Reduced monthly payments help many people struggling with financial problems. You need to determine if debt management or debt consolidation is better to pay off bills.

As the wealth of households fell into recession, American families are facing financial difficulties due to high debt. In 2007, before the start of the recession, only 15% of U.S. families had debts of more than 40% of their income. Today people with financial difficulties need to enter a debt management plan or take out a debt consolidation loan to lower monthly payments.

Debt consolidation is to put all sources of borrowing such as overdrafts, credit cards and smaller loans under one roof and make a single payment. It is possible to extend a loan to reduce monthly repayments and simplify the family finances. Financial difficulties are relieved that more money left each month for essential household bills and house payments.

Owners should think carefully before putting the unsecured debt such as credit card debt, overdrafts and small loans in personal debt which is secured on a house. Read more…

I put down my pen on this topic, assuming youd had your fill of examples of the Senate of Canadas Report on the Business Development Bank of Canadas 10 year Statutory review (see prior post BDC snows the Senate part 5 Mar 18-11). But, just yesterday, BDC was back on Parliament Hill once again, expousing on the state of innovation in Canada. Different BDC team presenting this time, but the messages were familiar.

During this new hearing, Toronto Senator Irving Gerstein asked BDC Executive Jerome Nyca how much BDC capital goes directly into VC investments and how much goes into VC funds.

Mr. Nyca replied (pg. 24 from the transcript):

In our strategy going forward we expect to do about $130 million in investments. It is about $80 million to $90 million direct and the balance is indirect. In any given year, we will do between $20 and $50 million of indirect. [Editor’s Note: If BDC does $130MM a year of VC investments, and $80-90MM is direct, than $40-50MM must go into funds, no?

Read more…

I know from listening to many readers of my blog, and small business owners, that cashflow planning is something that can be intimidating. I made this video to show just how simple and uncomplicated cashflow planning can be. Theres no need to make it complicated or time consuming, cashflow planning is vital for small business success, but it can also be incredibly easy. Give it a try, and let me know what you think of the video!

• The Ifo current conditions has increased to its highest level in 20 years. We see no signs of any impact from the Japanese earthquake or the ongoing debt crisis.
• The German Ifo expectations index fell, but still remains at high levels, in line with our expectations of strong German growth.
• Going forward, we expect Ifo expectations to decline moderately. Our Ifo expectations model is clearly pointing downwards now.
• The annual growth rate of loans to the private sector increased and, more importantly, monthly loan flows to non-financial corporations remained high.
• The strong Ifo index and the monetary developments will give the ECB some support in its decision to hike rates in April.

Ifo current conditions at highest level in 20 years

The Ifo current conditions increased to 115.8 from 114.7 (consensus 114.6, Danske Bank 114.2). Read more…

Please recommend how much to allocate retirement savings between a 401(k) plan and a Roth IRA. How do I choose between the two, assuming there is no employer match in the 401(k) plan?

With no employer match, your choice is similar to the decision between a traditional IRA and a Roth IRA — at least up to the contribution limits of an IRA account. In general, you want to contribute on a tax-deferred basis if you expect your marginal federal income tax rate to be lower in retirement than it is today. If you’re in a fairly low bracket now, then making after-tax contributions to a Roth IRA allows you to take qualified tax-free distributions in retirement.

Another reason to contribute to the Roth IRA is if you don’t expect to need the money in retirement because Roth IRAs aren’t subject to required minimum distributions.

Employee contributions to a 401(k) plan are made with pretax dollars. Contributions to a Roth IRA are made with after-tax dollars.

Read more…

What to do with a hefty windfall

It’s everyone’s favorite fantasy: a nice, huge windfall.

Maybe that scratch-off lottery ticket pays off big, or that dusty vase in the attic turns out to be a collector’s item, or that stock you’ve been hoarding turns out to be worth a bundle.

Suddenly you’re sitting on a nice mid-five-figure gift that you weren’t expecting, and that’s after taxes.

Now what?