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  [IMAGE]  Welcome back to eJoin Finance News, where there's always time to get in on a hot property and always time to bail when that "sure thing" heads south.   In this issue?  Collection Agency Harassment Junior Investors: UGMAs Index Funds: An overview  Very few things make me happier than receiving your email (My therapist says I'm making great progress though!). Please send any finance-related material, questions or stories to editor@ejoin.com [IMAGE]       The statements contained in this newsletter that are not historical facts are forward-looking statements that involve risks and uncertainties.  You should consult with a certified financial advisor prior to making investment decisions.           [IMAGE]             Collection Agency Harassment and What to do About it.       If you've lived long enough, then the chances are pretty good that you've had at least one run-in with a collection agency. Chances are even better that it was a thoroughly unenjoyable experience.   Whether your debt is the result of investments gone south, unexpected medical expenses or a struggling home business, you still have a ton of rights as a citizen of this great nation. One of those is the right to not be harassed by collection agencies.  But how can you tell the difference between aggressive collection tactics and outright harassment? If the collector is engaging in any of the following activities, then you may well be looking at harassment:  Debt collectors may not harass, oppress, or abuse anyone. For example, debt collectors may not:   use threats of violence or harm against the person, property, or reputation publish a list of consumers who refuse to pay their debts (except to a credit bureau) use obscene or profane language repeatedly use the telephone to annoy someone telephone people without identifying themselves advertise your debt  Debt collectors may not use any false statements when collecting a debt. For example, debt collectors may not:  falsely imply that they are attorneys or government representatives falsely imply that you have committed a crime falsely represent that they operate or work for a credit bureau misrepresent the amount of your debt misrepresent the involvement of an attorney in collecting a debt indicate that papers being sent to you are legal forms when they are not indicate that papers being sent to you are not legal forms when they are  Debt collectors also may not state that:  you will be arrested if you do not pay your debt they will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so actions, such as a lawsuit, will be taken against you, which legally may not be taken, or which they do not intend to take  Debt collectors are also not allowed to:  give false credit information about you to anyone send you anything that looks like an official document from a court or government agency when it is not use a false name  Debt collectors may not engage in unfair practices when they try to collect a debt. For example, collectors may not:  collect any amount greater than your debt, unless allowed by law deposit a post-dated check prematurely make you accept collect calls or pay for telegrams take or threaten to take your property unless this can be done legally contact you by postcard  If you are being harassed by a collection agency, the normal reaction by most people is to either avoid the calls, or get angry with the collector. While getting angry with the harassing party might give you a brief moment of satisfaction, there are more productive ways to go about ridding yourself of that harassment.   Tell them to stop  Under the Fair Debt Collection Practices Act (FDCPA), you have the right to tell a collection agency employee to stop contacting you. Simply send a letter (registered mail) stating that you want the collection agency to cease all communications with you. All agency employees are then prohibited from contacting you, except to tell you that collection efforts have ended or that the collection agency or original creditor may sue you. You can do this even if the collector is not breaking the law.   Document the harassment  If a debt collector breaks the law, document the violation as soon as it happens. Start a log -- and write down what happened, when it happened and who witnessed it. Then, try to have another person present (or on the phone) during all future communications with the collector. In some states, you can record phone conversations without the debt collector's knowledge. But beware. In a few states this is illegal unless you get permission from the collector or warn him that you are recording the call. Check with your state consumer protection agency to find out if you live in one of these states.   File a Complaint  File an official complaint with the Federal Trade Commission (FTC), the federal agency that oversees collection agencies. Ask the FTC to send you a complaint form, or just write a letter. Contact the Federal Trade Commission at:   6th and Pennsylvania Ave. NW, Washington, DC 20580  Or visit their website: http://www.ftc.gov/ftc/complaint.htm  Include the collection agency's name and address, the name of the collector, the dates and times of the conversations, and the names of any witnesses. Attach copies of all offending materials you received and a copy of any tape you made. Also, send a copy of your complaint to the state agency that regulates collection agencies for the state where the agency is located. To find the agency, call information in that state's capital city. Finally, send a copy to the original creditor and the collection agency. The original creditor may be concerned about its own liability and offer to cancel the debt.  Once your complaint is filed, don't expect immediate results. The FTC may take steps to sanction the agency if it has other complaints on record. The state agency may move more quickly to sue the collection agency or shut it down for certain violations. Your best hope is that the creditor will offer to cancel the debt.       Junior Investors: UGMA's     This investing stuff is so easy; a kid could do it!  ?and probably should.  If time is the most important factor in an investment program, than it's impossible to be too young to be an investor. Indeed, you should start an investment program as early as possible.   Starting an investment program is easy, regardless if you are a young adult (18 years or older) or a youngster. Once you reach the age of majority (18 in most states), you may have an investment account registered solely in your name. [IMAGE]  Youngsters under the age of 18 are not permitted to have their own investment accounts. However, several ways exist to introduce youngsters to investing.   When establishing investment accounts for youngsters, consider carefully how you want the account registered. If you choose to have the account in your own name, you will be responsible for taxes on the account. The good thing is that you also retain complete control over the account for as long as you want.  An alternative is to set up the account as a Uniform Gift To Minors Account (UGMA). Funds in the account are in the minor's name and social security number and are considered to be owned by the minor. Dividends paid on the account are taxable, most likely at a preferred tax rate. The adult custodian is responsible for the account until the minor reaches the age of majority. Any withdrawals from the account are payable to the custodian on the minor's behalf until that time. However, once the youth has reached the age of majority, which is 18 in most states, control of the account reverts to the child to do with as he or she sees fit. This is the downside of setting up a UGMA. Parental control is lost at the age of majority.  Another consideration is that college financial aid decisions could be impacted if a child has sizable assets in a UGMA.  For these reasons, it is important to understand the pros and cons of UGMAs before registering the investments in that manner.  There really is no right or wrong way to set up an investment account for a child. What may work for a friend may not work for you. For that reason, make sure you set up the account in the way that meets your, and your child's, objectives.             [IMAGE]           Index Funds: An overview    If you are new to the wild and wooly world of investing, then you are probably a bit overwhelmed by the number of different "types" of investments. From stocks to bonds, mutual funds and IRAs, it seems like you need a bachelor's degree in finance just to understand your options. In this article, we'll introduce you to Index Funds and explain why this might be an investment alternative worth looking into.   Unlike a typical mutual fund, index funds do not actively trade stocks throughout the year. This makes it an obvious choice for the investor that doesn't want to monitor the fund on a daily basis. Rather, the funds hold their stocks for the full year and even longer if the index incurs few changes. This helps to cut costs by reducing transaction fees and eliminating the need for highly paid fund managers.  There are a number of sound reasons why index funds are so popular with investors. A few of those are:  No Sales Charges. No Manager Risk. Less Volatility. Less Operating Costs. More Diversification. Less Capital Gains Tax. Higher Gross Returns for Both Bonds and Stocks. Even Higher Net Returns.  Not all indexes are created in the same way, though. How they are assembled can affect investor returns. Three methods primarily used to construct indexes are:  Market value-weighted Method- Each stock is given a weighting proportional to its market capitalization  Price Weighted Method- Each stock is given a weighting proportional to its market price  Equal Weighted Method- Each stock is equally weighted in the index   The market value-weighted method, where a company worth $2 Billion is given twice the weight of a company worth $1 Billion, is the most popular way of creating an index. A market value-weighted index allows investors to best capture total economic activity and changes in valuation of the companies in the index. By giving larger companies higher weighting, this method reflects the fact that large companies have larger revenues and profits and that any change will have a larger effect on economic activity than change in smaller companies.   A price-weighted index over-weights the performance of companies with higher listed stock prices. Early in this century, high prices were synonymous with larger companies and higher market caps. Things are different today but the old method is still used for computing the index.  An equally-weighted index makes no distinction between large and small companies, both of which are given equal weighting. The good performance of large-cap stocks is negated one-for-one by poor performance of smaller-cap stocks in this index. Since there are many more small companies than large ones, this strategy greatly overemphasizes the importance of small company activity.  Despite the fact that index funds tend to be much lower risk than other investment options, you should still speak with a financial advisor prior to making the purchase. He might be able to point out an index fund or two that have a higher yield potential.  And that is always a good thing!    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