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Sunday Roundup: Vacation!

Misc

Friday was the start of my vacation.  I’m terribly excited.   After a couple of months of long hours, launching a side business, and trying to keep up with my kids, I need a break, from at least my day job.

We’ll be spending a long weekend with my parents, followed by 6 days at home, doing all of the fun things there are to do around Minneapolis.   Brat #1’s vision therapy ate into the vacation fund a bit, so we’re staying cheap and close to home.

Best Posts

Did you know that preventing global warming will keep ET from wiping us out for our own good?

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Carnivals I’ve Rocked

4 Ways to Change Your Life for the Better was included in the Carnival of Financial Planning.

Playing For Blood was included in the Totally Money Carnival.

Zombie Wheels: How to Own a Car that Just Won’t Die was included in the Festival of Frugality.

Thank you! If I missed anyone, please let me know.

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Have a great week!

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Resolving Legal Disputes

Misc

Shelby County Courthouse, Memphis, Tennessee, USA
Shelby County Courthouse, Memphis, Tennessee, USA (Photo credit: Wikipedia)

Dispute resolution has to do with the impartial rectification of conflict between individuals or parties. More specifically it is the utilization and execution of methods that are designed to resolve conflicts. In a case in which there is a dispute between people or groups, often times a third, neutral, party is selected to be an impartial representative for the disputing persons. Although dispute resolution can refer to resolutions both in and out of the court, it mainly applies to disputes that are settled outside of the legal framework of the judicial system.

Two of the most common types of dispute resolution are known as adjudicative and consensual. While adjudicative resolution requires a third party to mediate the outcome, such as a judge or jury, and usually involves some form of litigation, consensual resolution is the attempt to solve the issue between the two disputing parties without involving a third party, although at times a neutral arbitrator will be selected to preside over the case, though they will often be there not so much for authoritative purposes but more as a council to keep things fair. There is also a third upcoming type of dispute resolution, online dispute resolution, or ODR, which has become more popular in recent years with the rise of the internet’s prominence in daily life, but it is mainly the application of traditional consensual resolution practices, only adapted to the online environment.

Many disputes can be solved simply through adherence to the law, however, sometimes issues arise that the legal structure isn’t equipped to handle, and so a third party is chosen to resolve the conflict. These types of conflict fall within the jurisdiction of the law and so will be relegated to the political system for arbitration. Judicial resolutions are conflicts that will be, hopefully, settled by the court. In the United States, this is often the case with dispute resolution. This form of resolution usually involves litigation. This is the use of outside individuals to argue for or against the disputing parties. In a courtroom, the lawyers are the litigators, while the judge and jury listen to the arguments in order to come to their decisions.

Extrajudicial resolution is non-court settlement of conflict. Also known as alternative dispute resolution, or ADR, this is what people are usually referring to when discussing dispute resolution. ADR is usually more efficient, cost effective, and less time consuming than judicial resolutions. Extrajudicial resolution concerns various types of ways to settle conflict. These include arbitration and mediation. In arbitration neutral individuals will listen to both sides of an argument and render a decision based on evidence. Unlike the court systems, this proceeding doesn’t necessarily include a binding agreement with the parties.

Mediation is used in extrajudicial resolution as a way to open a dialogue between conflicting parties. The idea is to use a trained neutral third party in order to come up with unique solutions to solve the issue. A mediator is trained to be both an effective negotiator as well as an excellent communicator. A mediator is like a judge in that they cannot take sides, and they do not give legal advice either. Their decisions are not obligatorily followed, though they tend to be followed since the mediators are trained to make decisions that benefit both parties.

The techniques used in dispute resolution can be used both in and outside of the court room. It is often used by individuals who wish to speed up the process by not having to get into the political system. However, they are useful in many cases where individuals wish to come to the most beneficial agreement for all the parties involved.

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Late Pass: Insurance for the Terminally Ill?

Misc

Insurance
Insurance (Photo credit: Christopher S. Penn)

This is a guest post.

Uh oh. Not only have you put in decades of loyal service for a company that does not offer a life insurance policy to employees, now you have a terminal disease that has numbered your days. You always meant to get a life insurance policy at some point, but it was just one of those things that there was never enough money left for at the end of a month after bills, groceries and just enough fun to make worthwhile.

Your life is one that needs insuring to protect your family following the now-inevitable, but has that ship sailed? Is it possible to make up for lost time by obtaining a life insurance policy as a terminally ill patient?

You already know that insurance companies are experts at assessing risk. Each potential policy holder is effectively examined to determine their likelihood of living a reasonably long time, and a terminal illness is an obvious negative in this department.

Many insurance companies will be hesitant to offer a comprehensive policy that they know they will have to pay out in fairly short order, but you may be able to get a type of life insurance known as graded premium life insurance.

With graded premium life insurance, you pay a monthly premium to retain coverage. If your illness should terminate within two years, your family will receive all the premiums you have paid as a benefit. Should you last longer, the insurance provider pays the full value of the policy. This is a compromise that gives you the peace of mind that a life insurance policy can provide while allowing the insurance provider to minimize their risk.

These policies typically have cash values ranging from $10,000 to $50,000, so while they might not guarantee the permanent stability of your family, it will offer them much-needed assistance through what is sure to be a difficult time in their lives. Premium amounts vary by age and relative health, but generally the closer you are to qualifying for a payout, the more it costs to enter the lottery.

Life is unpredictable except for its certain end, and sometimes this reality leaves us less prepared for the future as we would like. Fortunately, a terminal illness does not make a person completely uninsurable in most cases. Of course, it is much easier and less expensive to get life insurance as a person who is not dying, so the best strategy may be to invest before your health becomes an issue.

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What to Take Away From John Cleese’s Divorce

Celebrities

Cleese as a Mexican maraca soloist as part of ...
Cleese as a Mexican maraca soloist as part of his 1977 guest appearance on The Muppet Show (Photo credit: Wikipedia)

If you haven’t been kept under a rock your whole life, you’re likely familiar with actor and comedian John Cleese.  Part of the infamous Monty Python crew, he starred in films such as Monty Python’s Quest for the Holy Grail, and television shows such as Faulty Towers.  However, are you familiar with what has happened to Mr. Cleese financially over the past few years?

When Cleese divorced his third wife she ended up with a divorce settlement that quite literally made her richer than him, despite the fact that they were married for only 16 years and had produced no children.

Divorce is, unfortunately, a fixture of modern society, and people of both sexes need to know how they can protect their personal finances in case of a divorce.  After all, these days more than 50% of marriages end in divorce, so not preparing yourself financially for it is engaging is some rather wishful thinking.  So how best to protect yourself and your personal finances, should you be unfortunate enough to have to go through one?

If you are the higher-earning party, get a pre-nup prior to marriage; this simply cannot be overemphasized.  Cleese himself, already married to wife number four, incidentally, was told that he should have her sign a prenuptial agreement, he initially didn’t want to, despite having just been taken to the proverbial cleaners.  He only reluctantly had one written up when his legal team essentially insisted.  Even though prenups can be challenged or modified in court, if you are the party bringing more assets to the relationship, it is irresponsible of you not to solicit a prenuptial agreement from a potential spouse.

Another thing to keep in mind is that you should protect assets you have in joint accounts with your spouse, and also begin to actively monitor your credit, if things become acrimonious between you two.  This way, you will prevent them from absconding with the totality of your shared funds, or ruining your credit if they are feeling malicious.  If you need further information on how to do this properly, speak with a qualified financial planner.

So if you find yourself considering marriage and either have significant assets to protect or suspect you might have them in the future, you owe it to yourself to look into the legalities surrounding prenuptial agreements, and other thorny issues related to personal finance.  Failure to do so can end up seriously impacting your life in a negative way, should you ever be faced with a vindictive or greedy spouse; protect yourself!

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Top 7 Reasons To Trade Forex Over Other Financial Instruments

Finance

This is a guest post provided by ForexTraders.com

The foreign exchange market has literally exploded over the last 10 years.  Before the 1990’s, the only players allowed to speculate in the forex market were banks, large hedge funds, and very wealthy individuals.  The reason was simple.  The minimum contract size was usually $100,000 and it ranged up to $1,000,000; therefore, most traders simply could not afford to trade in the market.  The advance of technology and internet changed that.  Today, traders can open an account with as little as $100 and begin trading in the spot fx market.  This change has caused traders around the world to rush into the market and the Bank of International Settlements now estimates that average daily turnover in the fx market is around $4 trillion!  Let’s examine a few of the top reasons why the fx market is drawing so many traders.

Leverage

In the United States, traders that engage in fx trading can leverage 50:1.  Leverage was much higher in recent years, but government regulations have now capped leverage at 50:1 effective late October.  This means that a forex trader can control a position of $50,000 with only $1,000 on deposit with his broker.  Leverage is definitely a two-edged sword that can help a trader garner very quick and substantial profits, but it can also lead to debilitating losses and should therefore be used with caution.

Liquidity

The huge amount of volume that is present in the forex market each day makes it basically impossible for any single financial institution or even group of market participants to manipulate price movements.  It also makes it much easier for large traders to enter and exit the market without trading against themselves, which is a common problem in the stock and commodity markets.

24 Hour Market

The forex market is a loosely connected network of international banks; therefore, the market never closes from Sunday evening until Friday afternoon.  Liquidity simply flows from financial center to financial center as time zones open and close business operations for the day.  This is a huge advantage for small, retail traders because those who still have full-time jobs can trade at night.

Small Initial Account Size

Traders can open accounts with as little as $1 at some brokers, and then trade positions where each 1 point movement is equivalent to $0.01 (in the U.S. this would be lower since the leverages are capped at 1:50).  This will obviously never get a trader rich, but it does allow traders a very low risk entrance into the market.  Traders generally need $20,000 in order to day trade the stock market.  This very low account size at an online forex broker is a big draw for many traders.

Long Trends

The currency market tends to develop very clear, long trends.  It is not uncommon for specific currencies to head in the same direction for 5+ years.  Of course, there are many dramatic price swings that make real-time trading difficult and challenging, but a quick look at longer-term currency price charts makes it clear that currencies develop strong trends.

Macro Economics

The currency market is very big picture-based.  This means there are not a million and one little things that a trader has to track as is common in other financial markets.  Currencies react to major macroeconomic developments around the world.  Seasoned fx professionals argue that this makes the job of economic analysis much different in the currency market.

Continued Growth and Volatility

The foreign exchange market is expected to continue to grow in coming years, and volatility is expected to remain quite strong as the world continues to move toward a more globalized economy.  As globalization continues to change the world economy, investor interest in currencies will most likely continue to grow steadily.

Jason’s commentary:  I’ve never looked into forex trading, mostly because I’m not in the “invest & grow rich” stage of my financial life.  Have you invested in the forex market?

Be Happy With What You Have…

Life

…or you will never be happy.

An emoticon with a smile. For more emoticons i...
An emoticon with a smile.

A newer car, a bigger TV, a nicer house, a fancier phone, better tickets, more friends, more gadgets, more toys…more, bigger, better…whatever.

It’s all a disappointment.

Nothing on that list will provide happiness.  If that is your goal, you will spend your life miserable.  It’s not possible to buy happiness, either directly or indirectly through the accumulation of “stuff”.  A purchase may fuel your ego or trigger endorphins, but it is all temporary.  There’s no sustainable happiness in the “high” of the latest purchase.

The search for stuff pales in comparison to the search for meaning.  Find your passion and follow that. Chase that to the ends of the earth, and come back feeling fulfilled.  Feel something that will last longer than the drive home or the next product release.

Find contentment.  At some point there is a satisfying level of “enough”.   More than that, you feel empty.  Less, envious.   Find enough and stop there.   Find the level that allows you to do the things you need to do and some of what you want to do.  Find your balance point and be happy with it.

Living life constantly disappointed that you don’t have more is a sure way to live life disappointed. How do you find your balance point?

Also, have you started the Happiness Challenge?