires who live below their means

Five Billionaires Who Live Below Their Means

by Katie Adams
Thursday, April 1, 2010

provided by

At least once in your life - maybe even once a week or once a day for that matter - you have fantasized about coming into a lot of money. What would you do if you were worth millions or even billions? Believe it or not there are millionaires and billionaires among us who masquerade as relatively normal, run-of-the-mill people. Take a peek at some of the most frugal wealthy people in the world.

Warren Buffett

Associated Press

Millions of people read Buffett's books and follow his firm, Berkshire Hathaway's, every move. But the real secret to Buffett's personal fortune may be his penchant for frugality. Buffett, who is worth an estimated $47 billion, eschews opulent homes and luxury items. He and his wife still live in their modest home in Omaha, Nebraska which they purchased for just $31,500 more than 50 years ago.

 Although he's dined in the best restaurants around the globe, given the choice he would opt for a good burger and fries accompanied by a cold cherry Coke. When asked why he doesn't own a yacht he responded "Most toys are just a pain in the neck." (Find out how he went from selling soft drinks to buying up companies and making billions of dollars.

More from Investopedia.com: • Millionaire Traits That You Can Adopt • Baby Buffett Portfolio: His 6 Best Long-Term Picks • Learn to Invest in 10 Steps

Carlos Slim

Associated Press

While most of the world is very familiar with Bill Gates, the name Carlos Slim rarely rings a bell. But it's a name worth knowing. Slim, who is a native of Mexico, was just named the world's richest billionaire – that's right, richer than the uber-famous Microsoft founder. Slim is worth more than $53 billion and while he could afford the world's most extravagant luxuries he rarely indulges. He, like Buffett, doesn't own a yacht or plane and he has lived in the same home for over 40 years.

Ingvar Kamprad

Associated Press

The founder of the Swedish furniture phenomenon Ikea struck success with affordable, assemble-it-yourself furniture. For Kamprad, figuring out how to save money isn't just for his customers, it's a high personal value. He's been quoted as saying "Ikea people do not drive flashy cars or stay at luxury hotels." That goes for the founder as well. He flies coach for business and when he needs to get around town locally he either takes the bus or will head out in his 15-year-old Volvo 240 GL.

Popular Stories on Yahoo! • U.S. Posts Biggest Job Gains in Three years • Big Businesses that are Hiring • Space City, USA, Faces Staggering Blow More from Yahoo! Finance

Chuck Feeney

Growing up in the wake of The Depression as an Irish-American probably has something to do with Feeney's frugality. With a personal motto of "I set out to work hard, not get rich," the co-founder of Duty Free Shoppers has quietly become a billionaire but even more secretively given almost all of it away through his foundation, Atlantic Philanthropies. In addition to giving more than $600 million to his alma mater Cornell University, he has given billions to schools, research departments and hospitals. 

Loath to spend if he doesn't have to, Feeney beats both Buffett and Kamprad in the donation category, giving out less grants than only Ford and the Bill and Melinda Gates Foundations. A frequent user of public transportation, Mr. Feeney flies economy class, buys clothes from retail stores, and does not wast money on an extensive shoes closet, stating "you can only wear one pair of shoes at a time". He raised his children in the same way; making them work the same normal summer jobs as most teens.

Frederik Meijer

If you live in the Midwest chances are good that you shop at Meijer's chain of grocery stores. Meijer is worth more than $5 billion and nearly half of that was amassed when everyone else was watching their net worth drop in 2009. Like Buffett he buys reasonably-priced cars and drives them until they die, and like Kamprad he chooses affordable motels when on travel for work. Also, like Chuck Feeney, rather than carelessly spending his wealth Mr. Meijer is focused on the good that it can provide to the community.

The Bottom Line

The dirty little secret of some of the world's wealthiest people is that they rarely act like it. Instead of over-the-top spending, they're busy figuring out how to save and invest to have that much more in the future. It's a habit you might want to consider in order to build up your own little storehouse of cash.

Housing in California

The problem is going to fully expose itself like a blossoming orchid when lenders suddenly send out that first recast anniversary payment only to receive a cold shoulder once day 31 arrives. The fact that California has a whopping $300 billion in pay option ARMs that will recast over the next few years is simply going to put a cap in any bottom talk for a long time. Keep in mind in the entire United States there are $653,502,658,632 in Alt-A loans out there. The vast majority of these pay option ARMs fall in this category. So California by itself has nearly half of the entire nominal amount of these toxic sludge mortgages that make subprime loans look conservative.
Let us not forget that there are still subprime loans out there. California still has over 465,000 subprime loans “active” as of June of 2008. So we are not out of the woods on that one. If the housing market correction has caused housing prices to drop by 38% in California in one year simply with the majority of the subprime problems, can you imagine when the marriage of subprime and pay option ARMs confront us at the same time later this year and throughout 2009?
http://www.doctorhousingbubble.com/foreclosure-and-short-sale-report-3379-of-all-southern-california-inventory-for-sale-is-distressed-homes


With unemployment peaking near 11 %, there is no way housing bottom has reached. Where do people have the money to purchase houses?

I am guessing recovery can be  based on unemployment coming down from double digits and purchasing a house is to be weighed with the current rent prices.

i mean    Monthly mortgage payments/ rent ratio

but if mortgage is high, buying may be postponed because housing market is going go down another 20% unless unemployment is goes down and banks bailed out again.

Car servicing Rip off !!! How to save money

Why don't we save enough money after all the expenses? Looks like we have not spent much but at the end of the money all the tiny little expenses accumulate to eat away the bank balance. Here is one way to save money on car repairs.

I went to this Midas servicing center for buying the spare wheel( I am talking about the core metal inside the tire). The one I have got damaged during last road trip. He quoted me 120 dollars. I was happy because I took the tire replacement guarantee, however I have to purchase the wheel core.

Later there was my engine light on problem. For which I had to go to the show room and it was the catalytic converter problem. In California it has to be done only at the show room because of the environmental pollution regulations. The part was 500 dollars and the servicing charges were another 500 dollars. What can I do, I had no choice but to spend that kind of money since no one else does it.

The show room service center gave me a list of things still to be done like the water pump replacement, air filter, cabin air filter. They also advice oil change after 5k miles.

Later, I suspected the part prizes at Midas and at the show room. Midas quoted me 220 dollars for the water pump and the Toyota show room 480 dollars for the replacement. I went to Auto Zone for the price quote on the parts. The water pump was 55 dollars but the servicing charges were kinda high like 250 dollars for the extensive labor time it takes to replace it. Casually, I asked the prize of wheel core and they quoted me 34 dollars at Auto zone. I just paid 140$ with taxes for it at Midas. I was just ripped off.

I went to pepboy auto parts where I met a nice guy who would help me determine if there was any leaking problem with the water pump. He checked and give me some tips on how to monitor the leaking situation and for now he cannot see any signs of leaking.

So, I advice everyone to purchase the parts that are necessary for repair work at Auto Zone or pepboy auto parts and then hand it over to your mechanic. These car mechanics make more money on auto parts than labor servicing. And the Toyota show room advices replacements that really do not need it. Get your oil change every 3.5 k miles. They show room says 5k miles oil change but several mechanic told me it is best if done after 3.5k. Spend wisely and learn from my rip off.

happy saving!!!