9 Tips To Consider Before You Apply For A Personal Loan

November 8, 2019

Personal Loans

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If you have some personal needs to cover, you can go for a personal loan. There is a defined term for which these loans are granted. You have to pay off the loan as soon as the term is over. If you want to take out a personal loan, make sure you consider 9 things that are given below.

1. Opt for the best deal

You can use this type of loan for a myriad of purposes. You can use it to make an investment or consolidate the debt on your credit card, for instance. You may also want to read up on other types of loans to meet your needs.

2. Work the best lender

Some good sources include online lenders, credit unions and banks. The terms and the rate of interest may be different based on the lender you opt for. Therefore, it’s better to shop around and look for one that can cover your needs.

3. Don’t ignore the fine print

Make sure you know the loan terms. Don’t forget to go over the fine print. Based on your budget, you should decide whether the repayment terms are fine with you. Keep in mind that you may have to pay late payment fees as well.

Since lenders get paid in the form of interest, you may have to pay some fee in case of late payments.

4. Your credit rating should be accurate

The interest rate associated with your personal loan may be different based on your credit score. For example, if you have a bad credit score, you may have to pay 20% more in terms of interest. Therefore, it’s a good idea to ensure that your credit rating is accurate.

5. Consider the origination fees

Although you will find some lenders offering lower rate of interest, keep in mind that they may charge a special fee that may increase the interest rate. Therefore, it’s better to use a lender with a high rate instead of one who may add an origination fee.

6. Consider your limits

This is important. Before you apply for a loan, don’t forget to get a better idea of your financial situation. In other words, you should only go for an amount that you can easily pay off.

7. Consider the automatic withdrawals

During your research, you may find that some lenders are ready to offer incentives if you allow them access to your bank account for automatic withdrawal of your loan payment each month.

8. Repayments

If you find it hard to make your payments, you may want to take a look at the other options that you may have. Can you make changes to the loan terms? Is the lender ready for arbitration?

9. Variable rate or fixed rate

Can you choose a fixed or variable interest rate on your loan? Usually, a variable-rate loan allows you to begin with a lower interest rate, but it will involve risk as well. With the rise of the interest rate, the variable rate will also go up. As a result, you will have to make higher monthly payments.

So, you may want to consider these 9 tips before you apply for a personal loan.


How A Personal Microloan Can Help Your Business

November 8, 2019

Personal Loans

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People utilize personal loans for a number of reasons, such as consolidating debts, paying for a medical debt or for costly auto repairs.

But there is something else the average consumer needs to know: a personal loan can be used for your small business.

Despite the label, a personal loan could just be what is needed to maintain your business. The personal microloan can be used for certain expenses such as:

• Inventory
• Equipment (things like printers, tools, copiers, manufacturing equipment, cubicles, etc.)
• Office space (either to purchase or rent)
• Marketing and advertising (digital, promotions, print, etc.)

For any type of business expense, if your business does not have the extra capital but needs cash to grow, then a personal microloan is a feasible option.

Small Business Loan vs. Personal Loan

Most small businesses that require necessary funds in order to grow their business typically search for a small business loan. This makes sense as a small business loan is generally beneficial to the small business owner.

In certain situations, the small business loan assists the business owner to purchase large ticket items, such equipment, inventory, or raw materials. However, just because the small business loan is the industry standard, it does not always make it the correct solution.

The biggest problem with a small business loan is the stringent requirements. Not only does this hold true with the eligibility requirements, but it also comes into play during the application process. Here are some of the biggest challenges:

• Lengthy application process that can eat up hours of valuable time
• Documentation requirements, such as providing a business plan, tax returns, references, and financial data
• It can take a long time to receive the funds (even after you get an approval), as the entire process can take up to 90 days
• There are as many as seven different types of small business loans… choosing the right one for you could take some time

Although it’s common to initially assume that a small business loan is the best choice, you may find that these requirements are difficult to meet or will take longer than you want to get your business moving.

Is a Personal Loan Application Process Any Better?

The short answer is that an application and decision regarding that application can be made by the company offering the personal loan within one day.

With a personal loan, you don’t have to jump through nearly as many hoops. Instead, its’ much easier to acquire a loan in a timely manner (and without the hassles mentioned above).

Some of the primary benefits of a personal loan for business use – especially compared to a small business loan – include:

• Simplified application process that can be started online or over the phone within a matter of minutes
• Fewer documentation requirements
• Same day decision (not always but most of the time)
• Fewer complications, with the main decisions being the repayment schedule and amount to borrow

The simplicity and convenience alone is reason enough to learn more about using a personal loan for your business.

Making a Final Decision

Now that you understand that a personal loan can be utilized for your business, you need to decide if this is the right financial solution for your company at the present time.
As you compare this option to a small business loan, ask and answer the following questions:
• How do you plan on using the funds?
• Do you need the money in the immediate future, or can you afford to wait?
• How much money do you need to borrow at the present time?
• Have you collected all the information you need for the application?
• Which type of loan is most affordable over the long run?

By answering these questions, while also consulting with a lender for each type of loan, you’ll find yourself in a position to make an informed and confident decision.


Top 5 Frugal Living Ideas to Save Money for Emergencies

November 8, 2019

Personal Finance

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Are you looking for ways to live frugally and save money? Frugal living means being resourceful and not spending more than required. In short, it implies that you are a careful spender and stay content living with less to save money for emergencies!

Benefits of Frugal Living

Practicing frugal living cannot only save you a lot of money but also help you in many other things, including:

  • Fast debt repayment
  • No paycheck to paycheck living
  • Safe early retirement
  • Fulfillment of dream vacation goals

Tips for Frugal Living

Here is a list of frugal living tips that will help you do away with some of the less significant things in life to save money for emergencies:

  1. Budget Your Finances: Having an effective budget is crucial if you want to achieve financial freedom. Know where your money is going and restrict where you are spending unnecessarily. Moreover, you cannot decrease your spending if you are clueless about your income and expenses! Therefore, creating a budget will reveal everything you need to know to cut back from your costs significantly!
  2. Learn to Appreciate Frugal Living: Being frugal helps you to take a look at your spending habits and reevaluate them. Previously you might have bought something that you thought you needed, but in reality, it’s not of any benefit and value at all to you. When you start to get rid of these unnecessary and expensive spending, you can learn to appreciate a more modest way of living.
  3. Quit Expensive and Unhealthy Habits: You should consider quitting expensive and unhealthy habits such as consumption of fast food, drinking excessive alcohol, smoking cigarettes, and more. These habits can be okay when done in moderation, but indulging too much in these unhealthy activities can be harmful.
  4. Save Money for Emergencies: According to a Bankrate report, 26% of Americans have no emergency fund at all. Everyone should have an emergency fund because it’s one of the best ways to prepare for any future financial crisis. Having an emergency fund can help you manage tough situations like loss of a job or an unexpected expense.
  5. Avoid Debt Wherever Possible: One of the great tips for frugal living is to avert any debt, which can be accomplished by purposely maintaining an emergency fund. Another tip is to utilize materials without owning them, like borrowing them from friends or using trading services. Make sure to think through your options to avoid piling up credit card debt for unnecessary purchases.

Conclusion

The above tips can help you begin your own frugal living journey. However, the first step towards your frugal living journey is to become debt-free. Also, securing a cash cushion accessible during emergencies will help get you to financial freedom.


Habits and Your Financial Health

November 8, 2019

Personal Finance

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There is a saying “you are what you eat”. There is another saying that is equally as important – “you are a product of your habits”. Using an analogy of an ocean liner – how would you steer it to change course in a meaningful way? Very slowly but consistently. If you can envision an ocean liner, you would turn the heading ever so slightly – fractions of a degree toward the direction you want to go. Someone watching the ship would not even realize that anything had happened. As time passes on, the effect of the small change in direction compounds and becomes larger and larger. By the time you reach your destination, you may be hundreds or thousands of miles from the original navigation. If you tried to steer that ocean liner all at once, would you succeed? You would likely overdo it and cause an accident, or get so far off course that you would lose time correcting the direction again.

What does this have to do with money and habits? Everything. If you have a goal of making or saving more money and get a ton of great ideas, and then try to implement them all at once, what would likely happen? Failure! None of the multitude of changes that you tried to do would stick and there would be no effect. What about going to a semi-nar and picking one change that you can make easily, and you make this change for a long period of time? You would likely be more successful. This is one of the secrets of changing money habits and letting time do its magic. If you make a change that is hardly perceptible (i.e. painless), then this method will hardly be a strain.

What are some examples of this? Have you heard of the latte factor? The latte factor is making one incremental change per day – not purchasing that cup of coffee and saving the money. Due to the frequency of how many cups of coffee someone would buy over years of their lifetime, this would add up to meaningful savings. Another version is instead of buying a latte, you buy a regular coffee and add your milk or cream to it. This would save you $2 per day as an example. After 365 days, you have saved over $700 per year from this one incremental habit change. The ocean liner analogy shows the effect of compounding the change to make it even larger. What would you do with the $700? Let’s say you invested it over 10 years. On top of the $700 x 10 years of contributions, you are also making a return on this investment. As a wild guess, let’s say you made $3500 in return over the 10 years – about 5% per year on average. Now the effect is compounded. You can then take this money and deposit it into an RRSP and get a tax refund which would amplify the effect a while longer.

The latte factor has been beaten to death in many blogs and financial circles. The point of the latte factor is an example of one small habit that can lead to large changes over a long period of time if applied consistently. There are many other habits that can achieve this result. How about saving $1 per day on buying bananas from your local grocery store? How about negotiating a slightly better rate on your cell phone plan? How about purchasing the basic gym membership instead of the deluxe one that includes less but would suit your needs exactly? How about wasting slightly less food each day and buying a little bit less? Maybe keeping the computer, cell phone or cars that you drive one year longer than you used to? Ask yourself what the trade-off may be in doing these things – but if there really isn’t anything lost then you have found a habit that will create more money.

There are techniques that say you need to do a routine for 21 days to make it stick. This is basically saying that by doing it for this long, you are making the habit automatic. It will get to the point that when you don’t do it, you will miss it! Why not be creative and see what habits you can change that add incremental effects over time?

Do you want to: Learn how the world of money really works without the need of a time consuming or expensive course of study? Discuss what you want to achieve according to your horizon? Restructure your finances to achieve your goals? Advice that is not affiliated with any institution or any product – an independent opinion?


Best Certificate of Deposit Rates: A Guide to the Different Types of CD Accounts and APY

November 8, 2019

Personal Finance

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Are you looking to start a savings account with a good yield? Perhaps the best place to get started is with an online bank. They are better able to offer the best certificate of deposit rates since they operate primarily online and don’t have physical branches to finance. CDs are often considered to be the “next level” up after a savings account. However, you will be required to keep your funds locked up for a set period of time. Depending on the bank, there might or might not be a penalty for an early-withdrawal.

Some banks offer a few different types of CD accounts, including Term CDs, in which the interest rate is locked without having to worry about the drama of market volatility, as well as a “no-penalty” CD, which allows you to still maintain access to your funds while still having the security of a certificate of a deposit. Some other CD types are designed to balance your investments and help maximum your return.

With a traditional CD, you might not be able to make additional deposits. If you want to add money later on down the road, the bank should provide the option to upgrade an existing account.

Best Certificate of Deposit Rates in Online Banks

The good thing about online banks is that they really do offer the best certificate of deposit rates, which can exceed 2.0% APY. It’s ideal to choose a bank that automatically renews the accounts at maturity. The more mature the account becomes, the higher the APY percentage. Ideally, there should be no fees for opening an account.

Consider your certificate of deposit term before starting an account. How long will you be able to afford to keep that money locked into the account? If you think you might need it in less than a year, look for a bank that offers a six or twelve month term, and won’t charge you a penalty for taking it out. On the other hand, if you are interested in saving for the long-term, such as for retirement or your child’s college tuition, then choose a bank that will keep increasing the APY % the longer the account matures.

Confirm that the CD will be insured. Avoid any bank that isn’t backed by the FDIC. Also, check a bank’s background to make sure that hasn’t experienced any financial problems in the past.


The Importance of Financial Planning

November 8, 2019

Investing

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For the majority of us, managing finances and the proper management of these finances for our future and our family’s future are a top priority. However, many of us aren’t sure where to start. In the back of our heads, we assume there will be more time or that we will begin in a few years, but the truth of the matter is, a few years may just be around the corner. It is crucial to be aware that when saving for your future the earlier you start, the better off you will be in setting and reaching realistic financial goals. It’s time we realize; there is more to planning than just saving money.

When we think financial planning, we think well of well-off individuals being able to hire someone to handle their bills. You may think, that is not for me, I do not have the kind of money to hire someone to manage my money. How can I trust them? However, hiring a certified financial advisor may be more affordable and credible than you think.

A good advisor can often provide you with the discipline we may lack when managing our finances and can be viewed as an impartial, unemotional third party who will apply steady fact-based advice and reassurance when the market may fluctuate. Typically, consumers using an advisor may see an estimated 3% increase in return when using strategies put forth by their financial investor. Additionally, hiring a planner may pay for itself over time with increased income for yourself and your future.

Advisors will also assist in increasing annual returns by using strategies for investments; such as asset allocation, minimizing taxes, rebalancing, and structuring timely withdrawals from your retirement. A good financial plan will typically include savings, investments, planning for retirement, education, emergencies, major purchases, financial goals, and insurance needs.

Do you have a plan in the event of an unforeseen emergency? Do you know where you would obtain funding? These are questions you may find you asking yourself when setting goals towards your future. An added benefit of making a financial plan is planning for life’s unexpected events; emergencies, large purchases, or insurance needs. Having a plan gives you the peace of mind you need when a troublesome situation may arise.

Whether you feel lost in your finances, or want a professional opinion, the judgment on hiring a financial planner can help secure your future and your future happiness. These professional planners can be extremely helpful in assisting you in making the best financial decisions, and ultimately seeing the best outcomes out of your money. Give yourself the peace of mind you deserve while securing your future for you and your family.

Investment Strategy: The Investor’s Creed Revisited

November 8, 2019

Investing

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Fascinating, aren’t they, these security markets of ours, with their unpredictability, promise, and unscripted daily drama. But individual investors themselves are even more interesting. We’ve become the product of a media driven culture that must have reasons, predictability, blame, scapegoats, and even that “four-letter” word, certainty.

We are becoming a culture of speculators, where hindsight is replacing the reality-based foresight that once was flowing in our now real-time veins. Still, the markets have always been dynamic places where investors can consistently make reasonable returns on their capital. If one complies with the basic principles of the endeavor and doesn’t measure progress too frequently with irrelevant measuring devices, growth in working capital, market value, and spendable income are quite likely to happen… without undue risk taking.

The classic investment strategy is so simple and so trite that most investors dismiss it routinely and move on in their search for the holy investment grail(s): a stock market that only rises and a bond market capable of paying higher interest rates at stable or higher prices. This is mythology, not investing.

Investors who grasp the realities of these wonderful (speculation driven) marketplaces recognize the opportunities and relish them with an understanding that goes beyond the media hype and side show “performance enhancement” barkers. They have no problem with the “uncertainty”; they embrace it.

Simply put, in rising markets:

• When investment grade equity securities approach the “reasonable” target prices you have set for them, realize your profits, because that’s the “growth” purpose of investing in the stock market.

• When your income purpose securities rise in market value the equivalent of one-year’s-interest-in-advance, take your profits and reinvest it in similar securities; because compound interest is the safest and most powerful weapon we investors have in our arsenals.

On the flip side, and there has always been a flip side (more commonly dreaded as a “correction”), replenish your equity portfolio with now lower priced investment grade securities. Yes, even some that you may have just sold weeks or even months ago.

And, if the correction is occurring in the income purpose allocation of your portfolio, take advantage of the opportunity by adding to positions, increasing yield and reducing cost basis in one magical transaction.

• Some of you may not know how to add to those somewhat illiquid bond, mortgage, loan, and preferred stock portfolios quite so easily. It’s time you learned about closed end funds (CEFs), the great “liquidators” of the bond market. Many high quality CEFs have 20 year dividend histories for you to salivate over.

This is much more than a “buy low, sell high” oversimplification. It is a long-term strategy that succeeds… cycle, after cycle, after cycle. Do you wonder why Wall Street doesn’t spend more time pushing its managed tax free income, taxable income, and equity CEFs?

• Unlike mutual funds, CEFs are actually separate investment companies with a fixed number of shares traded on the stock exchanges. The stock can trade (real time) above or below the net asset value of the fund. Both the fees and the net/net dividends are higher than any comparable mutual fund, but your advisor will probably tell you they are more risky due to “leverage”.
• The leverage is short term borrowing and is absolutely not the same as a margin loan on the portfolio. It’s more like a business line of credit or a receivables financing tool. A full explanation can be found here: https://www.cefconnect.com/closed-end-funds-what-is-leverage

I’m sure that most of you understand why your portfolio market values rise and fall throughout time… the very nature of the securities markets. The day to day volatility will vary, but is generally most noticeable surrounding changes in the longer term direction of either market, income purpose or growth purpose.

• Neither your “working capital” nor your realized income need be affected by the gyrations of your market value; if they are, you are not building a “retirement ready” portfolio.

So rather than rejoicing through each new stock market rally or lamenting each inevitable correction, you should be taking actions that enhance both your working capital and its income productivity, while at the same time, pushing you forward toward long term goals and objectives.

Through the application of a few easy to assimilate processes, you can plot a course to an investment portfolio that regularly achieves higher market value highs and (much more importantly), higher market value lows while consistently growing both working capital and income… regardless of what is happening in the financial markets.

Left to its own devices, an unmanaged portfolio (think NASDAQ, DJIA, or S & P 500) is likely to have long periods of unproductive sideways motion. You can ill afford to travel eleven years at a break even pace (the Dow, from December 1999 through November 2010, for example), and it is foolish, even irresponsible, to expect any unmanaged approach to be in sync with your personal financial objectives.

The Investor’s Creed

NOTE: The original “Investor’s Creed” was written at a time when money market funds were paying above 4%, so holding uninvested equity bucket “smart cash” was, in effect, a compounding of profits while waiting for lower equity prices. Income bucket cash is always reinvested ASAP. Since money market rates have become minimal, equity “smart cash” has been placed in tradeable equity CEFs with yields averaging over 6% as a replacement… not as safe, but the compounding makes up for the increased risk over money funds.

The “Investor’s Creed” sums up several basic asset allocation, investment strategy, and investment psychology principles into a fairly clear, personal portfolio management direction statement:

• My intention is to be fully invested in accordance with my planned equity/fixed income, cost based, asset allocation.
• Every security I own is for sale at a reasonable target price, while generating some form of cash flow for reinvestment.
• I am pleased when my equity bucket cash position is low, signaling that my assets are working hard to meet my objectives.
• I am more pleased when my equity bucket cash is growing steadily, showing that I’ve been capitalizing all reasonable profits.
• I am confident that I’m always in position to take advantage of new equity opportunities that fit my disciplined selection criteria.

If you’re managing your portfolio properly, your cash + equity CEF position (the “smart cash”) should be rising during rallies, as you take profits on the securities you confidently purchased when prices were falling. And, you could be chock full of this “smart cash” well before the investment gods blow the whistle on the stock market advance.

Yes, if you are going about the investment process with an understanding of market cycles, you will be building liquidity while Wall Street is encouraging higher equity weightings, while numerous IPOs are taking advantage of euphoric speculative greed, and while morning drive radio hosts and personal friends are boasting about their ETF and Mutual Fund successes.

While they grow their hat sizes, you will be growing your income production by holding your income purpose allocation on target and salting away the growth purpose portion of your profits, dividends, and interest in an equity based alternative to “de minimis” money fund rates.

This “smart cash”, comprised of realized profits, interest, and dividends, is just taking a breather on the bench after a scoring drive. As the gains compound at equity CEF rates, the disciplined coach looks for sure signs of investor greed in the market place:

• Fixed income prices falling as speculators abandon their long term goals and reach for the new investment stars that are sure to propel equity prices forever higher.
• Boring investment grade equities falling in price as well because it is now clear that the market will never fall sharply again… particularly NASDAQ, simply ignoring the fact that it is still less than 25% above where it was nearly twenty years ago (FANG included).

And the beat goes on, cycle after cycle, generation after generation. Will today’s managers and gurus be any smarter than those of the late nineties? Will they ever learn that it is the very strength of rising markets that, eventually, proves to be their greatest weakness.

Isn’t it great to be able to say: “Frankly Scarlett, I just don’t care about market directional changes. My working capital and income will continue to grow regardless, possibly even better when income purpose security prices are falling.”

Best Financial Investment Companies Overview

November 8, 2019

Investing

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Five top rated financial investment firms that are growing faster than their peers are FXCATCHER, Schwab, Ally Invest, Scottrade, and TD Ameritrade. This article will make a detailed analysis of each company and try to determine what exactly investors like about these companies that cause them to expand.

FXCATCHER LTD – www.fxcatcher.com
A personal favorite, FXCATCHER (LTD) was formed in Kemp House, 152 – 160 City Road, London EC1V 2NX, United Kingdom.

FXCATCHER is a one of a kind investing community. A group of successful financial investors who’ve decided to share their investing knowledge with everyone interested in grabbing the endless opportunities which the investing market has to offer.
Up to 5% Monthly return. Minimum investment amount: $100

Schwab
Another brokerage firm showing strong potential is Charles Schwab. Founded in California in 1971, the company went public as The Charles Schwab Corporation in 1987. In 1997, the company had a million online accounts, and just one year later, it had double that amount. In 2003, the company launched an FDIC-insured bank, and by 2012, it had more than $2 trillion in client assets. Today, it has offices around the world and services around 10 million accounts.

What has fueled such consistent growth is attention to the customer. The broker offers 24/7 customer service in the United States, with 325 branch locations for clients who want in-person service. An on-line chat function is available on the broker’s website, and Chinese speakers can reach an associate over the phone who speak Mandarin or Cantonese.

Ally Invest
A third brokerage firm that is showing signs of strong growth is Ally Invest (also known as TradeKing). Founded in 2005, the company has steadily grown in size. In 2012, the company merged with low-cost broker Zecco.com. This was followed in 2014 by the creation of TradeKing Advisors, an on-line portfolio management firm. It was announced that Ally Financial, a company with more than $150 billion in client assets, has agreed to acquire the TradeKing Group. In its eleven-year history, Ally Invest has grown from an unknown broker to one with 260,000 accounts. Remarkably, it has done this with little advertising. It currently has $4.5 billion in customer assets.

What has attracted so many investors to Ally Invest is the broker’s emphasis on low fees and commissions. Charging just $4.95 for stock and ETF trades, the brokerage house is one of the lowest-cost firms in the business. Ally has said it has no plans to change the Ally Invest commission schedule. This includes option contracts at just 65¢ each. While the firm does not offer mutual funds that are both no load and no transaction fee, it does offer all loads funds free to trade, while no-load funds cost just $9.95 per transaction.

Scottrade
Scottrade recently has been acquired by TD Ameritrade – read about it in the next section.
Scottrade has also been expanding its footprint in the securities world in recent years. The company was founded in 1980 in Scottsdale, Arizona as Scottsdale Securities. One year later, the firm opened its second branch location in St. Louis, Missouri. Within ten years, the company had 15 locations across the country. In 1994, Inc. magazine named the firm one of the fastest growing private companies in the United States. In 2000, the company changed its name to Scottrade, and by 2007, it had reached over 300 brick-and-mortar locations. In 2008, Scottrade hired nearly 1,000 financial advisors and opened Scottrade Bank. Today, the company has more than 500 offices throughout the country, an investment advisory division, and over a $1 billion in annual revenue.

TD Ameritrade
Scottrade’s growth did not go unnoticed, which is probably why TD Ameritrade purchased it last year. Without Scottrade, TD Ameritrade today has more than $600 billion in client assets, with customers placing around 400,000 trades per day. The company began in Omaha, Nebraska in 1975 with much smaller operations. Starting in the early 2000’s, the firm began buying other companies, fueling its growth. In 2009, TD Ameritrade purchased thinkorswim, which at that time was the fastest growing broker.

The recent acquisition of Scottrade will give TD Ameritrade almost overnight a much larger presence in the brokerage world. Assuming regulators approve the sale, the new TD Ameritrade will have more than 600 brick-and-mortar locations across the United States. This network will be the largest of any on-line discount broker.

Wrapping Up
While some top financial investment firms are shrinking in size, these five have expanded, sometimes from nothing. The fact that investors trust them with enormous sums of money is a good sign that these companies have excellent financial services.