Stan Poores, Author at The Free Financial Advisor

What Consumers Can Do to Protect Themselves From Credit Card Fraud

May 31, 2016 by Stan Poores Leave a Comment

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One in five Americans say they’ve experienced identity theft, according to a poll by Gallup. In addition, 62 percent of those who had their identity stolen say someone charged purchases on their credit card. Identity theft and credit card fraud are pervasive threats around the world, but particularly in the United States. Global card losses in the United States is responsible for 48.2 percent of the share of total global card losses. Card fraud also rose by 19 percent while sales volume grew by 15 percent.

The statistics may look alarming, but there are ways you can protect yourself from fraud. Anyone can employ common sense tactics, such as protecting their cards and using them sparingly. But if you want something more advanced, here are five sophisticated ways to protect yourself from credit card fraud and stay ahead of the rise in crime.

Only Use EMV Readers

As of October 2015, merchants are liable for credit fraud and liability unless they adapted to the EMV chip and pin technology. EMV stands for Europay, MasterCard and Visa, and it contains a secure microchip on the front of the card that provides a new level of security to protect your information. You’ll know if you’re using an EMV-enabled reader if you can insert your card into the machine to read your credit card chip instead of swiping your card.

Even the smallest business owners selling at farmers markets and one-on-one with customers can adopt an EMV reader. To help protect your information, purchase goods only from merchants that use EMV readers.

Notify Your Creditors When Traveling

Contact your credit card companies, banks and other financial institutions before traveling and let them know the dates you will be gone. Bank and debit card crime is on the rise in Mexico, among other countries, and should be diligently monitored, claims Mexico News Daily. But it’s not just crime that happens while you’re traveling. It’s not uncommon for ATM cards to be compromised months after returning from a trip abroad. If your credit card companies and banks know your travel plans and where you’ve been, they can be more diligent in protecting your accounts and identity.

Monitor Your Credit Score Diligently

Requesting a free credit score from AnnualCreditReport.com is only the first step in credit score monitoring. Study the credit reports for any errors and check for fraud. Afterward, it’s important to stay on top of your credit score. Use an identity theft monitoring service like LifeLock to get alerts on when credit cards, utilities and other accounts are set up in your name. Such companies can help stop fraud in its tracks and help restore your credit as needed.

Watch out for Spear Phishing

Spear phishing makes it easy for criminals to glean your personal information from Facebook, Instagram and other social media accounts and use it to their advantage. Next, identity thieves send you an email asking you to click on a site and sign in to address an urgent matter. The email can also be made to look like it’s from a personal contact from your electronic address book. Even if the link appears to be from your bank or creditors, delete the email. Instead, call the number on the back of your card and speak to a representative to find out the validity of the communication or to report the phishing.

4 Things to Do Right Now to Get More Money Each Month

May 31, 2016 by Stan Poores 1 Comment

Happy woman using smartphone with dollar bills flying away from

Other than negotiating for a big raise, there’s not much you can do to increase your monthly income. The best method of taking back some of your hard-earned cash is to cut out some of your unnecessary costs that rack up each month. The problem is that most people don’t want to significantly change their lifestyle in order to save some cash. There are, however, several monthly expenses that you can easily take control of and quickly lower, so you can get more money into your bank account each month without impacting the way you live.

1. Utility Bills

The first thing you should take a good look at is the amount of money you pay each month to your utility company. During the hottest or coldest times of the year, it’s important to make small adjustments inside of your home, so you can lower your utility costs a bit. One easy thing to do is to simply adjust your thermostat. Lowering or raising the temperature in your home one or two degrees is a small and immediate action you can take that can make a lasting impact on your monthly budget. Using a programmable thermostat makes this easy. Another great idea is to simply turn off the lights in rooms you aren’t occupying.

2. Credit Costs

Next, it’s time to closely analyze your credit cards and whether or not you’re paying excessive costs such as annual fees or high interest rates. First, if you have any balances that can’t be paid off, consider transferring them to a card with a lower interest rate to save some money. If you can’t transfer your balances, try calling your bank and negotiating a lower rate or the elimination of the annual fee if there is one. Of course, the best thing to do is to avoid racking up high credit card balances in the first place.

3. Tax Tips

Another helpful tip to give you more money at the end of each month is to focus on the money you pay in taxes. Before you analyze the amount of taxes you pay at the end of every year, take a close look at your withholding allowances. If you haven’t adjusted your withholding for a long time, you may be due for an update. Allowing the government to borrow a piece of your paycheck each year isn’t the best use of your salary, so you want to make sure you’re not withholding too much.

4. Insurance Savings

Lastly, you can add an instant boost to your income by checking out your insurance coverage. Most people need several different types of insurance, such as car, homeowners, or renters insurance. Instead of finding several different cheap policies offered by various companies, a smart thing to do is to go with one insurance agency and bundle your policies. With a bundled packed of insurance products, you can get the lowest rates and save the most money, without downgrading any coverage.

If you want to maximize your income potential each month, it’s important to look for small changes that you can adopt that can make an impact on the amount of extra money you have left over each month. While it’s difficult to increase your salary, the only real option is to cut back on something. It’s easy to follow these simple tips and watch your savings grow, giving you even more disposable income that you can choose to spend on the things you enjoy in your life.

As a final note, to be a really effective saver you need to be part of a supportive community. One place to find this community is on online forums. For savers specifically, a good spot is the Savingadvice.com forums. It’s a community of savers who pretty much just want to talk about saving money. Check it out here.

Crude Oil Inventories Move to a Deficit

May 23, 2016 by Stan Poores 1 Comment

There has been a sea change in the supply/demand balance in the crude oil market which has surprised even some of the largest players. The change has helped push oil prices to a 7-month high, and prices could continue to climb if the trajectory of the declines continue. In the latest week, inventories began to decline, predicated on lower production and a gap in imports. The number of drilling rigs also continued to drop in the latest week dipping by ten to the lowest level seen in the past 30-years.

Output has been reduced in a number of areas including Canada. The wild fires that spread near the tar sands was a strong catalyst for the lack of recent output. The current reduction in Canadian crude oil output is due not to direct damage from the fires in Alberta, but more of a function of the evacuation of oil workers from Fort McMurray. Oil sands operations may be seriously reduced by the unavailability of staff in the coming days and week. Many employees are without homes and unable to return to the area which will put a significant strain on output. Slightly more than 50% of the oil output produced in Canada is from tar sands.

Unplanned production output has reached a 5-year high according to the Energy Information Administration. It has moved quickly enough for investment bank Goldman Sachs to change their short term outlook on oil prices. They claim that the global has moved from a robust surplus to a deficit in very short order which could continue to drive the price of oil higher. One caveat is that oil prices above 50 per barrel will bring U.S. producers back into the market place. The hydro-fracking producers can move online very quickly, and levels above 50 might entice them to come aboard.

OPEC is the real wildcard when it comes to outages. Since 2012, unplanned crude oil supply disruptions among OPEC producers have accounted for the majority of the outages according to a recent report from the Department of Energy. These outages, which increased annually between 2011 and 2015, and have averaged about 2.7 million barrel a day in 2015. The stoppage of production at the Wafra and Khafji fields in the Neutral Zone straddling Saudi Arabia and Kuwait caused, on average, an additional 0.4 million barrel a day in outages during 2015. With the exception of Iran, the issues underpinning the outages in most of these cases remain largely unresolved.

Demand in the United States has also continue to surprise to the upside. Low gasoline prices have pushed demand at the pump up a robust 5% on a year over year basis. The unofficial driving season begins in the U.S. on Memorial Day which will likely further boost gasoline demand. Demand has recovered after a relatively weak winter which say distillate demand drop more than 15% on a year over year basis. The weather was the main catalyst for the decline in heating oil demand.

In evaluating the fundamentals of oil, the real question for crude oil investors is whether the trajectory of the recent declines will continue pushing inventories lower and back into the 5-year range. If there continues to be unplanned maintenance this is likely to happen as imports stall and U.S. production continues to drop.

Stock Market 101: Basics of Investing

August 13, 2013 by Stan Poores 6 Comments

Sometimes I hear people tell me that the stock market is like magic. That’s not the case at all.

Making money in the stock market does not have to be an impossible or difficult feat. Perhaps the biggest obstacle when it comes to investing is making sure time is on your side. Time is maybe the most important factor in investing for two reasons:

– there is longer for your money to compound

– you can make mistakes and learn the basics through trial and error

By reading some of the tips below on how to succeed in the stock market, you should be well on your way to starting an investment portfolio in stocks.

History proves that with time on your side, you can count on the history of the market to know that your investments will pay off. It is a well-known fact that in the long term, stocks have historically outperformed all other types of investments. Over long periods of time, that stock market has averaged around 10 percent. If you’re wanting to try investing using stock trading, then looking at some investment apps uk or other countries have available can kickstart your investment portfolio.

What About Over Shorter Time Frames?

Quite to the contrary, stock performance over the short term is a much riskier. There are countless examples in history where stocks have plummeted in a single day. When it comes to stocks, timing the market or day-trading is a skill that takes a lot of time and knowledge, and still is a dangerous pursuit. All in all, stock investments should only be relied on as long term investments unless you want to risk your savings. If so, I’d still recommend a day at the casino over the stock market. You’ll probably lose all of your money there, too, but you’ll certainly have more fun!

Risk/Reward

It’s true that as you increase your risk, you have a greater chance for a nice reward at the end of the rainbow. This is certainly the case when it comes to stocks. To take more risk, focus on sectors that historically have seen more volatility, such as real estate. If you’re hoping to lower your risk while investing, do your due diligence and never invest in something that you have not researched completely. Most investors have problems when they “take a flyer” or “trust their gut.” These are horrible ways to invest.

How To Pick Long Term Winners

Nothing is a better predictor of stock price appreciation over the long term than earnings. Companies with solid earnings sometimes can outspend their profits, but usually if you focus on earnings, you’re headed toward winning companies. When it comes to valuing a stock or determining how risky it is, looking at the historical data on earnings to discover risky or potentially successful the investment will be to you. The company earns little money but shows a profit? That company is downsizing and showing profits through cutting. You can’t do that forever. One huge quarter for earnings? You should ask yourself how the company can duplicate that feat in the future. You can learn a ton from earnings.

While earnings is a great place to start as you’re getting your feet wet, it’s definitely not the only indicator. Remember the whole “Time on your side so you can learn” speech above? This is meant to point you in the right direction. People spend years perfecting their knowledge of more advanced concepts such as price to book and price to earnings ratios.

Stocks Vs. Bonds

When comparing a bad day for a stock to a bad day for a bond, the differences are significant. Bonds tend to bounce back from a bad day much more quickly than a stock would. Historical data shows that a small dip in a stock’s price versus a bond’s price can mean entirely different long term results. A bond may bounce back quickly while a stock may take more than five years to recover. While bonds will rebound (or the company will go bankrupt), you never know with a stock.

Another good indicator for both the performance of stocks and bonds comes with a look at what interest rates are doing. When interest rates go up, bond prices fall. On the other hand, when interest rates fall, bond prices go up. Similar trends occur with stocks. Knowing these patterns can help you determine when a good time to buy or sell would be. While it is never a good idea to time the market without significant experience in investing, it is wise to know what the economy is doing. In general, the success of your investments will follow the success of the economy.

Pay a Little Extra on Your Mortgage – What a Difference it Makes

July 2, 2013 by Stan Poores 10 Comments

Could you adjust your budget and pay a little bit more toward your mortgage every month? Perhaps you can save a small amount and make a lump sum payment once per year?

It might not seem like it, but paying a little bit extra can actually make quite a big difference over the length of your mortgage. It is possible to take years off the loan by simply paying a small amount more per month or making one extra payment per year. When you shorten your mortgage loan, you also end up saving thousands in interest rates over the years.

You might not feel like you can afford to pay extra money on your mortgage, but there are likely a few adjustments that you can make to your budget so that you can squeeze in more payments.

Paying Biweekly Rather Than Monthly

One strategy for paying more on your mortgage is to change your payments to biweekly rather than monthly. Instead of paying a monthly amount, you will pay half the monthly payment every two weeks. As there are 52 weeks per year, you will end up making 26 payments rather than 24 if you made two payments per month. However, you will not notice the difference to your monthly budget.

Make a Big Lump Sum Payment Every Year

Another way to reduce your mortgage is to make a single large payment from the amount that you owe. When you do this, it will be taken directly off the capital, which will mean that your mortgage term becomes shorter. For example, if you get a Christmas bonus at work you could use the amount to pay off some of your mortgage. By doing this, you can reduce your mortgage loan length by several years.

Round Up Your Payments

Why not round your mortgage payment to the nearest hundred? For example, if your monthly payment is £573.45, you could pay £600 instead. This will not affect your budget too much, but it will mean that you end up paying an extra £26.55 per month, which adds up to an extra £318.60 per year.

To find out more about how you can pay more on your mortgage, talk to a UK mortgage broker such as First Mortgage.

Photo: 401(k) 2013

Gambling, Smoking and Other Fun Ways To Ruin Your Budget

June 4, 2013 by Stan Poores 14 Comments

Daniel Wesley is the founder and CEO of CreditLoan.com, a website that educates consumers about various personal finance issues. Among some of the topics discussed are bad credit loans, credit cards, auto financing, and many other credit and financial help issues. Connect with Daniel on Twitter and Google+.

Paychecks never seem to go as far as you think they should and your piggy bank is looking pretty empty these days. Some of the choices you make every day could be hurting you financially. By identifying the extraneous items you’re spending money on and eliminating those purchases, you can make a significant difference to your finances over the course of a few months or a year. Here are five common spending habits that could be wrecking your budget:

5 Spending Habits Wrecking Your Budget

– Gambling

It’s the thrill of a shot at winning it big, but whether it’s the lotto, casinos, or a work pool, you can waste a lot of money gambling. A few dollars here and there on scratch-off tickets when you fill up with gas start to add up quickly. Quit cold turkey, avoid situations where you might be tempted to gamble, or seek help if you think you might have an addiction. Think of it this way: you’re likely to make more money by investing than gambling it away.

– Smoking

Many people consider certain parts of their lifestyle a normal expense rather than a luxury, but cigarettes are expensive and costly to your overall health. Sit down and add up the amount you spend on cigarettes over the course of a week, month, and year. Many people will be shocked at the actual figure. Like gambling, there are ways to kick this habit. Stop on your own, seek a doctor’s assistance, or join a program. However you decide to eliminate this expense from your life, your body and wallet will thank you for it.

– Extraneous Spending on Beverages

Like most people, you probably look forward to a caffeinated pick-me-up at some point in the day, but consider how much you’re spending on extra beverages each month. From coffees in the morning to soft drinks when you’re out at dinner (which are usually the same price as a whole two-liter bottle at the store!), the cost of buying drinks at restaurants and convenience stores adds up fast. Find money-saving alternatives like refilling a sports bottle with water throughout the day or making your own coffee at home. However you work it out, if you stop buying beverages, you’ll save money at every meal.

– Eating Out

You might be surprised to learn that the average American spends approximately $2,500 per year eating away from home. Now multiply that number by the number of people in your household, and you’ll get a better idea of why eating out is not a smart move financially. This doesn’t mean you need to completely deprive yourself, but stick to going out for special occasions rather than a couple of times per week. Make more meals at home, and cook a variety of dishes to prevent boredom. Save (and use!) leftovers. Buy more store brands or stock up on items when they go on sale. Pack a lunch for work. All of these are great methods of cutting your food cost down considerably.

– Paying for Unnecessary Services

We often pay a lot for convenience, but how much of it is really necessary? Do you truly not have the time for some things, or do you simply not want to do them? If you make the effort to limit the services you pay for that you could actually do yourself, you’ll be shocked at how much you will save. Mow your own lawn. Clean your own pool and house. Change the oil in your vehicle yourself. Give yourself a pedicure. Learn how to groom your pet. It may not be as convenient, but the money you save will really add up.

Going On the Attack: Planning Your Future

Once you’ve identified and eliminated your bad spending habits, re-examine all of your monthly expenses and create a budget; the next time you go to the store, don’t allow yourself to spend money on things that will exceed that budget. Audit yourself and evaluate the true value of what you’re spending money on to find even more ways to cut back, whether it’s your cable package, your cell phone plan, or the magazines you subscribe to.

The last step is figuring out what to do with all the money you’re no longer throwing away. It probably goes without saying that the best thing to do is save. Having extra funds stored away is always a good idea; unforeseen expenses can quickly crumble your financial well-being, and having money saved away is the best way to protect yourself and your family.

Being mindful of your finances is important at every stage in life. Minimizing excess can be a difficult process, but cutting out unnecessary expenses can significantly ease financial pressure. Recognize your bad spending habits, find a way to eliminate them, and take steps to make better choices in the future. Your piggy bank will be filling up before you know it.

Photo: Stephanx80

How to Start Saving Money Now

May 28, 2013 by Stan Poores 13 Comments

Struggling to save money? It will never get easier if you wait. Luckily, we’ve got your back.

If there’s one thing that’s difficult to do in our society today, it’s saving money. Everywhere you turn, there’s an advertisement for the next hot toy. On the side of that semi, on the billboard near the highway, over the radio waves, through your television, and as I’ve experienced lately, even in a parade – these are all ways that companies are trying to market their product to you.

In order to save money, you first need to filter out the media. No matter what the product is, it’s not going to give you long-term joy (which is really what we’re all looking for, isn’t it?). Mainly, these products or services will provide short-term happiness that will last for maybe a week or two. That’s all. You’ll be much better off saving your money for an important event in the future than on a cheap thrill in the present.

Start Saving Money Tip #1: Sell Some Stuff

Once you can ignore the media a little better, the stuff that surrounds you each and every day should be a little less important. In fact, there may be some items in your basement that you haven’t used in the past year and may never use again. So why in the world are you hanging onto this stuff? The next step (after ignoring the media) to saving money now is to sell some of the things that you no longer use and do not need.

You could start selling items via a community garage sale, Craigslist, or even through eBay. It really doesn’t matter what avenue you choose, just as long as you get rid of some clutter and make some money in the process.

Use this money to pay down debt, establish your emergency fund, or open that IRA you’ve been waiting on. It’s time to put your money to work!

Start Saving Money Tip #2: Reduce Your Monthly Expenses

The next best way to start saving money is by reducing your expenses. Most of us think we live so much more frugal than our friends, but are we really? Where are we shopping for our groceries (the more glamorous store or the discount club)? What type of cell phones do we own? Where do we go on our vacations (camping at the local state park or heading to Aruba)? And, what type of cars do we have parked in our driveway? No matter how cheaply you think you’re living, there are always things that we can cut back on.

– Track your expenses.

– Eliminate wasted home entertainment subscriptions.

– Search for energy efficient practices in your home.

Start Saving Money Tip #3: Make Money with Your Money

If you get to the point where you have saved a decent amount of money, then it’s time to start investing and earning more money with your dollars. This is the absolute best part of your savings because you’ll finally have the mentality of the rich, which means that you’ll soon be living like the rich as well!

Just to be clear here, I’m not suggesting that you use all of your savings for an investment. Rather, I’d say that you should only use a small portion of your savings for multiple investments. I know of quite a few people that have started an online business for less than $100 and are earning thousands of dollars each month today. It doesn’t cost much to get started and it could increase your savings exponentially!

Photo: Images_of_Money

5 Surprising Tips to Supersize Your Family Vacation

May 17, 2013 by Stan Poores 18 Comments

Memorial Day is right around the corner. Have you started planning your summer vacations yet?

Do you take a family vacation every year? Where do you typically go and how much does it cost you? What if I told you that you that for the same amount of money (or less), I could teach you how to go somewhere nicer or do more at that vacation spot you love. Yes, it is possible. Let’s check out the list!

My 5 “Not So Obvious” Family Vacation Tips

1) Stop Planning – I know, it almost sounds counterintuitive to what you should do to save money on your vacation. Typically, you’re taught to plan where you’re going in advance because if you wait until the last minute, everything will be much more expensive. While this is still the case for some items, there are benefits to waiting before choosing your exact destination. Websites such as TravelZoo or CheapCaribbean offer last minute deals on all-inclusive getaways and cruises all over the world. I once saw a weeklong trip to Aruba for only $800, which included the flight, the hotel stay, some events, and all of the food! Sometimes it pays to wait.

2) Stay Connected to Your Friends – With the help of Facebook, it’s pretty easy to stay connected to your friends today. And, since our world is becoming so globalized, your friends will most likely move to all corners of the world. While this may be tough to deal with at first (since you no longer get to see your friends every day), it provides a great reason to visit a new area on the globe and to do it for cheap (since you’ll be staying with your friend)! Just offer to pay for their food for the week and it’s suddenly a win-win situation.

3) Buy Groceries, Not Fine Dining – The purpose of your vacation is most likely to explore a new area that you’ve never experienced, not to eat at a chain restaurant that is prevalent in your own hometown. With a week-long vacation, it is much cheaper to go to the grocery store at the beginning of the trip than to eat out for every meal. This small tip could very easily save you $200-$400!

4) Learn From the Locals – No matter where you’re vacationing to, there will be “must see” attractions that are sent your way which aren’t really that great of an experience. Unfortunately, you won’t know this until your money is already spent! Do your due diligence on this one and try to learn from the locals. Whether your vacation is at the luxurious belmond cap juluca in Anguilla or a magnificent riad in Morocco, find a blog about local fun or connect with a friend of a friend that can give you some quick tips on what to see. Oftentimes, the best attractions are the ones that are free!

5) Explore, Then Do – For many of us, when we go on vacation we feel like we have to hurry up and do as much as we can, but this is no way to vacation at all. Once you finally get home, you’re more exhausted than when you left, and you’re way poorer than you expected too! Instead of charging forward and doing a bunch of activities that are presented to you that first day, take it easy and go for a stroll around the city. Make a mental note of what you’d like to do and see. Not only will you enjoy yourself more, but you’ll have save some of that money in your pocket.

How do you save money on family vacations without skimping on fun? Let’s share notes in the comments below….

Photo: Stevendepolo