Maybe it was in a finance class in college. Or maybe it was on the evening news. Wherever it was, you've probably heard the term "microfinance" before, but you might not know exactly what it means. With the recent explosion of microfinance in the United States and abroad, you'll be hearing more and more about this revolutionary approach to philanthropy in the coming months and years.
So, just what is microfinance?
To put it as simply as possible, microfinance is the practice of giving very small loans to poor citizens with the goal of helping them start their own businesses so they can pull themselves and their families out of poverty. In other words, microfinance isn't a hand out; it's a hand up that allows the poor, mostly women, to achieve sustained financial success.
Microfinance United States is based on the age-old concept of "Give someone a fish, feed them for a day. Teach them to fish, feed them for a lifetime." That's why microfinance is about more than just loans. In addition to providing the underprivileged with small loans, microfinance agents also educate loan recipients on how to create and run a profitable business and how to manage and grow their money. This allows the money raised for microfinance to create a much longer, more sustained impact than a simple charitable donation could ever yield.
It's important to note that microfinance in the United States and abroad is a loan system. These small loans are paid back with interest, and you might be surprised to learn that the poor are actually excellent credit risks. When properly educated, the recipients of these loans are financially prudent. In fact, the microfinance industry has given loans to over 100 million poor people, with a payback rate of 97%!
The goals of the microfinance industry are simple:
• To eliminate extreme poverty throughout the world
• To empower the working poor to lift themselves out of poverty
• To promote gender equality
Examples of Microfinance United States
Although the concept of microfinance dates back to 1973 in Brazil, it's only been over the past few years that microfinance has really started to popularize in the United States. Several non-profit organizations are dedicated to the cause of empowering the working poor.
One recent example of this is the revolutionary Lingerie Miami program, created by Renata Black. This event brought out top fashion designers and A-list celebrities for the purpose of raising money for microfinance in the United States and several other countries. The fashion show was so successful at raising funds to empower women that it's being spread to New York in 2010. Future plans call for these philanthropic lingerie fashion shows to be held in major cities throughout the world.
All funds raised at these fashion shows are sent directly to microfinance institutions throughout the world. These funds are then carefully distributed in small loans to the working poor, mostly women, with the goal of helping them start their own small businesses.
Are you interested in taking part in the microfinance United States revolution? Visit http://www.lingeriemiami.org today to learn how you can help.
Thursday, November 26, 2009
Saturday, November 14, 2009
CBA points to improvements in economy
Bad debts have reached their peak the Commonwealth Bank of Australia (CBA) claims, as more people make use of its monetary assistance services.
An increasing number of people are taking advantage of the financial assistance services on offer from the Commonwealth Bank of Australia (CBA), it has been revealed.
Pointing out towards a rise in customer take-up of such a programme, the financial services firm indicates that arrears have remained largely stable during the third quarter of this year.
It was also revealed that there were slight improvements in the amount of money issued to consumers through CBA and Bankwest home loans, while "a continued prudent approach to wholesale funding" is taken.
Meanwhile, an improvement in the firm's credit card portfolio was also noted, as credit quality trends were deemed to generally be moving in line with expectations
However, the bank - which includes the Commonwealth Gold credit card in its range of products - points out that in spite of some improvements in its group net interest margin, are a number of challenges remain.
This is particularly the case in regards to bank deposits, where margins are stated to be under pressure.
Such comments come as Australian banking figures from the firm indicate that cash earnings for the three-month period stood at $1.4 billion.
CBA chief executive officer Ralph Norris points out: "Whilst the economic outlook has improved since our results in August, the pace and extent of the recovery remains unclear. We will therefore continue to retain our conservative business settings until such time as a sustained improvement is evident."
He adds that although it is likely that the level of bad debts have reached their peak some of the bank's "customers are continuing to face financial hardship".
Such comments come as the bank announced last week that rates across its range of variable home loans and deposit accounts were to rise following the Reserve Bank's decision to increase interest rates to 3.5 per cent.
An increasing number of people are taking advantage of the financial assistance services on offer from the Commonwealth Bank of Australia (CBA), it has been revealed.
Pointing out towards a rise in customer take-up of such a programme, the financial services firm indicates that arrears have remained largely stable during the third quarter of this year.
It was also revealed that there were slight improvements in the amount of money issued to consumers through CBA and Bankwest home loans, while "a continued prudent approach to wholesale funding" is taken.
Meanwhile, an improvement in the firm's credit card portfolio was also noted, as credit quality trends were deemed to generally be moving in line with expectations
However, the bank - which includes the Commonwealth Gold credit card in its range of products - points out that in spite of some improvements in its group net interest margin, are a number of challenges remain.
This is particularly the case in regards to bank deposits, where margins are stated to be under pressure.
Such comments come as Australian banking figures from the firm indicate that cash earnings for the three-month period stood at $1.4 billion.
CBA chief executive officer Ralph Norris points out: "Whilst the economic outlook has improved since our results in August, the pace and extent of the recovery remains unclear. We will therefore continue to retain our conservative business settings until such time as a sustained improvement is evident."
He adds that although it is likely that the level of bad debts have reached their peak some of the bank's "customers are continuing to face financial hardship".
Such comments come as the bank announced last week that rates across its range of variable home loans and deposit accounts were to rise following the Reserve Bank's decision to increase interest rates to 3.5 per cent.
Friday, November 13, 2009
Keeping Track of your Bank Account Balance – Easy as 1,2,3....
Keeping track of your bank account balance has never been easier. Long gone are the days when the only way to accurately discover how much was sitting in your current account was to traipse down to your local branch, or pick up the phone and call the bank’s telephone banking department.
Now, the vast majority of account holders can determine their balance - and indeed do the majority of their banking - 24 hours a day, seven days a week via the internet. Offered by all the major high street banks online banking allows account holders to effectively self-serve their banking needs. Setting up direct debits, standing orders, arranging bill payments and transferring money between accounts can all be easily done online as well as host of other services, dependent upon the user’s bank.
But, those who are regularly out and about and unable to access online banking may wish to sign up for free text alerts to their mobile phone. Offered by most UK high street banks, by subscribing to mobile phone alerts a bank account holder can receive notification of their balance on a weekly basis; on a particular day and time of their choosing. The balance sent is normally taken from close of business the night before and most banks also offer details of the last few transactions on the account as well as the overall balance.
In addition, banks now allow the receipt of text alerts when an account holder slips into the red or their account balance falls below a set figure and most also offer the facility to order PIN numbers, cheque books, paying-in books and various other bank account items by text. Banks may charge a monthly fee for those mobile banking features, examples of which also include the facility to request balance information instantly by text; extremely handy for anyone about to make a purchase but unsure as to whether they have enough cleared funds to pay for the transaction.
Finally, if all else fails then account holders can always pick up the telephone and talk to someone, or listen to an automated service to discover their balance. High street banks have been offering telephone banking services for some years and - just like online banking – most require prior registration before being allowed to use the service. However, once registered it is easy to use and telephone banking can also be used to request a host of current account services; many similar to online banking services. Whatever method you choose, it really is easy and convenient to keep track of your bank balance these days.
Now, the vast majority of account holders can determine their balance - and indeed do the majority of their banking - 24 hours a day, seven days a week via the internet. Offered by all the major high street banks online banking allows account holders to effectively self-serve their banking needs. Setting up direct debits, standing orders, arranging bill payments and transferring money between accounts can all be easily done online as well as host of other services, dependent upon the user’s bank.
But, those who are regularly out and about and unable to access online banking may wish to sign up for free text alerts to their mobile phone. Offered by most UK high street banks, by subscribing to mobile phone alerts a bank account holder can receive notification of their balance on a weekly basis; on a particular day and time of their choosing. The balance sent is normally taken from close of business the night before and most banks also offer details of the last few transactions on the account as well as the overall balance.
In addition, banks now allow the receipt of text alerts when an account holder slips into the red or their account balance falls below a set figure and most also offer the facility to order PIN numbers, cheque books, paying-in books and various other bank account items by text. Banks may charge a monthly fee for those mobile banking features, examples of which also include the facility to request balance information instantly by text; extremely handy for anyone about to make a purchase but unsure as to whether they have enough cleared funds to pay for the transaction.
Finally, if all else fails then account holders can always pick up the telephone and talk to someone, or listen to an automated service to discover their balance. High street banks have been offering telephone banking services for some years and - just like online banking – most require prior registration before being allowed to use the service. However, once registered it is easy to use and telephone banking can also be used to request a host of current account services; many similar to online banking services. Whatever method you choose, it really is easy and convenient to keep track of your bank balance these days.
Thursday, November 12, 2009
Value of Money
Measuring the exact value of money
Syed Zahid Ahmad
Often it is said that money value is declining, but we have yet to find any statistical report over it. The Reserve Bank of India (RBI) as monetary regulator in India monitors different monetary ratios like 1) GDP/Broad Money, 2) GDP/Narrow Money and 3) GDP/Currency with public etc. to evaluate the impact of money on income velocity. But still after 75 years of monetary regulations, RBI is not in a position to tell us exact figure of decline in money value because its approach misses some important factors like growth of credit and accrued interest etc. in broad and narrow money. Actually RBI does not use the concept of gross and net liquidity to measure the value of money at a given point of time.
The value of all commodities and services could be measured in terms of money, but money cannot be measured through itself. Since money is used to measure and exchange the goods and services produced in any economy, it is better to evaluate money value in proportion of Gross Domestic Products (GDP). The value of GDP at Market Prices in proportion of Broad Money may reveal lowest value of Money whereas Value of GDP at Market Prices in proportion to currency with the public reveals the highest money value. It would be confusing to denote different money value at a time, so it is desirable to find actual money value at a given point of time.
Considerably it is the liquid of money which allows economic transaction in any economy. Since the actual liquidity in the market differs from Narrow Money (M1) and Broad Money (M3), we need to evaluate actual liquidity in the market which enables sale of GDP at market prices. So, it is better to compare the components of M1 and M3 with respect to actual liquidity. Only then we would be able to understand what RBI is missing to evaluate the actual money value.
The Narrow Money (M1) constitutes of three factors a) Currency with the public, b) Deposits (other than Banker’s deposits) with RBI and c) Demand Deposits; whereas the Broad Money (M3) is equal to Narrow money plus Time Deposits. Since Time deposits pull liquidity from the market and discourages economic transactions, RBI in general considers Narrow Money as total liquidity in the market.
But there are other factors considerably increasing the liquidity in the market which are not considered by RBI in calculating Narrow or Broad Money. The first is Bank Credits which as proportion to Narrow Money has increased by 194.41% during 59 years (from 27.07% in 1950-51 to 221.48% in 2008-09). Similarly bank credit as percentage of GDP at Market Prices has increased by 46.73% during this period, as it was just 5.42% in 1950-51 which increased to 52.15% in 2008-09.
The second factor is the accrued interest over Time Deposits which may be used by the depositors periodically or after maturity. Considerably annual interest on Time deposits as percentage of Narrow Money was just 0.98% in 1950-51 which was found 22.41% in 2008-09. This as percentage of GDP at Market Prices has also increased by 5.08% during 59 years (from 0.20% in 1950-51 to 5.28% in 2008-09). Thus bank credits and interest on time deposits when added to narrow money increases gross and net liquidity above and above the narrow and broad money in the economy.
So if we really want to evaluate actual liquidity in the market, we need to add these two components into the narrow money. To know about net liquidity in the market we have to add Bank Credits into Narrow Money and to get gross liquidity, we have to add accrued interest on time deposits into net liquidity.
The amount of Gross and Net liquidity reflects the gross and net purchasing capacity of consumers. So, to evaluate the exact money value at a given point of time, we need to divide the value of GDP at Market Prices with Gross Liquidity or Net liquidity. The outcome will be actual value of money. After analyzing the available data for last 59 years (1950-51 to 2008-09), we have found that the value of money declines considerably if we divide GDP at Market Prices with Gross Liquidity, or Net Liquidity or even with Broad Money. This decline moderates if we divide GDP at Market Prices with Narrow money. Contrary to these evaluations, if we divide GDP at Market with Currency with public, the value of money is found to be increasing. Who will accept this analysis that value of money has increased during 1950-51 to 2008-09? Better we should consider the value derived by dividing GDP at Market Prices with Gross Liquidity as real value of money which has considerably declined by 2.66 points (from 3.9 points in 1950-51 to 1.2 points in 2008-09).
If we use this mechanism of evaluating the currency value, we may go on evaluating currencies of different countries. The respective points of currencies in different countries may allow us fix actual rate of currency exchange instead of taking purchasing power parity, SDR or US Dollars as base to calculate currency exchange rates. The value of currency in different countries by dividing their GDP with their gross liquidity may help us evaluate exact currency value of different countries, which may be compared among nations to fix exchange rate of currencies at international level. Let’s hope the monetary regulators at international level will start behaving rationally and do justice in protecting values of their currencies and adopt fair currency exchange rates for different countries.
Syed Zahid Ahmad
Often it is said that money value is declining, but we have yet to find any statistical report over it. The Reserve Bank of India (RBI) as monetary regulator in India monitors different monetary ratios like 1) GDP/Broad Money, 2) GDP/Narrow Money and 3) GDP/Currency with public etc. to evaluate the impact of money on income velocity. But still after 75 years of monetary regulations, RBI is not in a position to tell us exact figure of decline in money value because its approach misses some important factors like growth of credit and accrued interest etc. in broad and narrow money. Actually RBI does not use the concept of gross and net liquidity to measure the value of money at a given point of time.
The value of all commodities and services could be measured in terms of money, but money cannot be measured through itself. Since money is used to measure and exchange the goods and services produced in any economy, it is better to evaluate money value in proportion of Gross Domestic Products (GDP). The value of GDP at Market Prices in proportion of Broad Money may reveal lowest value of Money whereas Value of GDP at Market Prices in proportion to currency with the public reveals the highest money value. It would be confusing to denote different money value at a time, so it is desirable to find actual money value at a given point of time.
Considerably it is the liquid of money which allows economic transaction in any economy. Since the actual liquidity in the market differs from Narrow Money (M1) and Broad Money (M3), we need to evaluate actual liquidity in the market which enables sale of GDP at market prices. So, it is better to compare the components of M1 and M3 with respect to actual liquidity. Only then we would be able to understand what RBI is missing to evaluate the actual money value.
The Narrow Money (M1) constitutes of three factors a) Currency with the public, b) Deposits (other than Banker’s deposits) with RBI and c) Demand Deposits; whereas the Broad Money (M3) is equal to Narrow money plus Time Deposits. Since Time deposits pull liquidity from the market and discourages economic transactions, RBI in general considers Narrow Money as total liquidity in the market.
But there are other factors considerably increasing the liquidity in the market which are not considered by RBI in calculating Narrow or Broad Money. The first is Bank Credits which as proportion to Narrow Money has increased by 194.41% during 59 years (from 27.07% in 1950-51 to 221.48% in 2008-09). Similarly bank credit as percentage of GDP at Market Prices has increased by 46.73% during this period, as it was just 5.42% in 1950-51 which increased to 52.15% in 2008-09.
The second factor is the accrued interest over Time Deposits which may be used by the depositors periodically or after maturity. Considerably annual interest on Time deposits as percentage of Narrow Money was just 0.98% in 1950-51 which was found 22.41% in 2008-09. This as percentage of GDP at Market Prices has also increased by 5.08% during 59 years (from 0.20% in 1950-51 to 5.28% in 2008-09). Thus bank credits and interest on time deposits when added to narrow money increases gross and net liquidity above and above the narrow and broad money in the economy.
So if we really want to evaluate actual liquidity in the market, we need to add these two components into the narrow money. To know about net liquidity in the market we have to add Bank Credits into Narrow Money and to get gross liquidity, we have to add accrued interest on time deposits into net liquidity.
The amount of Gross and Net liquidity reflects the gross and net purchasing capacity of consumers. So, to evaluate the exact money value at a given point of time, we need to divide the value of GDP at Market Prices with Gross Liquidity or Net liquidity. The outcome will be actual value of money. After analyzing the available data for last 59 years (1950-51 to 2008-09), we have found that the value of money declines considerably if we divide GDP at Market Prices with Gross Liquidity, or Net Liquidity or even with Broad Money. This decline moderates if we divide GDP at Market Prices with Narrow money. Contrary to these evaluations, if we divide GDP at Market with Currency with public, the value of money is found to be increasing. Who will accept this analysis that value of money has increased during 1950-51 to 2008-09? Better we should consider the value derived by dividing GDP at Market Prices with Gross Liquidity as real value of money which has considerably declined by 2.66 points (from 3.9 points in 1950-51 to 1.2 points in 2008-09).
If we use this mechanism of evaluating the currency value, we may go on evaluating currencies of different countries. The respective points of currencies in different countries may allow us fix actual rate of currency exchange instead of taking purchasing power parity, SDR or US Dollars as base to calculate currency exchange rates. The value of currency in different countries by dividing their GDP with their gross liquidity may help us evaluate exact currency value of different countries, which may be compared among nations to fix exchange rate of currencies at international level. Let’s hope the monetary regulators at international level will start behaving rationally and do justice in protecting values of their currencies and adopt fair currency exchange rates for different countries.
Tuesday, November 3, 2009
Cholesterol and Life Insurance
It's in the news and seems to pop up in commercials every five minutes...the warnings and apparent medication fixes for elevated cholesterol. Needless to say, cholesterol has an impact on your life insurance eligibility and perhaps more importantly, your life insurance rate. Let's look a little closer at how cholesterol readings affect your life options.
First, why is cholesterol important to life insurance anyway? Anything that has a bearing on life insurance eligibility must tie in with mortality rates. Mortality rates are essentially the odds of passing away at a given age based on certain demographic information (area, health status, etc). If a habit, health status, or attribute affects this mortality rate based on historical data, the life insurance company is going to be very interested.
Think of elevated or skewed cholesterol as a common bedfellow with heart-related and arterial diseases. Over the last few decades, it has become apparent that higher total cholesterol, elevated LDL (the bad cholesterol) and the ratio between LDL and total cholesterol have a statistically relevant correlation with heart disease, heart attacks, strokes and other cardio-pulmonary diseases. We don't really need to know what the reason is for this correlation...just that it exists. Cholesterol is one of those issues that may go on for decades unchecked. This accumulated damage can lead to problems later on. It's not uncommon to have a person find out they have elevated cholesterol as the result of the paramedical exam that constitutes part of the life insurance enrollment process. We've had surprised reactions such as "I don't have high cholesterol!" only to show the results. Cholesterol requires a blood test (usually while fasting to get a more accurate reading). It's important to address elevated cholesterol with your doctor for health reasons, but let's look at how life insurance companies will view it.
Each carrier will have different requirements for cholesterol readings. Life insurance is actually more lenient regarding total cholesterol than most health insurance carriers. Health carriers usually want total cholesterol under 200. Life insurance companies are typically satisfied under 240. It's possible to qualify for the best health class with a reading under 240 (assuming healthy in other regards). As you go up from here, the health class will adjust which essentially means you will pay a higher rate. You can expect (other health issues being equal) that a higher tier will be triggered from 240-259 and then another tier from 260-279. It might be difficult to qualify for life insurance with cholesterol over 280 but contact us to see if there are options we can use in such a situation such as no medical life insurance. There are new options available to address such a situation.
The life insurance companies also look at your HDL (high density lipid) to total cholesterol ratio. HDL's are the good cholesterol which have more of a protective effect within limits. If a higher percentage of your total cholesterol is derived from HDL's as opposed to LDL's (low density lipid), then that is beneficial. For the best health class, you typically want the ratio of total cholesterol to be less than 5 times the HDL's. The next health class down requires this ratio to be below 6.5 times. Beyond 7.5 times, it becomes more difficult to qualify for standard life insurance plans.
These are two main cholesterol components that impact life insurance: total cholesterol and the ratio of total cholesterol to HDL's. With non medical life insurance plans and the newly created hybrid plans, we may be able to find alternative options to address your particular situation. With extensive knowledge of the carriers underwriting requirements and guidelines, we can help help you find life insurance options that work better with your current cholesterol make-up.
First, why is cholesterol important to life insurance anyway? Anything that has a bearing on life insurance eligibility must tie in with mortality rates. Mortality rates are essentially the odds of passing away at a given age based on certain demographic information (area, health status, etc). If a habit, health status, or attribute affects this mortality rate based on historical data, the life insurance company is going to be very interested.
Think of elevated or skewed cholesterol as a common bedfellow with heart-related and arterial diseases. Over the last few decades, it has become apparent that higher total cholesterol, elevated LDL (the bad cholesterol) and the ratio between LDL and total cholesterol have a statistically relevant correlation with heart disease, heart attacks, strokes and other cardio-pulmonary diseases. We don't really need to know what the reason is for this correlation...just that it exists. Cholesterol is one of those issues that may go on for decades unchecked. This accumulated damage can lead to problems later on. It's not uncommon to have a person find out they have elevated cholesterol as the result of the paramedical exam that constitutes part of the life insurance enrollment process. We've had surprised reactions such as "I don't have high cholesterol!" only to show the results. Cholesterol requires a blood test (usually while fasting to get a more accurate reading). It's important to address elevated cholesterol with your doctor for health reasons, but let's look at how life insurance companies will view it.
Each carrier will have different requirements for cholesterol readings. Life insurance is actually more lenient regarding total cholesterol than most health insurance carriers. Health carriers usually want total cholesterol under 200. Life insurance companies are typically satisfied under 240. It's possible to qualify for the best health class with a reading under 240 (assuming healthy in other regards). As you go up from here, the health class will adjust which essentially means you will pay a higher rate. You can expect (other health issues being equal) that a higher tier will be triggered from 240-259 and then another tier from 260-279. It might be difficult to qualify for life insurance with cholesterol over 280 but contact us to see if there are options we can use in such a situation such as no medical life insurance. There are new options available to address such a situation.
The life insurance companies also look at your HDL (high density lipid) to total cholesterol ratio. HDL's are the good cholesterol which have more of a protective effect within limits. If a higher percentage of your total cholesterol is derived from HDL's as opposed to LDL's (low density lipid), then that is beneficial. For the best health class, you typically want the ratio of total cholesterol to be less than 5 times the HDL's. The next health class down requires this ratio to be below 6.5 times. Beyond 7.5 times, it becomes more difficult to qualify for standard life insurance plans.
These are two main cholesterol components that impact life insurance: total cholesterol and the ratio of total cholesterol to HDL's. With non medical life insurance plans and the newly created hybrid plans, we may be able to find alternative options to address your particular situation. With extensive knowledge of the carriers underwriting requirements and guidelines, we can help help you find life insurance options that work better with your current cholesterol make-up.
Tuesday, October 20, 2009
Obama's Federal Grants For Debt Relief
Are you struggling each month trying to pay bills that you have accumulated over the years? Are bill collectors constantly calling your house and harassing you? Do you have lots of unpaid medical bills from a severe injury that has cost you hundreds or even thousands of dollars in medical bills? Or maybe you have no health insurance and have had to see the doctor with no way to pay for the visits. You medical bills have piled up and you keep getting bill after bill. Have you lost your job in this economic crisis and fallen behind on your bills because you have no income and there are no jobs in your area? Then this might be good for you to know.
There are many federal grants out now that can help you with your debts. President Obama has realized what a hard place the economy has put us all in. He has come up with grants to relieve us of things such as over unpaid medical bills, paying off our cars, and in some cases people have even been able to get a grant to pay off their credit cards too.
This is something that most of us could probably benefit from. There only seems to be one problem with this and that is that not many are aware about this debt relief program being run and funded by the government. You need to spread awareness about it. Also, you should act quickly before the funds actually run out. You can apply online for many of these grants on the government websites. Go ahead apply today before the funds are exhausted.
There are many federal grants out now that can help you with your debts. President Obama has realized what a hard place the economy has put us all in. He has come up with grants to relieve us of things such as over unpaid medical bills, paying off our cars, and in some cases people have even been able to get a grant to pay off their credit cards too.
This is something that most of us could probably benefit from. There only seems to be one problem with this and that is that not many are aware about this debt relief program being run and funded by the government. You need to spread awareness about it. Also, you should act quickly before the funds actually run out. You can apply online for many of these grants on the government websites. Go ahead apply today before the funds are exhausted.
Hiring A Financial Advisor By Jay Moncliff
When hiring a financial advisor you don’t want to simply hire someone who looks like they know what they are doing, but rather a financial advisor that knows what they are doing and has proof. You will need to ask your potential financial advisor several questions in order to get a real feel of whether this financial advisor is skilled or has no clue how to advise you on money matters. You will be able to find a financial advisor who is going to really help you with your finances by simply asking the following questions.
First of all, you want to ask the potential financial advisor what kind of education he/she has. This is important because a quality financial planner will have educating supporting this field of work, as well as credentials, continuing education certificates and the like. You will also want to ask what kind of experience the individual has as a financial advisor and how long the individual has been working as a financial advisor. This information will enlighten you as to the type of financial planner you are considering hiring.
Another question that should be offered to the potential financial advisor is how they receive payment. Does this particular financial advisor charge an hourly rate, work only on commission, or have some other fee schedule? You will need to know up front how the financial planner plans on billing you before you agree to let them advise you on your finances.
Asking the financial advisor for referrals, especially past clients, is a great way to know if the financial advisor is for real and has been successful with other clients. If the financial advisor does not have any referrals, you might be skeptical about this particular financial advisor.
Finally, ask the financial advisor to give you an outline of what will be covered and how he/she can help you reach your financial goals. An experienced financial advisor will be able to tell you several topics he/she will want to cover with you.
Resource: http://www.isnare.com/?aid=12076&ca=Finances
Tuesday, October 13, 2009
Financing A Small Business - What Alternatives Are There To Finance Your Business?
A lot of reasons exist why you should not only get into business, but also endure in business. You may want to take any of these decisions because of the love of a particular business, because of a need to do so, because you are bound to continue from where someone stopped or because you simply have a feeling to do so. In almost every country of the world, people are looking at the business sector as one of the bests. There are always statistics of these found in all countries. For example, the United States Department of Labor produces statistics which indicate that for almost the first three quarters of last year, unemployment was very high and a lot of people resorted to doing business.
There is no need to trouble yourself on the way your business is going to look like. All that is necessary for you to do is to develop a plan and seek for any of the so many options of securing finance for the business. The following lines are meant to encourage those coming into business and even those already in business to seek for means of financing their businesses:
Loans
This type of finance for a business is common all over the world and it can easily be gotten. In some cases, there is often a belief the loans can easily be gotten by everyone who applies for it. This may be true or false. It all depends on your business plan, the lending policy of the bank and the type and value of security you have. What makes this source of finance much considered is that interest rates on the loans are also reasonable. It should be warned that you should not get into taken of loans without seeking for proper recommendations from experts. Remember that it is always good to know the ins and outs of every type of loan ahead of getting into it.
Angel Financing
This is also another common source of finance that is common among new businesses and even those that are already in existence. What obtains here is that there are so many people who have the willingness and ability to pump finance into any business which have potentials to grow. Angel financing can be a family type. This will involve members of the same family pulling their resources together and investing it to develop a business plan. This is good but not preferable because of the close ties that the members may attach to each other, which may not be best for the health of a business. Angel financing can also be an affiliation angel. This will involve an association of friends willing to see a business plan from conception to completion. Another strand of angel financing is idea angel. These are financiers who are involved at the conception and actual progress of the business. Whatever the form of angel financing that you may opt for, you must get into the set of connections that these angels operate before you can benefit from financing.
Equity Financing
This involves raising money for the business by using what the business owns and can give out to the public. There are individuals willing to pay for equity in the business and even take part in the running of the business. Although this type of financing is common, it may not be available to every type of business. This is the more reason why every business owner must always carry out enough research in order to get the appropriate financing for his or her business.
There is no need to trouble yourself on the way your business is going to look like. All that is necessary for you to do is to develop a plan and seek for any of the so many options of securing finance for the business. The following lines are meant to encourage those coming into business and even those already in business to seek for means of financing their businesses:
Loans
This type of finance for a business is common all over the world and it can easily be gotten. In some cases, there is often a belief the loans can easily be gotten by everyone who applies for it. This may be true or false. It all depends on your business plan, the lending policy of the bank and the type and value of security you have. What makes this source of finance much considered is that interest rates on the loans are also reasonable. It should be warned that you should not get into taken of loans without seeking for proper recommendations from experts. Remember that it is always good to know the ins and outs of every type of loan ahead of getting into it.
Angel Financing
This is also another common source of finance that is common among new businesses and even those that are already in existence. What obtains here is that there are so many people who have the willingness and ability to pump finance into any business which have potentials to grow. Angel financing can be a family type. This will involve members of the same family pulling their resources together and investing it to develop a business plan. This is good but not preferable because of the close ties that the members may attach to each other, which may not be best for the health of a business. Angel financing can also be an affiliation angel. This will involve an association of friends willing to see a business plan from conception to completion. Another strand of angel financing is idea angel. These are financiers who are involved at the conception and actual progress of the business. Whatever the form of angel financing that you may opt for, you must get into the set of connections that these angels operate before you can benefit from financing.
Equity Financing
This involves raising money for the business by using what the business owns and can give out to the public. There are individuals willing to pay for equity in the business and even take part in the running of the business. Although this type of financing is common, it may not be available to every type of business. This is the more reason why every business owner must always carry out enough research in order to get the appropriate financing for his or her business.
Bridging Finance Guide – What is a Bridging Loan?
What is a Bridging Loan?
A Bridging Loan is short term funding to provide temporary financing until more permanent finance can be found. Bridging Loans are available for a whole range of financial requirements and can be on the basis of a 1st, 2nd or even 3rd charge equity release, usually provided for any legal purpose.
Examples:
•Commercial & Residential Purchase
•Commercial & Residential Refinance
•Auction Purchases
•Capital Raising *
•Chain Breaking
•Refurbishment
•Speculative Deals
•Business Cash Injection
•Defective Property
* Capital raising funds can be used for many reasons including holidays, overseas property investment and tax bills etc.
Security
•Residential Property
•Commercial Property
•Land (with or without planning permission in place)
•Real Property (such as Plant machinery)
Bridging Loans carry a higher interest rate than standard mortgage lending and at the offer of loan stage there will be an agreed term of repayment, normally between one day and two years.
Bridging Loans are most commonly used when the financing requirement is urgent and beyond the timescales that a standard mortgage lender or bank could provide. In some cases Bridging Lenders can provide funds within 24 hours. Another common use of bridging finance would be to fund the purchase a new home prior to the existing property being sold.
Characteristics
Bridge loans will almost certainly carry higher fees which can include:
•Administration Fees
•Arrangement Fees
•Legal Fees
•Completion Fees
•Valuation Fees
•Exit Fees **
•Broker Fees (normally non-disclosed)
** A fee charged to redeem the loan, typically equivalent to one month’s interest payment.
As most bridging Loans are not regulated by the Financial Services Authority the above fees can vary substantially as they fall within no boundaries or guidelines, only competitive pricing.
Application
Bridging Lenders will consider loans to discharged bankrupts and clients with adverse credit such as CCJs and IVAs. They will lend to individuals as well as Businesses, Ltd Companies and tax efficient vehicles such as SPVs.
Variations
Bridging Loans are split into two main categories:
Closed Bridging Finance
At the time the funds are drawn down there is a firm exit in place to repay the loan normally within a short period of time. The most common use of Closed Bridging Finance would be the pending sale of an existing property on which contracts have been signed and exchanged/missives concluded
Open Bridging Finance
At the time the funds are drawn down there is no fixed exit or repayment method for the lenders comfort, only an agreed maximum term that the loan can run for. Seen as higher risk than closed Bridging Finance it is therefore more expensive.
Other forms of short term finance:
Mezzanine Finance
Often a combination of debt and equity stake which is typically used to finance the expansion of existing companies. To secure mezzanine finance the business would normally have to demonstrate a track record in the industry with an established reputation and product, a history of profitability and a viable expansion plan for the business (e.g. expansions, acquisitions, IPO).
Lenders
There are over 20 Primary Bridging Lenders in the UK that are able to lend their own funds and therefore set their own criteria of risk.
Private Financers
Should Bridging Lenders decline to lend, Private debt and equity financers can be sort to provide funding for the examples above. This type of finance is normally very expensive.
Specific Uses
Bridging Loans can be used as a Below Market Value (BMV) purchase instrument where the initial purchase takes place at the lower purchase price allowing a subsequent refinance application to be placed with a mainstream lender for borrowing based on the Open Market Value of the property with the purpose of releasing the difference in equity between the purchase price of the property and the higher resulting remortgage loan.
Costs
Bridging Loans typically cost between 1-2% per month. Variable rates with margins over Libor can sometimes be applied as an alternative or an addition.
Find an Independent Bridging Finance Broker to give you all the available options.
A Bridging Loan is short term funding to provide temporary financing until more permanent finance can be found. Bridging Loans are available for a whole range of financial requirements and can be on the basis of a 1st, 2nd or even 3rd charge equity release, usually provided for any legal purpose.
Examples:
•Commercial & Residential Purchase
•Commercial & Residential Refinance
•Auction Purchases
•Capital Raising *
•Chain Breaking
•Refurbishment
•Speculative Deals
•Business Cash Injection
•Defective Property
* Capital raising funds can be used for many reasons including holidays, overseas property investment and tax bills etc.
Security
•Residential Property
•Commercial Property
•Land (with or without planning permission in place)
•Real Property (such as Plant machinery)
Bridging Loans carry a higher interest rate than standard mortgage lending and at the offer of loan stage there will be an agreed term of repayment, normally between one day and two years.
Bridging Loans are most commonly used when the financing requirement is urgent and beyond the timescales that a standard mortgage lender or bank could provide. In some cases Bridging Lenders can provide funds within 24 hours. Another common use of bridging finance would be to fund the purchase a new home prior to the existing property being sold.
Characteristics
Bridge loans will almost certainly carry higher fees which can include:
•Administration Fees
•Arrangement Fees
•Legal Fees
•Completion Fees
•Valuation Fees
•Exit Fees **
•Broker Fees (normally non-disclosed)
** A fee charged to redeem the loan, typically equivalent to one month’s interest payment.
As most bridging Loans are not regulated by the Financial Services Authority the above fees can vary substantially as they fall within no boundaries or guidelines, only competitive pricing.
Application
Bridging Lenders will consider loans to discharged bankrupts and clients with adverse credit such as CCJs and IVAs. They will lend to individuals as well as Businesses, Ltd Companies and tax efficient vehicles such as SPVs.
Variations
Bridging Loans are split into two main categories:
Closed Bridging Finance
At the time the funds are drawn down there is a firm exit in place to repay the loan normally within a short period of time. The most common use of Closed Bridging Finance would be the pending sale of an existing property on which contracts have been signed and exchanged/missives concluded
Open Bridging Finance
At the time the funds are drawn down there is no fixed exit or repayment method for the lenders comfort, only an agreed maximum term that the loan can run for. Seen as higher risk than closed Bridging Finance it is therefore more expensive.
Other forms of short term finance:
Mezzanine Finance
Often a combination of debt and equity stake which is typically used to finance the expansion of existing companies. To secure mezzanine finance the business would normally have to demonstrate a track record in the industry with an established reputation and product, a history of profitability and a viable expansion plan for the business (e.g. expansions, acquisitions, IPO).
Lenders
There are over 20 Primary Bridging Lenders in the UK that are able to lend their own funds and therefore set their own criteria of risk.
Private Financers
Should Bridging Lenders decline to lend, Private debt and equity financers can be sort to provide funding for the examples above. This type of finance is normally very expensive.
Specific Uses
Bridging Loans can be used as a Below Market Value (BMV) purchase instrument where the initial purchase takes place at the lower purchase price allowing a subsequent refinance application to be placed with a mainstream lender for borrowing based on the Open Market Value of the property with the purpose of releasing the difference in equity between the purchase price of the property and the higher resulting remortgage loan.
Costs
Bridging Loans typically cost between 1-2% per month. Variable rates with margins over Libor can sometimes be applied as an alternative or an addition.
Find an Independent Bridging Finance Broker to give you all the available options.
Financing Your Small Business
If there were only two reasons for a business to fail they would be poor financing and poor management or planning. You can't over-emphasize the importance of financing your business. Financing the business is not a one time activity as some might think. It is necessary whenever the need arises such as when expanding, modernizing etc. At this stage you need to understand the importance of exercising extreme caution and plan the utilization of capital. A wrong decision here can haunt your for the life of your business.
Are You Sure You Want To Raise External Funds?
For start-ups, it's understandable that you need to raise capital through loans. But what about expansions and upgrades? Make sure that external financing is an absolute must before you apply. It is critical that you organize your finances at transitional stages but only after you make sure that you can't do it yourself, either permanently or for some time. Equally important are the criteria of risk, the cost of not financing and how well it contributes to specific and overall goals of the company.
FINANCING TYPES
Equity Financing: Equity financing involves selling off of your shares (mostly partially) in return for cash and giving away that portion of ownership and rights to profits. Equity financing can be sought from private investors or venture capitalists. This brings about proper capitalization opening access to debt financing. Equity finance doesn't need to be returned like loans unless your partner wants to withdraw.
Debt Financing: Debt financing is loan financing against some kind of guarantee of repayment. The guarantee can be collateral, a personal guarantee or a promise. Lenders restrict the use of debt finance to inventory, equipment or real estate. You need to properly structure the debt and the rule of thumb for doing so is giving long term debt for fixed asset loans and short term for working capital. The reason is that fixed assets generate cash flow over their lifetimes and have the benefit of lower interest rates as opposed to working capital loans.
Sources of Finance:
You can choose finance sources depending on your circumstances and the amount required.
1. Family and Friends: Small and short-term working capital requirements can be financed quickly through your own resources or through family and friends. The benefit here is the absence of the interest component (mostly.) This method of raising finances is handy even in early stages of business. You should be mindful, though, that disputes over money are the main reason that close relationships turn sour.
2. US Small Business Administration: This is the most prominent source for debt financing. The SBA doesn't lend money directly but organizes and guarantees loans through various lenders and sources under its umbrella. Local governments, banks, private lenders, etc. disburse loans immediately to businesses approved by the SBA. SBA loans are available for various business purposes and at the lowest interest rates available.
3. Venture capital: Raising venture capital is organizing financing through selling shares whose value equals the finance you require. Essentially this means selling a portion of the ownership and control rights. It is essential that a proper valuation of your business's worth is made before the deal is done.
Financing a business shouldn't be hard provided you have established your credentials as a good manager, have collateral/assets, a convincing cash flow statement, genuine need, a proven track record, good credit history and a robust plan. This should not just save your business from collapsing but also allows it to grow and succeed.
Are You Sure You Want To Raise External Funds?
For start-ups, it's understandable that you need to raise capital through loans. But what about expansions and upgrades? Make sure that external financing is an absolute must before you apply. It is critical that you organize your finances at transitional stages but only after you make sure that you can't do it yourself, either permanently or for some time. Equally important are the criteria of risk, the cost of not financing and how well it contributes to specific and overall goals of the company.
FINANCING TYPES
Equity Financing: Equity financing involves selling off of your shares (mostly partially) in return for cash and giving away that portion of ownership and rights to profits. Equity financing can be sought from private investors or venture capitalists. This brings about proper capitalization opening access to debt financing. Equity finance doesn't need to be returned like loans unless your partner wants to withdraw.
Debt Financing: Debt financing is loan financing against some kind of guarantee of repayment. The guarantee can be collateral, a personal guarantee or a promise. Lenders restrict the use of debt finance to inventory, equipment or real estate. You need to properly structure the debt and the rule of thumb for doing so is giving long term debt for fixed asset loans and short term for working capital. The reason is that fixed assets generate cash flow over their lifetimes and have the benefit of lower interest rates as opposed to working capital loans.
Sources of Finance:
You can choose finance sources depending on your circumstances and the amount required.
1. Family and Friends: Small and short-term working capital requirements can be financed quickly through your own resources or through family and friends. The benefit here is the absence of the interest component (mostly.) This method of raising finances is handy even in early stages of business. You should be mindful, though, that disputes over money are the main reason that close relationships turn sour.
2. US Small Business Administration: This is the most prominent source for debt financing. The SBA doesn't lend money directly but organizes and guarantees loans through various lenders and sources under its umbrella. Local governments, banks, private lenders, etc. disburse loans immediately to businesses approved by the SBA. SBA loans are available for various business purposes and at the lowest interest rates available.
3. Venture capital: Raising venture capital is organizing financing through selling shares whose value equals the finance you require. Essentially this means selling a portion of the ownership and control rights. It is essential that a proper valuation of your business's worth is made before the deal is done.
Financing a business shouldn't be hard provided you have established your credentials as a good manager, have collateral/assets, a convincing cash flow statement, genuine need, a proven track record, good credit history and a robust plan. This should not just save your business from collapsing but also allows it to grow and succeed.
Saturday, September 5, 2009
How To Save Money And Get Discount Car Insurance In New Jersey By Larry Nez
The best way to save money and get discount car insurance in New Jersey is to design a car insurance policy that's right for you and then see how much that policy would cost from every insurance company operating in New Jersey.
In order to do this let's start by looking at everything you can do to build a policy from the ground up that will save you as much money as possible.
The minimum car insurance you are required to carry in New Jersey is Liability, Personal Injury Protection (PIP) and Uninsured Motorist (UM) coverage.
None of these types of insurance will repair or replace your vehicle if you are in an accident, especially if you are at fault for the accident. If you want to protect your own vehicle then in addition to the three types of insurance that I just mentioned, you will also need to buy Collision insurance as well as Comprehensive insurance.
Just so you know, driving without insurance in New Jersey can land you in a lot of hot water. At a minimum you may be subjected to fines, community service, license suspension and when you do buy insurance so that you can legally drive in New Jersey you can count on what is referred to as an 'insurance surcharge' – in other words, yet another fine.
So let's start designing a policy that will cost you as little as possible while still giving you the coverage you need.
The first thing you need to do is to keep your driving record clean. This means you do not have any speeding tickets or other moving violations and that you most certainly do not have any convictions for Driving Under the Influence (DUI) or for Driving While Intoxicated (DWI). Even a speeding ticket will prevent you from getting the best rates on discount car insurance, but a DWI or a DUI will send your rates to the moon.
If you are under 25 years old stay in school and keep your grades up. If you can maintain at least a 'B' average then you can save about 5% on your monthly car insurance premium.
Can you keep your car in a garage at night? If so there's another big savings on your insurance.
Do you drive less than 500 miles each month on average? If so there's no reason for you to pay for insurance while your car is just sitting in your garage – you should be eligible for a Low-Mileage Discount.
Do you have more than one insurance policy with the same insurance company? Maybe you have a life insurance policy, or a homeowner's policy with the same company? If so you should be eligible for a Multi-Policy Discount on your car insurance.
Have you been insured with the same insurance company for at least 5 years? If so ask for a Long-Term-Policy Discount.
Are you 55 or older? If so see if you qualify to take a special driver's refresher course. If you qualify and you pass the test you can shave about 10% off your car insurance bill month after month!
Are you driving an old clunker of a car with little or no Kelly Blue Book value? If that's the case and you are still paying for collision or comprehensive insurance you are simply throwing your premium dollars down the drain.
Along those same lines remember that each year that passes your vehicle loses value according to the Kelly Blue Book. Therefore you should lower the amount (and therefore the cost) of your comprehensive and collision insurance each year – talk to your agent about how much you could save by simply doing this.
How large of a deductible can you afford? Think carefully before you answer. The higher your deductible the lower your monthly car insurance premium, but keep in mind that however much you set your deductible for, that is the amount of money you are going to have to pull out of your own wallet any time you have a claim. Make sure you can afford your deductible.
O.K., now you've got enough information to create the perfect, low cost car insurance policy. Now it's time to get online and find at least 3 different websites that let you compare prices on policies between different insurance companies.
Each site wants you to think that it is comparing prices at every single insurance company, but that is simply not the case. If you are really serious and want to genuinely save money and get discount car insurance in New Jersey then you're going to have to take a few extra minutes and compare the price of your super policy on at least 3 different websites.
Then simply pick the best price you can find and you're done! You've saved money and gotten the very best deal you could on car insurance here in New Jersey. Congratulations!
Resource: http://www.isnare.com/?aid=195247&ca=Finances
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