Personal Finance Tips

In today’s capitalist society, the temptation to succumb to consumerism is ever-present. Managing your finances can be one of the most difficult, yet most rewarding challenges in your life. Here are 3 personal finance tips to help get you on the right track to financial happiness and freedom.


1. Know where your money is going
It sounds cliché but this tip is probably one of the most underestimated one when it comes to proper personal finance management. It truly does not matter how much money you make; if you do not know how you spend it or what you spend it on, you will never be able to assess your financial situation.

Every household, whether you are single or have a family, should have a budget. How complex and detailed it is is up to you, but by establishing your net income and required expenditures (i.e. mortgage, car payment, insurance, electricity), you will have a better understanding of how much cash flow you have at the end of every month.


2. Limit and control your debt 
Living without debt is not an easy goal to reach. Whether it is student loans, a new car, a house, or that long-desired television, debt accumulates quickly and easily. One of the most dangerous ways people start accumulating insurmountable amounts of debt is by using credit cards. If you are the type of person who has multiple credit cards, limit usage to one or two.

Too many credit cards is seen as a negative factor in calculating your credit score, and it also makes it easy to spend without keeping track of expenses. If you have debt with multiple credit card companies, consolidate them on the card with the lowest interest rate and try to make more than the minimum payment required each month. In planning your budget, keep a certain amount of money to use on paying down other debt such as mortgage and student loans.

Most plans allow for extra payments – over what is required on a monthly basis – which allows you to reduce your debt further and pay it off faster. Use your money on the loan that has the highest interest rate first.

3. Seek the help of a financial planner
Whether you can barely make ends meet or have a comfortable income, getting assistance from a financial planner will allow you to plan for your short and long-term financial needs and goals. Retirement plans and education-savings funds, for example, are complex and it is sometimes difficult to understand which one is better for your situation.

A financial planner will guide you through the various plans and together, you will determine which one suits your needs. Personal finance management should be a priority. With finances often being a point of contention in many households, if yours are well managed and in order, you will have more time to spend energy on other things that matter.

Making sound financial decisions should be part of your lifestyle; while you may have to work hard to achieve your goals at first, establishing some basic ground rules and principles will help you reach financial stability.

Invoice Financing

Available from banks and other financial institutions, invoice financing is a way for businesses to raise cash from their sales invoices the moment that they are raised rather than waiting for the customer to pay.



Sometimes known as invoice discounting or factoring, the business invoices their customers for work completed or products supplied in the usual way and submits a copy of that invoice to their invoice financing company who will pay a cash advance for a percentage of that invoice, generally around 80%. On the face of the invoice, there is usually included what is known as a ‘notice of assignment’ which advises the customer that the invoice had been assigned to the finance company and that payment is due to them rather than the original supplier.



When the invoice has been paid, the finance company will pay the supplier the remaining percentage of the invoice, usually around 20%, less any interest and charged for the service. The interest and the charges usually amount to more than would be charged for a standard overdraft facility or loan.



In essence, the finance company is buying the debt to the supplier at a discounted rate and invoice financing can provide going-concern companies with a boost to working capital. At the outset of the agreement, the finance company will normally purchase the outstanding accounts receivable and then purchase on-going invoices moving forward as well.



Depending on the type of agreement, companies can also benefit from the financing company providing credit control services as well and so removing an administration task from the supplier.



Whilst invoice financing can provide an initial cash boost and an on-going cash flow improvement, there are some drawbacks to this type of agreement. Although not necessarily true, some people view a company which is financing its invoicing as one which is suffering from financial difficulties and this can have a negative effect on sales. Invoice financing is also not the cheapest form of finance open to a company and, in some cases, charges and interest can be extremely high.



It should also be borne in mind that not all types of invoices can always be financed. For example, invoices for services in advance, such as annual support agreements, cannot normally be financed. In addition to this restriction, finance companies may impose a maximum percentage of total debtors that one single invoice represents.



The terms and conditions for different finance companies can vary considerably from the percentage of the initial advance on invoices provided, through interest and charges, to the potential requirement for personal guarantees on the agreement from the directors of the company so any business considering invoice finance as a source of working capital would be advised to obtain quotations from several different sources first.

When to Choose Structured Finance

When it comes to financing, there are tons of options available. You can get various types of loans and leases. But today, we would like to talk about another financing option that many people are not aware of. This method of financing is called structured finance. It is used through a complex service for unique situations to help finance companies.

When there are companies or borrowers in unique situations that need money, structured finance is usually the financial source of choice. This type of financing is not offered by all lenders and is usually given to those in need of a large capital when a simple loan will not do the job.

Some of the most popular financial instruments involved in structured finance are collateralized bond and debt obligations, various types of securities (assets, mortgages), credit derivatives and much more. There is a lot more variety involved, but these options mentioned above are usually the main components.

Risk transfer is one of the central components for this type of financing. There is usually a combination involved in structured finance that contains a mixture of the financial instruments mentioned above. Many people decide to go through this route because it is an alternative source of funding, which can be cheap when compared to other options. Interest rates and liquidity can also be key factors in certain cases.

Credit ratings also play an important role in structured finance! These are ratings that are applied to financial instruments such as derivatives, obligations, mortgages and others. Investors use credit ratings to help make their decisions. When it comes to credit ratings, there are different regulations applied to help keep them efficient and effective. This is done to provide accurate ratings that can be used by investors and the government.

Overall, when it comes to structured finance, it is a complex process for distinctive cases. It involves providing a financing option to those in need through a combination of different financial securities. These securities are arranged depending on what your situation is. For example, certain combinations might be used to increase cash flow while others are used for financing situations.  This should help you decide when it’s best for you to choose this financial option!

Portfolio management software can support you

How to Manage Your Investments

If one thing is sure with stocks and shares markets it’s that investing is hard work. With share prices fluctuating every day it’s very hard to keep track of when to buy and when to sell. It is also advised that you purchase a variety of stocks to reduce your level of risk; one successful UK spread betting trader (link to http://nakedtrader.co.uk/) mentions that he owns and maintains over 1000 shares! This form of spread betting requires a great deal of control and high level management; this is where portfolio management software can support you.

Reduce your Risk

The rule of thumb with investments is to make sure you have a stop loss for each share. A stop loss is the point that you will sell your share once the amount gets too low. Web based portfolio trackers are able to notify you when your share falls below this point so that you can make a decision on whether to sell. This kind of immediate information is vital for serious investors and can greatly reduce the risk that your share will continue to lose value. Good softwares can also notify you when specific stocks are rising or if there is a change in processing costs for a stock that you’ve ordered.

Transaction Tracking

If you are buying and selling a number of shares it is vital that you keep a record of what you currently own. Most software will show a list of your historic transactions to make sure that you never miss or forget something. These tools can often collate your investments to give you an idea of how much profit you have made or in some cases how much you have lost.

Reports

Getting information on market news, growth/decline and your own profits is a vital part of improving your knowledge and expertise as an investor. Many portfolio management systems will publish tailored reports for you to clearly shown the information that relates to you and your invesatments.

The Essentials About Car Finance Rates

Cars, there are many of them. Luxury, sports, comfort, and “fast” are some of the words used to describe the different types of cars available for us to buy.  When it comes to buying cars, there are many payment options you can use. You can pay by cash, credit, or sign a loan. You purchase a car at full price or sign up for a car lease.

When you’re looking to buy a car, there is another method that is quite popular when making vehicle purchases. That method involves, “car finance rates”. Instead of purchasing the car outright or even leasing, you can finance it! Leasing and financing are two different options. In this article we want to focus on financing your car.

After you agree to pay the price for the car you like, it is now time to make the purchase. You have two choices. You can either pay in cash or you can agree to start financing it. In most cases, people decide to go with financing instead of paying cash because not everyone can afford paying the full amount directly. When it comes to financing your vehicle, it is important to find the best car finance rates.

The rates offered for financing vary depending on which options you decide to choose. Some of the most popular options are a bank, a credit union, the car dealership, or any other financial institute. Each place usually offers a different car finance rate.

When financing a car, you are given a loan. This loan is used to help you make your vehicle purchase. After purchasing the car, you must pay back the loan with an additional interest charge. So when looking for car finance rates, it is best to go with the lowest interest rate available. This means you will have to pay back less money.

The last step to successfully financing a car is usually a credit evaluation. This is when a bank, credit union, dealership or anyone that you are receiving the loan from, evaluates your credit. Financial institutions and dealerships use this evaluation before providing you with money because they want to know if they will be able to receive their money back. The better credit rating you have, the higher the chance of you successfully financing a car!

What Are Your Equipment Finance Options When Growing Your New Business?

As your new business begins to expand, your equipment needs will likely grow with it. If you are a running a business that relies on large amounts of equipment or expensive devices, you can find yourself in a difficult situation: how will you be able to afford purchasing the equipment you need to stay in business when you don't yet have enough working capital?



This is where equipment finance comes in. As a business owner, you may have the option of financing your equipment with either a loan from a bank, a finance program offered by your vendor, or an equipment lease. The following is a brief rundown of each option:



Equipment Finance with a Bank Loan

When it comes to a bank loan for equipment financing, while it's definitely an option for some businesses, it's not always so easy one to get approved. Application requirements tend to be pretty strict, and the whole process can drag on for several months. Some of the factors that will be considered include: the credit rating of the business and its owners, sales history, the age of the business, the company's industry and business model, and the amount being requested.



In order to improve your chances of getting accepted you may need to back up your loan with collateral, get a co-signer, request a small amount, or wait until your business has enough of solid sales history. You may also want to approach a small community bank where the loan officers are more familiar with both you and the surrounding community



Securing Vendor Financing for Your New Equipment

Some equipment vendors may offer their customers a full-service financing solution that includes a variety of leasing structures and payment plans. This will be especially true if they are targeting smaller businesses that generally do not have a lot of capital to purchase expensive equipment outright.



Knowing this, you may want to keep this in mind when searching for equipment vendors. Before committing to a specific vendor ask about their financing options and requirements. They may be a bit more lenient than a bank because they want your business.



Leasing Your Equipment

The last equipment finance option to consider is equipment leasing. You may want to consider leasing your equipment instead of buying it, because it can free up a significant amount of your cash flow which can then be used to run your business. It also protects your business from the loss incurred as equipment ages and depreciates. The biggest downside, though, is that in many cases you don't own the equipment at the end of the lease.



That said, there are two primary types of equipment leasing: a true lease and a finance lease. During a true lease, you will make payments, but when the term is up, you will not own the equipment. This may be an attractive option because the payments are pretty low, and they are usually tax deductible. You can also opt for an equipment upgrade every few years. On the other hand, if you want to own the equipment, you can get a finance lease. The monthly payments will be a little higher and are not tax deductible, but you will own the equipment in the end.



In short, even if you don't have so much money to purchase new equipment for your growing business, you may have several equipment finance options that will help you get the equipment you need.

The benefits of getting a finance major

When it comes to the financial world, knowledge is important for success! With the right knowledge, you can be successful in areas such as corporate/personal finance, financial economics, investing, and in other important areas related to finance. To help you gain this knowledge, a finance major would be recommended. This field of study mainly focuses on mathematical and statistical analysis of financial information.

By completing this major, you will have the skills necessary to analyze different types financial information. The tools you learn to use will help with information on money management, investments, business funding, financial planning and much more.  The field of finance is huge. There are lots of topics that require attention. With successful completion of a major in finance, you gain the skills necessary to solve problems related to loans, dividends, equity, and other financial terms.

A finance major is offered at many colleges and universities around the world. Each educational institution has its own unique academic program. This means that some schools that offer the program may focus on different areas of the financial world compared to other schools. So be sure to look through the program outline of the major to make sure that the areas of concentration are that of which you prefer.

A finance major can help provide you with many career opportunities. Some possible career paths you can pursue are financial consulting, investing banking, bank management, financial analysis, and much more! There are so many possibilities when it comes to choosing a career in finance. By completing this major, you open yourself up to tons of job opportunities available around the world. You could be working in a small office, a big financial firm, or even from your laptop at home.

As mentioned above, there are many benefits of majoring in finance. There are also many different areas of focus related to this subject. So it’s important that you focus on one area of speciality. After deciding your area of speciality that you would like to place more emphasis on, it’s now time to find the right program. As mentioned before, every educational institution provides a different program when it comes to obtaining major in finance. That is why you want to decide and join a program that focuses on the area you would like study more towards.  Use the tips mentioned in this article to help you with getting your finance major!

Finding the Best Car Finance Deal

Gaining finance for a new car is a big decision; there many options available and making the wrong choice can often leave you with a great deal of debt. However, with the right research car finance can be a very useful and necessary tool.  It is said that a new car is the second most expensive item you will ever pay for after your home.

When Should You Consider Car Finance?

1. Paying for a car in cash is perfect if you can afford it; but the truth is most of us just don’t have the disposable income to fork out such a huge lump sum for a car. Car finance can spread out this cost and leave you paying affordable instalments whilst enjoying you new car within a day of application (or less!).


2. If your car is written off or fails its service there is often period of distress; we need a car to commute to work and sometimes the insurer cannot provide a cover vehicle. Suddenly we need a lump sum of cash to pay for a replacement vehicle. This is where finance can help.


3. Financing a car will often allow you to afford a make/model that you normally couldn’t afford up front. Allowing you to enjoy a more comfortable and reliable vehicle whilst spreading the cost over time.


4. Boost your credit score! Paying off your car finance will boost or rebuild your credit score; this very useful if you’re looking to secure a mortgage any time soon!

Consider Your Options

There many companies out there dedicated to providing car finance but the simple truth is that you are more likely to receive a generous interest rate from your bank. Alternatively you could consider a loan from a family member which will likely save you a great deal of money in the long run.

If you can’t convince the bank (or the wealthy uncle) then many car finance companies are happy to give out loans to individuals with bad credit. Before you strike a deal, make sure you are aware of all of the costs including processing fees, instalments and additional interest. Only go ahead if you are confident that you can comfortably pay back all of the instalments for the entire period.

Top Tips to Save Money on Car Finance

• Arrange a shorter repayment period
  
  
  
  • A long term loan will have a much higher interest rate than short term loan. If you can afford to pay it off quicker, do it!

• Negotiate the car price prior to gaining finance
  
  
  
  • Dealers are often willing to sell for much lower than the price tag. If you can haggle before getting your loan, you can ensure that you aren’t paying interest on money you don’t need!


• Shop around
  
  
  
  • There is always a better deal! Finding a car finance that suits your situation is vital to keeping your costs down; take some time and do your research!


• Try some new options!
  
  
  
  • Get a few quotes and change some information each time; try a different car, a different repayment period and different lump sum. It’s surprising how on small change can save you a great deal of money!

How to Get International Student Loans

The cost of a college education in the United States just keeps soaring. According to the College Board, tuition and fees at public four-year institutions rose at an average rate of 5.2% per year over the past ten years.

Because of this, international students who choose to study at colleges and universities within the U.S. typically need to access alternative sources of financing beyond scholarships and grants. To help fill in the gap, several lenders within the U.S. offer international student loans for foreign students wishing to study in the United States.

While that may sound great, qualifying for international student loans are not always so easy. One of the biggest roadblocks is that lenders will not offer private student loans to international students without a the presence of a credible, financially stable cosigner. A further hurdle lies in the fact that the vast majority of international student loan programs require a cosigner who is a U.S. citizen or permanent U.S. resident. While there are a few loan programs that will accept a cosigner from the student's home country, these are very hard to find and qualify for.

For international students wondering where they can find a cosigner, the best and most common options include an extended family member, friend, or even an acquaintance (the cosigner doesn't have to be directly related to the student seeking financing). The most important thing is that the person meets the general requirements and is willing to cosign on the loan. The cosigner should have a social security number, and provide a current U.S. address, phone number, references, as well as employment information.

Cosigners should be chosen carefully because if the loan defaults they will be held liable for the outstanding debt.

For those who have a cosigner to turn to and are looking for programs and additional international student loans information, the best online resource to turn to is The International Education Financial Aid website (IEFA.org). This site maintains a very comprehensive listing of grants, scholarships, loan programs, as well as other information on international financial aid. International students should start their search here to see what is available to them.

Lastly, foreign students seeking to attend college in the U.S. should make sure to check in with the college's financial services department to make sure the financing they would receive will adequately meet their needs.

In short, though it may be a bit of a challenge for some international students to secure financing for their studies within the U.S., if they can get around the cosigner issue, they may have several options for international student loans.

Stock Trading

Everyone talks about the stock markets; The FTSE100 in Great Britain is down, the NSDAQ in the US is up, the Nikkei in Japan has crashed. News about share price indices such as these are quoted daily in nearly every news bulletin broadcast around the world; but what does it actually mean and can anyone trade in stocks and shares?

First of all, when people talk about owning stocks and shares, they are actually talking about the same thing; they own share certificates in a company or companies. The difference between the two is purely a semantic one and both refer to the same thing, for the purpose of this article.

In simple terms, shares represent the part ownership of a company. When a company wishes to raise funds, they sell shares in the company to investors and, in return for their funding, the investors gain voting rights at shareholders meetings and a share of the company’s profits which are paid in dividends.

The value of a company’s shares may go up or down depending on the performance of that company. If they make profits and the company’s future prospects look good, the value of shares in that company will rise and this potential movement in value of shares means that shareholders can make money by buying and selling stock, or trading, in those stocks on international stock markets.

A ‘stock market’ is a national or international market place for buyers and sellers to trade in the stocks of those companies that are listed on that market. This does not mean a physical trading floor, as most of us might think of it, as nearly all trading is now carried out via computers.

The stock market indices mentioned earlier are aggregated indicators of the overall performance of the price shares on that particular market and, as they represent a’ basket’ of companies they are also seen as good indicator of state of the economies of countries, regions or even the entire world as well.

The size of the global stock market is huge and is estimated at a value in excess of $40 trillion and investors include; private individuals, banks, insurance companies, hedge funds, mutual funds and corporations.

Anyone can try their hand at stock trading but should be aware that it can be a risky business. As all the advertisements for financial products say; shares can go down in value as well as up and many investors have lost fortunes trading in stocks. However, with proper planning and research and prudent risk taking, a stock trader can make a good living and avoid the traps.

To start trading in stocks an investor will need to open a brokerage account at a well-respected stock brokers and it is this broker, for a commission, who will conduct the transactions on the investor’s behalf. Anyone can trade in stocks but investors should always do their homework first.

Foreign Exchange Trading

The foreign exchange (FX) market is a huge global market that operates 24 hours a day, except for weekends, trading in different currencies and it is this FX trading that determines the exchange rates at which we can be foreign currency.

Banks around the world use specialist firms known as dealers, who paradoxically are also usually banks, who trade in huge volumes of volume exchange which can involve hundreds of millions of dollars at a time.

The end result of all this FX trading is that the man in the street and companies around the world can buy and sell goods and services in different currencies as well.

According the Bank for International Settlements the average daily trading in foreign exchange in 2013 is in the region of $5 trillion per day. FX trading consists of two man types; Spot trading, which is where one currency is sold for another currency at an agreed rate there and the then and a number of derivatives such as currency options, currency swaps, currency options and forward contracts.

Spot Transaction

Spot transactions account for around 40% of all FX trading and are agreements between two parties to sell one currency for another on the spot date at an agreed exchange rate.

Forward Transaction

A forward currency exchange transaction is an FX trade where the buyer and seller agree to sell one currency for another at a date in the future but at an exchange rate agreed today.

This is where the terms long and short trading come from. The party agreeing to buy the currency in the future is taking the long position and the party agreeing to sell the currency in the future is taking the short position.

Swap Transaction

A currency swap is a form of FX trading whereby an agreement is made to simultaneously buy and sell identical amounts of currency on different dates and is typically used as a hedge against future future exchange rate rate fluctuations.

The two transactions are normally conducted, one at the spot rate and the other at the future rate and it allows companies to minimise their currency exchange risk by maintaining equilibrium of currency values on their balance sheets. The dates between the two transactions are normally only a matter of days.

Currency Option

A currency option is an FX trade whereby an agreement is reached that gives the owner of the trade the right to buy currency in the future at a previously agreed exchange rate but not an obligation to.

With its huge trading volume, wide geographical dispersion and its near continuous operation, the FX trading market is considered to unique and often cited as being the nearest that there is to a perfect market.