Should You Invest In A Health Savings Account?

When you are spending too much of your monthly budget for health insurance, there are several ways to find low-premium plans. The most obvious strategy is to raise the deductible on your health insurance, but how are you going to manage medical bills if you get hurt or sick until the deductible is met?

If you’re saving now and paying taxes on the interest your savings are earning, why not invest some of your savings in a tax-free account. That’s one of the advantages of a health savings account (an HSA). You are only allowed to open an HSA with certain qualified high-deductible plans, rather than all plans that have large deductibles.

In case your employer doesn’t offer an HSA plan, you can decide which bank or other financial institution has the best HSA plans and start your own. Basically, the only requirements are that you’re under age 65 and you purchase an HSA-qualified high-deductible health plan (HDHP). Your employer can help to build your HSA, but you’ll retain control of the funds. You can even continue to use your HSA to fund health care after you retire.

How Do Health Savings Accounts Compare To Co-payment Plans?

When your health is good and you require few doctor appointments, co-pay plans may cost you more. A typical co-pay to see a doctor runs around $25 or $35. If you pay for an in-network doctor out of your own pocket, that may only run about $65. If you pay $25 a month to keep your co-pay at $25 to $35, you could have to visit the doctor eight times or more just to break even. Switching from a co-payment plan to a high-deductible HSA-plan can help you save while your health is good.

High-deductible plans purchased after March 2010 pay for an annual checkup, vaccinations and several screenings to identify major problems, like cancer, whether you’ve met your deductible or not. Now that you can maintain recommended health care without a lot of out-of-pocket expense, high-deductible plans make more sense.

Do Health Savings Accounts Work During Middle Age?

Even people in their fifties, as long as their health is relatively good, can keep their health insurance premiums low by switching from traditional co-pay plans to HSA-qualified plans. That makes it possible to build up the balance in an HSA with the amount saved on monthly premiums.

If you’re paying a lot in income taxes, HSA Plans can also help you cut down on what you pay in taxes. Those savings can also be invested in your HSA. Most health care costs are considered tax deductible when paid for from an HSA. If your health insurance plan doesn’t cover Ayurvedic medicine, dental services, eyeglasses, homeopathy, etc., you can still pay for these services from your HSA. You’re allowed to take a tax deduction for all qualified health care expenses even if you don’t itemize on your tax returns.

If you expect to need a lot of expensive health care in the near future and don’t have the savings to manage a high deductible, full-coverage plans are a safer bet. In addition, remember that you’ll have less time to build up the balance in an HSA when you are close to retirement.

HSA-eligible plans do come in a wide range of deductible options, so balance the amount of health care you’re able to cover until the deductible is met with the savings available. Consider how much you can save in income taxes, with lower premiums and by earning tax-free interest.

How to Earn Money in the Midst of an Economic Crisis (A Guide to a Microlending Business)

The economic problem that the world is experiencing right now has actually provided a ray of light for aspiring entrepreneurs. While others are selling their businesses or discouraged from engaging in one, there are others who have thought of making this recession an opportunity.

Micro lenders are among these people who have considered going into business. In a country where many people also go into small businesses to survive this economic crisis, this micro lending business has quite a big target market. Here is a guide on how to establish one in the Philippines and earn money from a business even in an economic crisis.

GUIDELINES AND REQUIREMENTS

After you have taken care of your capital and you have an excellent business plan drafted, then it is time for you to establish your business. You have to submit a series of documents to SEC or the Security Exchange Commission. In doing this, you also need to acquire a business permit in the city where you want to establish your business and a certification from the Bureau of Internal Revenue. Requirements vary according to the nature of your business. You can register your business as a single proprietorship, a partnership or a corporation. For more information on other requirements you can check the SEC ( Philippines ) site.

CLIENTS

It is easy to establish a client base for this kind of business. A lot of people these days consider borrowing money from micro lending agencies rather than going to a bank. Why is this so? Banks require many requirements that these micro lenders don’t ask from them. When they know the right lender to go to, they could get interest rates that are much lower than in the banks. But what probably attracts most of them is that loans are released faster. There are even those that only take a one day of processing and then clients can get their money immediately. Thus, getting clients will not be a headache.

These days, there are a lot of individuals who have considered going into small and medium businesses. And these people need financial resources.These people look for ways where they can have money as a capital for the businesses that they have thought of.

Who are these people that you, as a micro lender cater to?

Individuals or groups who want to start a small business will comprise your market. This could be from retail stores, cottage industries to buying franchises. You can advertise for this one or rely on word of mouth from your first few clients and your friends and families. Big targets for the micro lending business are the many employees from different companies. Here, you can approach different companies and pass a proposal. You might give them an attractive one where they can receive commission for each employee who lends money from you.

STRATEGY FOR SUCCESS

Although there are many potential clients, you should be careful who to lend to. One of the major concerns is getting the loans paid on time. You should see to it that they have the financial capability to pay you back. To ensure this, experts on micro lending recommend that you based their loans on their actual and potential income. This means that you will only loan a certain amount to your clients depending on how much their revenues are. Borrowing money is easier than paying. There are others who just borrow money without even thinking of their capability to pay. The payment schedules should also be arranged in a way that they can afford to pay their dues each month.

Another strategy that you should employ is zero-tolerance for payment delinquencies. Although you are not as strict as banks when it comes to requirements from your clients, you should not be as tolerant when it comes to paying their loans on time. You must impose some penalties for delayed payments. Otherwise you will end up not having any profit from your business if you will treat them as welfare cases!

It is also essential that you assess your clients yourself. It is not just enough that you grant them the loan based on the requirements and collateral (for bigger loans) that they are able to submit. Take into consideration their character and integrity. How do you feel when talking to them? Are they likely to avoid paying their dues or do they strike you as diligent in paying? Also consider if their businesses are viable and if they can manage a business well. Remember these businesses will be their means of income, thus, their means of paying you. If you think one’s business or their ability to handle it is questionable, then you might also think twice of paying them.

OTHER ASPECTS

Since you are still starting, it is better that you lend small amounts of money to your clients first. This makes your clients capable of paying you easier than when you lend them big amounts. Clients such as retail store operators and employees usually borrow money of small amounts. Borrowers of big amounts higher than 50,000 are usually those who also want to start small businesses and OFW’s. For clients like these, you can ask for a collateral in case of failure to pay. Micro lending agencies usually have terms of a month to half a year with a bi-monthly or monthly repayment schedules. Micro lenders usually charge 3-5% interest. Aside from these charges, there is also the service charge of 3%-5% for some lenders and then of course the penalty fee in case of payment delinquencies. Note that interest rates vary. Take more time to study on what is a competitive interest rate for your lending business.

Keeping track of all the dues and the payment schedules takes a lot of effort. These days, a lot use a business software to ensure more efficiency. It would be advantageous for your business if you invest in a software that will allow you to efficiently track your clients’ loans, their repayment schedules and the overall flow of money in your business. If you do not want to use such, you must ensure that you have an efficient manual record system.

To ensure an efficient collection of payments, you need to employ one person who is in charge of this alone. You can assign someone else for the application and release of loans to clients. As with any business, you need to also employ the services of a bookkeeper to take care of your overall financial aspect of your business. It is also very important that as the business owner, you need to be there yourself to do the assessment for the prospective clients’ application.

Micro lending is a viable business especially these times. However, just like any other business, you just don’t provide the capital and then let your business run through your staff. Especially during these hard times, your management of your business plays a very important role. It is better that you are there to personally see how things are. You just have to be sure who you lend your money too. As long as you have a good system keeping track of who borrows and who pays, nothing could go wrong. At these times when people are faced with financial problems, you already have a market. Just tap the right ones so your money will not fall in the wrong hands.

MLM Business – Who’s Better at Growing an MLM Business, Men Or Women?

Okay, so I’ve noticed a trend in the MLM business industry, the top money makers featured in various company sponsored magazines and media are mostly men or couples. It appears that men do play the upper hand and have a more predominant role within the “inner circles” of various popular MLM businesses, but do they actually grow a business better? 

There are scientifically proven differences between the way a women and a man will grow their business based on societal pressures and  basic human psychology (this is just a generalization of gender and is not personally directed and men or women). These differences stem back to the very essence of a human’s biology, the woman’s role being the nurturer and the man’s role as the hunter/gatherer.

MLM – Women’s Growth Strategies:

In general, women do their research before starting a business or jumping into an MLM opportunity. They also plan ahead and look at the big picture years down the line of what they want their ultimate goal to be, their big “why.” Women also will seek advice when they’re struggling in their businesses and set more realistic business growth and financial expectations. Here’s where biology kicks in, since women are nurturers, they will commit to their business and build more personal relationships with their downline while providing emotional support which in turn increases their retention rate.

MLM – Men’s Growth Strategies:

It’s in a man’s blood to take greater risks and when growing an MLM business, this can definitely pay off.  Men have traditionally had access to larger finances and are able to invest more money into the growth of their business. Men also are generally more aggressive because they’re biologically hunters, so this will reflect in their business growth and success.

Overall, men are more successful in growing their businesses into massive organizations; however, women will stay in business longer. That’s the way the cookie crumbles.