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Category : financial guide

Multiple loans as integrated units

Filed Under : credit score,economy,finances,financial guide,get out of debt by admin
Mar.24,2010

In the early 1900s, American engineer and efficiency expert Frederick W. Taylor experimented with methods of improving work processes, including the use of quantitative measurement, to increase production. The goal was to make these processes more efficient by simplifying the work, thereby reducing labor costs. The presumption was that since the task was simpler, employers could use cheaper, less educated, less skilled workers.

What resulted in many organizations was a workforce that functioned not as integrated units benefiting the whole but as separate units focused on their own existence. The engineers ignored what they couldn’t measure. They could measure the material realm: product quality, levels of service, production and sales activity, and even profit.What they couldn’t measure was the ethereal realm: the vision, values, ethics, and culture. In this case, engineering didn’t guarantee anything but successful engineering. What Taylor did, in effect, was cut workers off from the ethereal qualities of their work by focusing their contribution on the task. This explains why assembly-line workers frequently describe their work as mindless and soulless. Today’s organizations are going to have to unlearn some of Taylor’s lessons since the new economy will have little to do with putting widgets together. Technology is reducing the role of manual labor by automating much of it with robotics. To accomplish the organization’s vision, employees operating in the new economy will need a holistic understanding of the business in partnership with other stakeholders.

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Gathering your resources to fight debt issues

Filed Under : credit score,economy,finances,financial guide,get out of debt by admin
Feb.17,2010

Reliefs come in various forms. Some defer charges, whilst others reduce the amount of tax before taper relief is applied. Some are allowed automatically, whilst others have to be claimed before the IR will allow them. The more important reliefs as far as business owners are concerned are as follows:

Rollover relief. (also sometimes called holdover relief) Rollover relief allows gains on disposal of business assets (excluding shares) to be deferred if you purchase replacement business assets with the proceeds. ‘Share for share’ exchanges can be eligible for holdover relief, which results in the CGT being deferred until the second parcel of shares is sold.

Retirement relief. This relief was phased out in April 2003.

Special investments. If you dispose of shares in a business in which you were either receiving the Enterprise Investment Scheme income tax relief, or which is a nominated Venture Capital Trust, your gains are exempt if you meet certain qualifying conditions.

Business transfer relief. Where you transfer a business you own to a company you own in exchange for shares, your gains are deferred until you sell the shares.

Gifts hold over relief. This relief allows gains to be deferred when certain assets are given away or sold at less than arm’s length value. An example of this would be a sale to a family member at less than fair market value.

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Controlling credit costs

Filed Under : CEO,bonds,financial guide,loans,money issues,revenue,shares by admin
Oct.26,2009

47Focus on major items of expenditure. Costs should be categorised as major or peripheral items. Undue emphasis is often given to the 80% of activities accounting for 20% of costs, rather than focusing on the priorities:

The activities generating the majority of costs. Reduce costs through cost awareness. While focusing on major items of expenditure, it may also be possible to reduce the overall level of cost of peripheral items. Costs can be reduced over the medium to long term by influencing people’s attitudes towards cost and wastage. In particular, examine managers’ attitudes to cost control and reduction and the effects of expenses on cash flow and profitability.

Maintain a balance between costs and quality. Commercial management and cost control mean getting the best value possible. This requires a balance between price paid and quality received.

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Break-even credit analysis (cost-volume-profit or CPV analysis)

Filed Under : CEO,bonds,business,cash reserves,finances,financial guide,making money,merger,pricing policy,revenue by admin
Oct.23,2009

Knowing when a project or new business will break even is important in any decision to invest money, time and resources in it. Break-even point is when sales cover costs, where neither a profit nor a loss results. It is calculated by dividing the costs of the project by the gross profit at specific dates, making an allowance for overhead costs. Break-even analysis is used to decide whether to continue development of a product, alter the price, or provide or adjust a discount, or whether to change suppliers in order to reduce costs. It also helps with managing the sales mix, cost structure and production capacity, as well as forecasting and budgeting.

For break-even analysis to be reliable, the sales price per unit should be constant, as should the sales mix, and stock levels should not vary significantly.

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Credit ratios and providers of capital

Filed Under : credit,credit cards,credit score,economy,finances,financial guide,get out of debt by admin
Oct.12,2009

Price/earnings (p/e) ratio. The price/earnings ratio is simply the share price divided by the earnings per share (eps). It is the one that investors
and analysts focus on and it forms part of the valuation of a company during acquisitions and disposals. The higher the ratio, the more the company is deemed to be worth, although there are several points to vote. p/e ratios vary across industry sectors and in different countries, and are relative to those of competitors. They rise when the share price rises – for example, when there is speculation about a merger or takeover. They can also lag behind events, combining current share price with past earnings. A p/e ratio may, for instance, be too high compared with likely future growth.

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Payday Loans

Filed Under : financial guide,investments,loans by admin
Jul.11,2009

I’ll be blunt on this one. Payday loans are a ridiculously bad idea! If you’ve used them, or are considering using them, you’re going to need to get out of that cycle right away. These loans, which can seem like a great way to make ends meet in a tight month, can often start someone down an irreversible cycle toward bankruptcy.

You cringe at the thought of a credit card that charges 25% to 35% interest, right? Yet, if you pay $50 to borrow $500 for 30 days, that’s an annual interest rate of over 120%. In fact, some payday loans are known to charge anywhere from 500% to 1,000% in annual interest!

To make matters worse, these loans that seemingly solve a problem for you in the current month, create a problem for you in the upcoming months. If you’ve borrowed money against a paycheck you haven’t received, that paycheck will actually leave you with less, and needing to borrowing again. With such high rates of interest and a continual cycle of borrowing against next month’s paycheck, an initial loan of $500 can grow to over $2,500 in debt in just 12 months!

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Retirement Plan Loans

Filed Under : business tips,credit score,financial guide by admin
Jul.6,2009

Over the last 20 years, 401(k) plans have become the primary form of retirement plan used by many Americans. In fact, the Investment Company Institute estimates that Americans now hold 4.5 trillion dollars in employer-sponsored retirement plans.

One of the features that makes these plans so attractive for many employees is the promise that they can borrow against their account balance should they need it. While the loan provision was put into the plan to help employees survive true emergencies, 401(k) loans are increasingly being taken to finance large purchases or pay off other debt.

Aside from the fact that a 401(k) loan freezes the growth on the portion of your 401(k)that you borrowed against, 401(k) loans can create a huge tax liability that forces many people further into debt. This occurs when an employee quits or is fired from his job prior to repaying his loan balance.

Whatever balance is still unpaid after a maximum of 30 days of leaving is included in the employee’s income, making it subject to income tax and a 10% penalty. This can easily equal 50% of the balance borrowed. Naturally, this often forces people to use credit cards or debt to pay off the IRS.

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A great investments example

Filed Under : business tips,credit score,financial guide,investments,loans by admin
Jul.3,2009

Michael and Susan have been saving for retirement for 10 years. They are also, like all the characters in this book, a composite from interviews
and people I have worked with during the past 21 years. Since Michael’s major promotion 10 years ago, they have invested about $50,000 a year.
Prior to that, they had less than $10,000 in investments. Now, stockbrokers, realtors, insurance salespeople, venture capitalists, hedge fund vendors, and other investment product peddlers have their number and routinely call them.

Michael and Susan have compiled investments worth $450,000 during the past 10 years: half in a 401(k) and half in an online brokerage account. Immediately, you might notice the math. If they have invested $50,000 a year for the past 10 years, achieving a zero total return on their money, they should have $500,000 in investments. You might do the math, but Michael and Susan have not. You would also think that Michael and Susan would be happy with the size of their nest egg. Sill in their mid-40s, they are in the top 1 percent of wealth in the world. But they are miserable.

Michael losses sleep over his investments regularly. Though he works 60 hours a week, he finds time several months a year to shift between $100,000 and $300,000 from one investment fad to another, believing he will increase his returns and then be happier with his portfolio. Among the other high-income employees where he works, this is routine practice. In fact, the main non-work-related topic among these employees is investing. Though not one of them has ever calculated their annual returns, they all constantly chase high returns and lose sleep worrying about the market.

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