Happy Thanksgiving everyone!  I’m thankful to be able to write this blog and that I have you as readers.  (And of course I’m thankful for many other things.)

The four articles that Gary North published today on his website are free for anyone to read today.  You’ll find them in the Recent Articles section.  These four articles are centered around the topic of Thanksgiving.  These articles are good advice for anyone.  I don’t know how long they’ll be free, so even if you don’t read them today, just go over and print them out.  Gary North is a big influence on how I think about the economy, investment, and a host of other things.  So, there you go.

Have a great day filled with thankfulness.

In a clear sign the federal government is far more concerned about the financial health of mortgage finance giants Fannie Mae and Freddie Mac than its public comments indicated as late as Friday, the U.S. government Sunday night announced what some are calling a “massive aid” package to the two shareholder owned and run companies officially cementing a government relationship that till now was only implied but never admitted to.
According to a Reuters dispatch, the plan, which will require swift approval from Congress, is designed to “head off a potential meltdown in financial markets.”

Here’s what the government is offering Fannie and Freddie:

1. Access to its emergency cash–the so-called discount window
2. A huge “temporary” increase in the line of credit available
3. The U.S. Treasury will, for the first time ever, purchase equity in both companies should it be needed
4. Investigation by the Securities and Exchange Commission to stop the spread of “false information.”

Both Fannie and Freddie are vital to the housing market–they buy mortgages from banks and other lenders and either keep them or repackage them into securities that are sold to investors.

“Welcome to the socialist state”

Strong words from some critics are already greeting the government plan. Josh Rosner, the managing director at Graham Fisher in New York told Reuters, “It’s outrageous. It’s offensive. Welcome to the socialist state. In capitalism, winners are supposed to reap rewards and losers are supposed to take losses for bad risk management. These are private companies.”

But others are deeply concerned that should Fannie and Freddie fail–though they both say they are well capitalized–the shockwaves would cause a financial meltdown world-wide.

The most troubling part of the government plan,perhaps, is the possibility the Treasury might buy equity in Fannie and Freddie. Some critics charge this could end up costing taxpayers enormous sums of money.

It will be interesting to see whether Wall Street gives the plan a thumbs up or thumbs down during Monday’s trading.

Here are 2 more articles worth reading:

• Government as the Big Lender
• Treasury Acts to Save Mortgage Giants

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This Post is from the BiggerPockets Real Estate Blog. Copyright © 2008 BiggerPockets, Inc. All Rights Reserved.

FEDS BAIL OUT FANNIE AND FREDDIE; EMERGENCY MEASURES TAKEN

Who’s to blame for the worst economic crisis since the Great Depression?

Warning… long rant ahead.

Have you heard the latest bad joke around? Okay not this bailout crisis joke I wrote about a week or so ago but the one on how we’re socializing our financial markets by making the taxpayers bail out all our financial institutions. As someone put it, “this is a form of wealth distribution alright, the government robbing from the poor to give to the rich….”.

So when will this nightmare of a crisis end? Sure we’re shoring up our failing banks and institutions right now, and even possibly certain vital industries that are the heart and pulse of our nation. But, I also see the flip-side, which is the fact that we (and our kids, and maybe even our grandkids) will be paying off for this till kingdom come, with the whole thing financed by our debt to foreign interests (e.g. Chinese).

This soap opera can’t be without its sorry cast of characters.

Golden Sach’s Bailout Man: Henry Paulson and George W. Bush, by Buckfush

Big 3 take private jets to grovel for cash, by Daily News

Capitalism Gone Awry

I wonder: how naive have I been? I am big on capitalism and believe wholeheartedly in rewarding anyone for the work they’ve done and value they’ve produced. I’ve always been of the mind that, if a CEO does well by his company and makes me happy as a stockholder, I have no qualms in approving a commensurate pay package for the geezer.

I’ve always been a proponent of self-regulation and a laissez faire economy, but this very thing has led to the disasters we’re seeing today. Now with the government sweeping in to save “the big guys” from themselves and their gross mistakes, I see that apparently, self-accountability is optional in this free market. Very interesting what this blog has to say:

Now consider: finance is a necessary function, but is represents a tax, a drain on the productive economy, just as defense and lawyers do. It is ironic that free market fundamentalists have so vociferously argued for unfettered markets, without understanding (or perhaps understanding all too well) that the house always wins.

The whole crisis has caused a very large swing from one extreme to another, the moving pendulum leaving behind much collateral damage: credit’s gone from very loose to extremely tight overnight.

Some people who had access to a lot of credit will correctly have a lot less, and that on dearer terms. But there are also perfectly worthwhile businesses and individuals who are also caught in the meat grinder of indiscriminate reduction of loan balances. Times are bad, and any efforts to extract more revenues from customers, even if it is blood from a turnip, or worse, even if it puts a viable business under, is warranted.

Silly me to have been so gullible, as I now stand confused about what should be done and how the economy should be run. It doesn’t help that I keep reading stuff like this to feed my migraines and sour stomach bouts.

How This Economic Crisis Is Breaking Financial Rules

What stance do I take now, as a die-hard pro-business supporter? I had placed my faith in the “powers that be” and didn’t think I’d ever see these levels of corruption, unchecked greed and blatant mismanagement in a first world country on this grand a scale (yes, I say this as someone who’s no stranger to the machinations of the third world, where corrupt ineptitude is rampant). This stuff happens, sure enough, but it happens in another world, and under the covers.

But there’s no hiding the ugly anymore. All I can see now is just how the ruling class has done a number on the working masses. And for the millions of people who followed the financial rule book throughout their lives to meet a horrible end to their futures because of the incompetent, morally degenerate few — well, I can say I’m beyond disappointed, and have crossed the line to feeling outrage and disgust.

Yes, this crisis is breaking all sorts of rules, including those I’d consider as long-standing successful personal financial tenets. Responsible approaches to personal finance don’t have a chance against a crisis of tsunamic proportions:

So let’s see — doing the right thing by scrimping, saving, investing, diversifying, doing proper asset allocation, avoiding market timing, indexing, and hedging against inflation through equities, even doing your job well will no longer guarantee you a splendid, worry-free financial future. Not when a “once in a century financial event” can just come by and rob you off the stuff you worked so hard for; not when someone “up there” can change the rules for you, just like that.

I didn’t necessarily see it coming, but some of my readers here have: I see just how observant readers have been, as they’ve shared their insights on the causes and consequences of the subprime mortgage financial crisis, the pros and cons of financial bailouts, and the relevance of market timing during a stock market bear and the current investment climate.

The Economic Crisis Calls For Faith: Do You Have Any To Spare?

Perhaps I’ve placed far too much faith in the integrity of our political and business leaders and trends in modern history to believe that our financial system was strong enough (and people were smart and honest enough) to absorb any shakeups, shocks and imbalances that happen. I still have hope, but recent events continually call to question my position in this matter.

Not long ago, I had asked: who’s to blame for the subprime mortgage mess? I said then that everyone here had a hand in this (from the mortgage lenders to the developers to the Fed to ignorant homeowners), but in reality, I’m now seeing where the bulk of that blame should go. It should be clear by now who should bear the brunt of your harsh judgment: follow the money.

Sure we (as the little people) can’t really do much about this (except whine, rant and call the villains out), but with more discussion, we can spread awareness of these ridiculous affairs. What I got out of this is that there’s little out there we can count on and few people we can trust when it comes to our finances. A sobering thought. Do you think there are really any lessons and takeaways here for the future? Do we even have much of a future the way it’s been mortgaged?

I welcome your thoughts on this matter. Fire away!

This is a post from The Digerati Life.

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How much of your money is in domestic stocks? What percentage of your portfolio is invested internationally?  If you’re like many average investors in the US the majority of your investments are in US companies.

Global Investing Seminar
I attended a seminar on global investing yesterday and it really made me think a little harder about our current exposure to international investments.  I had to keep in mind it was presented by a financial company that runs a global fund, so the point of the seminar was to reinforce the importance of international investing in the minds of current and potential investors.

However, they did cover some interesting statistics that apply no matter what investment vehicle you use to diversify overseas.  They fed us lunch so I didn’t get to write down all the statistics since I was busy feeding my face but I still remember the general concepts.

Global Growth Trends
One of the graphs was from a Morgan Stanley study that looked at the total value of US public companies compared to the total value of international companies.  The graphic showed the value in approximately 20 year time intervals: 1988, 2008, and 2030 projected. 

I wish I had the exact numbers but the overall trend showed a global economy that was dominated by American companies in 1988, maybe about 2/3 of the global corporate value was in the US,  but the estimates for 2030 approximated US companies making up only a quarter of corporate capital markets.

Of course the numbers aren’t exact but I think the trend is definitely accurate and that the US position as the world’s financial superpower is slipping.  While this may not be great news for us as consumers or workers, it does present an opportunity for us as investors.

Evaluating International Markets
The speaker worked for a global fund, his role is to fly around the world visiting and evaluating companies that the fund is considering putting money into. He walked us through his fund’s investment positions in the various global regions, explaining their reasoning behind being underweight in places like Great Britain and overweight in places like Taiwan and South Korea.  He definitely pointed to Asia as the region with highest potential for growth over the next two decades.

He gave some staggering statistics on the sheer size of the Chinese consumer and business market and the enormous potential for growth there.  He also commented on the enormous currency reserves the Chinese government has built up and all the money they need to spend on infrastructure.

However, the speaker went on to warn us that the Chinese markets are overpriced, in his opinion, due to a massive runup in the stocks of Chinese companies over the last few years.  He had the same caution for stocks in India, that the price earning (PE) valuations were higher than they wanted to pay.  His company is looking for opportunities in areas like Taiwan or South Korea where the PE ratios are much lower.

Risks of Investing Internationally
The truth is we live in a global economy and changes around the world can effect how US companies perform so even domestic investments are influenced to an extent by international markets.  However, if you decide to put your money in a foreign company your investment is suddenly influenced heavily by regional events, currency fluctuations, and the policies of the foreign government. 

If you’re investing in an emerging market where there is large amount of growth there’s also typically a lot of change both economically and politically that can potentially put your investment at risk. Although there are risks associated with global investing, in my opinion they are definitely worth the opportunity to benefit from the growth in economies around the world. 

You wouldn’t want to put all of your money into international companies, just make them a part of your investment portfolio.  Several years ago about 10% of our portfolio was in international funds when I increased it to around 15% and now I’m looking to raise the percentage even higher.  How much exposure you want to international markets is up to your situation but it’s definitely something you should at least look into.

How to Invest Internationally
So how can you put your money into companies overseas?  The easiest way is to buy an international ETF or mutual fund.  The approach I decided to take several years ago was to invest in multiple international funds.  I choose an option from my 401k, Dodge & Cox International Stock (DODFX), one from my wife’s 403b, American Century Intl Growth (TWIEX), and also opened a non-retirement account with Oakmark International (OAKIX).

Dodge & Cox International Stock has done the best for us. American Century Intl Growth has been decent but nowhere near the performance of the Dodge and Cox fund.

Oakmark International had been going gangbusters until last December when it took a big hit.  I had been debating between the Oakmark fund and the Vanguard Total International Stock Index Fund (VGTSX) back in early 2003. 

Our financial advisor recommended Vanguard but I went with Oakmark instead.  As the graph shows, I’d be wealthier if I’d have listened to her, I guess hindsight is 20/20.  The Total International Stock Index Fund is actually composed of investments in three other Vanguard international indexes:

• Vanguard European Stock Index Fund
• Vanguard Pacific Stock Index Fund
• Vanguard Emerging Markets Stock Index Fund

The fund is a simple way to gain exposure to a variety of markets all over the world.  There are many other international funds available so you have lots to choose from.

One other option I’m considering for investing overseas is opening an account with ETrade to take advantage of their online global trading.  This would be a different approach than the mutual fund route which would require more research and carry more risk.  It would allow me to invest directly in companies in Canada, France, Germany, Hong Kong, Japan and the United Kingdom.

International Investing Summary
Whatever approach you decide to take, I’d recommend at least reading up on the growth of economies outside our borders and how you can invest in them.  As I mentioned in the beginning, the long term trend is that international companies are growing to compose more and more of the investment options available to you and all the other investors in the world.  In order to diversify your portfolio and benefit from global growth consider taking a look at your international investment options.

There is so much bad news floating around, so much to be worried or angry or upset about in the world. However there is a lot to be grateful for as well, so I thought I would take a moment and count a few blessings. This may be a bit late, considering Thanksgiving was a week ago, but I suppose it is never a bad time to be grateful.

A few quotes on the subject I have read recently:

“Life isn’t fair, but it’s still good.” - Unknown (to me)

“To be grateful is to recognize the love of God in everything He has given us-and He has given us everything.”-Thomas Merton

Now you may not be religious, but that last quote really struck me when I read it. It reminds me to take the bad with the good, and to appreciate it. It might seem wrong or even stupid to try to appreciate what seems unfair, bad, or even evil, but it is possible - and important. We can learn and grow and change for the better as a result of every experience - be it sickness, recession, job loss, or even death.

I once overheard my mother say that having cancer was a huge blessing. I recoiled, but she explained that it brought our family closer together and made her realize her inner strength. Remembering that comment has always kept me in check when I find myself whining or self-pitying.

Things for which I am grateful:

• Having a job and a regular paycheck; not everyone does right now.
• Not having to worry about where I’ll get my next meal or bath.
• Having the means and time to give to others who need support.
• A large family which supports and uplifts me.
• The freedom and ability to learn and pursue whatever I choose.

Many in our country are struggling, some for the first time, as our economy sags and companies lay people off and wages stagnate. Of course we are all still much better off than many in the world, but is still natural and easy to worry, to complain, to be angry and even scared.

But struggles can bring us together, and they can encourage us remember what’s really important - what matters a lot more than the 401k balance or the big bonus check. I hope as this volatile year comes to an end that we can all find some things to be truly grateful for.

More from Meg at The World of Wealth

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The Motley Fool is a web site devoted to helping average people make better investment and financial decisions. Recently, GRS forum administrator (and resident economist) Jericho Hill got a chance to visit The Motley Fool headquarters. This is part two of a report on his experience. (Here’s part one.)

When I was in high school, I participated in my state?s stock market game. It was designed to introduce our economics class to the world of investing. That?s where I first heard of The Motley Fool, an upstart website for financial investors that went against the grain of having advisors manage your money. Their newsletter analyzed the advantages of managing your investments yourself, and advocated indexed mutual funds over managed funds.

So, when I received an invitation recently to visit the Fool Headquarters in Alexandria, VA for a focus group, I jumped at the chance. The purpose of the focus group was two-fold.

• One part of the meeting focused on The Motley Fool?s free CAPS service, a community stock-picking tool. I discussed this experience last week.
• The second part of the focus group dealt with how the participants used financial information, where they got it from, and what our views on investing were.

It was the second part of the meeting that I felt was the most valuable. Along with various Motley Fool staffers, the group members spoke about their personal investing habits, beliefs, thoughts, and attitudes. We heard from people ranging from first-time investors saving for retirement, to a professional financial planner, to well, myself. The breadth and depth of perspective was illuminating.

Prior to the focus group, I had walked around the office floor and noticed quite a few quotes on the walls. One by Peter Lynch read ?Never invest in any idea you can?t illustrate with a crayon.? Another said ?Though it?s easy to forget sometimes, a share is not a lottery ticket, its part ownership in a business.?

Later, during the group discussion, another quote came up by Warren Buffett: ?If you have one or two great ideas a year, you?re doing great.? The two new investors in the room stated that they felt pressure to succeed and succeed often as they started to invest for retirement. Knowing there were resources that played on the psychology of investing rather than mathematics of investing was important to those attendees. They also didn?t know where the best sources of information were, or who to follow.

Many of those in the room felt that it was not prudent to follow one particular author or person. Rather, it was the subject matter that as important, and as Burton Malkiel said ?Investors should act like intelligence agencies, gathering information no matter how seemingly insignificant.?

Somewhere during the conversation, I brought up the problem of risk. Individuals have different risk profiles, just as some people can ride very scary roller coasters while I?m stuck on the Dahlonega Mine Train ride at Six Flags. Further, not only do we handle risk differently, but another attendee pointed out that we even define risk differently. Our group took five minutes to write individual definitions of risk. They were all different when we reconvened.

We had a long discussion about risk, and about how our differing views on risk can make conversations on financial topics difficult. Different risk tolerances create difficulties in determining just what one?s best financial plan is. How does one define risk? More importantly, how do you define risk? All agreed that becoming more comfortable with one element of risk (volatility) was exceptionally important to being a successful long-term investor.

When the focus group ended, there was no general consensus on what information we should consume, to whom we should listen, where we should invest, or even how we should invest. That seems like a profound thought to me: that your best personal finance advisor is yourself, regardless of whether you?re just starting out or finishing up.

Jericho Hill also recently had a chance to speak with David Gardner, one of the founders of The Motley Fool. Look for excerpts from that interview at Get Rich Slowly in the future.

---
Related Articles at Get Rich Slowly:

• Picking Stocks with The Motley Fool’s CAPS
• How to Get Out of Debt
• links for 2007-05-16
• How to Obtain Your Free Credit Report
• Daily Roundup: Money Myths, Going Organic, and DIY Halloween Calendar

Finance Findings is Binary Dollar’s periodic link dump.

• Zecco IS Cheap [Sun’s Financial Diary]
• Traditional Jobs For Men And Women And The Gender Divide [Digerati Life]
• Practicing Basic Tax Diversification [Tao]
• How to Talk Your Way into Debt [Money Smart Life]
• Lazyman’s Prosper Update [Lazy Man and Money]
• Don?t Be Fooled Into Thinking an Oil Change Every 3,000 Miles Is Necessary [Generation X Finance]
• Are Inflated Shipping Charges On eBay Bad? [Mighty Bargain Hunter]
• Why You Need a Budget [Free Money Finance]
• Are You a 0% Credit Card Daredevil? [Five Cent Nickel]
• GEICO Paid Out A Fraudulent Claim [Blueprint]

Send your submissions for Finance Findings to henry@binarydollar.com.

Sponsor: Parlayer - Henry and Matt blog about sports and stuff.

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Fannie Mae and Freddie Mac, combined, own or back up some $5 trillion dollars of debt. That is about half of ALL the mortgages in the U.S. They have already lost some $11 BILLION since the current mortgage/credit crisis began, so it is easy to see why there is profound concern about their fiscal health–or lack there of.

Concern turned to horror today after the New York Times reported that the U.S. government is thinking about a takeover of the mortgage giants–placing them in a conservatorship.

Should that happen, the shares of both could be worth almost nothing and taxpayers, you and me, would have to pick up the tab, says the Times, for “any losses on mortgages they own or guarantee–which could be staggering…”

This news brought about what the AFP news agency referred to in a headline as a “meltdown” of the share prices of both Fannie and Freddie.

According to Reuters, “Fannie shares closed at $10.25, down some 22 percent but well above the session low of $6.68. Freddie closed at $7.75, down 3 percent, after touching a low of $3.89 earlier in the session.”

And, here is the most amazing part of the story. Freddie and Fannie have lost almost 90 percent of their enture value just since August, says Reuters.

Doubts about bailout

As the day drew to a hectic close, Treasury Secretary Henry Paulson sent out signals that it is not likely there will be any federal bailout–However, Sen. Christopher Dodd of Connecticut, who is chairman of the Senate Banking Committee, said he spoke with both Paulson and Fed Chairman Ben Bernanke and that they are looking at options that would include “opening access to the discount window,” Reuters reports. The discount window allows the Fed to act as an emergency lender for the banking system.

Meantime, both Fannie Mae and Freddie Mac insisted they have enough capital to keep going and Sen. Dodd said both are “fundamentally sound and strong.”

Although both were originally formed by the federal government, they now function as private corporations, though there has always been an assumption that the government would never let either go under for fear of what might happen to the entire financial system in this country and, indeed, around the world.

How they got into trouble
To understand how they got into trouble, you must first understand what it is they do. Both buy up literally hundreds of billions of dollars in mortgages–then repackage them as securities.

In some cases, they hold on to these new securities, but they also sell them to investors.

That is why when the subprime mortgage crisis hit,Fannie and Freddie were hit hard. And, says the New York Times, “analysts expect the companies to announce a new round of write-downs and possibly be forced to raise capital by issuing additional shares.”

Stocks tumble then regain

At first, the fears of a Fannie/Freddie implosion plunged the Dow Jones Industrial Average down more than 200 points…but, by the end of the trading day, it closed down “just” 128.48 points.

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This Post is from the BiggerPockets Real Estate Blog. Copyright © 2008 BiggerPockets, Inc. All Rights Reserved.

Fannie Mae & Freddie Mac: What Will The Feds Do?

Live Search Cash Back is a new Microsoft initiative that is supposed to provide a rebate to consumers for items found via the Microsoft Live search functionality and purchased online.

The word on the street says this is Microsoft’s attempt to compete with Google in the online search market.  The concept is that in return for being listed in Microsoft’s search results, merchants have to offer cash back to consumers instead of paying Microsoft for placement.  Microsoft doesn’t make any money off of the transaction but their hope is that more users will start using Live Search instead of competitors such as Google.

Shopping Comparison Features
 Always looking to save a few bucks, I poked around the Live Search cash back interface to see if it would be useful for me.  I’m in the market for some new jogging shoes so I typed in “nike mens running shoes”. Unfortunately, the search interface is lacking basic functionality that all Web users have come to expect.  For example:

• You can’t order search results by price, seller reputation, or product rating
• You can’t specify a price range for the product
• Default 16 items shown per page. You can’t opt to see more items on one page
• You can’t choose whether to see a list vs more detailed view of results

Retailer Options
Once I scrolled through 16 pages of results to find the lowest price shoe, it only showed me results from two different online stores.  I guess one of the drawbacks of only including retailers that offer cash back is that your comparison is limited to the number of retailers that participate in the program.  How do I know that there aren’t other merchants that offer the same shoe online for a lower price?  They may not offer cash back but the shoe may be cheaper in the first place, saving the hassle of the rebate all together.

Rebate Hassles
Once I chose the store with the lowest price and best rebate I clicked through the “Go To Store” button.  I was taken to the merchant page where I could complete the transaction.  You aren’t given the discounted price at checkout, first the retailer has to report the sale to Microsoft.  Here’s the description of the cash back process from Microsoft’s terms & conditions:

“Within seven days after a qualifying purchase is reported to us, we will list the purchase in your account with a status of “pending.” The purchase will stay in pending status for a period of 60 days to account for returns, refunds, fraud and other processing issues. After this point, if the purchase is eligible for awards, it will be marked as “available” in your account and the associated awards will be eligible for redemption as described below. You must ensure that we properly post awards to your account. If you believe that you have earned awards that are not posted to your account, we will not consider posting them to your account unless you contact us within six months after the date of the associated purchase. We may require reasonable documentation to support your claim.”

Sounds more like hassling with a rebate than a cash back program to me.  The money may show up in your account but if it doesn’t you have to do the work of following up for months afterwards to make sure you get your cash back.  Similar to a rebate, you’re paying tax on the full purchase price, even though you might get cash back down the road.  I say might because Microsoft has a list of reasons that disqualify you from cash back:

“You will not earn cash back awards on purchases where (a) you open the store’s web site in a different web browser; (b) your browser is not configured to accept cookies; (c) the purchase is not completed in the same web browsing session (not to exceed 24 hours) initiated by clicking on the eligible advertisement or listing; (d) the order is later cancelled or the goods or services are later returned; (e) the store does not report the purchase to Microsoft; (f) the goods or services are acquired for resale or other business purposes; or (g) you also use a separate discount or coupon.”

A little bit further in the terms and conditions there is more language that could foreshadow difficulty claiming cash back.

“There may be additional limitations on purchases on certain merchant sites, and those limitations will be disclosed on the merchant site. Your participation in the Live Search cashback service on such merchant sites will be subject to these terms and conditions as well as any additional ones disclosed on the merchant site. In the event of a conflict between any of these terms and conditions and those disclosed on the merchant site, the ones disclosed on the merchant site will apply and control.”

Live Search Summary
The limited shopping comparison features, limited retailer options, and the whole lengthy rebate process are enough to discourage me from trying the Live Search Cashback for now.   The final deciding factor for me is that you have to sign up for a Windows Live ID in order to participate in the cashback program.  I have enough user id’s already, I don’t need anymore. 

For now I’ll continue to use Google web search and Google product search when I’m shopping for items online.  I’ll just keep my eyes open for deals and sales and get my discounts that way rather than go through the whole Live Search cashback ordeal.  Hopefully, Microsoft will enhance their search functionality, add more retailers, and make the cashback process less worrisome. Until then, I’ll rely on Google’s expertise to help me find the best deals.

If you’re covered by a health plan, you’ve probably encountered the words deductible, co-pay, and co-insurance a number of times when examining your bills, paying your doctor for a visit, or simply looking at the benefits package from your employer. These terms can be a bit confusing, and with all of the limits, maximums, and different coverage options, it is important to understand what they mean so you can obtain the best coverage for the right price.

When looking at your health insurance options, it’s important to go beyond the premium. The premium is the amount you pay each paycheck or month just to have the coverage. Obviously, you want the lowest premium you can get for the coverage you want, but you really need to look beyond that. Saving $20 a month on your insurance premium may end up costing you hundreds of dollars in co-pays or out-of-pocket expenses. So, let’s take a look at how you can make sense of all these terms.

Defining the Terms

Deductible

This is probably the most straightforward, and easiest ways to change the premium on your policy. The deductible is the amount that you need to pay for a claim before the insurance kicks in. If you have a $50 deductible and you are billed for $500 in services, you’d need to pay $50 out of pocket before the remainder is sent off to the insurance company.

Obviously, the higher the deductible you choose, the lower your premium will be since you’ll be covering more of the expenses out of pocket. So, you have to be careful. If you choose a high deductible in an effort to keep premium costs down, a period of poor health or unexpected medical treatments could add up quickly.

Don’t forget the maximums. Deductibles usually have an annual maximum, for both individuals and families. When comparing plans or options within your plan, determine how likely it would be that you’d reach those maximums, and if two plans have different maximums, think about which one provides the best cost-to-benefit ratio.

Co-pay and Co-insurance

The co-pay is probably another common term you’ve heard, and have probably paid a number of times without thinking much of it. Co-pay and co-insurance are basically the same thing, but cover different items. In either case, this is the amount of money you have to pay for a claim or service rendered. The difference is that a co-pay is typically a flat dollar amount for a specific item such as an office visit, exam, or prescription. Co-insurance is typically based on a percentage. This means that you’re responsible for a certain percentage of a claim, and the insurance provider is responsible for the rest.

Again, when comparing plans, the co-pay amount or co-insurance percentage can play a big role in how much your premium is. A plan with an 80/20 co-insurance (insurance company pays 80%, you pay 20%) will have a higher premium than a 50/50 plan, and so on.

Compare All the Numbers

So, when you’re exploring your health insurance options, it pays to look at more than the premium. While the premium directly affects your bottom line, saving a few dollars on the premium could cost you much more in the long run, and paying a higher premium for coverage you might not need may also cost an unnecessary bundle.

This is especially important if you have a certain condition that requires specific tests or drugs, or if you are planning on having a baby, as the amount of coverage provided for these items may require digging a little deeper than glancing at your premium. So, take the time to completely understand your health benefits, and you can be sure that you’re getting as much coverage as you need, and paying no more than you have to.

Comparing Deductible, Co-Pay, and Co-insurance When Looking at Your Health Insurance Benefit Options

Want to skip out on traffic and crowds, and save some time and money when you shop? Here’s how the bargain hunter goes online shopping — through these top retail coupon sites!

Image is from the coupon site, RetailMeNot!

I live in a pretty remote area that is seriously deficient when it comes to decent shopping. The retail event of the century was when the new Super Wal-Mart opened, so “dining out” around here means making a trip to the local Ponderosa. There’s certainly nothing wrong with any of this, but I sometimes miss the enormous malls full of pretty, shiny things (many of which I couldn’t and still can’t afford) that I left behind.

Because I can no longer visit the stores where I used to shop at when I lived in the city, I do a lot of shopping online. Just because I live in a rural area with few shopping opportunities and locales, I shouldn’t have to give up the brands that I love. I also shouldn’t have to pay more for those brands just because I end up buying them through the internet. Even with shipping costs, I’ve found that it’s often easy to meet or beat store prices by shopping online. All it takes is a little detective work and a good coupon site.

Top Retail Coupon Sites for the Stay At Home Bargain Hunter

There are dozens of websites dedicated specifically to retail coupon codes for online shopping. They contain tons of coupons that can be used at your favorite e-tailers, so you’ve got less of an excuse to pay full price at an online store. Here are some of the more popular options:

1. Ebates

While Ebates is technically more of a fantastic cash back rewards program, they actually offer a great listing of coupons for hundreds of online merchants. Just click on the merchant and a little pop up window appears to advise you of all the great deals and coupons that are available in addition to the cash back that you’ll receive.

2. Retail Me Not

Retail Me Not is a very easy to use coupon site. Simply type in the name of your target merchant on the site’s front page, and the site will provide you with a list of coupons for that merchant. Some notable features of the site: users may submit and share coupons through a submission page; there’s also a forum area where you can make money (through revenue sharing) by posting and participating in the RetailMeNot community. The site also allows you to vote and comment upon how well a coupon has worked for you and shows the coupon’s success rate (the percentage of times a particular coupon has worked for users who have tried it).

3. Coupon Mountain

Coupon Mountain is also very easy to search. I?ve had less luck finding usable coupons through Coupon Mountain recently, but it may be because my merchant preferences have changed. YMMV.

4. Coupon Cabin

Coupon Cabin is a site that has received many positive media reviews. The most popular coupons on Coupon Cabin are tested daily to ensure their validity, which saves the user a lot of time. Additionally, you can read user reviews written about various merchants, and/or view exactly where on the merchant site the coupon code should be entered.

5. Coupon Code

Coupon Code is not a site that I’ve used before, but I think I’ll be trying it out in the future. The site appears to be very well designed and user friendly, with a drop down list on the top of the page listing dozens of merchants. Selecting a merchant takes you to another page that lists all of the coupon options for that particular merchant.

Quick Tips on Using Online Retail Coupons

Which retail coupon site should you use? It depends, really, on what you need or want. Not all sites have all online stores listed. Also, you may find that some coupon sites have better codes than others, or more working codes. E-coupons expire just like paper coupons do, though sometimes you will get lucky and the code will work for a day or so past its expiration date.

You might need to spend a little time finding the best coupon code for any given transaction. Most online stores will accept only one coupon or promotional code, but multiple codes may be available for different types of discounts. Weigh free shipping offers against dollars off or percent off coupons to determine which will give you the most benefit. There are a few merchants who will allow use of more than one offer. Victoria’s Secret, for instance, allows the use of up to three promo codes per transaction — no wonder it’s a popular pick at these coupon sites! On my last Victoria Secret order, I scored $15 off, a free lip gloss set, AND free shipping!

With all of the coupon sites available, there’s little reason why I should pay more than my city-dwelling friends for the things that I love but can’t buy locally. Now how about sharing your favorite retail coupon sites with us?

 
Contributing Writer: Emiley Thacker

This is a post from The Digerati Life.

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Failure was not an option. The government finally stepped in on Sunday and unveiled plans to take over troubled mortgage giants Fannie Mae and Freddie Mac, putting to rest fears that the two firms would collapse and send the housing market into a death spiral.

The housing market breathed a sigh of relief – but no cheers from the stockholders of the two firms. Fannie Mae [FNM] was trading at around $7.00 towards the end of last week and immediately collapsed to about a buck on news of the announcement. As of close today it’s hovering around $0.74.

For investors Fannie and Freddie have seemed like a pretty safe play for years. Stodgy, even. A publically traded pseudo-government entity which was crucial to the U.S. economy and backed by government guarantees seemed like a pretty safe place to stash away some cash that you didn’t want invested in risky stuff; let the day-traders mess with the bio-techs and dot.coms.

But what a difference a week makes.

A lot of investors took a bath on this one. We’re still in the shadow of Enron, WorldCom, Quest, Tyco, and others – but I never cease to be amazed when I speak to folks who have large percentages of their net worth tied up in a single stock. Sometimes it’s because it’s a “safe bet”, or because they’re comfortable and haven’t bothered to rebalance. But most often it’s because they work for the company in question.

This isn’t smart behavior. Real estate investors understand that there is no reward without risk, but diversification is the way that smart, tactical investors hedge their bets. Anything else is just gambling.

Contrast this to the advice that millions of Americans swallow then they read what is undoubtedly the worst personal finance book ever: Robert Kiyosaki’s Rich Dad Poor Dad. Diversification, according to get-rich-guru Kiyosaki, is for suckers. “Put a lot of your eggs in a few baskets,” he exhorts. “Do not do what poor and middle class people do: put their few eggs in many baskets.” A balanced portfolio “…is not the way that successful investors play the game.” These are quotes from the book; I’m not making this stuff up. The biggest problem with Rich Dad Poor Dad is not that it’s filled with vague motivational psycho-babble; it’s that hidden in the self-help hucksterism there are gems like this that are actually dangerous.

Kiyosaki is undoubtedly a smart businessman and has made millions of dollars selling his books and courses, but I’d encourage his true believers out there to take a critical look at some of the ideas that he’s promoting.

Related:

• Why I don't like Rich Dad Poor Dad
• The Black Swan :: The highly improbable and real estate
• Another bailout on the horizon?  Fannie and Freddie