December 2007

A Financial Services Corporation

FinanceMatters

Keeping you in touchwith your financial

future

9300 Wade BoulevardSuite 125

Frisco, Texas 750351.888.404.6848www.clausa.com

Better Business Bureau Tips on Repairing Your Home or Business After a Disaster

When your home or business is damage in a storm, chances are you will be looking for a contractor to help with repair and restoration. After such a damaging event occurs the demand for contractors causes the supply to dwindle. Because of this, some contractors are known to take advantage of people in this very vulnerable position. They will often times perform shoddy work and skip town before the job is finished.

Legitimate and licensed home repair companies can be booked solid for months causing frustrated and anxious homeowners and landlords to compromise their usual high standards when choosing a contractor. Some consumers will hire part-time contractors who may or may not get the job done in time or contractors from a dif-ferent town who may be hard to contact if problems arise. Inexperienced contractors may not be able to perform the tasks they are undertaking and some may be opportunists looking to make a fast buck. The consequences may be devastating and will cost much more in the long run.

The Better Business Bureau offers the following tips for consumers who are giving major repairs after a disaster hits home:

∞ Deal only with licensed and insured contractors. Verify the track record of any roofer, builder or contractor you're thinking of hiring. Ask for a list of recent customers and call them.

∞ Get recommendations from friends, relatives, neighbors, co-workers, insurance agents or claims adjusters. Also check with the local Better Business Bureau and Home Builders Association to see if complaints have been lodged against any contractor you're considering.

∞ Take your time about signing a contract. Get a written estimate that includes any oral promises the contractor made. Remember to ask if there's a charge for an estimate before allowing anyone into your home. Ask for explanations for price variations, and don't automatically choose the lowest bidder. Get a copy of the final, signed contract before the job begins.

∞ Resist dealing with any contractor who asks you to pay for the entire job up-front. A deposit of one-third of the total price is standard procedure. Pay only by check or credit card and pay the final amount only after the work is completed to your satisfaction. Don't pay cash.

∞ Be skeptical of contractors who encourage you to spend a lot of money on temporary repairs. Make sure there's enough money for permanent repairs.

∞ Ask a knowledgeable friend, relative or attorney to review a home repair contract before you sign. If you get a loan to pay for the work, be cautious about using your home as security. If you don't repay the loan as agreed, you could lose your home. Finally, consider asking an attorney to review the loan documents.

For more tips, go to the Better Business Bureau website at www.bbb.org.

Your Old Hard Drive Is a Criminal's Gold Mine

Two MIT graduate students recently bought 158 used hard drives from computer stores, small businesses and eBay, the online auction site. Many of the hard drives were physically damaged or had unreadable sections. Nevertheless, the pair managed to retrieve information from directories and files that had been deleted. Many of the drives had what appeared to be credit card numbers, some with expiration dates that may have been used for internet purchases. One drive appeared to have been used in an Illinois ATM and had nearly 3,000 numbers that they suspect are ATM card numbers. The hard drive also contained account numbers and balances. It appeared that no effort had been made to remove the drive's financial information. Their finding: People are not generally aware that even after the computer says the information has been deleted, it can be recovered.

The ease of obtaining this information makes it a treasure trove for potential identity thieves. Most users and businesses do not realize that deleting or simply formatting a hard disk doesn't actually remove all the data from the drive and that a dedicated hard drive cleaning application is needed.

Covering Your Digital TracksTo really get rid of something on your hard drive you have to go way beyond pressing the delete key. When you delete a file, the computer's operating system marks the file with a symbol and, essentially, removes it from view. If you did a search for the file, it wouldn't show up, but it's still on the hard drive until it's been written over multiple times by other files. It's like a pencil mark on a wall that you cover with a coat of paint. You can still see the mark, so you cover it with another layer of paint and it's obscured some more. That process is called wiping, shredding or file wiping. In fact, it's adding layers of data on top of other data. Keep in mind, if you don't use a lot of graphics, video or music files, you may not run out of space, so your system may never need to write over data you deleted. Thankfully, there are freely-available disk-cleaning apps that write over every area of the disk several times with random garbage data.

One free software program called AutoClave claims to overwrite to U.S. Department of Defense specifications, which is a seven-layer overwrite. That's an important feature. In fact, many experts like to use DOD specs as the minimum standard when erasing hard drives.

Another software program, CyberScrub, is not free but it contains two erasure programs. The first, CyberCide,is designed to erase everything on the hard drive, including the operating system. The other, CyberScrub, is designed for daily use. It erases your files on demand as well as any previously deleted material and ensures it is not recoverable.

But, if you really want to be sure, opt for the heavy-duty programs. Some software uses a higher standard, called the Gutman, which overwrites the data 35 times. An Internet search will turn up hundreds of software programs that erase hard drives. But, be aware that all scrubbing software can fail. Most software is sold without warranty and while it's pretty safe using technology to get rid of technology, there is always the human error factor and possible equipment problems. That leaves you with one other option.

Destroying the hard driveIn case you've never looked inside your computer, the hard drive is in a flat metal box that's about the size of a paperback novel. Many technicians prefer unplugging the drive and using a drill with a good, strong drill bit to drill through the metal casing of the hard drive five or six times in different locations. Drilling makes the hard drive inoperable, but someone with forensics ability may be able to recover the data where it wasn't drilled. Others prefer using a sledgehammer to crush to drive. Many technicians think that is socially irresponsible since there are many schools, non-profit organizations and low income individuals whom can benefit from your used computer.

Beware: If you're under investigation, or if your computer files are about to be subpoenaed, it's not a good idea to start wiping your hard drive. It's illegal and your intentional destruction could easily be detected.

Annuity Surrender Charges vs Mutual Fund Fees and Costs; Who Wins?

You don't have to read too many investment magazines and newspapers to come across articles making negative comments about annuities. In many cases, the authors of these articles zero in on SURRENDER CHARGES. As an example, we have seen these negative articles state that $100,000 placed into an annuity with a beginning surrender charge in year one of 16% would have a cost to the owner of $16,000. But is this really how annuities are sold and used? Do agents actually suggest consumers purchase an annuity knowing full well that the customer will need access to 100% of their money within one year? Of course not.

To level the playing field, we thought you would enjoy seeing a comparison between the above mentioned annuity ($100,000) growing at 5% and an average mutual fund ($100,000) growing at 8% each year (that's 60% more that the annuity). The annuity also has a 5% first year premium bonus. According to Investment News' July 9, 2007 edition, the average mutual fund has an expense ratio of 1.21% and an average trading cost of 1.44% for a total average annual cost of 2.61% of the account value. Using these numbers, we calculated the following results to evaluate how the customer's money might be affected by these variables when accessing their money or simply leaving it to grow.

Leave it Alone!Mutual funds often tout their performance over an extended period of time and advise investors to buy and hold. Over 10 years, our hypothetical mutual fund will have grown by $70,163.67. The total costs for owning the mutual fund would be $35,755.87. The sample annuity, on the other hand, would have grown by $71,033.94 with a surrender charge cost of ZERO! Since this annuity has only 10 years of surrender charges, the customer will never pay a surrender charge. The Mutual fund will charge them $4,671.30 the next year.

Withdraw a Lot!What if this customer needs to access $10,000 each and every year? The Mutual fund will charge $21,149.47 in the first 10 years. By the 15th year, the Mutual Fund will be out of money and the costs will have equaled $24,257.72. The annuity will also have some charges for withdrawals that exceed the penalty fee totaling $1,303.94. The annuity will also last one year longer with funds available for withdrawal in year 16. ANNUITIES STACK UP JUST FINE!

The fact is that mutual funds have costs just like any other financial product. The key is that these costs are incurred by the investors whether they take withdrawals or not. In fact, as a mutual fund's account value grows, so do the actual fees associated with the fund. A Fixed Indexed Annuity's surrender charges decrease over time. As the annuity's account value grows, so does the penalty free withdrawal amount thus increasing the amount of actual cash they can withdraw without incurring a charge.

We can help you evaluate what is a suitable amount for you to place within an annuity. By planning ahead, you can actually experience outstanding liquidity, guarantees, and benefits without ever paying one penny to surrender charges. For more information, please call us at 888-404-6848.

NEW PROTECTIONS FOR CONSUMERS BEGIN JAN. 1

Starting Jan. 1, consumers will gain protection against identity theft and unwanted credit-card solicitations. Banks and other financial institutions must have ID-theft prevention systems that will allow consumers to "opt out" of solicitations.

Steps include watching for unusual credit-card activities, sharp increases in the number of credit-related questions or new credit lines under a customer's name. Credit card issuers must scrutinize change-of-address requests that are closely followed by requests for an additional or replacement card.

The "opt out" provision restricts financial institutions in the use of consumer’s information to send solicitations. The financial institution must notify consumers and give them a reasonable opportunity to opt out. The new regulations are required by the Fair Credit Reporting Act of 2003.

A Financial Services Corporation

9300 Wade Boulevard, Suite 125Frisco, Texas 75035

PRE-SORTEDSTANDARD A

U.S. POSTAGE PAIDDALLAS, TX

PERMIT NO. 3998

7 Reasons to Choose Credit Over DebitBy Marshall Loeb, MarketWatch

1.Credit costs you less. Money Advisor reports that some banks charge customers for so-called in-store "PIN-based" debit-card transactions. Fees range from 25 cents to $1, depending on the bank. By choosing a "signature-based" transaction, you sidestep these fees.

2.Credit won't result in a hold on your account. When you use a debit card to reserve a hotel, rent a car or even fill up your tank, vendors sometimes put a "block" on your checking account until the transaction is processed -- and the amount of the block can significantly exceed the purchase price. Using your debit card to buy $25 worth of gas, for instance, may result in $100 of the money in your account being "blocked." If you're running a low balance, this can result in punishing overdraft charges.

3.Credit makes it easier to cover your bases. If you haven't been keeping a close eye on your bank balance, it may be a good idea to choose the credit option on your debit card because it takes longer for the money to be debited from your account (usually around two days). This gives you a little time to make sure you have enough in your account to cover the charge.

4.Credit offers better rewards. While some debit cards now offer rewards, such as air miles and cash-back bonuses, credit-card rewards tend to be far more generous, according to Money Advisor.

5.Credit allows interest to accrue. If you religiously pay off your balance at the end of the month, you stand to make more money by paying with a no-fee credit card. Why? Because you can allow your money to grow in an interest-bearing account until your bill comes due.

6.Credit gives you an out. Using a traditional credit card makes it easier to reverse the charges if you get into a dispute with a merchant or vendor.

7.Credit shields you from liability. If someone gets hold of your credit card and wracks up a laundry list of charges, you're typically responsible for only $50 worth of fraudulent charges. If you're unfortunate enough to have your debit card stolen, you may be liable for as much as $500 in unauthorized purchases, unless you report the theft within two business days.

Moving? Be sure to contact our offices at 888-404-6848 & update your address & phone number so we may continue to provide you the excellent service you have come to expect.