In the biggest bank failure in U.S. history, the Federal Deposit Insurance Co. seized Washington Mutual's assets Thursday. The FDIC then quickly sold most of WaMu (that's assets and liabilities) to JPMorgan.
Simply put, WaMu was victimized by a classic "run on the bank." Customers withdrew $16.7 billion in a 10-day period following the bankruptcy of Lehman Brothers, leaving WaMu "with insufficient liquidity to meet its obligations," its regulators determined.
A longer explanation is WaMu was victimized by mismanagement and misguided bets on exotic (and toxic) instruments such as option adjustable-rate mortgages.
The deal has major ramifications for JPMorgan and the banking industry as a whole, as Henry and I discuss in a forthcoming segment.
For the vast majority of people who bank at WaMu, which had 2200 branches and $188.3 billion of deposits as of June 30, the important thing to remember is your deposits are insured up to $100,000, and the Federal government will go to every extreme to make sure it's available.
"There will be no interruption in services and bank customers should expect business as usual come Friday morning," FDIC Chairman Sheila Bair told reporters last night.
The sobering truth, however, is that repeated declarations about the sanctity of FDIC insurance from Bair, President Bush, Treasury Secretary Paulson, Fed Chairman Bernanke and others failed to quell concerns among WaMu's customers. That suggests more "bank runs" could be in the offing unless the government moves quickly to restore confidence.
http://finance.yahoo.com/tech-ticker/article/73415/Run-on-Bank-Helped-Kill-WaMu-But-Your-Money-Is-Safe?
Source:
Friday, September 26, 2008
Your Money is Safe !!!
Sunday, August 31, 2008
Friday, August 22, 2008
7 Counterintuitive Ways to Save Money
by Jeffrey StrainSaturday, August 16, 2008provided by TheStreet.Com
Earnest attempts to save money here and there don't always add up to much. When traditional methods fail, it's time to consider a few counterintuitive options.
Spend Money
If you want to get the most for your money, you are going to have to spend. One of the biggest mistakes people make when they are trying to get their finances in order is to stop spending money alogether. Not all spending is the same. You should limit unnecessary purchases, but spending on essential upkeep, preventive measures and items that will save money in the long run is vital for getting and keeping your finances in order. Scrimp now on items and services that can help prevent larger expenses in the long run--such as routine car maintenance and energy-saving bulbs--and you could pay for it later.
Don't Stay Home in Front of the TV
While staying home is certainly less expensive than going out with your friends, it isn't likely to improve your financial situation significantly. In fact, it can cost you a lot of money.
Instead of staying home and lamenting that you can't afford to go out, take the initiative. Sign up for some classes to improve your job prospects and learn new cost-cutting skills so that next year you don't have to sit at home thinking about the things that you want but still can't afford.
Don't Spend Time Learning How to Invest
When you are first starting to improve your finances, don't make learning how to invest a priority. Instead, put your investing on autopilot and follow the advice of Warren Buffett: "The best way to own common stocks is through an index fund."
Once you've mastered your finances and have saved a nice nest egg, then you'll have time to research individual stocks. Until then, your time will be much better spent on improving your finances through other means.
Don't Leave Your Investments to Experts
Do your own investment research. This research should include getting experts' opinion, but don't rely on it exclusively.
You should make the final decision for your circumstances. Giving your finances completely over to someone else to take care of, no matter how much of an expert he or she may be, is asking for financial trouble.
Don't Let Salary Determine Job Choice
One of the worst financial mistakes you can make is to base your job choice on salary alone.
For long-term earning and financial health, you're almost always better off choosing the job you will find most satisfying.
Even if the salary is lower at the outset, you'll be more productive -- and more likely to advance -- if you're engaged and motivated.
Don't Buy What Is Cheapest
"Cheap" rarely means "the best value." To get the most out of your hard-earned money, you must think value rather than price. A car that is inexpensive, but costs a lot to drive and needs frequent repairs has less value than a car with a higher price tag but costs less to run and maintain. This concept of buying value over price can be applied to anything and will mean that you rarely buy items which are the least expensive.
Don't Buy Things That Are on Sale
Much like things that are on the cheap, things that are on sale are rarely the best value.
There are two major problems with most items on sale: They are often something that you really don't need, and even if you do need them, you can usually find an alternative with better value. If it's not something you'd buy even if it weren't on sale, it's a purchase you shouldn't make. When you find something on sale that you do need, don't buy it without looking at other options. If you need the item and there aren't better options, buy away.
Copyrighted, TheStreet.Com. All rights reserved.
Tuesday, August 19, 2008
Top Money Myths
We all bring money beliefs, habits, and anxieties into the way we deal with
our everyday finances. Our value standards and behaviors about money affect
not only us, but also the people we love. Any unchecked control issues that
play out over money can derail relationships and even impact the lives of
those we care about after we’ve passed on. The following are money myths
that underlie some of our greatest fears or our cherished-but-wrong-headed
beliefs and habits. If you want to take a new path to financial competence
that is proven, easier, sound, and even enjoyable, follow along as we help
you become more open-minded about your personal financial present and
future.
1. Having money means fewer worries and ease of living.
It is tempting to believe that people who have money are wise, selfdisciplined,
self-confident and untroubled. Yet having money does not
by itself lead to feelings of security, and at times not even to feelings
of financial security. How you feel about life and how comfortable you
are about money management is not determined by the size of your bank
account, but by your values and priorities.
2. Financial matters are too complicated to understand
and master.
Financial competence is like most life challenges: The fundamentals are
mastered one at a time. We begin by learning the financial basics and the
practical steps we must take to resolve the financial concerns in life. To
succeed, we must patiently explore our own needs and values and be willing
to seek appropriate guidance from skilled partners, family members, friends,
or professionals when advice is needed.
3. Financial planning and investing should be left to an expert.
We all need to take responsibility for our patterns of spending, difficulties with budgeting, and willingness to plan, save,
and invest for future life events. We need the courage to communicate with partners and other family members. Then we
are in a position to choose financial experts wisely and deal most constructively with them.
4. Credit and debit cards are convenient devices that make purchasing easy.
With credit and debit card use, one side of the exchange transaction is missing—the act of consciously paying money for
goods or services received. We benefit by consciously planning our everyday purchases and limiting impulse buying to a
budgeted amount each month.
5. A lot of money is the best gauge of success in our society.
While this myth forms the basis for much of society’s interactions, it is nevertheless a myth. Yes, the accumulation of
money is one driving force. When we really look at the sad (and sometimes tragic) lives that have been governed by
wealth, however, we can see its uselessness as a primary success indicator. Even opinion polls disagree with this widely
held notion about the power of money. They show “life satisfaction,” “a happy marriage,” and “feeling in control” as more
cherished signs of success than “a lot of money,” and these values win out by a very large margin!
Source:
You and Your Money: A No-Stress Guide
to Becoming Financially Fit
Lois A. Vitt
Karen L. Murrell
ISBN: 9780131003101
Monday, August 18, 2008
WEALTH ACCUMULATION RULES FOR SAVING MONEY
Pay yourself first. This is the number one rule!!! It may be difficult at first but you will find the small amount you save will not be missed after the first month or so. This is a great way to get in the habit of saving. Pay yourself first,
not last. If you budget to save $100 monthly and, for example, you budget $100 for eating out, pay yourself $100 first and then as the month goes along you may find yourself short and may have to cut back on your eating out. It is best to cut back on "eating out" than on your savings plan.
Pay yourself automatically. Simply have a certain amount of your check deposited into a financial account every month. You can start out by depositing it into a normal savings account, then as the amount increases, it can be switched to accounts that offer a better yield (CDs, etc.)
Save 10% of your monthly income. If at the stage of your life you do not feel you can do this, then save 5% and gradually work up to reach the 10% mark. And if you can save more, wonderful! You'll be thankful you did when you retire.
Develop a sound investment strategy. Invest regularly through a process called dollar-cost averaging. This means investing a specific amount at regular intervals which enables you to even out the cost of your investments over time.
Avoid "get rich quick" schemes. There are always those out there who will offer you an investment that "should earn you a great deal of money." But be extremely cautious. The majority of such investments will end up costing you money. Stick to solid, safe investments.
Be very aware of the power of compounding. This means that you will be
earning interest not only on what you save, but also on the interest that is generated. There are many investment opportunities, but the simplest strategy is to just leave it alone and let it accumulate over time, or "compound." Money saved at 7% will double in approximately seven years.
Source:http://wealthinfoplus.com/WealthAccRules.html
Friday, July 25, 2008
"Kutu Programme"
Program kutu secara wang pos sudah agak menular dan popular pada masa ini. Mereka yang berhadapan dengan masalah kewangan melihat program ini dapat membantu menyelesaikan kemelut kewangan mereka. Bagi pihak yang berwang pula, berhasrat untuk membantu sahabat-sahabat dan rakan-rakan yang berada dalam kesusahan dengan menamakan mereka sebagai penerima wang pos berkenaan.
Persoalannya, adakah program ini berjalan tanpa terdapat apa-apa unsur haram sehingga program ini benar-benar menjamin kebaikan sebagaimana yang dijanjikan. Tetapi jika program ini mengandungi unsur-unsur haram, maka kegelapan dan kerugian pastinya akan menemui peserta-pesertanya atau sebahagian daripada peserta-pesertanya.
Unsur-unsur haram yang dapat dikesan. Setelah meneliti perjalanan beberapa bentuk program wang pos, didapati ia mengandungi beberapa unsur haram. Antaranya:
1.Unsur Gharar
Jika dikaji berkenaan program ini didapati asas kepada pembinaan dan perjalannya adalah 'auto placement' yang menjadikan orang bawah atau peserta baru mangsa yang tidak mendapat apa-apa pulangan apabila program 'auto placement' ini berhenti berpusing. Oleh itu, setiap yang menjadi peserta yang peringkat awalnya mengharapkan pulangan apabila sampai gilirannya kehilangan wang apabila program ini terhenti.
Setiap sesuatu pastinya ada permulaan dan pastinya juga ada titik penamatnya. Pada waktu tersebut, pastinya sesiapa yang masih berada di bawah akan menjadi mangsa apabila wangnya diperolehi oleh orang atasan sedangkan orang bawahannya belum wujud. Gharar yang terdapat disini ialah gharar fil husul (tidak tentu dapat) dan gharar fil miqdar (tidak tentu kadar).
2.Riba
Program ini sebenarnya bersifat 'money game' yang mendedahkan pesertanya kepada riba. Ini kerana, setiap yang menyertai program ini atau sebahagiannya berhasrat mendapatkan pulangan. Jika ia menaja dengan mengeluarkan wang sebanyak RM100, maka ia mengharapkan pulangan lebih. Jika ia benar-benar mendapat pulangan yang lebih banyak, maka ia adalah riba kerana tiada transaksi perniagaan atau khidmat di dalam program ini.
3.Judi
Dalam program ini terdapat unsur judi kerana sepastinya ada pihak yang mendapat untung dan ada pihak yang pasti mengalami kerugian. Untung dan rugi ini boleh berlaku apabila program ini berhenti. Jika ia berlaku, maka mereka yang berada di line atas akan mendapat keuntungan manakala mereka yang berada di line bawah mendapat kerugian.
Beberapa jawapan kepada kekeliruan
Mereka yang menyertai program ini melihat ia adalah harus dari sudut syariat dengan alasan-alasan berikut:
1.Sumbangan atas alasan hibah
Antara alasan yang sangat luas dijadikan hujah membolehkan ialah sumbangan setiap peserta adalah hibah. Sebenarnya alasan ini adalah alasan yang tidak boleh diterima syariat kerana hibah tidak mensyaratkan keuntungan dan tidak mensyaratkan pulangan.
Tetapi program ini jelas berbentuk permainan wang (money game) dalam bentuk pusingan 'auto placement'. Justeru itu, hibah bersyarat jika tidak kena caranya boleh menjerumuskan kepada riba sebagaimana sabda Nabi Muhammad s.a.w. yang maksudnya: "Setiap pinjaman yang mensyaratkan manfaat (faedah) adalah riba." Pada masa yang sama bayaran yang dianggap hibah tersebut adalah dalam bentuk tetap dan dijanjikan pulangan sebagaimana dalam iklan yang disiarkan. Maka setiap transaksi syariat bukan dilihat kepada lafaz dan binaan kalimah tetapi ia melihat kepada hakikat dan perjalanannya. Kaedah fiqh menyebut yang bermaksudnya: "Yang diambil kira pada akad transaksi ialah maksud dan makna, bukan lafaz dan susunan kalimat."
2.Sumbangan mestilah ikhlas membantu.
Alasan kedua yang biasa digunakan ialah sumbangan itu ikhlas membantu sahabat-sahabat seagama yang susah. Menurut syariat, apabila sesuatu transaksi di dapati haram, maka ikhlas tidak akan merubahnya menjadi halal. Sebagaimana tiga orang berjudi dan setiap seseorang mempertaruhkan wang RM10. Sekalipun setiap seseorang berniat derma ikhlas untuk si pemenang ia tetap haram kerana ia adalah judi dan ikhlas tersebut tidak boleh mengharuskan perkara yang haram.
Ikhlas atau lebih tepat tidak dipaksa adalah syarat sah jual beli dan segala jenis transaksi yang harus. Firman Allah SWT dalam surah an-Nisa ayat 29 yang maksudnya: "Melainkan ia adalah perniagaan yang berlaku secara reda meredai antara kamu."
Ayat ini menunjukkan reda dan ikhlas menyertai perniagaan yang halal, bukan menjadi syarat sah kepada transaksi yang haram.
3.Kias kepada belanja kawan makan atau minum di kedai.
Kias tersebut adalah kias yang salah kerana ia mempunyai perbezaan yang sangat ketara. Antaranya, belanja kawan di kedai makan tidak melibatkan pusingan wang. Dalam program ini ia melibatkan wang dengan wang yang sepastinya mendedahkan kepada riba. Tambahan pula setiap pesertanya disyaratkan menaja dan ditaja.
Penutup dan kesimpulan
Sememangnya setiap transaksi hukum asalnya adalah harus sehinggalah ia dicemari oleh unsur-unsur haram.
Setelah diteliti program wang pos ini, didapati program ini adalah haram disebabkan unsur-unsur yang disenaraikan di atas.
Justeru itu, umat islam digesa supaya tidak terlibat dengan program ini kerana ia membazirkan wang disamping keharaman yang disebutkan.- tajdid
Source:harakahdaily.net
Monday, July 21, 2008
Choosing the best credit deal
As a general rule, most experienced consumers know that the way to spend the LEAST possible amount of money when borrowing is to:
1) find the lowest interest rate
2) borrow as little as possible
3) borrow for as short a time as possible (pay debt off quickly)
In some situations, those three principles are sufficient to making wise borrowing decisions. In other cases, however, it gets trickier. Take the following example:
Suppose you have decided to purchase a new vehicle for $25,000. You have two financing options:
A - receive $1500 cash back now, and finance the purchase @ 2.9% for 48 months OR
B - $0 cash back, and financing @ 0.9% for 36 months
Can you tell which is the better deal? Here's how it works out.
Option A -
Your monthly payment will be $552.25
Over the course of the loan, you will pay a total of $26,508. BUT when you subtract the $1500 cash back, your net cost is $25,008
(note: if you applied the $1500 to the purchase price,
then your total cost would be even lower).
Option B -
Your monthly payment will be $704.12/month
Over the course of the loan, your total payment will be $25,348
In this case, Option A is ultimately cheaper. But the average person really can't figure that out in their head, or even with an ordinary calculator, when just the basic details are given. Don't be rushed into a quick decision.
*** The Moral of the Story: you need to see the bottom line in order to make wise borrowing decisions.
Consumer Reports has created an on-line calculator that will help you evaluate vehicle purchases when you have options for incentives and/or special financing. Go to www.ConsumerReports.org and search for "car buying calculators."
The Take Control of Your Money web course: www.extension.iastate.edu/financial/money
Source:
Barb Wollan
ISU Extension Family Resource Management Specialist
Thursday, July 17, 2008
Sunday, June 15, 2008
Money and Marriage: Don't Let Money Problems Ruin Your Relationship
Money problems can cause fights and increase tension in a relationship. That is the finding of a survey by Consumer Credit Counseling Service (CCCS) of people who came to the organization for debt or budget counseling.
According to the survey, sixty percent of married respondents report fighting about money with their spouse. In addition, nineteen percent said that financial problems negatively affected their relationships with their parents; while thirteen percent said the same was true for their friends. More than ninety-three percent report that financial problems increased the amount of stress in their lives.
CCCS reports, however, that you can prevent financial issues from ruining your marriage or other personal relationships. "It starts with setting aside the time to talk about money," says Suzanne Boas, president of CCCS. "Discussing the issues calmly can prevent the situation from overheating."
CCCS recommends holding your money discussion in a quiet, neutral place. Decide in advance on ground rules such as staying calm, refraining from character attacks, and putting the issue aside if tempers get heated. If you find you are unable to discuss money calmly, consider consulting a professional financial planner or therapist. Here is a list of potential topics to address in your discussion. The list is geared toward couples, but can apply to any relationship in which money is an issue.
Lay your cards on the table. Honesty and trust are the hallmarks of a strong relationship. Too many people, however, keep financial secrets from their partners. Instead, commit to discussing your financial positions openly. Disclose how much is owed on credit cards, other outstanding liabilities, and your joint and separate assets.
Compare money experiences. Share your values and attitudes about money. Tell how money was handled in each of your households growing up and how you view money today as a result. Realize that families have different approaches to finances; try to remain nonjudgmental about your partner's experiences.
Set joint financial priorities. Separately, each person should write down his or her short and long term goals. Then use these plans and wishes as a starting point for deciding on mutual goals. Priorities may include building up an emergency savings fund, getting out of debt, planning for a new home, starting a family, making major purchases, saving for retirement, or going on vacation. Next, develop a budget to help you meet these goals.
Be realistic about your family's expenses. As you develop your budget, understand that emergencies and unexpected expenses will come up, often at the worst possible time. Be diligent about making regular deposits in your savings account for these unexpected expenses. A dented fender is bad enough without having to fuss over money for the repairs.
Determine which accounting approach is best for your family: joint or separate checking accounts and joint or separate savings accounts. Most couples find it easier to have one checking account for paying bills. But, if you do have separate checking accounts, decide who is responsible for paying which bills. Remember, nothing is set in stone; if one way does not work, try another.
Agree on what you are going to teach your children about finances. Allowances can be a dicey subject for parents. Does one parent think the kids should get paid for doing chores and the other think chores are just part of being a family? Have a united front when it comes to presenting financial issues to your children.
Baby budget: Financial Planning Is Key When Having A Baby
So I hear you're having a baby.
If you've recently discovered that you're expecting an addition to the family, get used to hearing that from all your family and friends. They'll call to congratulate you. They'll call to offer their support. They'll call to ask how you're feeling.
But most of all, they'll call to tell you how much your life is about to change. Keep in mind, however, that having a baby is like any other major change in that planning ahead makes the transition a lot easier.
In planning your personal finances for the baby's arrival, there are several issues you need to consider. It's time to get out a pen and paper and work out a budget that you can use once you've brought the baby home. Remember, these figures are in addition to your regular weekly and monthly bills.
First of all, a new baby means an extra mouth to feed, as well as diapers and baby clothes. Also, you'll find that miscellaneous expenses, including paper towels, tissue, and detergent, will all increase. Even your utility bills will go up because you're home more often. You're probably safe if you figure a minimum of an extra $200 a month, although you may have to make some adjustments in either direction as time goes on.Additionally, there are some one-time purchases you might want to consider, including a crib, car seat, monitor, and baby swing. Of course, many expectant mothers receive these as gifts at a baby shower.
If both parents plan to work after the baby is born, start calling daycare centers as early as possible, just in case you have to get on a waiting list. Daycare costs can range from $40 a week for a program in someone's home, to $125 a week or more for an established center. Ask friends who have children to recommend a good center, and call the state agency that regulates daycare centers to get their rating. Just don't delay. It's important that you plan for this new weekly cost in your budget.
Another important area for your post-birth budgeting is health care. How much will your health insurance premium increase by adding the baby? Make sure you discuss this with your employer to find out what the family rate is, and specifically, how much more will be taken from your paycheck every week.
Once the baby is born, you can plan on an occasional visit to the pediatrician, both for regular check-ups and minor illnesses. Some parents get very lucky and experience very few health problems with their newborn, beyond the minor colds and infections all babies get. Other infants need more attention from their pediatrician. So, it's really very difficult to carve that number into stone. However, depending on your deductible or copayment, you may need to budget an additional $200 to $300 a month just for the baby's medical care, at least for the first few months.
Now for the good news.
Almost every expectant parent, especially those expecting their first child, worries about money. Most discover after the baby is born, though, that it isn't as hard as they thought.
Having a baby forces certain changes onto the parents, typically resulting in a less expensive lifestyle. You don't go out as often for dinner or to a movie. If you think about it, people who don't have children waste a lot of money filling time and avoiding boredom. Rest assured: you'll have no problem finding something to do once the baby arrives.
Monday, June 9, 2008
7 Common Money Mistakes To Avoid: Part I
“I have been working for 20 years, yet I have very little cash in my savings. Sometimes I wonder where all of my money have gone to”
Does the above statement sound familiar? If you ask around, you are sure to find at least one person you know, who share the same sentiments as Mrs. Chong.
If you are thinking of improving your financial health, first, you need to be able to recognize your financial mistakes so that you can learn not to repeat them.
Here are some commonly made money mistakes that everyone should avoid:
Mistake #1: Failing to Plan
If we carry out a survey on the people around us, we would be sure to find that not many of us plan our finances. The most common response that we can anticipate would be the classic excuse “We are just too busy with work and family that we hardly have any time left to do the planning”. As a result, most of us end up paying higher taxes, leave our savings sitting silently in lousy investments for years or overpaying for financial products. Since there are always deadlines to be met at work, we tend to let our finances run its own course, thinking that it is of lower priority as there are no deadlines to meet nor is there anyone to force us to look into our financial plans, unless of course we run into serious deficit.
However, the important point to note here is that PLANNING is typically found to be a strong habit among people who have successfully accumulated wealth, even with just a modest income.
Mistake #2: Spending Beyond Our Means
Nowadays, we constantly overspend due to peer pressure and consumer temptation that surround us on a daily basis . We are, to a certain extent, exposed to mild brainwashing with TV commercials, newspaper ads, sale circulars, and flashy shopping malls promoting the lifestyles adopted by the rich and famous, which of course involves having the latest mobile phone models, the latest luxurious cars, latest fashion trend. All these tempt us into spending exorbitantly and unnecessarily. The signals we get from not jumping on the bandwagon is that we will be considered left out of today’s scene. However, in order to do so, far too often, we end up spending way beyond our means. We will find that at the end of each month, the net salaries that go into our bank account are usually meagre, after servicing our car loans, housing loans, credit card bills and other utility bills.
Mistake #3: Spending Future Money
Buy now and pay later! This has become a norm nowadays and the credit card has become a must-have item in our wallet. In fact, a lot of us carry more than one in our wallets. No doubt of it is a convenient item to have around, however, some of us misuse it and treat it like a vehicle to spend our future money at will. It has become a common phenomenon where, by just settling the minimum payment at the end of the month, you will buy more now. As a result, the credit card bad debt snow-balls to an extent beyond our control. According to the bankruptcy report, the percentage of people declared bankrupt due to default in credit card payment has increased in the last few years especially among the younger age group. Be wise when using credit card. Making minimum monthly payment on credit card debt allows you to buy more now, but it will cost you dearly in the future.
7 Common Money Mistakes To Avoid: Part II
Mistake #4: Delaying Saving for Retirement
Most of us aim to take up early retirement. In order to achieve this, we need to plan our finances to make sure that we have enough savings to sustain the life style that we desire even after retirement. However, many of us find that even when we approach retirement, we still struggle to meet the savings target that we have set for ourselves earlier. As our income grows, our savings are supposed to increase as well, instead, we more often than not, have big items to spend on, i.e. house upgrading, new car purchase, club membership to keep up with our peers, etc., that prevents us from depositing more into our savings.
Mistake # 5: Investing in the Wrong Products
There are various kinds of financial products in the market. However, in order for us to identify the right product that suits our risk and return profile, we need to equip ourselves with some basic investment knowledge and do the homework ourselves. Instead, most of us end up investing in some products, simply because we rely too much on the financial advisers, who might have the agenda of pushing higher sales for their products and therefore providing misleading information to us. It is always important to study the product characteristics or the management team track record before investing.
Mistake #6: Not Saving for a Rainy Day
Some of us think that purchasing insurance is a waste of money. However, we are vulnerable if we and our family do not have insurance to cater for any loss of income. In the event of some unfortunate incident, especially those affecting the family’s bread winner, without any cash reserve or insurance, it will be devastating to the whole family. By then, it would be too late to start thinking of income replacement.
Mistake #7: Focusing Too Much on Money Matters
All the above tell us to focus on our finances. However, on the other extreme, we must also not be too engrossed in accumulating our wealth to the extent that we lose sight of other priorities in our lives. While we plan our financial health, we must not neglect our own health, family and friends, career satisfaction and fulfilling interests. Without these, even with tons of money, we will not be happy.
Lastly, we need remind ourselves of the importance of planning our finances. If we are not fully, totally and truly committed to creating wealth, chances are wealth will remain estranged to us
Friday, June 6, 2008
Peak Oil: Gas Prices, Oil Supply Depletion & The New Energy Crisis: SU... DetailsCommentsMore from userPeak Oil: Gas Prices, Oil Supply Depletion & T
Stocks fall sharply on surge in oil, jobs data
By TIM PARADIS, AP Business Writer
NEW YORK - Wall Street tumbled Friday, taking the Dow Jones industrials down nearly 400 points, on a pair of alarming economic developments: oil prices that shot up by more than $11 a barrel and approached $140 for the first time, and the biggest gain in the government's unemployment reading in more than 20 years.
The jump in oil to a price that might have seemed unfathomable only a few months ago appeared to wipe out investors' recent optimism over the prospects for a strengthening of the economy. Oil jumped following a Morgan Stanley analyst's forecast of $150 oil by July 4, and in response to a drop in the dollar and fresh tensions in the Middle East.
The surge in oil seemed the guarantee that gasoline prices that are on the verge of a national average of $4 a gallon will only continue to climb, putting additional pressure on consumers who have been forced to forgo discretionary purchases in order to pay for gas and other basics. Moreover, consumers who can't find work or who are worried about losing a job will be even more hesitant to spend on extras.
Wall Street has been worried of late that a pullback in consumer spending will deal a blow to the economy, as Americans' expenditures account for more than two-thirds of U.S. economic activity. So Friday's surge in oil convinced many investors to pull money out of stocks that suddenly seemed too risky.
Crude oil saw a huge rebound during the week after falling amid a drop in demand for gasoline. The biggest gains came Friday, with light, sweet crude setting a high of $139.12 in after-hours trading on the New York Mercantile Exchange. Oil settled at $138.54, a gain of $10.75 for the regular session; that was the biggest one-day advance for oil in the history of the Nymex.
The spike in energy prices came as the Labor Department said the nation's unemployment rate jumped to 5.5 percent in May from 5.0 percent in April. It was the biggest monthly increase since February 1986 and the rise leaves unemployment at it highest level since October 2004. Wall Street had predicted an uptick to 5.1 percent.
The number of U.S. jobs shrank by a smaller-than-expected 49,000, but that development offered Wall Street little solace as May marked the fifth straight month of jobs losses.
But the sudden spurt in oil appeared to weigh most heavily on Wall Street. The increase, fueled in part by a weak dollar, also came after an Israeli Cabinet minister hoping to replace Prime Minister Ehud Olmert was quoted as saying Israel would attack Iran if it doesn't abandon its nuclear program.
"I think the biggest concern right now is oil and it's potential for a stagflationary environment," said Bill Knapp, investment strategist for MainStay Investments, a division of New York Life Investment Management. Stagflation occurs when stalling growth accompanies rising prices.
The headwinds facing the economy sent the Dow Jones industrial average down 394.64, or 3.13 percent, to 12,209.81; it was down by as much as 412 points at its low of the session. The decline was the worst percentage and point drop since Feb. 27, 2007, when the blue chips dropped 416.02 points, or 3.29 percent, amid concerns about souring debt and an economic slowdown.
Broader stock indicators also fell sharply Friday. The Standard & Poor's 500 index lost 43.37, or 3.09 percent, to 1,360.68, and the Nasdaq composite index fell 75.38, or 2.96 percent, to 2,474.56. The day's declines were the steepest percentage losses for the S&P 500 and the Nasdaq since Feb. 5 this year.
The Dow Jones Wilshire 5000 Composite Index, an index that measures a wide swath of the U.S market, fell 2.9 percent Friday, a paper loss for the day of about $500 billion.
Investors' nervousness was clear. The Chicago Board Options Exchange's volatility index, known as the VIX, and often referred to as the "fear index," jumped 26.5 percent Friday.
Friday's pullback came a day after the Dow jumped nearly 214 points, its largest daily point gain since April 18 and a reaction to better-than-expected sales from retailers and a dip in weekly jobless claims. The welcome economic news helped investors shrug off a more than $5-a-barrel jump in oil prices. But the advance in oil Friday made it clear to Wall Street that ascendent energy prices posed a serious threat to consumer spending and the economy.
Friday's session capped an erratic week for the markets. Stocks fell Monday and Tuesday before moving sideways Wednesday and surging Thursday. The back-and-forth moves left the Dow down 3.39 percent for the week, the S&P 500 off 2.83 percent and the Nasdaq with a loss of 1.91 percent.
Bond prices jumped Friday after the weak jobs data sent investors scurrying for safety. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.91 percent in late trading from 4.04 percent late Wednesday.
The dollar declined against other major currencies — a move that makes each barrel of oil more expensive. Gold prices jumped.
Knapp remains skeptical of the reasons behind the run-up in oil.
"The supply demand dynamics just don't warrant where we are today. It's becoming incredibly hackneyed to say it's all coming from demand in China," he said. "I think the consensus is that something is going to come along to deflate this commodity bubble and put the stock market back on track."
And the worries about employment and oil may be intertwined.
Ethan Harris, Lehman Brothers' chief U.S. economist, contends that the jobs report helped drive oil prices higher. He said traders are worried that the increase in unemployment would leave the Federal Reserve unwilling to raise interest rates. A notion of a Fed with few options combined with comments from the European Central Bank this week on the possibility of rate hikes have hurt the dollar.
"The weaker dollar is pushing up oil prices because oil is denominated in dollars and oil sellers want to be compensated for the weaker dollar," Harris said, adding that he thinks the market's moves have been overdone.
"While I'm skeptical of the whole thing in terms of whether it makes sense logically, this is the way the market behaves. It's like a Pavlovian response. If the Fed looks soft, oil prices go up," he said.
Declining issues outnumbered advancers by more than 4 to 1 on the New York Stock Exchange, where consolidated volume came 4.69 billion shares, compared with 4.18 billion traded Thursday.
The Russell 2000 index of smaller companies fell 22.90, or 3.00 percent, to 740.37.
Wall Street's pullback weighed on Europe. Britain's FTSE 100 ended down 1.48 percent, Germany's DAX index fell 1.99 percent, and France's CAC-40 lost 2.28 percent on the day. Japan's Nikkei stock average closed up 1.03 percent; trading there ended before the release of the U.S. jobs report.
The Dow Jones industrial average ended the week down 428.51, or 3.39 percent, at 12,209.81. The Standard & Poor's 500 index finished down 39.70, or 2.83 percent, at 1,360.68. The Nasdaq composite index ended the week down 48.10, or 1.91 percent, at 2,474.56.
The Russell 2000 index finished the week down 7.91, or 1.06 percent, at 740.37.
The Dow Jones Wilshire 5000 Composite Index — a free-float weighted index that measures 5,000 U.S. based companies — ended Friday at 13,924.63, down 336.13 points, or 2.36 percent, for the week. A year ago, the index was at 15,343.15.
Tuesday, June 3, 2008
Kids and Money
No matter what age your children (or grandchildren, or...) are, NOW is always the time to work on building financial skills. Like any skill, financial management develops with PRACTICE. And a child who begins learning a skill early in life will usually be more skilled. (Think of the best wrestlers or gymnasts - usually they started at an early age!)
When it comes to personal finance there are some key skills all young adults need: living within limits (i.e. spending less than they earn); comparison shopping; stretching resources; planning ahead; managing a checking account (including debit cards and on-line banking); wise use of credit; prioritizing goals, needs, & wants. Nearly every child of school age can start practicing some of these skills. Obviously, a 6-year-old can't manage a checking account (although she may be able to observe her parents using one and discussing it), but a 6-year-old can start doing some comparison shopping, and making choices to live within limits.
The critical element here is practice. Everyone learns by doing. Just being told what to do or how to do it is not enough to really learn a skill. Some learners will self-teach by trying things out, asking questions, and practicing on their own. If you leave your children to self-teach their financial skills after they become adults, they may eventually learn most of the skills needed, but it may take a very long time, AND it may involve some very costly mistakes which could haunt them for decades.
That is why it is so important to create opportunities for young people to practice financial skills before they are out on their own. Younger children can help make some family shopping decisions, and when they have money of their own to spend they can learn about limits and deciding which option is most valuable. By early-mid grade school children are ready to manage a steady income, which parents can provide in the form of an allowance. Checkbook management skill-building can begin in the teen years.
Think about your own children, and the children you care about. What financial skills are they already practicing? What other skills do they still need a chance to practice? What can you do to help create opportunities for practicing those skills?
As summer vacation begins, with a break from formal education for most children, look for opportunities for informal education. If the kids are at home for the summer, involve them in planning food shopping; summer snacks and easy-to-fix lunches can be costly, and involving the kids in planning (within a budget) for that spending will help them learn a key skill -- and will also help keep your food spending within reasonable limits. Other ways to involve the children are plentiful - haave them help manage the checkbook (writing checks, recording transactions in the register, adding and subtracting - and older kids can reconcile the bank statement when it arrives). Vacation and special-event planning create more opportunities. Just keep your eyes open and you will find numerous ways in which your children can practice financial skills this summer and throughout the year!
by : Barb Wollan
ISU Extension Family Resource Management Specialist
The Billionaire Universities
by Andrew Farrell Friday, May 30, 2008
provided by FORBES
For every one opening at Harvard's undergraduate college, there were 14 hopeful high school applicants. Despite the daunting odds, there's good reason to try to win one of those coveted acceptance letters.Harvard is consistently ranked as one of the top schools in the country. Its $35 billion endowment makes it the best-funded college in the United States.Oh, and there's this: Harvard students are more likely to become billionaires than graduates of any other college.
Of the 469 Americans on Forbes' most recent list of the world's billionaires, 50 received at least one degree from Harvard. The school has produced 20 more current American billionaires than No. 2 on our list, Stanford University.
Harvard's billionaire alumni are an accomplished group. They include Microsoft Chief Executive Steve Ballmer, New York City Mayor Michael Bloomberg and media tycoon Sumner Redstone.Stanford University trails Harvard, but still boasts 30 billionaire alumni. These include Nike co-founder Philip Knight and discount brokerage mogul Charles Schwab.
Fittingly, the California university, which has produced so many ultra-wealthy businesspeople, was founded by one. The grieving railroad tycoon Leland Stanford decided to found a university after his only son died of typhoid fever. With considerable land and money donations from the Californian, the school opened its doors in 1891.
Following Stanford is the University of Pennsylvania, with 27 graduates. Notable members of the group include real estate king Donald Trump and SAC Capital founder Steven Cohen.
Rounding out the top five are Yale, with 19 billionaire graduates, and Columbia University, with 15. The top school from the Midwest is the University of Chicago, ranked seventh, with 10 grads. No. 1 from the south is Duke, with eight.
A dubious distinction goes to New York University. The school has five dropouts who have gone on to become billionaires, including Carl Icahn. After receiving a degree in philosophy from Princeton, Icahn enrolled in NYU's medical school. Bored by all the memorization required, he jumped ship to be a stockbroker.It proved a profitable career change. The Queens, N.Y., native is now the 46th wealthiest person in the world with a fortune of $14 billion. He could rack up another $300 million in profits if he can push Yahoo! to reconsider a sale to Microsoft.
A small group of schools account for a disproportionate amount of billionaire education. Just 20 universities and colleges account for 52% of the billionaire graduates while 182 schools count for the remainder.What makes certain schools billionaire factories? For one thing, they offer excellent educations. But they also offer networking, which in many cases amounts to a ticket to the old-boys network, still very much in existence these days.
Some programs, like business schools, are more likely to produce super-high earners. Of Penn's 27 billionaire graduates, 20 attended its prestigious Wharton business school.Strong research programs in developing areas of tech are important too. Sergey Brin and Larry Page met at Stanford's storied computer science program. The Google co-founders are now worth nearly $19 billion each.
Selectivity also helps. The best schools are overwhelmed by applicants each fall. Acceptance rates for nearly all of the top billionaire-producing schools are below 30%.The low acceptance rates ensure that incoming classes are exceptionally smart. They're full of people whose resumes already point to great successes ahead.
Future billionaire Patrick McGovern caught MIT's attention as a teenager after building a computer that was unbeatable at tic-tac-toe, a remarkable feat in the 1950s. After attending MIT on a scholarship, McGovern began publishing magazines covering the growing computing world. Today, his tech media empire now puts his net worth at $4.7 billion.
Thursday, May 29, 2008
Wednesday, May 28, 2008
Painless Ways to Save Money
by Tawra Kellam -LivingOnADime.com
The average American often feels overwhelmed by debt and doesn't know where to start or how to go about getting out of debt. It's a misconception that the more money you earn the easier it is to save. My husband and I paid off $20,000 of credit card debt and medical bills in 5 years on an average income of $22,000 a year.Here is how you can save over $7,000 in just one year cutting a few things from your grocery bill. They are painless, simple and add up over time.If you don't think that cutting out one bag of potato chips or one soda will add up, look at the numbers at the end of a year. If you're trying to save so you can be a stay-at-home mom or dad, to pay off a down payment on a house, get rid of some credit card debt or just to have some emergency money, here are 13 ways to do it without depriving yourself:
By eliminating one $2.00 bag of potato chips (not all just 1 bag) from your grocery bill each week you can save $104.00 per year.Cutting out one six-pack of soda will save another $104.A weekly $4.00 box of granola cereal adds up to $208 a year.If you eat out one less time each week at $30 a meal, you can save $1,560 and ordering one less delivered pizza at $20, can save you $1040 per year.
Similar annual savings can be realized by cutting out weekly purchases of fruit rolls ($130), daily gourmet coffee at $2.50 per cup ($910), a daily liter of soda ($365), snack cakes ($455), one less bottled water ($455), one cup less juice per person in a family of four ($546), 3 lbs. less red meat a week ($390), and by eliminating a $4.00 lunch five days a week ($1040).
By themselves, these efforts may seem small--but they add up to over $7,000.
Spend $10 Today, Be Out $100K Tomorrow
by Jeffrey StrainMonday, May 5, 2008provided by TheStreet.com
Little amounts can make a large difference to your finances.
As gasoline and food prices continue to rise, the squeeze to make family budgets balance each month becomes more of a struggle. After the big savings have been found and taken, smaller savings have to be found to make ends meet.This can be frustrating as it can feel like everyone is being nickled and dimed to death. That's why it's important to realize how these small amounts can make a huge difference in your overall financial health.
You've likely heard about the little ways to save money a million times. Money-saving advice includes standards like packing your lunch instead of buying it at work, skipping the Starbucks and making your coffee at home and watching videos at home instead of going out to the movies. While you may have grown tired of hearing them, they are still as true as ever and even more important when the economy is struggling. More from TheStreet.com: • Use Your Pantry to Pinch Pennies • Minimum Payments Cause Maximum Financial Pain • Ten Strategies to Fight Bank Fees
Saving small amounts of money is good advice for everyone, it's not as essential for people that are currently living well below their means. If you spend $5 on a cup of coffee each day, but you're still able to put away five times that amount toward your savings, that coffee splurge isn't going to hurt as much as for someone who isn't saving anything. For those that are barely making ends meet, spending small amounts of money can be the difference between deep debt and a nice retirement account.
When you are faced with a budget that isn't balancing, you have two main choices: earn more money or cut more expenses. Unfortunately, many turn to a third alternative. When they can't seem to make their budget balance, they decide that it's acceptable to place the difference onto a credit card. Even though the monthly shortfall in the budget is small, placing it onto credit cards is one of the worst financial moves that a person can make. The result will be a downward cycle that will not only keep you in debt, but also create a tremendous amount of stress.
There is often a false assumption that saving $10 and spending $10, although opposite, are relatively the same. For example, if a person saves $10 a day, after a month their account will have $300 while if a person spends $10 a day, that will result in a debt of $300. While on the surface this makes perfect sense, the problem lies in that these numbers fail to take into account the interest that can be gained or charged on this money. It is this failure to understand the concept of compound interest and the dramatic effect it can have that greatly changes these results.
It's important to understand that it takes very little to start sinking into debt. For most people, spending $10 a day would not be considered extravagant spending by any means, but $10 can result in tens of thousands of dollar of debt. It's simple to see when you compare the results of what happens when one person saves $10 a day while the other spends $10 a day that he doesn't have.
If a person were to save $300 a month (approx. $10 a day) and invest it to get a 5% yearly return, that person would have $20,402 in the bank after five years. On the other hand, if a person ends up spending $300 a month more than he has and puts it onto a credit card that he doesn't pay off over the same 5 year period, that person will owe $36,259, assuming a 26% credit card interest rate. After five years, the difference between saving $10 and spending $10 each day results in a $56,661 gap in net worth between the two.
Add another five years to the same patterns, and the results are even more dramatic. After 10 years, the person who saved $10 a day would have $46,585 in the bank, whereas the person whop spent the $10 he didn't have would be $167,470 in debt, resulting in a net worth difference of over $210,000.
Of course, there are many other factors that could alter these calculations. The interest you can earn and what your credit card interest rates are will vary from this example. There is a minimum amount that the person would need to pay on a credit card each month. If debt to this extent began to occur, the person would have their credit cut off long before this amount accumulated and would likely need to declare bankruptcy. The point is that over time, small amounts added to debt can result in far more debt than most people realize.
Once you learn that saving a small amount and overspending a small amount aren't simple opposites, you understand the importance of having a budget and strictly sticking with it. If you are able to fight through the hard times and keep your budget balanced, then you set yourself to reap great financial rewards when the economy finally turns around.
Copyrighted, TheStreet.Com. All rights reserved
Saturday, May 24, 2008
Examining Four Key Types of Investment Ratios
With that caution in mind, examine the types of ratios, and, in a big-picture sense, how they're used in practice. Ratios can be classified into one of four categories largely defined by what you're testing for:
Asset productivity ratios: Assets are resources used in a business to produce a profit, or return. This group of ratios describes how effectively those assets are deployed or utilized. Some analysts call these efficiency or asset management ratios. How much inventory, accounts receivable, or fixed asset investment does it take to support a given volume of business? Are these assets being managed effectively with proper controls?
Profitability ratios: How profitable is the company? Sure, there may be a lot of business activity. But how much profit is produced? Per dollar sold? Per dollar invested? Some analysts refer to these ratios as management effectiveness ratios because they indicate management's overall success in generating returns for the enterprise.
Wednesday, May 21, 2008
Retirement Planning Checklist
Find the category that best describes you. After answering the questions, bring the list to a qualified financial professional who can help make sure your retirement plan is on target.Saving for Retirement
1. Have you performed a comprehensive retirement needs calculation?
2. Are you contributing enough to potentially reach your financial goal within your desired time frame, by maximizing contributions to tax-advantaged retirement accounts, such as your employer-sponsored retirement plan and an IRA?
3. Is your asset allocation aligned with your retirement goal, risk tolerance, and time horizon?
4. Have you determined if you might benefit from contributing to a traditional IRA or a Roth IRA?
5. Do you review your retirement portfolio each year and rebalance your asset allocation if necessary?
Nearing Retirement
1. Do you know the payout options available to you (e.g., annuity or lump sum) with your employer-sponsored retirement account, and have you reviewed the pros and cons of each option?
2. Have you considered your health insurance options, (i.e., Medicare and various Medigap supplemental plans or employer-sponsored health insurance), out-of-pocket medical expenses, and other related health care costs?
3. Have you contacted Social Security to make sure your benefit statement and relevant personal information are accurate?
4. Should you purchase long-term care insurance? If so, have you investigated which benefits are desirable?
5. Is your asset allocation properly adjusted to reflect your need to begin drawing income from your portfolio soon?
6. Have you determined an appropriate withdrawal rate of your assets to help ensure that your retirement money might last 20, 30, or more years?
7. Have you figured the amount of your annual required minimum distribution (RMD) and developed a strategy to reduce your tax burden once you're required to begin taking RMDs?
8. Have you appointed a health care proxy and durable power of attorney to take charge of your health and financial affairs if you are unable to do so?
9. Have you reviewed all your financial and legal documents to make sure beneficiaries are up-to-date?
10. Are you making effective use of estate planning tools (such as trusts or a gifting strategy) that could reduce your taxable estate and pass along more assets to your heirs while also benefiting you now?
Summary
Planning for retirement is a lifelong process. Determining your retirement needs by identifying your potential retirement expenses and sources of retirement income is an important step.
Starting to invest early for retirement and contributing as much as possible to tax-advantaged employer-sponsored retirement plans and IRAs are two ways to leverage your retirement dollars.
Determining an appropriate asset allocation -- how you divide your money among stocks, bonds, and cash -- is a time-tested strategy for helping you pursue your financial goal.
It's essential to determine an appropriate annual withdrawal rate of your assets during retirement so you don't outlive your money.
After age 70 1/2, you must begin making an annual required minimum distribution from certain tax-deferred retirement accounts. Preparing for this phase ahead of time may help reduce your tax burden.
Developing an appropriate estate plan is the important final stage of crafting an effective retirement plan.
Checklist
Try to accumulate enough emergency savings and insurance coverage so that you can address unexpected financial crises without spending money earmarked for retirement.
Update beneficiary designations on all retirement accounts and other financial paperwork.
Consider changing the date of your retirement if it would make it easier to retire with enough money for the future.
Rebalance your retirement account's asset allocation if necessary.
Sunday, May 18, 2008
How consumers can cut their grocery bills
By Anne D'Innocenzio, AP Business Writer
Strategic shopping can help consumers lower their supermarket bills despite soaring prices
Q. The price of milk, rice and other food basics is soaring. How can I reduce my grocery bill while still providing my family with nutritious food?
A. With staples like milk now selling for almost $4 a gallon and the price of eggs at more than $2 per dozen, Americans' household budgets are being squeezed. And some analysts predict food inflation could double this year, lifted by the rising costs of fuel, corn and soybeans. But families can take steps to limit the impact of higher prices.
"Overall, you can control what you spend even in an environment where food prices are escalating fast," said Goutam Challagalla, associate dean and associate professor of marketing at Georgia Institute of Technology. "You can save without sacrificing quality."
First, Challagalla and other experts recommend that consumers make a list of food items the family needs before they go shopping and stick to it. Walking aimlessly up and down the aisles will encourage shoppers to pick up extra items like cookies and other munchies.
It's also a bad idea to go shopping when you're hungry. Consumers tend to be more impulsive, and pick up unnecessary items when they're shopping on an empty stomach.
Here are more tips to keep your food budget in check:
-- Buy store brands. The quality of store branded food items has improved dramatically in recent years, and many now compete with major national labels, according to Tod Marks, senior editor at Consumer Reports magazine. Some consumers may want to stick with name brand detergents or soaps, for example, but buying store brands for a broad array of products from fruit cups to cereals and pastas can save anywhere from 20 percent to 50 percent, Marks said.
-- Evaluate unit prices. Buying in bulk is traditionally more economically, but that's not always the case, Marks says. So he and other experts recommend shoppers look at the item's cost per unit, which is found on the shelf sticker next to the item. Marks added that when items go on sale, shoppers should always compare the cost per unit on both the big and small packages to see which is a better deal.
But experts also say shoppers should keep in mind how much their families are going to consume. It's not economical to buy a big bag of fruit if it's going to end up rotting in the refrigerator.
-- Compare prices of the same product in different areas of the store. "Where things are placed in a store can make a big difference," says Challagalla. For example, cheese is often cheaper in the dairy aisle than the deli because shoppers have to pay extra for it to be sliced.
-- Clip coupons. Shoppers should look through circulars for special deals, but Marks warns them not to assume that all items in a supermarket's weekly flyer are on sale. He noted that manufacturers could have paid to have the item featured.
-- Obtain a store card. These loyalty cards allow shoppers to get extra discounts on items without having to clip coupons.
-- Consider frozen foods. Frozen peas, fish and other items are cheaper than fresh because they have a longer shelf life.
"Anything that is perishable, shoppers are going to have to pay higher prices because stores have to build it into their (profit) margins," said Challagalla.
-- Ignore precut fruit or vegetables or other prepped items. While it's nice to have that pineapple cut up in chunks, that extra convenience costs money.
-- Avoid items displayed at the checkout counter. Stores feature single serving pies, cans of soda and other items at the checkout that are often more expensive, but can be tempting to shoppers, particularly hungry ones, Marks said.
On the Web: http://www.consumerreports.org
Friday, May 16, 2008
SEDEKAH
Bersedekah demi keredaan Allah
Oleh DR. ZULKIFLI MOHAMAD ALBAKRI
Sayyid Qutub berkata: “Oleh sebab itulah satu peralihan pembicaraan dibuat iaitu daripada berbicara dengan orang-orang yang beriman kepada berbicara dengan Rasulullah SAW untuk menjelaskan beberapa hakikat yang besar dan mempunyai kesan yang mendalam dalam usaha menegakkan kefahaman Islam di atas asas-asasnya (yang kukuh) dan menegakkan tingkah laku Islam di atas jalannya (yang sebenar).
Ibn Abi Hatim meriwayatkan dengan isnadnya daripada Ibn Abbas r.a daripada Nabi SAW bahawa dahulu beliau menyuruh supaya jangan diberi sedekah melainkan kepada orang-orang Islam sehingga turun ayat di atas. Ibn Jauzi berkata, sebab turunnya ayat ini kerana orang Muslim rasa kurang senang bersedekah kepada kaum kerabat mereka yang musyrikin, inilah pendapat jumhur. Adapun urusan hati, hidayatnya dan kesesatannya, maka ia bukan urusan seseorang makhluk Allah walaupun dia itu Rasulullah SAW sendiri. Ia adalah urusan Allah Yang Maha Esa sahaja. Kerana hati itu adalah ciptaan Allah dan tiada siapa selain Allah yang boleh menguasai dan mengendalikannya.
Tiada siapa yang mempunyai kuasa-kuasa di atas hati-hati itu selain daripada Allah SWT. Tugas Rasul hanya menyampaikan perintahnya dan urusan hidayat terletak di tangan Allah. Ia mengurniakannya kepada sesiapa yang dikehendaki-Nya dari mereka yang diketahui wajar menerima hidayat dan berusaha untuk mendapatkannya. Mengeluarkan urusan hidayat daripada ikhtisas manusia itu menjelaskan hakikat yang pasti ditanam di dalam hati setiap Muslim agar ia bertawajjuh kepada Allah Yang Maha Esa sahaja dalam usahanya untuk mencari hidayat dan agar ia menerima bukti-bukti hidayat daripada Allah Yang Maha Esa sahaja.
Kemudian hakikat ini juga melapangkan dada Rasulullah Sahibud-Dakwah dalam menghadapi kedegilan orang-orang yang sesat. Kerana itu hatinya tidak merasa bosan terhadap mereka apabila beliau berdakwah kepada mereka, malah beliau menaruh perasaan belas kasihan terhadap mereka dan menunggu keizinan Allah semoga hati mereka mendapat hidayat semoga hati mereka mendapat hidayat dan semoga Allah memberi taufik kepada mereka ke arah mendapat makrifat Allah apabila Ia kehendaki.
Firman Allah SWT: Bukanlah kewajipanmu menjadikan mereka mendapat petunjuk, akan tetapi Allah-lah yang memberi petunjuk (memberi taufik) siapa yang dikehendaki-Nya. Sayyid Qutub berkata: “Oleh itu hendaklah engkau lapangkan dadamu kepada mereka dan banyakkan toleransimu kepada mereka dan hulurkan kebajikan dan pertolongan yang diperlukan mereka darimu dan serahkan perkara mereka kepada Allah dan ganjaran setiap pemberi bantuan tersimpan di sisi Allah”.
Dari sinilah kita dapat melihat beberapa kemuncak toleransi yang tinggi dan gemilang. Kemuncak inilah Islam mengangkat hati kaum muslimin dan melatih mereka supaya mencapainya. Islam bukan sahaja menegakkan dasar kebebasan beragama dan bukan sahaja melarang paksaan memeluk agama, malah Islam menegakkan dasar yang lebih jauh daripada itu, iaitu ia menegakkan dasar toleransi insaniah yang diambil daripada arahan Allah SWT yang menetapkan seluruh orang yang memerlukan itu berhak mendapat pertolongan dan bantuan.
Selama mereka tidak berada dalam keadaan perang dengan kelompok muslimin. Tanpa memandang kepada agama mereka, juga menetapkan bahawa ganjaran bagi orang-orang yang memberi pertolongan itu tetap tersimpan di sisi Allah dalam segala keadaan selama infak itu bertujuan mencari keredaan Allah.
Itulah toleransi yang membangkit dan menampilkan umat manusia ke depan. Hanya Islam sahaja yang dapat melakukannya dan hanya orang-orang Islam sahaja yang mengetahui hakikat-hakikatnya. Firman Allah: Dan apa saja harta yang baik yang kamu nafkahkan (di jalan Allah), Maka pahalanya itu untuk kamu sendiri. Dan janganlah kamu membelanjakan sesuatu melainkan kerana mencari keredaan Allah.
Al-Zajjaj berkata, ini khusus bagi orang yang beriman di mana Allah mengajar mereka bahawa ia sungguh Maha Mengetahui kehendak mereka di sisi begitu juga memberi tahu mereka dengan sahnya qasad dan nawaitu mereka. Maka sesungguhnya Allah juga mengkhabarkan kepada mereka balasan. Al-Hasaan al-Basri berkata, orang yang beriman nafkah untuk dirinya dan ia tidak infak untuk mencari keredaan Allah. Sedangkan Ata’ al-Kharasani berkata, yakni jika kamu kurniakan semata-mata kerana Allah maka tiada dosa dan kesalahan bagi kamu apa yang dikerjakannya.
Ibn Kathir menyatakan ini adalah makna yang baik. Kesimpulannya bahawa yang bersedekah semata-mata mencari keredaan Allah, maka sesungguhnya ia pasti mendapat pahala dan tiadalah ke atasnya sebarang dosa daripada nafkah yang dilakukan sama ada bagi orang baik dan orang jahat. Begitu juga orang yang berhak atau tidak ia tetap mendapat pahala berdasarkan niatnya. An-Nasafi berkata, bukanlah nafkah kamu kecuali mencari keredaan Allah dan menuntut di sisi-Nya.
Firman Allah: Dan apa saja harta yang baik yang kamu nafkahkan, nescaya kamu akan diberi pahalanya dengan cukup sedang kamu sedikitpun tidak akan dianiaya (dirugikan).
Al-Baghawi berkata, ayat ini mempunyai syarat jika sekiranya kamu nafkahkan daripada harta yang baik sudah pasti Allah membalas untukmu dan kamu akan termasuk dalam golongan seperti yang difirmankan Allah.Sebagai penutup penulis menukilkan hadis Abu Hurairah, sabda Rasulullah SAW: Seorang lelaki pernah berkata: Aku akan bersedekah pada malam ini kemudian beliau keluar dan memberi kepada seorang penzina, keesokan harinya orang ramai bercakap penzina telah diberi sedekah. Lantas lelaki ini berkata, Ya Allah bagi kamu segala kepujian atas penzina tersebut dan aku akan bersedekah pada malam ini kemudian beliau keluar dan memberi sedekah pada orang kaya.
Keesokan harinya orang ramai berkata, orang kaya mendapat sedekah maka berkata lelaki tersebut, Ya Allah bagimu segala kepujian atas orang kaya. Pada malam ini aku akan bersedekah dan aku memberi kepada pencuri. Keesokan harinya orang ramai berkata, pencuri mendapat sedekah. Lantas katanya, Ya Allah, bagi kamu segala kepujian ke atas penzina, orang kaya dan pencuri. Kemudian datang dan dikatakannya adapun sedekah kamu diterima. Adapun penzina semoga ia menjaga maruah dengan sedekah tersebut dari berzina. Dan semoga orang kaya mengambil iktibar untuk menjadi orang yang berinfak ke atas kurniaan Allah. Dan semoga pencuri menjaga maruahnya dengan sedekah tersebut daripada mencuri. (riwayat Bukhari dan Muslim)Bersedekah demi keredaan Allah.
Source : Utusan Malaysia, May 17, 2008
HIBAH
Hibah, wasiat boleh beri kepada waris
Soalan:SAYA mempunyai persoalan tentang harta peninggalan wanita bujang. Saya ditinggalkan oleh ayah sejak kecil tanpa nafkah. Emak sayalah yang membesarkan saya.
Saya merupakan anak tunggal. Mengikut hukum faraid, sekiranya saya meninggal, sebahagian besar harta peninggalan saya akan diwarisi oleh ayah dan adik-beradik tiri saya (berlainan emak).
Saya merasakan ayah saya tidak berhak langsung mendapat harta saya kerana dia telah mengabaikan kami sekeluarga. Tidak adil rasanya jika dia yang selama ini tidak menghiraukan kami sekeluarga tiba-tiba mendapat bahagian daripada harta yang saya kumpulkan selama ini, tanpa bantuannya. Saya mahukan harta peninggalan saya digunakan untuk menjaga kebajikan ibu saya dan anak angkat saya. Bagaimana boleh saya tinggalkan harta saya kepada mereka setelah ketiadaan saya?
Jawapan:
Seperti yang saudari sedia maklum, Islam telah menetapkan prinsip-prinsip pengagihan harta si mati, yang secara lazimnya dikenali sebagai hukum faraid. Prinsip-prinsip am hukum faraid terkandung dalam al-Quran, Surah al-Nisa, ayat 11-14.
Namun, faraid bukanlah satu-satunya cara pembahagian harta dalam Islam. Kami di Sisters In Islam memahami kehendak saudari yang ingin memastikan kebajikan dan kepentingan orang-orang tersayang dilindungi apabila saudari tiada nanti.
Surah al-Nisa ayat 11 telah menyatakan bahawa "…pembahagian itu ialah sesudah diselesaikan wasiat yang telah diwasiatkan oleh si mati, dan sesudah dibayarkan hutangnya…"
Seorang Islam boleh meninggalkan wasiat, tetapi wasiat tersebut mestilah mematuhi syarat-syarat berikut:
i. tidak boleh mewasiatkan lebih daripada satu pertiga (1/3) daripada keseluruhan harta pemberi wasiat;
ii. penerima wasiat mestilah seorang yang tidak disenaraikan sebagai waris dalam hukum faraid - syarat kedua ini adalah hukum mengikut mazhab Sunni.
Bagaimanapun, kebanyakan ulama Sunni juga berpendapat bahawa wasiat kepada salah seorang waris yang tersenarai dalam hukum faraid (misalannya, dalam kes saudari ini, ibu saudari) masih sah sekiranya waris-waris lain setuju dengan isi kandungan wasiat selepas kematian pemberi wasiat.
Namun demikian, masalah mungkin timbul apabila salah seorang waris yang sah tidak bersetuju dengan wasiat tersebut. Apabila ini berlaku, mahkamah akan merujuk kepada hukum faraid.
Dalam kes saudari, anak angkat bukanlah seorang waris yang tersenarai dalam hukum faraid. Jadi, saudari bolehlah mewasiatkan kepadanya tidak melebihi satu pertiga (1/3) nilai jumlah keseluruhan harta saudari. Waris-waris yang sah tidak boleh mempertikaikan wasiat ini kerana cukup syarat-syaratnya.
Ibu saudari pula merupakan seorang waris yang tersenarai dalam hukum faraid. Sekiranya seseorang Islam itu meninggal dunia, maka ibu si mati hanya berhak menuntut harta benda si mati mengikut perkiraan hukum faraid. Sekiranya si mati meninggalkan hanya ibu dan ayahnya dan tidak ada anak, maka, secara amnya, ibu akan berhak mendapat satu pertiga (1/3) dan ayah akan berhak mendapat dua pertiga (2/3) daripada harta si mati.
Di negara kita ini, nisbah pembahagian harta pusaka menurut faraid secara lazimnya ditentukan oleh Mahkamah Syariah melalui suatu sijil faraid bagi setiap kes. Sekiranya si mati telah meninggalkan wasiat, maka pembahagian harta pusaka kepada ayah dan ibu akan dilakukan selepas wasiat disempurnakan.
Hukum faraid tidak akan terpakai sekiranya si mati, sebelum kematiannya, telah memindahkan harta kepada orang lain. Jadi, dalam keadaan sekarang ini, saudari bolehlah mempertimbangkan untuk memindahkan harta tertentu kepada ibu atau anak angkat semasa hayat saudari masih ada (sekiranya saudari ingin memberi wasiat kepada anak angkat). Melalui proses ini, waris-waris yang lain tidak akan berhak kepada harta pusaka saudari kelak.
Konsep ini diberi nama hibah atau terjemahannya hadiah. Apa yang penting ialah saudari perlu memindahkan harta yang ingin diberi kepada ibu dan anak angkat semasa saudari masih hidup. Hibah itu juga mestilah diterima oleh penerima. Jika penerima tidak tahu bahawa ia telah dihibahkan sesuatu benda, maka hibah tersebut mungkin tidak sah.
Proses pemindahan harta ini bolehlah dilakukan dalam beberapa cara. Misalannya, jika saudari memiliki rumah atau tanah, saudari boleh memindahkan rumah atau tanah tersebut kepada nama ibu atau anak angkat menerusi prosedur pindah milik di bawah Kanun Tanah Negara 1965.
Source: Utusan Malaysia, May 17, 2008
Thursday, May 15, 2008
Cost of PUTRAJAYA
Kos bina Putrajaya RM11.831 bilion
KUALA LUMPUR 14 Mei – Perdana Menteri, Datuk Seri Abdullah Ahmad Badawi berkata, kos sebenar bagi pembinaan Putrajaya sehingga kini adalah sebanyak RM11.831 bilion.
Menurutnya, ia meliputi pembangunan pejabat-pejabat kerajaan, kuarters kerajaan, Pusat Konvensyen Antarabangsa Putrajaya dan rumah kediaman rasmi Perdana Menteri, Timbalan Perdana Menteri, Menteri-Menteri dan Hakim. Selain itu katanya, ia turut meliputi pembangunan infrastruktur seperti terowong, jalan, jambatan, menara selain kemudahan awam seperti taman, dataran dan tasik.
Tambahnya, pembangunan pejabat-pejabat kerajaan di Putrajaya adalah secara penswastaan melalui kaedah bina, pajak dan pindah. ‘‘Melalui kaedah ini, Putrajaya Holdings menggunakan pembiayaan sendiri untuk membina pejabat-pejabat kerajaan secara berperingkat di atas tanah kerajaan di Putrajaya,” katanya. Perdana Menteri berkata demikian dalam jawapan bertulis kepada soalan Liew Chin Tong (DAP-Bukit Bendera) pada persidangan Dewan Rakyat hari ini.
Source : Utusan Malaysia
Tuesday, May 13, 2008
An Islamic Concept of Wealth
By L. Yulyadi Arnakim
Muslims should not love wealth, but love the sustainer, Allah.
Wealth in Arabic term is known as 'al-ghina', which means 'no needs or needs less' and wealthy is known as 'al-ghaniyu' means 'self sufficient', which is one of attributes of God. As Allah says, "To Him belongs all that is in the heaven and on the heart: for verily God - He is free of all wants, worthy of all prices" (Qur'an: 22:64) and in another verse, Allah says, "Thy Lord is self sufficient, full of mercy…" (Qur'an: 6:133,). From the above verses, basically wealthy in Islam consists of two elements of life; physical and spiritual. The first dimension depicts the possession of materials which is known as 'Maal' ('amwaal' in its plural form), which basically means 'property, assets or what ever mankind posses'. The latter indicates spiritual dimension such as knowledge and virtue that reside in their souls.
The natural relationship between the two dimensions is closely interrelated. For wealth is an outcome of interactions between mankind and their surroundings include all things in the heaven and in/on the earth such as flora, fauna and the like that can facilitate mankind to gain a convenient life in this world. In Arabic tradition, the first dimension of wealth was usually cattle for traditionally the Arab wealthy families were those who possessed more camels. Nevertheless, it does not mean that wealth is only derived from the animals. It can be from any things and any forms. Currently, many people possess different forms of property. It may be in the form of cash money, shares, land, house and other goods. As Allah says, "…God has subjected to your (use) all things in the heavens and (all things) on earth…" (Qur'an 31:20).
The first wealth is also very attractive to the nature of mankind, thus every man inclines to have wealth as Allah says, "Fair in the eyes of men is the love of things they covet: women and sons; heaped-up hoards of gold and silver; horses branded (for blood and excellence); and (wealth of) cattle and well-tilled land. Such are the possessions of this world's life; but in nearness of God is the best of the goals (to return to)" (Qur'an 3:14).
Moreover, when people consider that the wealth is every thing then it may become their master. They may do what ever it is requested solely for the wealth, and they are worry of their wealth for being lost from their hands. As a result their wealth is gradually and unintentionally felt as the most beloved one. At this point people may serve their wealth and they are consequently being greedy and niggardly kind of people as what happened to Qarun (as it is explained in the story of Qarun, see Azman Ismail, "Wealth is not wrong", in Personal Money, January 2004, p. 69.). Undoubtedly, this wealth does not grant happiness to the mankind.
The latter dimension of wealth is food of spiritual such as knowledge and virtue. Presently, first dimension of wealth may be used as means to gain the second dimension of wealth that is knowledge and virtue through education and training. Knowledge is complete comprehension and interaction with this comprehension in the depths of the soul and conscience, which is then followed by action in harmony with them. As what Muslims are thought to recite a prayer: "O Lord, give us useful knowledge, large property and release us from any kind of illness and disease".
In addition, knowledge may also yield the first dimension of wealth. As it was known, that knowledge will lead to the profession, and this profession consequently will resolve the scarcity of ability of mankind in utilizing and exploring the resources. As what was been insisted by the prophet peace be upon him by saying, "any one who wants this worldly life, he should have knowledge, and any one who wants the life of the hereafter, he should have knowledge, and who wants both this life and next hereafter, he should also have knowledge". Furthermore when the prophet's son in law, Ali bin Abi Thalib compared the two dimensions of wealth, he once said, "knowledge will take care of you while you will protect your property".
Muslims should use both elements of wealth in rendering the service to Allah. Wealth in Islam is "rizq" that connotes subsistence or means of living. This means of living is not necessarily as an outcome of man's effort. It is indeed an endowment or a gift from Allah. Because He is the one who sustains mankind's life. The effort of mankind is considered as a process, which will consequently lead to either positive or negative result. As Allah says, "Say: O God! Lord of Power (and rule). Thou givest power to whom Thou pleasest, and Thou stripest off power from whom Thou pleasest: Thou enduest with honour whom Thou pleasest, and Thou bringest low whom Thou pleasest: in Thy hand is all good. Verily over all things thou hast power. Thou causest the night to gain on the day, and Thou causest the day gain on the night: Thou bringest the living out of the dead, and Thou bringest the dead out of the living; and Thou givest Sustenance to whom thou pleasest without measure" (Qur'an: 3:26-27).
The wealth in Islam, may also function as means of trial and test to find out whether a person is a true Muslim or vice versa; being wealthy he is being tested and being poor or wealth-less he is also being tested. As Allah says, "Now, as for man, when his Lord trieth him, giving him honour and gifts, then saith he (puffed up), 'my lord hath honoured me'. But when He trieth him, restricting his subsistence for him, then saith he (in depair), 'my Lord hath humiliated me'" (Qur'an 89: 15-16).
Dealing with the wealth is not as easy as Muslims' dealing with other obligations. In fact, many Muslims perform their obligation towards their God such as performing prayers, fasting, and other ritual worships, but they fail in wealth management. Thus Arabic wise word says, "Prayer is a custom, Fasting is an affordable act, see and analyze people through their dealing with the wealth". Prayer for being an obligatory thing it may become a usual thing that people do not regard it as special and extraordinary. Thus it gradually becomes a custom. Fasting is also an obligation that Muslims perform it only a month in a lunar year, and where Muslims join together to celebrate the month, thus it becomes affordable activity. While wealth is an essential part of life, many people could not be able to pass this trial. As Allah says, "Be sure We shall test you with something of fear and hunger, some loss in goods or lives or the fruits (of your toil), but give glad tidings to those who patiently persevere" (Qur'an 2:155). Who are they?... then Allah explains in the following verse, "Who say, when afflicted with calamity: 'To God we belong, and to Him is our return'" (Qur'an 2:155-156).
In sum, wealth is not an entity that a Muslim should love, for the one whom should be beloved is the giver and sustainer, which is Allah. As such a person will be very happy and content with what his beloved one (God) gives. In order to get happiness in this world and hereafter, Muslims should successfully manage their wealth in accordance with the injunctions of Allah, use it as means to worship Allah, and submit every thing to Him after we have accomplished jobs, for mankind plan and execute, while He decides the result
Monday, May 12, 2008
Investment Information
AMES, Iowa -- In today's Internet world, there are numerous Web sites with the words investing, money or finances in their titles, but hoow do you know which ones are reliable? A study conducted by Consumer Reports' Webwatch showed that viewers are more apt to evaluate a Web site on its visual appeal such as color and layout than on its content. "This is not a good way to decide if information is trustworthy," says Pat Swanson, CFP® and families specialist with Iowa State University (ISU) Extension's Invest Wisely Project (www.extension.iastate.edu/investwisely).
"A better way to evaluate a Web site is to look at its address, its URL. This will tell you about the sponsor or creator of the site," Swanson explains. "Site names ending in .edu are educational; .org is used in web addresses of organizations; .gov are government sites; .com are commercial sites. Here are seven non-commercial Web sites that I use on a regular basis. I have authored some of the materials on the two Extension Web sites."
The Investor Protection Trust (IPT)'s Web site (www.investorprotection.org) provides independent, objective information needed by consumers to make informed investment decisions. The IPT serves as an independent source of non-commercial investor education materials. There are a number of booklets on the IPT Web site, such as "Mutual Funds: Maybe All You'll Ever Need."
FINRA is the Financial Industry Regulatory Authority. Its function is to regulate securities firms and stockbrokers. As a not-for-profit financial resource, FINRA offers unbiased information on its Web site (www.finra..org) on a full range of issues that affect your money and investments. For example, FINRA recently issued an investor alert urging homeowners to carefully weigh their options before obtaining a reverse mortgage.
The Securities and Exchange Commission (www.sec.gov) is the governmental agency that oversees and regulates the securities markets in the United States. The SEC also provides information to help the consumer invest wisely. For example, its mutual fund cost calculator can help you compare the costs of different mutual funds and understand the impact fees and expenses can have over time.
The Iowa Insurance Division administers Iowa securities laws. It provides consumer alerts and educational materials on its Web site (www.investsmartiowa.gov).
Iowa State University Extension (www.extension.iastate.edu/finances) provides unbiased, research-based information and education to help Iowans of all ages make better investment decisions. For example, a series of retirement planning fact sheets can help you identify retirement goals and invest to achieve those goals.
A new educational partnership, eXtension (www.extension.org), combines the efforts of more than 70 land grant universities to provide a one-stop shop to access the best educational materials that are developed by Extension across the nation. Personal finance is one of the topics on eXtension's Web site. The viewer can learn about everything from investing, retirement and estate planning to organizing your household records and teaching children about money. Other features include frequently asked questions, ask an expert, news and upcoming events, and online calculation tools.
MyMoney.gov (www.mymoney.gov) serves as the federal government's one-stop shop for financial literacy and education programs and information. Links to financial information are provided by many reputable educational and governmental agencies.
"The Web has dramatically increased the amount of financial information at the finger tips of consumers -- a real plus. The challenge is to sort out trustworthy sites with unbiased and accurate information," Swanson says.
The ISU Extension Invest Wisely Project provides a series of newspaper, radio, and web resources for investors. It is funded by a grant from the Investor Protection Trust (IPT). The IPT is a nonprofit organization devoted to investor education. Since 1993 the IPT has worked with the States to provide the independent, objective investor education needed by all Americans to make informed investment decisions (www.investorprotection.org).
Barb Wollan
ISU Extension Family Resource Management Specialist
Sunday, May 11, 2008
How Does OPEC Affect Oil Markets?
The Organization of the Petroleum Exporting Countries (OPEC) comprises 11 countries that are involved in the production and export of crude oil products around the world: Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela. Because OPEC’s members collectively hold about 65% of total crude oil reserves and produce 40% of the world’s oil, they have considerable influence on the markets.
Because its members are key players in the global oil markets, any decision taken by OPEC can significantly affect the price of oil globally. One mechanism through which OPEC achieves this influence is through the use of a quota system, in which individual members must follow pre-established production quotas.
OPEC quotas dictate the oil production levels for some of the world’s most important oil producers. But even more important is the actual oil production from each member country, which may differ from the quotas: Some countries, enticed by the high price of crude, are tempted to increase their production to bring in more petrodollars. This is ironic because the production quota is partly responsible for the increased prices, and prices decrease as production increases.
You can keep track of regular developments from OPEC that may affect oil markets through the OPEC Web site. Although OPEC’s influence on the markets has diminished since the 1973 Arab Oil Embargo, it still wields considerable influence over the oil markets
Home Values
WITH HOME VALUES continuing to plummet across the country, it's become clear that the real estate meltdown is far from over.
Values for single-family homes in 14 major U.S. cities posted double-digit declines from their respective peaks, according to the Standard & Poor's/Case-Shiller Home Price Indices, which tracks prices of single-family homes. On a national level, home values are down 12% since December 2006. And according to Beth Ann Bovino, a senior economist at Standard & Poor's, they could drop another 10% by the end of the year.
"Things are accelerating downwards [and] in most cases the fall gets steeper and steeper every month," says David Blitzer, chairman of the index committee at Standard & Poor's.
The biggest culprit for this downturn: rampant speculation on property values during the past several years. "The areas that have seen a huge amount of speculation...are the ones that got nailed," says Blitzer. "The farther up prices went the farther down they've come." This was especially true in the Sun Belt region. Cities like Las Vegas, Miami and Phoenix, which are popular for either their beaches or deserts, lured investors looking for rental properties that would appreciate in value so they could later sell them to baby boomer retirees for a sizable profit, explains Danielle Babb, a real estate analyst and professor of economics and statistics Northcentral University in Arizona.
Foreclosures have also contributed to the decline in home values. During the first quarter, foreclosures were up 112% from the same period in 2007, according to RealtyTrac, which lists foreclosed properties. As a result, there's now a glut of homes for sale on the market and a lot of very nervous mortgage lenders reluctant to give out loans.
