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Now That Bin Laden Is Dead, Will Anyone Get The $27 Million Dollars In Reward Money?

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A couple of days ago we all heard the news that Osama Bin Laden had been found living in a mansion in a village called Abbottabad, merely 30-40 miles from the capital city of Islamabad, Pakistan.  Our military, once it had been confirmed that Bin Laden was there, swooped in and killed Bin Laden after a 40 minute firefight.    His body was taken with them, and eventually after his identity was confirmed, his body was dumped into the ocean.

I think most freedom loving people are glad that he has been brought to justice, and that he'll no longer be able to kill or harm innocent people.  What effect this has on terrorism in general remains to be seen.

$27 Million In Reward Money

Now that he has been caught and killed, one interesting question has popped up.  Will anyone be able to claim the $27 million dollars in reward money that has been offered for information leading to or resulting in Bin Laden's capture?

The U.S Government has used reward money as a way to put added pressure on fugitive terrorists.

The use of reward money has become an important asset in the government's fight against global terrorism.

The Rewards for Justice program, run by the U.S. State Department's Bureau of Diplomatic Security, has paid out more than $100 million to over 60 people since it was created in 1984.

In the past the reward money has had positive effects.  In 2003 the largest reward ever was paid out when a $30 million dollar bounty was paid after information lead to U.S. troops finding and killing Uday and Qusay Hussein, sons of Saddam Hussein.

Osama Bin Laden Reward

The U.S. government has offered a $25 million dollar bounty on Osama Bin Laden's head, although a State Department spokesman noted that the reward was for up to $25 million, meaning it could be less.  In addition the Airline Pilots Association and the Air Transport Association put together another $2 million in rewards – for a total of $27 million dollars in potential reward money.

As of right now it doesn't sound like anyone is in line to get the money since the intelligence that was used in order to kill Bin Laden originated from, according to the Obama administration, “un-identified detainees”.  In other words, some of the Guantanamo Bay detainees turned in some good intel that lead to Osama's trusted courier – who lead them to Osama.

Who Do You Think Should Get The Money – If Anyone?

So it doesn't sound like anyone gave up Bin Laden of their own free will, or he wasn't turned in by anyone that could claim the reward.    Because of that, it may never be rewarded.  Question is – should it be?

Some are clamoring for the reward to be given to the Navy Seals who were responsible for his being brought to justice, or for parts of it to be used for our troops and intelligence folks who tracked him down.  I would have no problem with that.

How about you?  Do you think the money should be rewarded?

The Importance Of Having Health Insurance As A Contractor Or Freelancer

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For many self-employed contractors working in the wake of the housing bubble, the idea of having medical insurance for themselves is seen as a splurge and an unaffordable luxury. This is especially true if a spouse is insured through work and the children are covered; most contractors see no problem roughing it out through sickness and injury if it means saving some serious monthly income. But this can spiral into dangerous long-term risks of unemployment following on-the-job injury or any other number of health concerns that risk your livelihood. An interesting statistic to consider, whether or not it applies to you:  Hispanics working non-union jobs are half as likely to have medical insurance, or seguro medico, than their unionized counterparts, and are therefore far less likely to seek medical attention in any preventive fashion.

Self-employed construction workers who neglect to get medical insurance, regardless of their ethnic background, are much less likely to participate in check-ups or seek assistance for anything other than serious bodily injury. Yet the overwhelming number of medical maladies that could inhibit someone from engaging in physically active labor is chronic or otherwise non-emergency ailments. The idea that as long as you watch your step you won't need the doctor is ridiculous when you really consider the kinds of unforeseen health problems that could arise in your life at any moment. Finding out that not seeing the doctor after weeks of feeling stiff as a board after driving to and from your job site means you're now unable to work the rest of the summer is unacceptable to most contractors, yet individual medical insurance is often as unacceptable.

Resources For Finding Insurance Coverage

Health Insurance

Before you decide to risk your future wages on not getting hurt in a dangerous profession, there are plenty of resources you can exhaust to try and net yourself a relatively inexpensive yet comprehensive health plan.

Get On Your Spouse's Plan

The first one alluded to earlier, is do everything you can to try and get on a spouses plan if possible. An increased premium is obviously cheaper than your own insurance, but it's most certainly cheaper than the cost of a serious job-related injury or other long-term problem.

Get Cobra Insurance

If you were recently laid off or about to be, COBRA is the way to go, if a more worthwhile severance package isn't offered. The federal government grants employees access to a former employer's insurance for up to a year and a half, but with the added premium and higher costs. This might seem like a shock to the system after receiving the same benefits for much less, but it's guaranteed to be cheaper than the alternative.

Local Contractor's Guilds Or Associations

Once those 18 months are up, or if you were always self-contracted, then look into local contractors' guilds and similar members' organizations who oftentimes have discounted group rates with certain insurance companies. The only drawback is that plans tend to be barebones.

Make Sure To Have Insurance

Playing the no-insurance game is always a big risk, but even bigger if your money relies on the dependability of your strength. The monthly savings are tempting, but they won't matter if they're ultimately spent on uninsured medical treatment.

Are you currently self employed, and living without insurance?  Have you had a situation were glad you got insurance coverage? Tell us about it.

Withdrawing From Your Retirement Account: Loans And Hardship

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At some point, you might end up in a situation where you feel like you need to withdraw money from your retirement account. You might have come up against some unexpected hardship, and need the money, or you might want the money for an education, or to help with the down payment on a home.

If you have a 401k, you usually have two options when you want to take money out of your retirement account: loan or hardship withdrawal. These are two different options, and it helps to understand the distinctions between the two.

401k Loan

As you probably know, you can borrow from your 401k. If you want to borrow funds, you generally need to provide a statement about what the funds are for. You won't be charged the 10% penalty for being under 59 1/2 (if you are laid off, you won't have the penalty if you are at least 55), and you won't have to pay income taxes on the money. Many employers also offer the option to have you repay the loan over five years, using automatic deductions from your paycheck.

Of course, anytime you borrow money, there are interest charges. The interest is usually low, though, and you are paying it to yourself. Some plans may charge you a processing fee, though, so watch out for that. While a 401k loan can seem tempting, there are some definite downsides. Your employer may not provide a match for your contributions — or even let you contribute at all — until the loan is repaid. Additionally, if you switch employers, you have to repay the rest of the loan within two or three months.

You also can't discount the cost of lost opportunity. Every day that money is not in your retirement account, it's one more day the money isn't working for you. However, sometimes you are just up against a wall. And a 401k loan is better than a hardship withdrawal.

Hardship Withdrawal

You also have the option of a hardship withdrawal. Some of the items that the IRS recognizes as hardships include:

  • Tuition
  • Medical expenses
  • Funeral costs
  • Avoiding foreclosure
  • Repairing damage to your home
  • Purchase of a primary residence

However, a hardship withdrawal is pretty much the same as a regular early distribution. You have to pay your 10% penalty, and the money will be taxed as income. On top of that, there is rule that you have to wait six months to contribute to your 401k after taking a hardship withdrawal.

Withdrawing from Your Roth IRA Instead

If you are going to withdraw from a retirement account, and you have a Roth IRA, you might consider that as a viable option. Because your contributions to a Roth IRA are made with income that has already been taxed, you can withdraw your contributions anytime you want with no penalty. (You will be penalized if you withdraw your earnings early, though, except in certain circumstances.) While it is never ideal to raid your retirement account, if you think there is no other way, you should first see about withdrawing from your Roth IRA. Then, turn to a 401k loan.

Choosing A Targeted Retirement Fund

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Just before the financial crash of 2008, one type of fund getting a lot of press was the targeted retirement fund. The idea cooled a bit during the recession, but the idea of these funds is starting to pick up in popularity again. While targeted retirement funds aren't for everyone, some investors find that they take a lot of the worry out of retirement planning, and provide peace of mind. Before you take the plunge, though, it helps to carefully consider your options.

First Things First: How Does A Targeted Retirement Fund Work?

The idea behind a targeted retirement fund is that all of the asset allocation stuff you would have to take care of on your own is done for you. Targeted retirement funds usually come with dates. If you want to retire in 2040, you would pick a fund with that target. You would invest a set amount of money in your fund each month, and, at first, the investments in the fund (which might even be investments in index funds) are more aggressive.

However, as you approach your target retirement date, the asset allocation shifts. Instead of investing heavily in stock funds, for example, the retirement fund might begin to shift toward investing in bond funds. The idea is that, as you near your retirement date, you should have a more conservative asset allocation, protecting you, to some degree from market crashes too near your retirement date. It you are into “set it and forget it”, a targeted retirement fund can be a boon.

And, of course, you can hold a targeted retirement fund in a tax advantaged retirement account. Hold your fund in an IRA or a 401k, and you will enjoy the tax benefits associated with your account, whether it is a Roth or a Traditional account.

Choosing A Targeted Retirement Fund

Before you decide on a fund, though, you have to do your research. Just because you don't want to mess with your retirement fund down the road doesn't mean you shouldn't do your due diligence now. Research your options. Morningstar provides information on a number of targeted retirement funds. Look for funds that:

  • Have low expenses. If the targeted fund invests in funds, then you want to watch out. The underlying funds will have expenses, and the targeted fund itself will add another layer of expense. Even so, it is possible to find a targeted retirement fund with low fees.
  • Offer the diversity you are looking for. Check into the underlying investments to see that you are properly diversified.
  • Provide the risk mix you want. In some cases, you might find that a fund is too aggressive, or too conservative, for your tastes. Look for a fund that is likely to fit with your idea of acceptable risk at various points during the target period.

A targeted retirement fund isn't for everyone. However, for someone who wants his or her retirement fund set on automatic, it can be a good idea to check into these funds. If you like index funds, you can choose a targeted fund that invests in index funds. There are also funds that include individual stocks, bonds and other investments. Figure out the kind of asset mix you want, and choose a fund that offers it — and that will re-balance in a way that you approve of as your retirement date draws near.

CapWest Mortgage: Discounts For Costco Customers, Good Rates For Good Credit

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My wife and I have been looking recently at possibly either buying a new home, or even building one if we were able to find the right lot.  Home prices are more reasonable now than they've been in a long time, and it sure is tempting to think about buying or building our dream home right now while the prices are so reasonable.

The thing is, however, so many are predicting that we still haven't hit the bottom of the real estate market, and in fact we may see a newer and lower bottom to the price floor.   While I think that idea has cooled us a bit on the idea of buying a new house right now, we're still looking, and keeping our eyes open for a mortgage company that we could use if we were to move. We're pretty sure we won't want to use Bank Of America again, for a variety of reasons. One mortgage company we're considering is CapWest Mortgage.

History Of CapWest Mortgage

Farmers Bank & Trust, is a small regional bank  founded in 1907 in a central Kansas town.  Their main business was with local farmers in the area.  Over the years they've grown and now have representation in several metropolitan areas in the Midwest, and across the country via the web. CapWest Mortgage, which this review is focused on is a subsidiary of Farmers Bank & Trust. From their site:

CapWest philosophies are paralleled with that of its parent, Farmers Bank & Trust, N.A., of Great Bend, Kansas; quality, honesty, integrity and ethics. A progressive national banking organization, Farmers Bank & Trust has strengthened customer confidence for over 97 years.

Since 1971, this family owned community bank has grown in assets from $4 million to more than $520 Million and maintains branch banking locations throughout the Central Kansas Region.

So CapWest is the relative newcomer to the Farmers Bank and Trust family, but they've been quickly expanding over the past decade and offering their services beyond just the Kansas area.

Better Business Bureau Rankings

I did a little bit of research on CapWest Mortgage, their customer service, and their Better Business Bureau rankings.  While you can't always rely on the BBB rankings, it still can be one of many indicators showing whether or not a company has good customer service.   When checking out CapWest, they came through with flying colors with an A+ rating on a scale of A+ to F.  While I wouldn't stake my entire reputation on the BBB, it's at least one of many signals to check.

CapWest Rate Check

One of the most important things to consider when checking out a mortgage company – is figuring out what your rates will look like when using the company.

I came up with a hypothetical situation where I would be taking out a $300,000 mortgage on a home purchase price of $350,000 for my city here in Shakopee, MN.  Here are the rates it gave me (in April 2011), all with closing costs around $3100.

  • 30 Year Fixed Rate Mortgage: 4.750% Rate – 4.979% APR – $16821.44/month
  • 20 Year Fixed Rate Mortgage: 4.375% Rate – 4.474% APR – $1922.77/month
  • 15 Year Fixed Rate Mortgage: 3.875% Rate – 3.978% APR – $2245.32/month

Their rates are going to be right in the middle when comparing to other companies I've run quotes for today.  The only thing is – if you're a Costco customer, you may be paying less – so it could mean a better deal.  To find out more details about that and to run a quote, click on the link or banner below.

Get Up To The Minute CapWest Mortgage Rates Here

Costco Member Discounts

One thing that I saw when researching CapWest was the fact that they advertise as having “special rates for Costco members”.  We're not members yet, but a membership isn't that expensive – and if we could save some good money by becoming members, we'd definitely consider it.

So what are the Costco Discounts? That's where it gets a little hazy.  On the Costco.com site they talk about their approved mortgage lenders, which CapWest Mortgage is one of, and how they have capped lender fees and lower rates than might otherwise be available to non-members.

Lender Fees have been capped at $600 for an Executive members and $750 for all other members. In addition, the borrower will pay for what is typically called 3rd party fees, such as appraisal, title, and credit report. These fees vary based on the details of your loan. All out of pocket expenses, lender fees and closing costs will be discussed with you at the time of application.

So depending on just which fees are capped, and what out of pocket costs they keep lower, this could definitely save you quite a bit of money. My only suggestion is if you're seriously considering using them, give them a call and see what they can tell you the discount might be.

What Do I Think?

CapWest Mortgage has quickly popped onto my screen lately because of the buzz I've been seeing on other PF blogs, and via companies like Costco that now list them on their website as an approved lender.  From everything I've read on the Better Business Bureau site and other sources they have good customer service, and their rates are competitive. If you've got good credit (do you have good credit?) you'll probably be able to get some good rates, and if you become a member at Costco you can probably have your lender fees capped and get a lower rate.  All in all CapWest Mortgage is definitely worth checking out.

To find out more about CapWest or their mortgage discounts you can go to their site through the link below.

What Constitutes A Worthwhile Expenditure?

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My husband is finishing up his Ph.D. this month. His defense is scheduled, and everything should be wrapped up by the beginning of May. This means, of course, that he will be looking for a job. He has already applied for a few jobs, and has been looking for openings, but many potential employers (mostly universities) want to see that he already has the Ph.D. Even though reports are that the job market is improving, things are still tough out there. Which is why we're looking for advantages. One of these advantages is going to conferences.

Projects my husband has been involved in have been accepted for presentation and exhibition at various conferences, although he doesn't always present it himself. Conferences add something to your CV, and they offer chances to network. One of these conferences is taking place in less than two months, in Madison, Wisconsin. My husband isn't sure he wants to go, since it will cost about $600. He's already been accepted to present, but he's thinking that if he doesn't go, he can use that money to buy an iPad. Here's how our conversation on the subject went:

Him: “I want to buy a nice laptop and iPad more than going to that stuff.” (His current laptop actually belongs to the school and he has to give it back at the end of the month. He can't use mine for personal reasons because it has already been deducted as a business expense.)

Me: “We've already budgeted in a laptop for you. We've been saving up for it.”

Him: “It would be nice to have an iPad. I doubt I'll get a job by going to the conference.”

Me: “Well, a presentation at ISSRM looks better on your resume than an iPad.”

Him: “True.”

Me: “If we're going to spend $600 on something, I'd rather have it be something that could potentially advance your career, rather than something we're pretty sure won't.”

Does Your Spending Help You Reach Your Goals?

When deciding whether an expenditure is worthwhile, I like to consider whether or not it will help our family reach a goal. It's true that one of our goals is to have a tablet computer with a low-end data plan so that we can access the Internet from anywhere, comparing prices while shopping, or looking for restaurants while traveling. However, this goal has a lower priority than helping my husband get a job.

At the conference, he will have the chance to meet other people and network. This could, potentially, help him find a job. On top of that, the date of the presentation shows that he was doing something after finishing his degree. In a world where you are practically unemployable if you have been out of school and jobless for more than six months, an international conference presentation can buy you a little time. In my mind, the chance that something will help my husband's career is more important than a fun gadget. After our conversation, my husband admitted that my argument had merit. So he's going to Wisconsin.

When you are making similar decisions, it's important to weigh the pros and cons. Consider what is more likely to help you in the long term. Consider your financial priorities and goals, and choose to use your money in a way that helps you move forward on the path to financial freedom.

What process do you go through when trying to make spending decisions?  Tell us about it in the comments!