Are you effected?

Dear Reader, 

Wish a very happy new year, I would like you share with all of you some important topics which helps you in making decision about your financial future, if you are leaving in united states probably you might be aware of discussions about financial cliff, probably by the time I publish this article there might some decision about all these things. But I would like to share some information about financial cliff it's not about debt limit or some thing else there are many tax exemptions are expiring on DEC 2012 which means there will be extra direct tax on individuals like you and me. According to he stats around $500 billion tax beaks are expiring on Dec 2012, government spending cut around $100 billion & some other tax benefits  

Read more information about financial cliff at Investopedia. 

But kind of effect you see if the deal not taken place or what kind of effect we see if the deal is taken place? Lets discuss about this.  

If deal not happened the your direct income tax rates are going to go up. Which means less take home money for you. Once less money in our pockets less spending which means less revenue to companies which means high chances of cutting down the cost by company, which might impact job growth or less jobs. This will create repulsive effect. Economy might go into recession or depreciation. 

What kind of effect we see if the deal happens, which means government/Federal bank pump more money into economy more liquidity means higher inflation which means we need to spend more money for same goods what ever we are buying today. imagine $600 billion cash per yearn into economy means more inflation.  i remember in 2007 we used to spend around $100 per month for food items & grocery but today same stuff cost us 4 time higher around 300 to 400 USD. this inflation is because of more stimulus pack (money pumped) by fed.  

Inflation is long term effect on our economy this will kill our purchase power as our income will not go up this fast. but at some point of time we need to accept that our life's are effected by what ever the decision governments are making,  but do you think every one life is like this not really lot of people build there wealth as inflationary proof.  

now you decide do want to leave your future in some other person hand or some organization decisions or do you want to take control over it? 

how to build good credit history

Dear Readers, 

I am sure if you are in USA credit score always matters, to rent a place or to buy a car or to buy a nice phone for less... I am sure if you don't have good credit score every thing is going costly for you. When you come to USA as an immigrant, you will have lot of questions about how to establish credit history? 

Lets look into this topic now. I am going to discuss about how you can build good credit score very faster?

You might be a student or you might be on your working visa, you can do these to start building your credit score. Most of the times we will think that we need to have income to start building credit score,but that is not true. You can build credit history even if  you are  on H4 or F2 or L2 ,any kind of dependent visa . 

To start with, first try to open a savings account. You can start with any bank. I prefer you can open with credit union (Some examples are Start One Credit Union, Tech CU, Valley Credit Union and many more link this) or you can open with reputed banks such as Wells forgo, Bank of America, Chase. Keep this point in mind USA federal insurance program cover maximum up 200K USD of deposit. (to know more FDIC click here) To know basic information about FDIC click here. One more good thing is that if you have account in credit union you are going to make good money as returns for your deposits.

Secured credit card is the right way to start for building credit score fast. Most of the banks and credit union offer secured credit cards. 

Check Credit score for free on regular basis at www.creditkarma.com without effecting the credit score. Following images show you some of the components which impact credit score. 

When I was new to the country couple of my friends told me that, we need to use max amount of our limit to build credit history fast. But what I learned from my experience is that, we should not use more than 15 to 20% of our credit limit to grow our credit history very fast. 

Few more points to remember: 

When we apply store credit cards they are going to impact credit credit score little high compared to applying for credit card from a bank or credit union.

Building credit score will be must faster when we are using store credit card compared to card from bank or credit union. 

Having too many credit cards also going to impact credit score negatively. You might ask how it can affect. Its very simple it might become tough for us to track and pay the bills on time. 

Do simple math before planning for number of credit cards. Calculate what is your average monthly spending & try to get a credit limit with 10 times more than that. If one card is not offering that much credit limit try to get multiple cards.

Read more about how to improve your credit score.

Learn about FDIC

Dear Readers, 

I am sure most of us want to protect our hand earned money, But if we look at today economic situation  around the world its very unstable and no one know what's going to happen & which financial institution is going to collapse. I am sure most of us know that central banks provide insurance to deposits. 

• In USA FDIC (Federal Deposit Insurance Corporation). Credit unions are not covered by FDIC insurance. Instead they have NCUSIF protection.
• In India DICGC (Deposit insurance and credit guarantee corporation)

There are many more more deposit insurance provider in different countries. for more information about these please look into WIKI. If you want to check weather bank covered under FDIC or not please visit the following URL (this URL is from FDIC office website) http://www2.fdic.gov/idasp/main_bankfind.asp

But there are some restrictions on the amount of deposit they cover. For example in India DICGC will provide the protection for 100K (1,00,000) Rs/-, In USA FDIC provide protection for $100,000/depositor & $250,000 in certain retirement accounts per depositor. Lets look into details what is covered & what not by FDIC. 

What is Covered

FDIC insurance applies to all deposits at covered banks. This includes:

• Checking accounts
• Savings accounts
• CDs
• Money market accounts (but not money market funds, don't get confused with Money market account & funds)

FDIC insurance does not cover:

• Safety deposit box contents
• Investments such as mutual funds or stocks
• Insurance products such as annuities

How this works: deposits done by USA citizen or any USA resident in any FDIC insured bank will be covered. For more details visit FDIC website. In Next article i will write more about NCUSIF & Credit unions.  

I am sure this information will be very helpful for all of you, if you think this information will be help full to your friends please share this URL with your friends. please add your comments so that i can improve and share better information with all of you.