The stock market’s wild gyrations make this a good time to check on your 401(k).

No panic moves, mind you.

Instead, put your portfolio through its paces to make sure it’s doing what it needs to do to help you reach retirement in good financial shape.

Here are four pieces of advice worth taking:

1. Consider Being More Aggressive

Recent events notwithstanding, stocks perform better than other investment vehicles over time. The typical stock fund averaged a 10.4% annual return from 1926 to 2005, compared with 3% for inflation, less than 6% for bond funds and less than 4% for Treasuries. And while stocks can be volatile, the risk of holding them diminishes over time.

Stocks have outpaced both bonds and Treasury bills during more than 75% of rolling five-year periods since 1926, according to Ibbotson Associates, a Chicago-based investment research firm owned by Morningstar. Look at 10-year periods, and stocks won 85% of the time. For 15-year periods, the percentage jumps to 92%. Your allocation to stocks should match your time horizon and risk tolerance.

Remember: your target date should not be the year you retire. Your retirement may well last for decades, and during that time your portfolio will need to grow enough to stand up to inflation, including rising health-care costs. Bottom line: Even as you approach and pass the end of your working years, don’t be afraid to emphasize growth — meaning stocks.

2. Expand Your Horizons

Today’s 401(k) plans tend to offer a broad array of investment possibilities. Consider whether your portfolio is taking advantage of them. Investment vehicles such as emerging-market stocks, high-yield “junk” bonds and small company stocks offer superior growth over the long run. They may seem risky — and in isolation they are. But when you hold them with other investments, they can actually reduce your overall risk. That’s because these asset classes tend to zig when other segments of the financial markets zag. As a result, they can help smooth out the year-to-year returns of your portfolio even as they increase your potential for long-term gains.

3. Identify Losers and Overlapping Funds

Review each fund in your portfolio, and compare it to others in the same category both inside and outside your plan. For example, how does your small-cap growth fund compare with other funds that hold shares of small growth companies? (You can find this info at websites such as Lipper.com, Morningstar.com and fund-company or 401(k) plan sites.)

Compare both returns and volatility over one, three and five years, with an emphasis on the longer term. While you’re at it, look for fund overlap, which occurs when two funds are concentrated on the same stock or sector. For example, if you hold several funds that have invested heavily in technology stocks or long-term bonds, you could be overexposed to a decline in those sectors.

4. Coordinate Your 401(k) With Other Accounts

Let’s say that your plan’s options in some categories aren’t appealing. In that case, consider investing in the plan’s strongest funds, then diversifying into other categories through an IRA or taxable accounts.

The bottom line: As a retirement account, your 401(k) should focus on the long term. But tweaking your holdings can improve that long-term outlook — and might also offer some shelter from the market gyrations that will occur in the meantime.

source:yahoo finance

The good news: mortgage rates are down. The bad news: it’s much harder to qualify for a refinanced loan these days.

What’s more, the borrowers who need to refinance the most - because their adjustable rate mortgages (ARMs) are resetting to higher interest rates - are among those having the most trouble winning approvals.

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“I’m turning away about 60% to 75% of the clients who come to me for a refi,” said Bob Moulton, president of Americana Mortgage Group on Long Island, N.Y. “Some don’t have enough equity and others have bad credit scores.”

During the boom years, lenders approved most anyone with a pulse. Not so today. Mortgage brokers recognize this and are now being very selective about the clients whose applications they choose to submit to the likes of Wells Fargo or Bank of America.

If an applicant has poor credit, or a home whose value is rapidly deteriorating, they’re just not going to bother.

“If the person is Sweet Polly Purebread - good income, good assets, high credit score - there’s money out there,” said Moulton. “But if not, then it’s harder.”

Interest rates are way down - 5.67% is the going rate for a a 30-year fixed loan this week, according to Freddie Mac. That has generated a spike in refinancing applications.

Total mortgage applications were up 73% last week from a year earlier, according to the Mortgage Bankers Association (MBA), and 69%of those applications were for refis. Last February, when interest rates were about 6.3%, about 46% of applications were for refis.

The make-or-break metric for anyone looking to refinance right now is home equity - the difference between what is owed on a house and what the house is worth. But with home prices down, many homeowners have little of that precious commodity left.

“If you have an 80% loan, with a 10% home equity loan, you may not be able to refinance,” said Peter Grabel, a mortgage broker in Connecticut - especially in down markets.

Consider a homeowner who bought in Miami a year ago with 20% down. Home prices have fallen 15% there in the past year, wiping out three-quarters of the equity. Lenders, who want collateral that’s worth more than the value of the loan, are wary about having so little cushion. If they have to repossess and resell the house, they’re on the hook for a big loss.

“No lender would take that deal,” said Marc Savitt, president of the National Association of Mortgage Brokers. “It’s a lot different from two years ago.”

The bar has also been raised for credit scores when it comes to refinancing, according to Grabel. And sometimes, it’s not a matter of whether someone can get refinancing but at what price.

“Those with high credit scores are getting very good rates, but the lenders have heightened the requirements to qualify,” said Grabel. Instead of a score of 680 for the best rate, a borrower might need 700 now.

For example, Grabel has a client who wants a cash-out deal. The client has lots of equity in his house but a dismal credit score - 552.

“I used to have 20 lenders I could send him to; now there’s maybe one,” said Grabel. “The rate, though, will be high, higher than what he’s paying now.”

The only reason that this client will take the deal is because he’s going through a divorce and needs to buy out his wife. He doesn’t have time to rebuild his credit rating, but he’s lucky that at least his house appraises well.

Indeed, appraisals are another tool that lenders are using to eliminate unqualified applicants.

“It used to be a formality,” said Grabel. “Now it’s, ‘Lets do the appraisal first and see what value comes in.” Lenders are scrutinizing them to a degree unheard of during the boom. They don’t want to lend $160,000 on an appraised value of $200,000 unless they’re sure the house is truly worth that.

Ted Grose, a past president of the California Association of Mortgage Brokers, said lenders now often conduct what he called “bench reviews” of appraisals. “They have an experienced, independent third-party go over the appraisal to make sure the numbers are accurate,” he said.

Grose called many of the applicants he sees “very challenging, mostly because of high loan-to-value ratios.”

Many of these people took exotic loans to get into high-priced properties. They used hybrid ARMs that are resetting to higher rates, or interest only loans.

Particularly deadly are option ARMs, which act as negative amortization loans; the payments don’t even cover the interest and the balance grows over time. Combine that with falling home prices, and the loan balance may be more than the home’s market value.

Under those circumstances, said Grose, few borrowers can be helped.

Source:yahoo personal finance

The above title might have scared you. For most of us, the ideal is to be as educated as possible and it’s a dream for us to also be able to send our kids to good schools.

That’s where the tag line comes in. What’s a good school? Will your child get a better job because he/she attended a prestigious four year university and received a B.A. in liberal arts?
I actually think not. Your child (or you, if that’s the more relevant case) will receive a huge debt, that’s what you can guarantee he or she will receive. The debt may take years to pay off.

Here’s a secret: The easiest thing to market in the world is education. “Without a good degree you won’t get any good job and won’t make any money,” is what every private or even public post high school recruiting agent will tell you. They essentially are experts at selling the American dream, which is not too hard to sell for many idealistically driven youth.

The reason why they are so successful is because what they’re saying has much truth. But that’s the difficulty in processing information. Truth mixed in with a little bit of lies is what ends up sounding as truth, but is actually quite different.

To fully comprehend what I’m saying, you’ll first have to understand the history of colleges, most notably the prestigious well established universities. These colleges were not intended (and in my opinion, are still not intended) for middle class and poor people to become educated in order to get good jobs. Universities were simply a social class symbol of pride. Previously you didn’t have to get straight A’s to get into Harvard, but rather come from the right family and have the right charisma and likeability to get accepted. Colleges were intended as a way for the wealthy to continue on with their education without ever having to get a real job, thanks to their family wealth and inheritance.

Does it make any sense to get a $100,000 loan to go to college (or even a $30,000) when the average person makes 7 career changes over their life-time and it may take a good few years until the person is established in a job which he likes and which pays decently (usually starting salaries aren’t that high, face it, regular people don’t make that much and it takes time until they are established and start making money.) The only thing it accomplishes is putting people in huge debt which can and usually does take years and years to pay off. Usually these payments need to be made in the years where every penny counts and people can least afford it. Globe, a Salt Lake City community newspaper discusses the financial difficulties pertained by students who have to make the tough decision of choosing to go to a prestigious university or opting community college.

Money is always a problem for college students. No matter which way you look at it, students will end up spending thousands of dollars each year for tuition. One positive is that SLCC is on the lighter side of the tuition scale. A full-time student at SLCC can expect to spend approximately $2,300 a year, where the tab at the University of Utah can tip the scale at about $5,000. More than double the cost, and for students on a budget $2,700 goes a very long way.

Do I advise not going to college altogether? Not at all. What I do advise, though, is going to community colleges. They are more career oriented, friendlier learning environments, and offer more practical classes. They also cut on big bucks.

The second, mostly over-looked issue reagarding college is the issue of maturity. Most 17 or 18 year olds are still too young to know what they want to study and do with their lives. Many students feel lost in huge universities where they don’t even know what they’re paying so much for. A common sentiment you’ll hear from university drop-outs is that if they had instead started out in a community college and then transferred they probably wouldn’t be drop-outs today.

Another separate issue to think about is what major to get into. A major in French Literature or Art History may be very fun and interesting, but honestly does not offer very many jobs. If your goal is to become a professor, so be it, but otherwise think through your options carefully.

Remember, it takes time until anyone- whether he is a graduate of Yale or Santa Monica College- to establish themselves and start making money. People generally don’t start making big bucks fast. Do you really want to have enormous loans sitting on your head while you need the money the most? I think not.

Frugal Home Tips shares with us her insights.

1. Set the thermostat at 68 degrees in the winter and 78 degrees in the summer. Use a programmable thermostat to set the temperatures at less comfortable levels when you’re not home or sleeping.

2. Use heavy drapes over your windows. In the winter, it will keep the warm air in, and in the summer it will keep the hot air out.

3. Caulk and weatherstrip the cracks in your house. Our landlord added some weatherstripping around our back door, and it’s made a world of difference!

4. Use ceiling fans. If you get the reversible kind, you can use them to push the warm air down to people level in the winter.

5. Line dry your laundry.

6. Unplug appliances you’re not using. Even if an appliance is turned off, it still uses a small amount of energy, if it’s plugged in. This is especially effective if you’re going out of town.

7. Close the heater vents in rooms you aren’t using.

8. Insulate, insulate, insulate! Our landlord says he went overboard on the insulation in our house, but with heating bills under $80 during the winter, I’m not complaining. You can even make sure your garage door is insulated to save more money.

9. Don’t use the air conditioner in the summer. It’s not real comfortable, but people survived for years without a/c, before it became standard in homes.

10. Switch to CFL bulbs. If you look hard enough, you can find good sales on them. I picked up most of our CFL bulbs on sale for 99 cents a bulb.

11. Wash your clothes less often. I’m not talking about being disgusting here, but many people throw clothing in the laundry after each use, whether it’s dirty or not. If you wear a dress for a couple of hours on a Sunday morning, you can probably forgo washing until after the next time you wear it.

12. Along the same lines, reuse your bath towels before washing them.

13. Have an energy audit performed on your home. Many electric companies offer energy audits free. You can call and have someone come out to your house and tell you about changes you could make to make your home more energy efficient.

14. Install energy saving appliances. I’m not advising that you run out and buy new appliances, but if your refrigerator stops working, look for an energy efficient model to replace it.

15. If you have older windows, make sure you put up the storm windows in the winter.

16. Weather proof your windows with that plastic stuff. Not pretty, but it saves energy.

17. Use small appliances like your crockpot and toaster oven for cooking, rather than heating the entire oven.

18. Keep your freezer full. It uses less electricity that way. If you have extra space, fill it with plastic water bottles.

19. If you do use the oven, cook multiple things at once. Make use of every inch of space in there.