It's High Time for Lifetime Savings Accounts

Written by Terry Mitchell


I'm constantly reading articles onrepparttar internet and in financial magazines in which so-called financial planning experts express perplexity as to why about 30% of employees do not participate in their employers’ 401(k) plans. These writers don’t seem to have clue. Well, allow me to enlighten them a bit. Forrepparttar 111891 most part, it’s because ofrepparttar 111892 restrictions imposed onrepparttar 111893 employees’ money. Also, because many people never know when they might need access to their money, they are unwilling to tie it up for long periods of time. They would rather give uprepparttar 111894 tax advantages as well as their employers’ matching contributions than to have those restrictions and age requirements placed on their money. I know because I was one of those people for many years. I just couldn’t bring myself to tie up my savings like that until I could see that my retirement was less than 25 years away. Unfortunately, it’s not advisable or practical to wait that long to start saving for retirement. It’s not just 401(k) plans that tend to scare people off. All ofrepparttar 111895 tax-sheltered accounts currently available require us to either userepparttar 111896 moneyrepparttar 111897 wayrepparttar 111898 government dictates (for retirement, education, medical expenses, buying a house, etc.) or jump through a bunch of hoops (which usually requires extensive knowledge of tax laws orrepparttar 111899 services of an accountant or tax lawyer) to be allowed to do otherwise. Anyway, what good would even a 50% average annual return do you if died before you were legally allowed to access those funds? It’s high time we got a tax-sheltered account which allows us to spend our money when, where, and how we want, without having to ask for anyone’s advice or permission. After all, it’s our money and we don’t need a government nanny watching what we do with it. So, what’srepparttar 111900 solution? Congress should get busy and pass legislation to create a Lifetime Savings Account option for taxpayers. There is at least one proposal for this kind of account floating around in Congress right now, with more expected soon. These accounts are not be confused withrepparttar 111901 so-called personal savings accounts that might be a part of any Social Security reform. Lifetime Savings Accounts would not be in any way connected to Social Security.

Is Business Credit Scoring a Killer Application or Application Killer?

Written by George A. Parker


In his 1968 seminal novel, 2001: A Space Odyssey, Arthur Clark introduced HAL, a spaceship computer with artificial intelligence. Mission engineers designed HAL to carry out an array of technical orders to safeguardrepparttar ship’s mission. HAL operated flawlessly until it reportedrepparttar 111890 failed operation of a ship system that was operating perfectly. Rather than correctrepparttar 111891 mistake, HAL’s logic dictated that it would be more efficient to killrepparttar 111892 ship’s crew. Everrepparttar 111893 polite computer, HAL killed quickly and quietly until it was unplugged byrepparttar 111894 sole remaining crewmember, Dave Bowman.

Many small business owners believe that HAL’s progeny are carrying out HAL’s murderous mission inrepparttar 111895 small business credit arena. Computers now make important credit decisions for major banks and financing companies. Each day inrepparttar 111896 U.S., computers with fancy algorithms score thousands of small business credit transactions. Though credit-scoring models work well for most small companies, many believe these systems, like HAL, have run amuck. Routinely, transactions with low scores are turned down and applicants are notified ofrepparttar 111897 decision by computer-generated rejection letters.

By gaining a better understanding ofrepparttar 111898 credit scoring process, you may be able to help your firm maneuver inrepparttar 111899 new world of credit scoring. Here are some key points about business credit scoring worth noting:

1. Credit scoring automatesrepparttar 111900 credit evaluation process. Credit providers use these systems to speed up loan processing, to cut processing costs, to quickly adjust rates and terms to match credit risks, and to add a high degree of objectivity to credit decisions.

2. Credit scoring is a predictive system based on statistical modeling. Scoring systems are designed to forecast whether borrowers will be successful in repaying loans. Many systems use up to 20 factors to evaluate credit worthiness.

3. Many lenders and leasing companies use credit scoring for business transactions under $100,000. Over 90% of major credit providers use credit-scoring systems on transactions below $ 50,000.

4. A pioneer and leading credit scoring service, Fair Isaac and Company, researched statistical credit modeling inrepparttar 111901 1980s. They determined thatrepparttar 111902 personal credit behavior of a company’s key principals/owners is a strong predictor of their business credit behavior. Simply stated, a business owner who pays personal bills on time generally will cause his/her company to pay bills on time.

5. The Fair Isaac scoring model produces business credit scores ranging from 50 to 350. Credit providers usually consider a business credit score above 220 to be a good risk. They consider a score of less than 175 to be a high risk.

6. The overriding factor in business credit scoring isrepparttar 111903 credit history ofrepparttar 111904 business owners orrepparttar 111905 key principals. In addition, there are other factors related torepparttar 111906 owners’/principals’ personal credit profiles used to score small business transactions

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