Warren Buffett S Berkshire Hathaway Discloses 10 Stake In Burlington Northern Avoid These Common Credit Card Balance Transfer Mistakes Refinancing Your Home For People With Bad Credit Don T Get Robbed Things That A Credit Card Cannot Do For You Pay Off Your Debt In Just A Few Years
Warren Buffett’s Berkshire Hathaway has disclosed a greater than 10% stake in Burlington Northern Santa Fe (BNI). Through three insurance subsidiaries (Columbia, National Indemnity, and National Fire & Marine) Berkshire beneficially owns 39,027,430 shares of Burlington Northern common stock according to an SEC filing made on Friday, April 6, 2007.
Berkshire’s most recent reported purchase was made on Thursday, April 5th, and consisted of 1,219,000 shares purchased at $81.18 each.
Upon presenting the familiar table of Berkshire’s major investment in his most recent letter to shareholders, Buffett wrote:
“We show below our common stock investments. With two exceptions, those that had a market value of more than $700 million at the end of 2006 are itemized. We don’t itemize the securities referred to, which have a market value of $1.9 billion, because we continue to buy them. I could, of course, tell you their names. But then I would have to kill you.”
It appears that Burlington Northern was one of the two large positions Berkshire was accumulating. Clearly, Berkshire has been a big buyer of Burlington Northern shares since Buffett wrote his letter to shareholders, because Berkshire’s position now has a market value of approximately $3.2 billion.
The size of the investment will make it one of about a half dozen large positions held by Berkshire. This investment dwarfs most of Berkshire’s investments made during the past few years – it is already considerably larger than any other single investment recently disclosed by Berkshire including the investment in Posco (PKX), US Bancorp (USB), ConocoPhillips (COP), Anheuser Busch (BUD), Johnson & Johnson (JNJ), USG (USG), Wal-Mart (WMT), and Tesco (TSCDY).
Simply put, this is the biggest single common stock investment made by Berkshire in a long time.
It’s big news – and it seems to have caught most Buffett watchers off guard. GuruFocus, a site that tracks Buffett’s moves religiously, announced that its contest to name the two mystery investments alluded to in Buffett’s annual letter had failed to turn up any guesses that Burlington Northern would be among the pair.
Burlington Northern Santa Fe operates one of the largest rail systems in North America. The system includes 32,000 route miles of track of which 23,000 are owned route miles.
In recent years, Burlington Northern Santa Fe has been buying back stock. The company expects share repurchases will remain the primary use of its free cash flow. In fact, Burlington Northern may allow “a moderately higher level of debt” so the company can “devote additional financial capacity to share repurchases”.
In that respect, at least, it is a typical Berkshire investment.
That offer to transfer your credit card balances sounds like a pretty good deal, doesn’t it? And it is, until you take out your magnifying glass and start reading all the fine print that goes along with the offer. What a lot of people don’t realize is that the lender making such an unbelievable offer wouldn’t be doing so if there wasn’t some way to benefit financially. These lenders actually feel safe in assuming that most people transferring balances won’t pay attention to the potentially costly details that accompany the offer.
Transferring balances from a high-interest rate credit card to one with no or a lower interest rate can save you a substantial amount of money if you don’t fall victim to these common mistakes.
1. Balance transfer fees
Rare is the balance transfer offer that doesn’t come with some sort of balance transfer fee. It might be a flat rate like $50 or $75 but it’s usually a percentage of the total amount of each balance transferred. Maybe 3% doesn’t sound like much but if you’re transferring several thousands of dollars, that fee can be hundreds of dollars!
Although you may know by now to look for such fees, there’s something else you need to look for: whether or not there’s a cap on how high the balance transfer fee can go. Avoid those without caps. Before taking advantage of an offer, always do the math. If the balance transfer fee ends up being more than you would have paid in interest had you not done the transfer, then don’t transfer!
2. Other interest rates
While there might be low or no interest on balance transfers, you’re still getting a new credit card which means you’ll still be able to use it to make purchases. Purchases though, normally aren’t part of the no or low interest deal. In fact, you can expect the interest rate on purchases or cash advances to be just as high as or higher than the credit cards you’re already using to make purchases. If you’re serious about chipping away at your debt, which is really the best reason to take advantage of balance transfer offers, then you really should stop accruing credit card debt!
3. Payment allocation
If you do transfer balances to the new account, and you do make purchases on this new credit account, you may be surprised to find that your payments are not allocated the way you thought (assumed) they would be. Say you transferred $1,000 and during the last month you made new purchases totaling $200. You make a payment of $300 thinking you’ll clear away the new charges and start chipping away at the balance transfer amount.
Next billing cycle you get your statement and find that the $200 in new purchases is still there – plus the couple of new charges you made since then. And all those purchases are compounding interest at a rate of 16, 19, 22% or more! What happened? Well, as stated in the fine print, the credit card company allocated your entire payment to the zero interest balance because – well it’s not making any money on that amount. But it certainly is on those new purchases!
4. Interest rate after intro rate expires
That low or zero interest rate won’t last forever and you need to know how much it’ll increase when the stated period expires. That’s because any balance remaining afterwards is likely to be whacked with a much higher rate. To keep this from happening – which negates any savings benefits you’ve reaped so far – make sure you have a plan for paying off whatever balance you transfer before the rate increases. Also make sure you don’t miss a payment or make payments late. If you do you might find – without warning – that your zero percent no longer applies and you’re paying more in interest than you were before.
Poor Credit? Need to Refinance Your Home?
1. Research The Going Interest Rate for Subprime Borrowers – Sometimes a reasonable interest rate for a borrower with poor credit will be 1-2 percentage points above the prime rate, but if you are being charged 3-4 or more points above prime for your loan, you are probably being taken advantage of.
2. Make Sure To Get a Few Loan Offers – You should obtain at least 2-3 mortgage loan offers before you commit to working with a lender. Ask for interest rate quotes and estimated loan fees. This will give you leverage when negotiating a lower interest rate and lower closing costs.
3. Excessive pre-payment penalties – Watch out for a pre-payment penalty longer than 6 months to 2 years.
4. Avoid an ARM Loan – If you have a decent interest rate now that is a fixed rate mortgage. It’s probably best to keep that loan before you consider replacing it will a lower interest rate Adjustable Rate Mortgage. After the initial payment lock period of the ARM loan, your interest rate could skyrocket and without good credit behind you, you might not be able to refinance for a lower rate. This is a risky loan for someone with poor credit.
5. Watch For Unusual Fees – Some fees that brokers might add to your mortgage loan that are not completely necessary are:
a) Mortgage origination fees should not be more than 2%.
b) Warehouse Fee – Not necessary
c) Fax Fee – Not necessary
d) Consulting Fee – Not necessary
e) Endorsement Fee – Not necessary
Consider the penalties to see if it’s worth the cost to refinance your home. Calculate the payments from the time you start the new loan until the pre-payment penalty is up. You will be locked into those payments for the allotted time. Calculate the cost of the fees for refinancing. If you are refinancing to get cash-out, consider getting a home equity loan instead.
Credit cards are one of the best financial tools you can have, but they can also be dangerous and leave you with lots of debt. If you are thinking about getting a credit card, then it important that you know the downsides as well as the benefits. This will help you to use your credit card more wisely and avoid getting into debt. Here is some advice what a credit card cannot do for you.
It cannot make you richer
Although having a credit card will improve your cash flow and financial independence, it does not make you richer. Many people who get into credit card debt do so because they see their credit limit as their own money. In fact, that credit limit is simply the amount that you can borrow from your card issuer. Instead of making you richer, every time you spend on your card you are pushing yourself into debt. The only way to stay out of this debt is to make sure you can afford to pay back what you spend.
It cannot stop your debt problems
Many people get hold of credit cards because they think a credit card will help them solve their current debt problems. If you are spending more than your income then using a credit card is not a good idea. Credit cards are an expensive form of borrowing, and charging things to a card will delay your problems and put you further into debt. If you are having problems with debt then consult a debt counsellor who can help you find the best way to manage your problems.
It cannot save you money
Although credit cards are a great convenience and can help you to buy purchases beyond your immediate means, credit cards don’t usually save you money. For example, if you decide to buy something on credit in the sale and pay for it over time, the interest payments will usually cost you more than the saving you made on the item. Credit cards usually cost you money rather than save you money. Also, the interest that you pay and the fees that you are subject to outweigh the rewards that you are usually offered on credit cards.
So why get credit cards?
Although credit cards can put you into debt and can be dangerous, if you are sensible and know about the risks they can be of great use. Credit cards are much more secure than using cash or cheques, and allow you to shop online where you really can save money. Also, carrying around a card is a lot more convenient than carrying around large sums of money, especially if you are travelling abroad. Furthermore, a credit card allows you to buy items that you can afford, just not all in one go. Although saving up for expensive items is more sensible, this is not always possible and credit cards allow you more freedom to spend. If you can try and pay the balance off in full each month, then you will get the most out of your credit card and avoid the things that credit cards cannot help you with.
Are you tired of watching your debt grow month after month? Do you realize how much you are paying in interest over the years to the companies you have credit cards with? We’ve all done it and sometimes it feels like there’s just no way out of the credit trap. I’ll share how you can start paying off your debt rather quickly by taking small steps and sticking with the plan.
You can start out with as little as $20 per week, but I suggest you do you best to come up with $200 a month extra to pay off your debt. You will see results much faster that way. In a couple of weeks we’ll talk more about simple ways to come up with a few hundred extra dollars per month, but for now start with whatever amount you can afford. The important thing is to get started.
Take out a sheet of paper and list all your current debt on there including
– Credit Cards
– Store Credits
– Furniture bought on buy now pay later
– Car Loans
– Student Loans
Now jot down how much you owe on each and how much interest you pay. Your highest interest debt is probably going to be one of your credit cards. That’s where we will start.
You are already making at least minimum payments to pay each of these debts off. I want you to take that $200 and add it to your regular payment toward your highest interest credit card. Let’s say you’ve been paying $50 each month toward it so far. Now you are going to pay $250 each month – until it is paid off.
Here’s where it gets interesting…
Once your first card is paid off, take the entire $250 and add it to what you are already paying on your second card. Let’s say you’ve been paying $100 so far. You would now be paying $350. Once that card is paid off you take the $350 and apply it towards paying off your next debt. Let’s say your next debt is your $200 car payment.
How fast do you think you can pay your car off by adding an extra $350 a month? And then you will have an extra $550 a month that could go towards paying off your student loans or your mortgage.
Can you see how once you get the ball rolling the debt starts getting paid off rather quickly?.
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