For many people living month to month on Social Security Income or who had once robust retirement accounts ravaged by the not-so-great recession, the reverse mortgage seems like an attractive choice. But, before you dive in there are a few things you need to know in order to make an informed decision about whether or not this is the right choice for your circumstances.

What is a Reverse Mortgage?

You may hear about other types of reverse mortgages in the marketplace today, but there is only one that is federally insured. It is called the Home Equity Conversion Mortgage, or HECM. This loan is only available through FHA approved lenders.

A reverse mortgage differs from a traditional home equity loan in that you are not required to make monthly principle or interest payments on the loan. Maturity is reached, and the loan must be repaid, when the home owner no longer lives in the home as his or her primary residence or certain other conditions, in accordance with the loan agreement, are met.

Reverse Mortgage Requirements

In order to qualify for a reverse mortgage, the home itself, along with the homeowner, must meet certain conditions.

Homeowner Requirements

• Homeowner must be 62 years of age or older.
• The home must be owned outright or carry a low enough balance that it can be paid off at closing with the proceeds from the reverse mortgage.
• Homeowner must have the financial means with which to pay property taxes and insurance on the home.

Requirements for the Home

There is a little bit of flexibility when it comes to the homes themselves. Properties eligible for reverse mortgages include:

• Single family homes
• Two to four unit properties in which the owner occupies one unit
• HUD-approved condominiums
• Manufactured homes built after 1976
• Town homes

Pros of Reverse Mortgages

There are quite a few benefits to consider when it comes to reverse mortgages, not the least of which is the easy approval for these loans. In some instances, when credit or income seems insufficient to meet the terms of the loan long-term, borrowers may be required to set aside funds in an escrow account to cover the costs of yearly taxes and insurance premiums for the home. Otherwise, approval is fairly straightforward.

Another big benefit for most seniors is the option to receive a lump sum payment or to spread the payments out over time in order to generate a steady stream of income. For those on fixed incomes, this can be extremely beneficial, just as it can benefit people who need one large payment for something like medical treatments or to make their home wheelchair or walker accessible.

No repayments necessary while the homeowners maintain the home as a primary residence.

Cons of Reverse Mortgages

While the attractiveness of a reverse mortgage is certainly attractive, there are a few considerations to keep in mind. The first consideration is a big one, or it can be. That is the cost of the reverse mortgage itself. There are many fees associated with mortgages in general include:

• Mortgage insurance fee
• Appraisal fee
• Title insurance fee
• Closing costs (which are substantially higher than with traditional mortgages)
• Interest

The other consideration that weighs heavily upon the minds of many seniors considering reverse mortgages, as it should, is the requirement to pay back the loan, in full, if you are no longer a permanent occupant of the home. In other words, if you are required to move into an assisted care facility, then the full force of your loan will become due.

Finally, the reverse mortgage impacts how much money you leave to your heirs. While that isn’t the primary consideration for everyone considering reverse mortgages, it is important to many, and worth taking into account.

Alternatives to Reverse Mortgages

Seniors are motivated for many different reasons to consider reverse mortgages in the first place. Whether it involves tight funds for retirement, a one-time expense that is too large to easily accommodate on a fixed income, or retirement dreams gone up in smoke during the market meltdown of previous years, there are alternatives to the reverse mortgage to consider.

• Cashing out life insurance policies.
• Part-time employment.
• Consulting with a financial advisor for ways to stretch your retirement.
• Selling your home and moving into a smaller home.
• Downsizing to one automobile rather than two.
• Reducing expenses and creating a budget.

This isn’t to say that reverse mortgages are never a good idea. You can’t take it with you, after all. It’s simply not a decision to be taken lightly either. Keeping these things in mind will help you make the best choice for you and your family.

Finances

Most couples will talk briefly about finances. Stuff like who will work, where the money will be spent, budgeting, common things like that. But, did you ever once mention who will be the main person to pay the bills? Is there going to be one joint bank account, or will each spouse keep separate bank accounts? It is important to decide just who will handle paying the bills and setting up the online accounts for those bills. This is very vital to discuss because of the confusion that can come if there is not a designated person. Now, just because one spouse is the designated bill payer that doesn’t mean that the other is completely cut off knowing anything about bills. They do have the right to know how much each monthly bill is and the password to those online accounts. Knowing the password is key because if something ever happens to the bill payer, then the other spouse will have immediate access to all that.  Also, the matter of separate or joint bank accounts is a personal one. Some people love joint accounts. It makes budgeting much easier and is very transparent. Joint bank accounts are more time consuming to budget. Remembering which account has which bill coming out or will the bills come out of one spouses account and the play money is from the other spouse. However you want to do it is fine as long as you can make it work for you.

Children

Now on to the subject of children. You have probably discussed the number you would like to have. Did you discuss who will be their main caregiver? It used to be no question, Mom was in charge of the home and family and Dad worked. But, nowadays those roles are changing and so is the scope of the family. If both parents want to work that is great, but who will be the one to take the day off to take care of the sick child? Who will be the designated chauffeur when it comes to sports, ballet, school functions, etc.? It is also important to decide on the type of punishments you both find acceptable for your future children. Kids are notorious for pitting parent against parent. They love to play I asked mom and she said no so I’ll go ask dad because I know he’ll say yes (or vice versa). Deciding on how to handle those situations will save your sanity in the long run.

Religion

Religion is a tricky subject to converse about. If you are marrying a person of a different religion you want to make sure you respect their beliefs. Even though this is difficult to discuss it is a crucial conversation that you will both need to make time for. Some of the talking points could center on what religion your children will be raised in. How will you handle holidays and celebrating certain religious specific ones? How will you attend church, will you go together to one spouse’s specific church or will you go separately to your respective churches? Is converting to a different religion open for discussion and if so which spouse will convert?

Politics

Politics is a huge one that you need to talk about before the big day. Some thing to remember about voting is that when you go to vote, don’t cancel each other out. Take the time to discuss which candidate you like and why. This may be hard if you like opposite parties, but still try to do it. You don’t want to get into that booth and essentially have your vote not count because you voted against each other.

You love your spouse enough to stay with them until “death do you part”.  If you can talk to your spouse openly about these subjects your marriage will be all the better for it.

Retire with peace of mind by making sacrifices at a young age and living a disciplined lifestyle. Once you get in the habit of saving and investing, you can expect to start increasing your personal wealth. Due diligence and regular inspections of your finances should ensure a promising retirement for you.

The first thing I did was to determine what kind of retirement I wanted. This helped me to determine how much money I would need to make it happen. I started by calculating my daily expenses and increasing them every year of my life expectancy, a trick I learned from my grandfather and www.aarp.com. Next I determined what my portfolio should look like. From then on I checked on my investments regularly, just to see how they were doing, but a re-evaluation was not really necessary unless I intended to add, delete, or change my investments.

I was fortunate to learn a little about investing from my grandfather at an early age. He did not know a lot, but he did know the importance of saving money and not to just dabble in the stock market by jumping around from stock to stock. I filled in the blanks with my own research by asking experts and reading financial articles. All types of portfolios agree that the amount of risk I am willing to take, diversification of investments, and saving money are essential to having money for retirement, and that my age would determine how this would change over time.

Risk is a part of all investments. As a younger person in my twenties, I was willing to take a greater risks. I was in a position to buy into several different companies that seemed sound to me.  Stocks are more high-risk, but I made sure that I could afford to lose what I invested, that my livelihood did not depend on the performance of my investments. Some provided steady income, and some only showed a return when their value increased. I took Warren Buffett’s advice and did not invest in any company that I did not understand, and I slept great at night by avoiding those “hot tips” from other investors.

Preparing for the worst was the best way for me to diversify my portfolio. I looked to www.forbes.com and www.fool.com to tell me about different types of investments, and turned to www.investopedia.com for specific definitions of terms when I needed it. Together they gave me free and solid advice and information. According to these sources, my investments should be designed to counter any losses that I may experience with any one of them, and provide other sources of revenue. I attempted to stabilize my portfolio by investing about 50 % of it in domestic and foreign exchanges, 40% in fixed-income securities, and the rest in cash.

By investing in domestic and foreign exchanges, I relied on different economies that usually were not directly connected to one another, like the United States and companies in other countries that do not depend on U.S. economy to thrive. I also chose to invest in real estate through mutual funds. I invested with others in office buildings, apartments, shopping malls, and warehouses in the United States and abroad.

My fixed-income securities were government bonds. I was practically guaranteed thousands of dollars in increase on tens of thousands of dollars of investments. I got a percentage of the investment in increase, plus the original investment of the bond.

I also learned from www.time. com/money that certain credit cards are better for loans, financing, bonus points, etc. I use them to purchase necessities like groceries and gasoline, utilities, etc., and pay them off every month. I save myself finance charges and consistently build my credit.

My cash assets were in CDs and savings accounts. I took advantage of a company-matched 401(K) and maximized my IRA, which allowed me to save a sizable amount to put in my personal savings or invest in my fixed-income securities. My grandfather was also wise enough to leave me money as a beneficiary of his life insurance policy. This allowed me to collect the full amount of my benefits without taxes or fees incurring. This is a part of the money I invested in my portfolio.

By the time I retired, my portfolio remained diversified, but reflected a shift in dynamics to roughly 20% in the exchanges, 45% in fixed-income securities, and the rest in cash. I was able to live in retirement instead of having to work to supplement it.

Saint Augustine, theologian and philosopher once said, “The world is a book, and those who do not travel read only one page.” In the common world road trips create an escape from the daily routine.

In order to have a successful trip you need to be fully prepared, and financially able to handle any unforeseen circumstances while on your trip. However, the first thing you need to figure out is how to start saving.

There are several tricks that can be utilized to help save money gradually over a period of time, most of them take an extremely minimal amount of effort and actually make saving easy.

Keep a jar of change

This is one of the oldest methods to holding on to money; in day-to-day life change often just gets thrown in a cup holder and forgotten. That change does build up, and it will build up faster than you realize.

Consider putting the jar in your laundry room, every time you find money in the laundry put it in the jar as well.

Pick a number

Every bill, of any value has a serial number, with 2 letters followed by a series of numbers.

Pick a number from 1 to 10, every time you get a bill that has that number at the end of its serial code put it away and save it.

Make a budget

Figure out all your expenses every month, and find out how much extra spending money you have after your bills are covered.

Once you have determined the amount extra you have, decide on a percentage and then take that amount out of your account each month and place it in a savings account.

Say no

Be aware of what you are spending money on, this is something to keep in mind while you are on your trip as well. Choose not to spend money on unnecessary purchases, if you buy a cup of coffee every morning of the week, go at least one day a week without buying your coffee.

So now you know how to save for a trip, but how can you prepare and plan out your expenses for the actual trip. Creating a budget specifically for your trip can allow you to maintain your spending and stay within your budget.

If you are able to plan your budget in a way that overestimates your spending, then you will end up with extra money to help cover for accidents or unforeseen issues.

Figure out your gas cost, and make an allowance for the fluctuations in gas price. Be aware that the cost of gas is different depending on what state you are in, find out which states you will be driving through and their gas prices.

Always be familiar with the distance in miles, and then make sure you have enough in cash to cover the cost of gas home with a little bit extra to help cover food. You do not want to get stuck at your location because you lost your debit or credit card. It is ideal for the cash to be kept in the car or in your suitcase, out of your wallet.

Being aware of your potential cost and budget will help you know how much to save, and extending that awareness throughout your trip will help you have a successful and enjoyable trip.

Photo: Richard PJ Lambert / CC 2.0

A positive first impression is worth more than a forever diamond. According to a Princeton University study, you get 100 milliseconds (1/10 of a second) to win someone over—that’s faster than you can text, “Like me.” Let’s look at 10 can’t miss practices for making a good first impression.

1. Pay attention to your appearance. Everything about your appearance should broadcast “neat and meticulous.” Show, don’t tell—a neat appearance proves your attention to detail. There’s no need to mention it if you can show it. Arrive on time and mind your manners. We shouldn’t have to mention not to chew gum, but when elected officials meet foreign dignitaries while chomping on gum, it needs to be repeated. Nails should be trimmed and neat with neutral polish, if any—no “Long Island Medium” nails. As your mother probably repeated in an endless loop, “Don’t slouch.” Hold your body erect and look at the other person. Finally, turn off your phone. If someone died, the body will be just as dead in a half-hour. If a loved one is at death’s door, reschedule.
2. Dress for success. In a job interview or a first meeting with a client, dress one step up the position you are seeking or up a step from the client will wear (do your homework), according to CBS Money Watch. “If your prospect is in denim, you wear khaki. They wear sport coats without ties; you are in suits without ties. The point is that you always dress one step further up the clothing ladder than your prospect, but not two.”
3. Be yourself. People can see through phonies a mile away.
4. Trustworthiness vs. confidence. We’ve all been led to believe that we must show confidence 24/7/365—or at least “fake it ’til you make it.” Wired magazine reports that social psychologist Amy Cuddy of Harvard Business School says that in a first impression, trustworthiness and confidence levels comprise 80–90 percent of the overall impression we give. Studies have shown that people place more importance on trustworthiness than confidence because if a person senses that you’re competent, he or she will be interested in your intention (trustworthiness) toward them. If you’re a highly confident person, you might want to dial back the confidence a bit and show more of your trustworthy side.
5. Victims are not winners. According to Psychology Today, “Feeling victimized is not adaptive.” You need to feel empowered to be nimble and to act proactively. If you are a bona fide “victim,” you’re also a survivor. Accentuate the positive and show your strength.
6. Show integrity. Demonstrate that your actions are in line with your values. If you were the star salesperson, demonstrate it with metrics. When you’re asked to talk about a weakness, answer honestly.
7. Prepare an elevator speech. You never know when you might have a chance meeting that could change the course of your life. An elevator speech takes 30 seconds. Address three things in the first 20 seconds: who you are, what you do, and what you want to do. That leaves 10 seconds to quiz the listener and show “what’s in it for them” and why you’re just the person to fill the need. Rehearse your elevator speech with a mentor who will tell you the truth and offer constructive criticism. Practice until you can give your speech in a natural, sincere manner, not as if you’re reading a teleprompter. End your speech with a call to action.
8. Don’t let social media kill your chances at success. It’s simple to search someone online, and the Internet is forever. If you wouldn’t want it broadcast on the 6 o’clock news, don’t put it out there on the Internet. If you’re social media image is less than sterling, clean it up. Delete your accounts and start new ones that give a better impression. You can remove yourself from Google but start building better online profiles—people without a past are no longer mysterious, they’re questionable. Even if you take all these steps, there are other ways people can discover your past.
9. Perfect your email netiquette. When you give your first impression via email, start with a succinct message header, an appropriate salutation and stick to business, according to Inc. Leave out off-colored jokes, private information, LOLs, OMGs and emoticons. Keep it short and write in complete sentences with proper capitalization and grammar. This isn’t Twitter. Before hitting “Send,” check your email for tone.
10. Pay close attention to the other person. The University of Kentucky suggests that you listen twice as much as you speak. Only through listening can you pick up clues about what needs you can fill.

Bottom line: You are not going to make a good first impression every time. Everyone has a bad day, and someone could take an immediate visceral dislike to you. It happens. But if you think that first impressions don’t count, ask yourself if you would let a surgeon to whom you took an immediate dislike cut you open on the operating table? There’s your answer. People want to trust and like those with whom they do business.

It was the go-go 90s and the stock market was on fire. In those days it was easy to make money in the market. It was a great time for momentum stocks and if you could get your hands on some shares of an IPO you had a chance to make a big score. From amateur investors to the most sophisticated traders on Wall Street, everyone was caught up in the exciting world of IPOs and short-term trading. I wanted to be part of that world!

TIP: Short-term trading carries higher risk than long-term investing. Traders can make a lot of money and also lose a lot of money.

Before I go any further let me just say that I have gone through different investment phases over the different stages of my life. Out of college, I preferred mutual funds and had my money invested with Fidelity, T.Rowe Price and Vanguard. In my early 30s I built my own portfolio of stocks. I invested some money in gold and silver bullion and I kept my retirement money in mutual funds. For a few short years, roughly from 1995-2000, I became a more aggressive investor. These were the years I got into day trading. They were also the years when I made the best investment of my life.

TIP: Base your investment strategy on your stage of life, tolerance for risk, and investment goals.

Online discount brokerage firms were in their infancy during the last decade of the twentieth century. Stock trading software was not nearly as sophisticated as it is today. However, it made it possible for people to trade frequently because you could buy or sell a stock for less than $10 per trade (a full service broker might charge $100 for the same trade). I opened a discount brokerage account and learned how to place market and limit orders. I eventually opened a margin account and it was nothing to buy or sell $10,000 worth of stock three or four times per week.

TIP: Open an online discount brokerage account and make your own trades. You’ll save on transaction costs, have a universe of stocks, bonds, ETFs and mutual funds, be able to view live quotes, do research, and track performance.. 

I am not going to lie and say I always made money on my trades, but I did make more good trades than bad ones. Most of the time I would make $200 – $300 on a stock I bought on one day and sold several days later. Sometimes the stock would go down and result in a loss. One thing I quickly learned was that you have to recognize when you made a wrong pick. I swallowed my pride, sold the loser, and went on to another stock.

TIP: Don’t ride a bad stock all the way down. Even Warren Buffet makes an occasional bad stock pick. When he does, he accepts a small loss (relatively speaking) and moves on. Limit your losses!

My best day ever in the stock market was the day I decided to buy into the IPO of a new stock called Books-a-Million (BAMM). The new issue was in great demand and I knew that it would immediately surge when the day’s trading session began. I got to my computer, proceeded to my online discount brokerage account, and placed an order for 2,000 shares at the market price (I wanted to make sure I was not shut out by a limit order).

TIP: Be ready when a great opportunity comes up. An IPO or a promising quarterly report can result in a rapidly rising stock price. Don’t be 100 percent invested. Have some cash on hand to take advantage of “special” situations.

For some reason, I thought that the market order had not been transmitted so I re-entered it. As you know, once you place a market order it is almost impossible to cancel it. A few minutes later I checked my account to see if my 2,000 share order had been executed. It had, and a second 2,000 share order also was executed. The IPO was priced at $12 and my two orders were filled at $17 and $20 as millions of shares traded in the first five minutes after trading began. It was not long before BAMM got very close to $30 and I was ecstatic. Then, reality set in and the stock sold off. I sold 2,000 shares at $27 and the remaining 2,000 shares at $25, netting me a one-day gain of $30,000. Although I did not sell at the very top I was still thrilled about being 30,000 richer!

TIP: Sometimes lucky is better than smart. If you buy a stock and it takes off, don’t be too greedy. Take some profits while it is going up and maybe hold on to some shares in case the stock continues to rise.

I would hardly call myself a brilliant investor, but I have been fairly successful over the last 30 years. Getting lucky is not an investment strategy. Sticking with some proven investment principles has helped me profit over the years.  

• Define your investment goals.
• Know your investment time horizon.
• Never buy on impulse.
• Always do your research before investing.
• Create a risk-adjusted portfolio
• Periodically review, adjust, and rebalance your portfolio.
• Be diversified. 
• Don’t invest under pressure.