What is Identity Theft and How to Prevent it?

Identity theft is when someone steals your identity and uses it for personal gain. Generally someone will use your name and social security number to open a bank account, take out personal loans, or credit cards. Identity theft ranges from what we most hear about, which is when someone steals our credit card information or “credit cars fraud” to true identity which is when the thief succeeds in obtaining the right information or “personally identifiable information” to become “you”. Personally identifiable information is what I call the type of information that could facilitate a criminal to pose as you, such as social security number, date and place of birth, physical address, even your school and university information.

Identity theft has become a plague in our digital world and there are no signs of this going away. With the growth of social networking groups such as Myspace, Facebook, Linkedin and others, if we are not careful a thief lurking around these sites could obtain valuable information about you. Identity theft can be a crippling event. It can take months or even years to fully recover of the effects of it.

According to the “Federal Trade Commission – 2006 Indentity Theft Survey Report”, approximately 8.3 million US adults discovered that they were vitims of some form of ID theft in 2005 (See report at http://www.ftc.gov/os/2007/11/synovatefinalreportidtheft2006.pdf ).

The target of identity theft is personal information that will enable the thief to assume another’s identity. Although identity theft is in itself a criminal act under both federal and most state laws, the crime is almost always a stepping stone to other crimes such as credit card fraud, bank fraud, computer fraud, internet fraud, mortgage fraud, and other scams designed to enable the criminal to profit from the original theft.

How can you prevent the risk of identity theft? Here are a couple of suggestions:

1. Watch for shoulder surfers. Be aware of who is around you when you are entering sensitive information in your computer or ATM machine.

2. Shred everything that contains personal information before you discard them.

3. Destroy digital data before disposing of it. Use software like ShredXP to make sure that data on hard drives are completely destroyed.

4. Don’t carry your social security card with you or write your social security on your checks. Give it only when it is absolutely necessary.

5. Don’t use obvious passwords like your social security number and date of birth.

6. Don’t use the same password for everything.

7. Keep your personal information in a secured place, specially if you have roommates.

8. Although it is more secure now, be careful when giving out personal information on the internet.

9. Make a point to check your credit report rating with all three beaurus at least once a year. Any conflicting information should be questioned immediately.

10. Use a postal box to receive your bank, credit and mortgage information. Anything that may contain personal information should be sent to a P.O. Box. One of the very popular and oldest techniques used by identity thieves is to search through your mailbox for information. Also be diligent about reviewing your statements.

11. When using your credit card in a shop or restaurant, watch as it is swiped, to ensure the clerk doesn’t try to run it through a “skimmer” that stores your information. Always take the receipts with you and don’t throw it into your garbage.

12. If someone calls you claiming being your “bank” or “credit card company” never give out any personal information over the phone.

13. Beware of those file-sharing programs. You might be able to download a movie or music, but others can also reach inside your computer.

14. Watch our for those debit cards. A thief who steal a debit card could wipe out your entire bank account.

15. Watch out for “phishing” emails. The sending of bogus emails from a company that appears legitimate in hopes of collecting your personal information.

It is one of the goals of this blog to protect our wealth. It is up to us to take the necessary steps to mitigate the rick of loss due to identity theft. It is up to us to empower ourselves with knowledge on how to protect ourselves and what to do if we suspect of being victims of this crime.

Here are a couple of link you may find helpful:

http://www.privacyrights.org/fs/fs17a.htm

http://www.ftc.gov/bcp/edu/microsites/idtheft/

The Most Overlooked Deductions

If you are like millions of Americans who throws all of their receipts, credit card and bank statements into a box and run to their tax preparers in the hope that they will be able to go through ALL your stuff and absorb all the information through osmosis, then you are likely to overlook hundreds of dollars in tax deductions when the time comes to prepare your tax returns. You cannot blame them, many times they are charging as low as $50 to prepare your tax returns. It is impossible for someone that was not with you all year to go through your box and in a matter of minutes be able to complete your tax return with all of your deductions. I do not care how many checklists they may have to collect your data.

Here is some information you may want to know:

· The most recent numbers show that about 46 million Americans itemized deductions in their 1040s. This group claims approximately 1 Trillion dollars worth of deductions. Astonishing isn’t it?
· Another 85 million Americans claimed more than 500 Million dollars worth of “standard deductions”. Some of these people shortchanged themselves to take the easy way out.

Here is your chance to claim a piece of that Trillion dollar pie. The secret is in your documentation, keep good records. Suggestion: buy a file cabinet (a deduct the cost of it as part of your business expenses or tax preparation costs) and start organizing your receipts for 2009. If you do not have time to do it, then hire someone part-time to do it (and deduct the cost). You can hire a youngster very inexpensively to sort through your receipts. Claim your deductions if you deserve them, and keep more money in your pocket. Don’t overpay taxes by overlooking tax deductions.

1. Accounting fees for tax preparation services, advice and IRS audits, including tax software if you meet the limits.
2. Alcoholism and drug abuse treatment.
3. Amortization of premium on taxable bonds.
4. Appraisal fees for charitable donations or casualty losses.
5. Appreciation on property donated to a charity.
6. Casualty or theft losses.
7. Cellular telephones required for business.
8. Cleaning and laundering services when traveling.
9. Commissions and closing costs on sale of property.
10. Contact lenses, eye glasses, and hearing devices.
11. Contraceptives, if bought with a prescription.
12. Costs associated with looking for a new job in your present occupation, including fees for resume preparation and employment of outplacement agencies.
13. Depreciation of home computers.
14. Dues to labor unions.
15. Education expenses to the extent required by law or your employer or needed to maintain or improve your skills.
16. Employee contributions to a state disability fund.
17. Employee's moving expenses.
18. Federal estate on income with respect to a descendent.
19. Fees for a safe-deposit box to hold investments.
20. Fees paid for childbirth preparation classes if instruction relates to obstetrical care.
21. Foreign taxes paid.
22. Foster child care expenditures.
23. Gambling losses to the extent of gambling gains.
24. Hospital services fees (laboratory work, therapy, nursing services, x-rays, and surgery).
25. Home office expeneses, if your home is your primary place of business.
26. Impairment-related work expenses for a disabled individual.
27. Improvements to your home.
28. Investment advisory fees.
29. IRA trustee's administrative fees billed separately.
30. Lead paint removal.
31. Legal abortion expenses.
32. Legal fees incurred in connection with obtaining or collecting alimony.
33. Margin account interest expense.
34. Medical aids such as crutches, canes, and orthopedic shoes.
35. Medical transportation, including standard mileage deduction and lodging expenses incurred for medical reasons while away from home.
36. Mortgage prepayment penalties and late fees.
37. Nursing home expenses that are primarily for medical expenses.
38. Out-of-pocket expenses relating to charitable activities, including the standard mileage deduction.
39. Part of health insurance premiums if self-employed.
40. Penalty on early withdrawal of savings.
41. Personal liability insurance for wrongful acts as an employee.
42. Points on a home mortgage and certain refinancings.
43. Protective clothing required at work.
44. Real estate taxes associated with the purchase or sale of property.
45. Reservist and National Guard overnight travel expenses.
46. 50% of self-employment tax.
47. Seeing-eye dogs for the handicapped or guard dogs for a business.
48. Seller-paid points on the purchase of a home.
49. Services of a housekeeper, maid, or cook needed to run your home for the benefit of a qualifying dependent while you work.
50. Special equipment for the disabled.
51. Special schools and separately stated feed for medical care included in tuition.
52. State personal property taxes on cars and boats.
53. State sales taxes – this write off makes sense primarily for those who live in states that do not impose a state income tax.
54. Student loan interest – even if paid by the parents (you cannot be claimed as a dependent by your parents)
55. Subscriptions to professional journals.
56. Theft of embezzlement losses.
57. Trade or business tools with life of year or less.
58. Uniforms and work clothes not suitable for street wear.
59. Union dues
60. Worthless stock or securities.

First Time Home Buyer Tax Credit – What Does It Mean For You?

There has been some confusion lately with the First Time Home Buyers Tax Credit. This has been caused by the fact that there are two tax credits that has been enacted in less than a year. Here I will give you a quick summary of both.

The Housing and Economic Recovery Act of 2008

· Authorizes a $7,500 tax credit for qualified first-time home buyers purchasing homes on or after April 9, 2008 and before January 1, 2009. This is in essence an interest-free loan.
· The credit is equal to 10% of the purchase price of the home , up to $7,500.
· Only first time home buyers can qualify for this credit as defined by this act. The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. For married taxpayers, the law tests the homeownership history of both the home buyer and his/her spouse.
· The income limit for single tax payers is $75,000, and the credit dissapears once the modified adjusted gross income reaches $95,000. For married couples the limit is $150,000, and the credit dissapear once the modified adjusted gross income has reached $170,000.
· Any home purchased by an eligible first-time home buyer will qualify for the credit, provided that the home will be used as a principal residence. This includes single-family detached homes, townhomes, condos, manufactured homes and houseboats, within the United States.
· You receive your credit when you file your tax return.
· Tax credit must be paid back to the government over a period of 15 years. The repayment starts in the second year after the tax year that the home was purchased. So, If you purchased your home in 2008, you will begin repayment when you file your 2010 tax return. Your payments are set at $500 per year for 15 years.
· A word of caution: If you sell the house or no longer the home as your principal residence before the end of the 15 years, you will pay the balance remaining on the credit on the tax return for the year of the change of use or sale.

American Recovery and Reinvestment Act of 2009
· The amount of the credit is $8,000 for primary residences purchased by first time home buyers during the period of January 1, 2009 and November 30, 2009.
· Credit does not have to be repaid, as long as the house is not sold within three years. Unfortunately, those who purchased their homes in 2008 are elegible to $7,500 tax credit and it must be repaid.

Face Your Fear

Many times we are terrified to take certain actions in our lives. Literally paralyzed by our fears. For example, some of us are afraid of speaking in public. You may know what I am talking about. The moment comes for you to make a presentation and you start to sweat, your voice starts to tremble, your knees to shake. Have you ever been there? I have. However, many years ago I made a decision that changed my life. I decided to face my fear! You see, it would be difficult for a consultant to be afraid to talk to people and be successful. So I invested on myself and bought books from Tony Robbins (yeah Tony). It helped me realize, face and conquer my fear.

I couldn't believe I spent all of those years of my life harboring the fear of speaking to people. After listening to my tapes and reading my books I decided to put my newly learned techniques into practice. I finally did it; the realization that there was actually nothing to fear about it was so blatantly ridiculous I felt like slapping myself on the forehead. I can't believe I spent all that time being afraid of something I was not supposed to be afraid of.

The moral of the story: Some of the things we're afraid of doing aren't actually as bad as we think they are. In fact, most of the time these things are actually nothing to be afraid of; you'd find yourself asking why you wasted so much time being fearful of them.

This is also true with Real Estate Investing. A lot of people are hesitant right now to invest in real estate because they're afraid it's going to be a lot of hard work that never pays off. Many of them are paralyzed due to the news from "experts" they read about the "housing market". They're afraid to be humiliated by sellers and buyers. They're afraid they won't know what to do when a deal is already on the line. They're afraid of this, they're afraid of that and so on. Bottom-line, many people fail to realize that there's nothing to be afraid of. Especially since a lot of experienced investors now are willing to walk you through every step of the way until you're comfortable with it. It's mostly irrational fear. If you're one of those still afraid to take the plunge and invest in real estate, then let me tell you one thing – Today is the best time to invest in real estate. There is tons of profit waiting to be made and it's up to you if you want a piece of the pie or not.

One of the biggest problems of investors is taking the first step.

The Importance of Family Budget

Many times people complain about being in debt or not knowing where their hard earned money went. When they are asked about their budget, how much they owe, which expenses they can cut, they just stare at you as if you were talking to them in a foreign language. What is truly amazing is when they refuse to invest in a family budget and expect to get out of debt and/or build financial wealth.

I am always amazed at this, how can you get out of debt if you don’t even know your current situation, if you are not willing to work to change your current situation. How can you achieve your financial goals if you don’t even know where your money goes. Remember, you cannot arrive to where you want to be if you don’t know where you are right now and what will it take to meet your financial goals. Those who fail to use a family budget often end up with family problems and worse yet, devastating losses all of which could have been prevented with a little bit of planning.

The purpose of family budgeting is:

1. Provide valuable information to make informed decisions.

2. Cutting costs

3. Gaining control and curbing expenses

4. Lead a stress free life when it comes to your household finances

5. Starting to save and build up wealth over time.

Budgeting is not just about restricting spending and living a cheapstake life. It is about informed decisions, action, and sustained discipline when it comes to your household finances. It acts as a guide so you know where all the money you bring goes on a monthly basis. It is not intended to restrict your life style, but to help you lead a stress free life when it comes to money matters. However, family budgeting does not have to be complicated like many people are lead to believe. It does not require an accounting and/or finance degree. In fact, I suggest that when you start your family budget you keep it simple.

I suggest that you have a written family budget. Why a written budget? Having a written budget makes you accountable for your finances. Most people don’t think about how much money they spend per week or monthly, but when you write down your expenses on a piece of paper or spreadsheet, it provides you awareness of your spending habits. It creates a framework to getting your family ahead financially and build wealth.

Here are a couple of places where you can start gaining understanding of your current situation:

1. Bank statements

2. Credit card statements

3. Credit reports

4. Tax returns

So what simple steps can you start taking today to address your current financial situation:

1. For small deficits you could start by reducing expenses such as: entertainment, cell phone plans, cancel pagers, bring your lunch to work, cut your latte macchiato in Starbucks, and catch the subway or bus to work to name a few.
2. For large deficit, you will need to make more drastic changes such as: increase your income, downsize your vehicle, downsize your accommodations.
3. For those whose income covers all of the expenses but does not provide surplus, you may still want to take a look at your spending habits to allow for savings and building wealth. Register to receive our free newsletters with valuable information on how to create savings and build wealth over time.

The secret of true financial wealth is not in how much money you make, but how much money you get to keep. Do you want to accomplish your financial goals? Do you want to educate yourself on how to build wealth over time? Work from home or part-time to generate multiple stream of income? If you answered yes to any or all of these questions, I invite you to register to our wealth building network blog to receive our updates packed with pearls of wisdom, be informed about recommended reading and upcoming e-books, and other valuable information on how to build, grow, and protect your financial wealth.

How Do I Know If I am Eligible For Student Loan Debt Consolidation?

Many times people complain about being in debt or not knowing where their hard earned money went. When they are asked about their budget, how much they owe, which expenses they can cut, they just stare at you as if you were talking to them in a foreign language. What is truly amazing is when they refuse to invest in a family budget and expect to get out of debt and/or build financial wealth.

I am always amazed at this, how can you get out of debt if you don’t even know your current situation, if you are not willing to work to change your current situation. How can you achieve your financial goals if you don’t even know where your money goes. Remember, you cannot arrive to where you want to be if you don’t know where you are right now and what will it take to meet your financial goals. Those who fail to use a family budget often end up with family problems and worse yet, devastating losses all of which could have been prevented with a little bit of planning.

The purpose of family budgeting is:

1. Provide valuable information to make informed decisions.

2. Cutting costs

3. Gaining control and curbing expenses

4. Lead a stress free life when it comes to your household finances

5. Starting to save and build up wealth over time.

Budgeting is not just about restricting spending and living a cheapstake life. It is about informed decisions, action, and sustained discipline when it comes to your household finances. It acts as a guide so you know where all the money you bring goes on a monthly basis. It is not intended to restrict your life style, but to help you lead a stress free life when it comes to money matters. However, family budgeting does not have to be complicated like many people are lead to believe. It does not require an accounting and/or finance degree. In fact, I suggest that when you start your family budget you keep it simple.

I suggest that you have a written family budget. Why a written budget? Having a written budget makes you accountable for your finances. Most people don’t think about how much money they spend per week or monthly, but when you write down your expenses on a piece of paper or spreadsheet, it provides you awareness of your spending habits. It creates a framework to getting your family ahead financially and build wealth.

Here are a couple of places where you can start gaining understanding of your current situation:

1. Bank statements

2. Credit card statements

3. Credit reports

4. Tax returns

So what simple steps can you start taking today to address your current financial situation:

1. For small deficits you could start by reducing expenses such as: entertainment, cell phone plans, cancel pagers, bring your lunch to work, cut your latte macchiato in Starbucks, and catch the subway or bus to work to name a few.
2. For large deficit, you will need to make more drastic changes such as: increase your income, downsize your vehicle, downsize your accommodations.
3. For those whose income covers all of the expenses but does not provide surplus, you may still want to take a look at your spending habits to allow for savings and building wealth. Register to receive our free newsletters with valuable information on how to create savings and build wealth over time.

The secret of true financial wealth is not in how much money you make, but how much money you get to keep. Do you want to accomplish your financial goals? Do you want to educate yourself on how to build wealth over time? Work from home or part-time to generate multiple stream of income? If you answered yes to any or all of these questions, I invite you to register to our wealth building network blog to receive our updates packed with pearls of wisdom, be informed about recommended reading and upcoming e-books, and other valuable information on how to build, grow, and protect your financial wealth.