Assume you are the proud owners of a new home and you need to finance a total of $250,000 over a 30 year fixed mortgage rate of five percent. Do you know what your monthly payment will be? Do you know how much money you are going to pay over the course of the full 30 years? Sadly, the numbers are probably a lot bigger than you think, but I’m going to show you just how to calculate this information on your own.

The formula for figuring out your own monthly payment on a principal loan is as follows:

M = P x J / 1 – (1 + J) ^ -N

To solve this formula, let’s first define all of the variables:

• M = Your monthly loan payment
• P = The principal amount of the loan. In this case, $250,000
• I = The annual interest rate. In this case, 5%
• L = Length in years of the loan. In this case, 30
• J = Interest rate in decimal form. (I / (12×100), in this case, 0.004166666667
• N = Number of months the loan is good for (L x 12). In this case, 360

Now that we have everything defined, a few simple computations and we will figure out just how much our monthly payment will be. Make sure you follow your math rules, always taking care of things in parenthesis first, then exponents, multiplication, division, addition and finally subtraction.

M = 250,000 x 0.00416666666667 / 1 – (1.00416666666667) ^ (-360)

Computing the number raised to the power of (-360) then subtracting it from 1, our formula is simplified and looks as follows:

M = 250,000 x 0.00416666666667 / 0.776173399

The final step is dividing the two numbers and multiplying the result by the principal balance of $250,000. Our results show a monthly payment of $1,342.05, which is exactly what any mortgage calculator will show if you use the above criteria. When you multiply this monthly payment over the course of 360 months, you find out that a total of $483,138 will be paid on a $250,000 loan. YIKES!

At anytime during your mortgage or loan, you usually have the option of paying more than you owe for the month, thereby reducing your principal. Paying off a little extra early on can save you thousands over the course of your entire loan and figuring out your new monthly payment is just as simple. Just change the principal amount and the number of months remaining on the loan to figure out what your new monthly payment will be.

And that’s all there is to calculating how much your monthly payment will be on a fixed interest rate loan. It’s never a pretty number in the end, but of course you can always make extra payments to reduce how long you take to repay the loan (and how much interest you pay).

About the Author: Michael is a contributing editor of the Dough Roller, a personal finance and investing blog, and Credit Card Offers IQ, a credit card review site.

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2. Mortgage Rates Briefly Explained
3. How to Find the Best Mortgage

Although global economies do not depend upon gold in the way they once did, gold is still an attractive investment. Why is that? And exactly how do you invest in gold?

The Allure of Investing in Gold

Gold can be a sound investment because, unlike currencies and securities, gold is in limited supply. (The gold supply increases as more gold is mined, but very slowly). Thanks to this scarcity, gold serves as a hedge against inflation. An ounce of gold can buy roughly the same amount of goods today as it did 50, 100, even 200 years ago. That’s not the case, of course, with a dollar bill. In fact, the value of gold typically increases as the value of a dollar falls.

For this reason, gold is a good choice for investors who want to insulate themselves somewhat from the inevitable effects of inflation. And who doesn’t?

But how do you make this happen? Believe it or not, buying gold (even physical gold coins) is doable for the average investor; you simply need to take the time to do it right.

How to Invest in Gold

Three common ways to invest in gold are:

• Gold exchange-traded funds (ETFs)
• Mining stocks
• Physical gold (e.g., gold coins)

Gold ETFs: With a gold ETF, you don’t have to worry about storing real gold (or paying for storage) or having your gold stolen. It’s easy to buy and sell ETFs using any discount broker and you can even include gold ETFs in your Roth IRA so your earnings can grow tax-free. Two gold ETF options are the StreetTracks Gold Shares (GLD), traded on the New York Stock Exchange and iShares Comex Gold Trust (IAU), traded on the American Stock Exchange.

Mining stocks: A more indirect way to invest in gold is via mining companies. You can purchase mining company stocks or a mutual fund or ETF that focuses on companies that mine precious metals. (Although gold is perhaps the most common investment metal, silver, platinum and other metals offer similar opportunities).

Gold Coins: For those who want a different kind of investing experience altogether, you can actually go out and buy real gold in the form of gold coins (which offer slightly better liquidity than other “real gold” options like gold bars).

How to Buy Gold Coins

Obviously you can’t just run down to the store and pick up a bag of gold coins. A number of Websites do, however, make it relatively easy to buy gold coins. Some sites sell coins directly; others provide trading platforms for individual investors. Both have pros and cons: marketplace sites typically offer better deals because you cut out middlemen but buying from direct dealers can provide an increased sense of security. As with any investment, however, it’s important to do your homework before buying gold coins; many sites are reputable, some are not.

There are also many kinds of gold coins available. Each is produced by different government mints and have different weights and purities, meanings it’s important to know the current value of the type of coin you are looking at buying. Popular coins include the American Eagle coin, the Canadian Maple Leaf coin, and the South African Kruggerand coins.

Gold And Your Investing Strategy

A sound investing strategy can be summed up in one word: Diversification. You may want to make gold a component of your portfolio, but don’t go overboard. Gold is not a total alternative to stocks and bonds, nor is gold a get rick quick scheme. Gold provides protection from inflation and, for some, the specter of total economic collapse. Although the price of gold is somewhat volatile, it has proven to make steady gains over time. The bottom line? You are not going to make a huge splash with an investment in gold, but gold coins especially will offers a tangible investment in a very intangible financial system.

• Yahoo! Finance Quote: Gold

If you do decide to get into gold, find a reasonable entry price. The price of gold has been high over the course of the current recession, although analysts forecast gold prices may continue to rise at least modestly over the next few years.

About the Author: Shaun Connell is the guy behind Learn Gold Coins, a website geared toward helping anyone learn to invest in gold. If you’re completely new to gold, check out Ways to Invest in Gold and How to Buy Gold Coins. Happy investing!

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1. All About Exchange-Traded Funds (ETFs)
2. The Inverse Relationship Between Gold and the Dollar
3. Asset Allocation for Investors Under Thirty

Probability of Developing Cancer

According to the American Cancer Society and their studies showcasing the probability of developing invasive cancers over selected age intervals there is a one in 70 chance of developing cancer before the age of 39 for men and a one in 48 chance for women. If we stretch it out even further then over ones entire lifetime there is a one in two chance of developing cancer for a male and a one in three chance for a female.

If the above statistics don’t scare you and shock you to some degree then consider that these are just cancer statistics! There are any other myriad number of different things that can and often do go wrong from a simple broken bone in a sports injury to an illness that you had never even heard of until the doctor sits you down to give you the diagnosis.

I’m not just rattling off these statistics to paint a doom and gloom picture, but to set the stage for three reasons I believe you need adequate health insurance benefits.

My Three Reasons

1. Very bad medical problems can and do happen to many of us—maybe even you.
2. Those very bad medical problems can be very expensive and potentially ruin one’s financial future if they do not have adequate health insurance.
3. It is a smart thing to purchase comprehensive health insurance coverage to protect not only your health but also your financial future.

The Cost of Common Health Procedures

According to ChangeHealthcare.com the cost of these common procedures at Tampa General Hospital close by where I live is somewhere in these ranges (keep in mind that these cost estimates are just for the hospital fees and does not include medications, extra tests, Doctors fees, etc.

I know from personal experience after talking with a friend of mine that after he developed leukemia the cost of his prescriptions alone would have been somewhere in the $3,500/month range without his health insurance. Stories like his are good stories to tell because he actually had health insurance coverage, where as the owner of an agency that sells Florida health insurance I could tell you many other stories from the flip side of people that ran their finances into the ground because they did not have adequate health insurance coverage):

• Heart Attack: $37,650 to $41,17
• Fracture of Upper Leg (Femur): $22,648 to $24,771
• Lung Disease: $49,963 to $51,366

Again, the cost estimates above are just the basic hospital average costs for Tampa General Hospital and do not include many of the associated fees that are involved.

Buy Health Insurance Before You Need It

Many people are of the mistaken belief that they should just wait until they develop a major illness before they buy health insurance. This kind of thinking is akin to someone who totals their car without having any car insurance and then goes to an auto insurance agent and attempts to buy collision coverage for their already totaled vehicle and expects the insurance company to pay for the damages to their car. The most responsible thing that you can do when it comes to caring for you and your family’s health (and securing your financial future) is to make sure that you have adequate health insurance at all times – before you may need it (and hopefully you never even need to use it!)

Compare Health Insurance Providers

If you have financial goals like buying a first home, getting out of debt, or any other number of great things then take the time to do some comparison shopping to find not only a cheap health insurance plan but one that will act as a safety net to protect your financial goals from the financial ruin that a uninsured medical bill could bring. Just like it is common knowledge that you can save money by doing a car insurance comparison every so often it is not as widely known but just as effective to shop around and compare health insurance providers in order to find an affordable plan.

Stick with large and trusted companies like Blue Cross Blue Shield, United Healthcare, Aetna, Humana, etc. and stay away from discount health plans that masquerade as true health insurance but in reality are just hyped up coupon cards that leave you out in the cold with little to no coverage should you ever get hit with a large medical bill.

Do your homework to shop around and then choose a comprehensive major medical health insurance plan from a trusted nationwide company to make sure that your health care and financial future has an adequate safety net should the unfortunate happen.

Joel Ohman is a Certified Financial Planner and President of 360 Quote, LLC. He is a serial entrepreneur and is currently spearheading several successful consumer comparison websites including Credit Card Chaser and Health Insurance Providers.

Photo Credit: The Doctr

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Plenty of parents help out their adult kids with cash, and it’s not just cars and trust funds. For many, the safety net is pulled on the way to college, while for others it never really ends.

If you’re still making withdrawals at the Bank of Mom and Dad, don’t worry so much about it. It’s nothing to be ashamed of and it may be more common than you think.

Of course, the relationship between money and family is different for everyone:

• One friend of mine just paid back a $5,000 loan to her parents, happy to be finally free of the family-entangled debt.
• Another friend of mine took out thousands of dollars in student loans while her parents are building a ritzy retirement home and paying for her sister’s private school education.
• A third friend is still out $4,000 her dad still hasn’t paid her back from years ago.

Maybe it’s because I’ve seen how my friends have struggled, but I love to praise my parents for the financial help they’ve given me. They were wonderful for paying for college for me, and yes, an allowance was included. (Okay, that might be a little embarrassing.) Hey, at least I was able to leave college without debt and with a small pile of savings.

Poll courtesy of FiLife: A Family Finance Site

After graduation, however, I hit a different financial road block.

I was living on the West Coast, with plans to move to New York that same summer to start my career (…and by ‘start my career’ I meant, move out there and hope to find a job.). Apartment hunting 3,000 miles away is not an easy endeavor, unless you have the big bucks.

Thankfully, about the time I was throwing in the towel a friend offered to share her apartment with me for a month, and my parents presented me with a deal: I’d have six months of support to make something happen or I would be heading back home.

Right before the job market fell apart, I found a job at FiLife, and a home in New York City. How do I feel about my arrangement with my parents? So grateful. I wouldn’t have made it without their help. I plan on returning the favor as much as I can from now on – but lucky for me, there’s no guilt administered in my family.

I realize that’s not the case for everyone, which is why people who are lucky enough to be supported when they need it (and not waste that gift!) shouldn’t be afraid to admit they received help from home.

What about you? Do you still receive money from your parents? Are there any strings attached?

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Deciding to expand my life after college in another country was a big decision and one that has challenged me financially and intellectually. As I packed up and left the good old U.S. of A. for law school on the other side of the pond (where lawyers sometimes wear wigs), I attempted to put my plethora of federal student loans into in-school deference or forbearance. Five separate enterprises own a piece of my undergraduate education totaling $50,000 at the time. Four of the companies put my loans into various types of in-school and hardship forbearance. The one that wouldn’t budge, however, was my Alma matter holding tight to my $3,000 Perkins loan and those $43.23 per month payments.

When a Student Loan Goes to Collections

Not only did I not have an extra $43.23 per month at that time but I didn’t even know how to transfer money from London to Boston in any way that didn’t attract at least $50 in fees. My deferments kept getting denied until the loan ended up in collections. If you’re familiar with a certain type of person from South Boston (think of the movie The Departed) and combine that with the evils of a third-party collections company, you can imagine those phone calls. They told me that they didn’t care where I was in law school; I needed to pay. And by the way, the loan had doubled in size, and I now needed to pay $6,000. Yesterday.

I used every skill they’d taught me in law school to refuse to speak to “Mark Wallburg Collections Co.” and instead spent Christmas break 2007 on the phone in a screaming match with the head of loan collections at my former college. According to him (but not the other four student loan companies), the fact that I went to a law school overseas prohibited me from getting an in-school deferment period. Furthermore, since I wasn’t paying U.S. taxes as an overseas student, I couldn’t prove that I was economically unable to pay. So, tough luck. Pay $6,000. Now.

How I Fought Back

I then used the public relations skills that I had learned at an internship (set up through that very university) to draft a press release outlining the way I had been treated and the various federal loan reporting laws they had broken. I went through old contacts and planned to send copies to everyone and anyone I could think of in Boston. I figured if it was a slow news day, the Boston Globe might pick it up as an interest piece. They love stories of how the Colleges in Boston screw over students.

But first, I showed my masterpiece to Head of Collections at my college and magically, my loan was put into in-school deferment—retroactively—and all charges and interest over the past year were removed. Sadly, it remains the most profitable piece of writing I’ve done yet (approximate value: $3,000)!

Repaying the Loan

When I finally started working as a lawyer and trying to change the path of my financial life through my blog Savings Not Shoes, I added the loan to the list of debts and it’s currently top of my list getting payments of between $500 and $1,000 per month. “Knee-Breaking Collections” is still on my credit report, which is annoying, but doesn’t really affect me as I am totally anti-debt these days.

You’ll imagine my surprise my college’s alumni association approached me and asked me to lead a new U.K. Alumni Club. It was finally time to try and make up for Christmas ‘07. I told the association that I would have been privileged to lead their overseas chapter in the U.K., if only I’d been treated with decency by the college’s student loans office when setting up my life over here, so I’d have to decline.

Now the alumni association has brought new life into my old tale of collections and woe. My goal is that it doesn’t happen to other students who perhaps didn’t learn as much in college—like writing press releases and having contacts on the Boston City Council.

Their veracity has impressed me enough to stop by when I’m in Boston at the end of the month and to go out to lunch with the alumni association. More importantly, I’m swinging by the loan office and giving them the remainder of the payoff amount for my loan…in person, and with a smile.

Related posts:

1. Student Loans Drying Up: What You Must Know About Borrowing This Fall
2. Six Things to Know About Your Student Loans
3. Understanding Student Loan Grace Periods, Deferment, and Forbearance

I just returned from two weeks in Europe, where I stayed in Hamburg, Germany, for a few nights with my friend Flo. He is a German native but studied at my high school for one year. We got to talking about problems currently facing our countries. I complained about illegal immigration, a broken healthcare system, and a broken retirement program. I had the impression that things in Europe were so much better. After all, Europeans enjoy universal health care and tons of vacation days, what more could you want?

When I expressed these opinions, Flo looked at me like I was crazy. He said Germany—especially Hamburg—has been deluded with immigrants from Turkey (many illegal). And while Germany has a government-regulated healthcare system, there is also private health insurance, so citizens much choose between private and public insurance, and everyone pays premiums. He also said Germany’s retirement program is struggling much like ours.

I was shocked. As I talked to Flo, I realized that just because America is mired in an unpopular war and struggling with a sagging economy doesn’t mean things are perfect in other countries. While Europeans may be benefiting from a strong Euro and—thanks to widely available public transportation—a lesser reliance on petroleum, they face many of the same financial struggles as Americans.

Some things, however, are very different in Europe.

Car taxes and fuel economy. After speaking with an elderly woman on a train in England, I learned that British citizens pay an annual car tax that is rapidly increasing. She said for tiny cars, it may only be 200 pounds, but soon may be 1,000 pounds or more, and will be higher for big cars that pollute heavily. Flo says Germans also pay an annual car tax that includes penalties for gas guzzlers.

Gas prices. Gasoline is currently about $9/gallon in the United Kingdom. According to an L.A. Times article, taxes account for 81.5 percent of London’s gas prices. And we thought we had it bad. On average, taxes account for 19% of the cost of a gallon of gas. Can you imagine if, on top of rising oil prices, we had to pay 60% more in taxes?

Coins, cash, and credit cards. I was surprised to discover just how much people in Europe use coins. Here in the States, our dollar coin,is a novelty that nobody uses. In the U.K. people commonly use one- and two-pound coins. Often I would hand over a five pound note for a one or two pound purchase and receive all my change in coins. Then I discovered that the automatic subway ticket machines in France accept European credit cards and coins only—no bills or American credit cards! My coin purse was heavy, but it came in handy buying subway fares—and whenever I came across an unattended pay toilet.

Vacation. In Germany, I met many of Flo’s friends, who asked me how long I was going to be in Europe. When I told them two weeks, they laughed and asked: Why would I come all the way there for such a short time? I told them that it was all the vacation time I had at work—I was using all 11 days for this trip. The Germans were flabbergasted. Most of them enjoyed between 25 and 30 vacation days annually, not including holidays. According to the German Embassy in Washington, D.C., “[German] law requires a legal minimum for vacation time of 18 workdays for adults, and 25 – 30 days for young adults up to the age of 18 years. However, due to collective bargaining agreements, 70 percent of all employees enjoy at least six weeks of paid vacation, and most of the others get between five and six weeks.”

In France, things were similar. Citizens had much more vacation time and work hours were more lax. While employers may not appreciate the reduced productivity, I have a feeling the workers are happier and healthier because they get more breaks and are less burn-out.

Employment notice. In Germany, if you are fired or resign from a job, you must work for two more months. I asked Flo what happens if you’re leaving on bad terms, and he said not all employees continue working that long, but they are still technically employed. He also explained that German law makes it very difficult to fire an employee. Essentially, employees have to steal or harm somebody else before their employer will give them the ax. That’s quite a contrast to America, where companies will lay-off qualified, hard-working employees at a moment’s notice.

Payroll taxes. On average, Federal income taxes are much higher in Europe that in the U.S. Because of these taxes, Flo never sees a whole fifty percent of his paycheck.. And I thought it was bad to lose about a third of my check!

Government assistance. Germany is very much a welfare state, Flo explained, and the indigent can get government money with few requirements. The government will offer you jobs, and if you keep turning them down you will get less money, but you still get some, so many abuse the system.

Flo complained about the money from his paycheck that goes toward this welfare program, but there are many citizens who don’t take advantage of it, as evident by the large homeless population. Shopping in the Hamburg city center, it was nearly impossible to find a bench. Flo said the city limited benches to avoid attracting the homeless.

I am happy to be home, with our standard conveniences of air conditioning, ice, and free toilets, but I am so glad I went–it was a very eye-opening experience!

Emily has been busy since she’s returned from Europe. Not only did she write this great guest post, she is also hosting this week’s Carnival of Personal Finance. Great work, Emily!

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