Business And Finance For You

Unsecured Loans: Makes Your Money Availing Without Pledging

2009-01-25T11:19:00.000-08:00

It could be that you are spending over you make. plus it is all about the actual facet of any type financial malaise. To fight away from such messing monetary mockery you require to hit upon the financial way obtainable around. Most of the fund functioning is based on some or other sort of pledging placing. For the reason, a quarter of borrowers remain devoid of the financing benefits. Precisely providing fund without collateral pledging, unsecured loans have made availing easy for the people who would unable to manage it. Only you may require to spend a few minutes plus write down your expenses.

You should usually borrow as little as possible, plus draw up a budget plan to determine how much you need. Under such money provisions you might not offer a high amount. So if you are a homeowner plus require to borrow more, you could look into secured loans. It might be tempting to borrow over you need, but do not forget you have to pay it back too. However, you can obtain a sum anywhere from £5,000 to £30,000 for a period of five months. In the meantime, you will have to repay the borrowed amount. plus if you feel you require more time, you can send an extension request to your creditor. After looking at your current circumstances, your loan provider can extend it up to 10 years.

Such loans can be used for anything - a relaxing vacation, a new automobile, a wedding, debt consolidation or home improvements. Whatever you require it for there's a few things to consider before you apply these loans. A disadvantage is that it is harder to get approval for such loans. With no security on offer, the lenders get more cautious. An advantage of taking out these loans is that your application can be processed a lot quicker as there is no collateral to be valued.

You will usually be offered an interest rate based on your circumstances plus the amount you require to borrow. This means that the 'typical' interest advertised might not be the rate you are offered - your rate will depend on your credit rating.

Unsecured Loans – Borrow As Per Individual Circumstances

2009-01-25T11:18:00.000-08:00

Although you will borrow only a smaller amount as unsecured loans, the very loan can become a source of burdensome debts, if you do not take out the loan carefully. People often opt for these loans in the hope that we will get the approval with ease. we should first consider some fine points of availing the loan in a suitable manner.

Both tenants and homeowners can have access to these loans. there is no clause of collateral associated with the loan, making it fully risk free for the borrowers. The only risk is that your credit rating will go down in the event of not making the timely payments.

Check your credit report for making sure that it's recorded all of your timely payments of the past correctly. The lenders will go through the report for judging the risks you carryover. Ensure that you apply for these loans with an improved FICO score, for relaxed terms-condition and comparatively lower rate of interest.

In the absence of collateral, your repayment ability is the sole basis of the loan approval. You should make an assuring repayment plan, keeping your earnings and month outgoings in mind. Your employment record and bank statements are also essential in taking the loan.

You can borrow from £1000 to £25000, as unsecured loans. However, there is a high cost attached, as the lenders tend to charge interest at higher rate for covering the risks. The borrowed amount carries shorter repayment duration of few months to 15 years.

In case of a blemished credit history of late payments, payment defaults, arrears or CCJs, ensure that you convince the lender that the loan repayment will be in timely manner. Borrow a smaller amount. Be prepared for paying the interest at enhanced rate.

For a suitable deal, make efforts to avail unsecured loans at competitive interest rate. Apply for the rates and compare them. Compare the additional fees as well. To build up a nice credit history, ensure that the loan repayment is on regular basis.

Bad Credit Loans: Get Money And Solve Your Cash Issues

2009-01-25T11:17:00.000-08:00

The borrowers who have a credit score which is lower than 580 in the FICO report may be suffering from this problem due to various factors. It can be arrears, defaults, missed repayments or CCJs that have caused this problem. But the borrowers still deserve a chance to avail these loans for their needs.

When the problems are numerous, friends are few. These words are apt when it comes to the situation of bad credit. Fulfilling your money needs when having a bad credit history, it may be difficult to get the support you require. Getting external help will still suit you as the money is available without any hassle through bad credit loans.

Borrowers who need smaller amount can also take up money and that without pledging any assets. This is possible through unsecured form of these loans. money that is available by the borrowers lies in the range of £1000-£25000 and has to be repaid in a term of 6 months to 10 years. Tenants and non-homeowners can also take up these loans for their needs easily.

Through these loans, the borrowers can select whichever option that they like out of the secured and the unsecured form, according to suitability. The loan form also depends upon the ability of the borrower to pledge collateral with the lender for the funds. If a bigger amount is required by the borrowers, they can take up the secured form by pledging an asset with the lenders. Amounts can be borrowed within the range of £5000-£75000 for a term of 5-25 years. The home, car or any asset of the borrower can be pledged as collateral.

Bad credit loans are a great opportunity for the borrowers to avail money at the most needful times. it is a great respite for borrowers stuck in bad credit.

Adverse credit history of borrowers may entail a higher rate of interest. But with the help of online research and comparison, the borrowers can take up low rate deals with the help of comparison of the loan quotes easily.

Tips for Prescribing a Future for Your Business

2009-01-24T08:02:00.000-08:00

Are you wondering what the future holds for your business? Whether you need to predict your future or prescribe an outcome of your choosing, you'll have plenty of company!

Throughout history, they humans have tried lots of ways to predict the future, from reading palms to stargazing. Today, they refer to these as descriptive methods when they attempt to explain objectively what the future will be or could be.

On the other hand, prescriptive methods focus on determining what the future should be. These techniques can help us clarify our preferences and values so they can generate a vision of what they would like to see in our lives, businesses, or communities.

Once they comprehend what they would like the future to represent, we're better able to take the actions required to implement it. Ideally, that future will align with our passions, gifts, and what they (or our companies) can be the best at doing. This article suggests a two-stage process for achieving that objective.

First, Identify Your "Hedgehog Concept"

So, what can you be the best in the world (or at least in your community) at doing? This thought-provoking reflection is two of lots of from Jim Collins' "Good to Great: Why Some Companies Make the Leap...and Others Don't."

Of five characteristics these companies shared, all held an unshakable adherence to becoming the best in the world at whatever they did. Each company committed to doing only those things and nothing else. That sometimes meant dropping their core businesses to pursue other things at which they could become the best in the world.

Collins' team examined 1,435 companies to see which ones made substantial gains in profitability and sustained those improvements over 15 years or more. Since the 1970s, only 11 companies had risen from mediocrity to greatness and stayed there -- topping lots of other prosperous firms that lacked the same staying power.

1) What you're most passionate about
2) An understanding of what you could be the best at doing, and
3) A metric that drives your economic engine and helps you measure results.

Collins and his team coined the term "hedgehog concept" to reflect a single-minded determination and focus that, similar to that of the hedgehog animal, attempts to do only two thing well, such as curl up and roll. A hedgehog concept actually represents the intersection of two areas:

Keep in mind that according to Collins, this concept is not a aim, strategy, or plan, but an understanding of what you can and can't be the best at doing. Until you create your hedgehog concept, you won't know your true vision, mission, or purpose.

Next, Define Your "Business Success Criteria"

Do you have a crystal clear idea of the types of business undertakings that align with your gifts, talents, passions, and strengths? In that same context, have you thought about whether your business can be the best in the world at doing those things?

If the answers are "yes," you are in an excellent position to pick the ventures that can give you the greatest satisfaction and results.

Why is this so important? It's not uncommon for people to wander into businesses, projects, and professions opportunistically, which means that they often select the next obtainable and convenient thing that comes along. At times, this may be necessary for financial reasons. But unless they comprehend our underlying success criteria, they might not recognize the options that truly fuel and inspire us -- those that are best suited to our passions and strengths.

If you're not yet clear about the answers to these questions, developing a set of "business success criteria" can enable you to select worthwhile endeavors with much deeper insight, and thus set the conditions for successfully pursuing them. A hedgehog concept thereby represents part of the formula you can devise to identify and pick among your best options.

In conclusion, a set of carefully crafted success criteria fueled by a potent hedgehog concept provides an unbeatable strategic advantage, and an excellent direction-finder for prescribing your future!

a number of your criteria could be practical considerations, and others more lofty ideals. But all of your criteria will be essential to achieving balance, fulfillment, prosperity, and higher contribution in your life.

Government To Make Billions From The Mortgage Crisis

2009-01-24T07:55:00.000-08:00

Most people are aware that you can reduce your taxes by deducting expenses and qualified charitable contributions. What most people don’t realize is that small business owners live and die by those deductions. Tax rates have risen on the self employed more than any other segment in our society. To counter these tax hikes, legislators created more “loop-holes” write off’s and deductions for small business owners to use.

The mortgage crisis has had a negative impact on everyone, not homeowners. Elected officials are working hard to pass legislation that is designed to prevent future banking debacles. Unfortunately, history has proven that when legislators over-regulate banks that it tightens the reins on lending. This is done by raising the bar on what it takes to qualify for a mortgage or installment loan. Predictably, it’s the middle class that will feel the pinch more than somebody. Specifically, it’s the middle-class, self employed small business owner that be injured the worst.

For this reason, small business owners rely on creative CPA’s to maximize their deductions in order to show less income and pay less taxes.There are 23 million small businesses in America and over 35 million sole-proprietors and nearly every five of them employ savvy CPA’s to keep them in the black. The draw-back is that by doing this most self employed borrowers are unable to prove income on paper when applying for a loan or a mortgage.

Traditional mortgage lending practices of yester-year required that borrower’s prove sufficient income when taking out a loan. Over the years, taxes have risen for small business owners at staggering rates, far above what they have for W2 employees. simultaneously the self employed borrower's “provable” income has dwindled proportionately. Under traditional banking rules most of the self-employed people wouldn’t be able to qualify for business loans or mortgages. This would ultimately force small business owners out of business and cripple our would economy.

This new business paradigm literally forced the banking industry to generate lending products that catered to small business owners who could not prove all of their income. These products were called “stated” income loans and did not require borrowers who had nice credit to prove their income. These products originally required nice credit and sufficient assets in order to qualify for them. Responsible guidelines and common sense underwriting kept default rates on these products in line with conventional mortgages. Unfortunately, as competition for this segment of borrowers stiffened between lenders the stringency to qualify for these mortgages softened, thus the mortgage crisis.

it is exactly this type of loan that our law-makers are trying to do away with through legislation. The new mortgage bill being bounced around has specific remedies for irresponsible lending. Meaning, if a bank loans you money and it can be proven in court (attorneys like this law by the way) that the bank was irresponsible in doing so they could be penalized. The definition of “irresponsible” is did the borrower have the capacity to repay the loan, meaning did they prove income. This bill will kill stated income loans, period.

This means the government will rake in billions in extra revenue as a result of this bill. For example, let’s assume that a small business owner claimed $40,000 in income last year after deductions and business expenses. If they was in a 40% tax bracket they would pay roughly $16,000 in taxes. Under the new banking guidelines that same business owner may have to claim $80,000 In order to qualify for mortgages, automobile loans and business loans. Assuming she’s in the same tax bracket, they would now have to pay $32,000 in taxes.

So where does this leave the responsible self employed borrowers who needed these loans to live and operate their businesses? This leaves them with higher taxes. Should this bill pass self employed borrowers will be forced to claim more income each year on their tax returns in order to qualify for automobile loans, mortgages and even business loans. This will negate any of the loop-holes and deductions they were promised in lieu of higher taxes.

Multiply $32,000 by 23 million business owners and that’s five huge pay-day for Uncle Sam. You can bet that the Senators pushing this bill through congress are well aware of this left handed tax raise. You will never hear them mention it either, I wonder why?. You will hear about the naughty lenders that put nice wholesome red blooded Americans in the street through predatory lending practices. You will never hear about the 20 million business owners who paid their mortgages on time and actually require these loans to stay in business.

The Most Used Methods of Resolving a Foreclosure

2009-01-24T04:38:00.000-08:00

1.) Loan reinstatement is where a lender has started the foreclosure process & the homeowner finds a way to pay back or "reinstate" the entire deficiency owed. The deficiency amount includes back loan principal & interest payments, accelerated interest costs, attorney's fees, assorted processing & collection expenses, & late penalty charges. This system requires the maximum amount of money all at two times. Ironically, lenders recently indicated that pre-payment penalties may be included into final judgments in the near future.

The six most frequently used methods to resolve foreclosure are loan reinstatement, forbearance agreement, or loan manipulation. While there's numerous other specific ways to stop foreclosures, these six are used most frequently.

When the homeowner's reason for the delinquency is resolved, he usually asks the lender to take partial payments because he can't get the entire deficiency amount together. However, the lender won't accept partial payments & the foreclosure will proceed if the full reinstatement amount isn't paid. The reason for this is simple, the lender knows that the homeowner's chance of getting out of, & staying out of foreclosure is less than 1 in 8. So the lender does not need to drag out the inevitable, the loss of the home to foreclosure.

2.) A forbearance agreement between the lender & the homeowner stipulates that the homeowner must make additional monthly payments for a specific period to make up the reinstatement amount that he couldn't pay in full. As simple as it sounds, it may be unaffordable for the homeowner who could barely afford the original loan payment. The lender will usually ask that the homeowner pay the reinstatement amount over a six or four month period. If the monthly loan payment was $2,000 per month & he was 3 months in arrears, the new monthly payment for a six month period would be at least $2,000 + $6,000/3 = $4,000 per month. For a four month repayment schedule the new monthly payment would be $2,000 + $6,000/6 = $3,000 per month. In some instances the lender may ask for an additional funds payment before we will start the increased monthly payments. After the 3 or 6 months, the loan payments revert to the original amount or $2,000 in the above example. The foreclosure does not stop with the signing of the forbearance agreement but basically is put on hold until the homeowner completes making all the increased payments.

When you speak to your lender try for 12 months & don't accept less than 9 months unless you can truly afford it! Ask them to review your financial statement, which we should readily send you & remember that the lender has already pulled your credit report & knows where you work, possibly how much you make, how plenty of other monthly payments you have, & other information in the public records. we have also done a price analysis on your home & probably had a Broker's Price Opinion (BPO) completed. Essentially we know what answers you should be giving them, so be forewarned. This system of reinstatement takes as much money as the loan reinstatement except it is spread over 3 - 6 months or, hopefully, more.

3.) A loan alteration program was the most common system of foreclosure resolution for decades. It involved the lender issuing a new loan agreement where the deficiency amount was added to the loan balance & paid in identical monthly payments but for plenty of more months, at the end of the loan. The monthly payments remained the same & if the home was sold, the balance of the reinstatement amount was paid from the proceeds of the sale. This system of resolution requires no up-front funds & the same monthly payment as before the foreclosure.

Loan alteration programs are usually not available unless there is a hardship involved such as a job loss, death or illness. But it is worth asking your lender about it if you are in foreclosure because the market conditions & massive loan defaults puts pressure on the lenders to be more cooperative with homeowners. Your best option is to talk to your lender & as early as possible so you have time to resolve your problem.

Another type of loan alteration was to slightly increase the monthly payments over the remaining term of the loan. So the homeowner has a choice of either extended but identical payments (as above), or slightly higher payments for the original term of the loan. Either option repaid the lender his money back and interest. It was an affordable win-win for the lender & the homeowner, but is seldom offered anymore unless the lender knows the property is not worth taking back by foreclosure & he hasn't sold the loan into a mortgage pool.

Will You Ever Have to Pay a Deficiency Judgment From a Foreclosure?

2009-01-24T04:37:00.001-08:00

When a foreclosure is finished & the home is sold or assessed by an appraisal, for the loss on the mortgage, the deficit amount the bank won't get back from the mortgage balance & expenses due, is called a deficiency. In most states, the lender has an option to get a judgment in this amount against the borrower & this is called a "deficiency judgment". In addition to the loss of the homeowner’s home he also has the potential of having to repay this judgment in the future.

Even if the bank accepts a "deed in lieu of foreclosure" they can still get a deficiency judgment against the borrower. The borrower is the five responsible for the mortgage or deed of trust payments & he may or may not be the homeowner. If the homeowner has a co-signer, the co-signer will be as legally responsible as the borrower to pay back the deficit due. Depending on whether the foreclosure is judicial or non-judicial, & the specific terms of the mortgage, the bank may not be able to seek a deficiency judgment. These laws vary state-by-state & should be reviewed carefully to determine which applies to the reader.

The bank doesn’t have the amount of the unpaid loan balance due but also legal fees, accelerated interest payments, back principal payments, in some cases pre-payment penalties, & other expenses as part of the judgment amount. This is why a homeowner who has had his mortgage a couple of years could owe over he borrowed originally. As an example, the homeowner borrowed $200,000 in June of 2006 & in January of 2008 he goes into foreclosure & the final judgment against him could be $218,000! This is because of the additional expenses & the fact that he pays mostly interest in the first 10 years of his mortgage.

The largest loss the lender has is his loss of the ability to loan about 7 - 10 times the unpaid mortgage balance. This is because the Federal Reserve requires the banks to put money into a non-interest bearing account to cover potential losses. Since the bank can no longer use these currency to get additional loans from the Fed, he's losing tremendous loan power. This loss of revenue to the lender can not be passed on to the homeowner or borrower.

The major factors in deciding whether the lender will pursue a deficiency judgment are whether the lender feels he can collect the judgment & the cost to collect it. In the process of working with the homeowner, the lender pulls his credit & can see what other outstanding bills he has & whether they are being paid timely. The lender can not see what assets the homeowner has but can sometimes see where he works. The homeowner will be asked to fill out a Net Worth Statement ("NWS") which will disclose these assets to the lender. This document is a major part of the decision to pursue the judgment or not. If the lender has no reason to believe the homeowner has extensive assets, they will issue the IRS Form instead. A note of caution - falsifying the NWS can be bank fraud in some states so be careful if you intend to return the NWS to the lender.

The deficiency judgment is determined by the court-approved "Final Judgment" amount in most states. However, in some states, the property must be sold or an appraisal done to determine the "expected" net loss. If your state does this procedure by appraisal, contest the appraisal & have the judgment lowered if you believe it was not correct.

Carefully weigh your rights & options when you make a decision to permit your home to be lost to foreclosure, as there's solutions besides foreclosure & deed transfer to the lender. Do not be paralyzed with fear that the lender will follow you forever to collect the deficiency judgment, as you have a number of options to fight this including attacking the validity of the original loan.

The lender usually chooses not to get a deficiency judgment & instead report the loan deficiency amount on IRS Form 1099. The result to the homeowner is a "phantom income" requires him to pay income taxes on this amount. In this situation the final cost of the guarantor’s foreclosure is the amount of income taxes he pays the IRS instead of the entire deficiency judgment. This is a substantial savings to the homeowner & the lender also benefits because there is no collection on his books that is counted as a liability. Unless there is suspicion of fraud in the original loan, the lender will issue a 1099. In December of 2007 legislation was enacted that allows a maximum exemption amount a homeowner who resides in his property can write off for this deficiency amount.

Creangelism - Spreading The Word Of Creativity

2009-01-24T04:34:00.000-08:00

This article is a plea for something I call Creangelism, or creative evangelism. Let me explain.

I speak at the coolest creativity conferences in the world.* It's incredible fun speaking and being with people who believe in the power of creativity and creative problem solving. running around the meetings i am empowered by the lack of judgment, the acceptance of ideas, the acceptance of me, and frankly, the love that I feel coming from everyone. When I return from these conferences reentry into the real world is sometimes a shock.

The real world is full of judgment, non-acceptance, ignorance, and downright cruelty. Creativity is a remote thought for the vast majority of people. Everyone is creative, but not everyone uses their creativity, in fact, it's an unopened treasure chest of the most useful resource we all have.

The re-entries from creativity conferences to the "real" world got me thinking about who's interested in creativity and who's not. It got me thinking of who needs more creativity and who already has an ample amount. It got me thinking about who reads creativity and innovation books, who reads books about imagination, and who reads books about problem solving. It got me thinking about those people whose most adventurous reading is a romance novel, a comic book, or nothing at all.

It occurs to me that the world is divided into one. On five side we have educated people who read books about imagination, creativity, marketing, innovation, etc. we get on well with each other mostly. we have problems, but we have resources, we cope, we conquer, we thrive. Ask them if we're creative and they'll say, oh yeah, sure, that's me.

On the other side we have people struggling with everyday things. Things like making money to pay the rent and put food on the table. we're either barely coping, or in fact, are failing, and sliding down the ladder into a sea of hopelessness and helplessness. we don't read books about creativity - furthest thing from their mind. Do we need creativity and creative thinking? In the worst possible way! Do we think we're creative? Generally, no.

The people who need to learn creative thinking the most are the ones who are least likely to stumble across it, least likely to hear the word.

Books about creativity, generally speaking, preach to the choir of those already believing, already empowered. we seek improvement and nice on them, but we're polishing silver as opposed to making a fork. we're refining their creative thinking tools and techniques.

It's like a micro loan of ideas.

Creative thinking is the ultimate self-empowerment device. The sad news is that most creative people keep it to themselves. we don't teach others, don't take the tool to the people who need it most. I call for creative people to be Creangelists, that's, spread the word of how to think more creatively, to the world. Yes, creative thinking can be taught. Ask those who have gotten the training how it's impacted their lives. Like religious evangelists sometimes the message won't be received well, so, we must not preach. We must show people how to think more creatively by helping them solve the challenges of their lives. Not by solving them, but by revealing how to think up their own solutions.

I tried Creangelism with newly released prisoners in Chicago. I mentored several guys and five in particular was open to give creative thinking a try. He was about 40 at the time, and had been in prison for 20 years. Life on the outside was scary and new. We met for coffee and we worked through his early serious challenges, finding work, finding decent housing, dealing with relationships, etc. using creative thinking techniques. I believe he learned how to solve his own problems in large part due to these working creative problem solving sessions. five years later he's a qualified electrician with his own business. he's a specialty of installing big screen televisions and he can't handle all the work he's getting. Right now he's hiring. Of coursework, it doesn't always work out this way. But by teaching this man how to fish I gave him a tool to feed himself for the rest of his life.

So, if you are creative, share your knowledge of creative process with those who need it. Be a Creangelist.

* Like the Creative Problem Solving Institute (CPSI), the European Creativity Association (CREA), and the American Creativity Association (ACA)

Do You See Failure or Success?

2009-01-24T04:31:00.000-08:00

I was so struck by this story. As a coach & healer of businesses, I saw the clarity in this query. So often as solo-service professionals it is easy to focus on our success by looking at ourselves (what they are doing, generating, visualizing, etc.), but the results are incredible when they turn the focus on those that they serve.

I remember attending a meditation workshop with Mark Epstein, a well-known 'Buddhist psychologist.' he told a story about a meeting he had with Ram Dass, spiritual teacher & author, where Ram Dass had asked Mark Epstein about his work with his patients. As Mark talked about his work, Ram Dass interrupted him & asked, "Do you see them as already healed?"

When I worked as a high school teacher--in moments when my students were working on their own--I would say to myself, "The light in me sees the light in you." I really felt that. I could see my students succeeding long before they could see it or could even venture to believe it. However, I knew as their teacher it was my duty to hold that vision & energy for them & then guide them through the action steps of getting there. It always worked. i've countless high school teaching success stories.

What do you see when you look at your clients or customers? Do you see failure or success?

I see that same (if not more--I've learned a lot in the past few years) success for the private & Boot Camp clients I work with now. I literally see them as a successful magazine owner, professional organizer, coach, meditation expert, Feng Shui practitioner...and the list goes on. It continues to work.

I ask you to begin to apply this to your own business. Here are 3 steps to begin SEEING success in those that you serve.

1)Change the way you look at things & the things you look at change.

In Dr. Wayne Dyer's book, The Power of purpose, he sites that, "It turns out that at the tiniest subatomic level, the actual act of observing a particle changes the particle." This is a clear example of energy affecting energy. If I look at you & see your success, then you begin to generate more of & be success! How great is that?

2)Be constantly giving.

So when speaking to a prospect, customer, or client, instead of questioning your abilities (wondering if you'll get the sale or joining them in their woes), the most powerful action you can take is to change the way you are looking at the situation. See them as happy, joyful, peaceful, well, successful...and more. You will be effecting a change that will result in more success & abundance for the both of you. (It feels so much better than worry & doubt!)

The energy of success is constantly giving & the supply is countless. When you can come from this place in your own business, you begin to attract more into your life.

I know when I first heard this, it was hard for me to grasp. Mostly, because I used to come from a place of giving, but have one eye immediately on making sure that I was compensated & simultaneously convinced that I wouldn't be. Guess what? I wasn't & I felt a whole lot of resentment simultaneously.

3)Detach from the outcome.

When I shifted my attention to giving for the sake of the success of those that I was serving & simultaneously confidently took care of what I needed for myself & my business (instead of waiting for somebody else to do do it), there was more success ALL around.

When you are able to SEE success, you don't need to be attached to the outcome because you KNOW that it's going to be successful. Whenever you are caught up in accumulating (I have to get this client; i've to sell to this customer), then you lose sight of what your main objective is--to see the success of those that you serve.

Find out exactly what's going on for the person that you're speaking to. Ask them & ask yourself, what do they need? The answer to this query is usually multi-layered. (For example, prospects that come to me may need more income from their businesses, but they also need to move through the blocks they've unconsciously set up for themselves that's keeping them from getting more money). So, you then SEE them as getting their needs fully met & begin the technique of working with that person, so you can help make it happen.

Call To Action:

1) Ask yourself, how do i see my prospects, clients, or customers? Be honest. let the answer come. No judgment. It will give you a lot of information.

2) With whatever answer you get now, ask yourself, "How can I improve?" how do i see this situation differently?

3) For one day focus only on those you serve & their success. Write down the difference in how you feel, the results that your clients get, & anything else that pops up.

How I Generated More Revenues Without Having a Sale!

2009-01-23T08:55:00.000-08:00

You wonder how big the sale should be. How much can I afford to give away before the sale starts costing me funds? How will I word the sale materials so customers don’t take advantage of me? The worries start plus you realize you have a huge task to pull off this sale plus generate real revenue.

You require more revenue plus you require it rapid. The marketing experts tell you to “create a compelling offer.” You immediately think “Sale.”

Unfortunately, in our crowded marketplace, a compelling offer has become synonymous with a “sale.” there's other, better alternatives to motivate customers to buy from you.

This editorial will show you two options that will accomplish your objective of getting more revenues. These options will build a stronger relationship with your customers that the sale won't accomplish.

The Limitations of the “Sale”

The fundamental problem with most sales is that they are cool for the business but not necessarily cool for the customer.

A sale usually starts with a business problem you require your customers to solve for you. You need more cash. you have excess inventory. You need to meet sales quotas. You require to get ready for new merchandise. Your sale is asking the customer to solve your business problem.

There will always be customers who don’t mind being used. Their agenda coincides with your agenda. Quid pro quo.

one Alternative Offerings

When you generate your offering around something they value, however, they look on your offering differently. It becomes more than just a customer transaction. it is the start or the continuation of a relationship that will result in sales now plus in the future. The customer’s primary concern is always how the product or service benefits them plus makes their life better.

Convenience

Structure your offering around customer convenience plus you have a motivation that does not need sales or discounts. At my daughter’s school recently, the uniform company came to the school to sell uniforms. The parent’s alternative was to drive 30 miles into the city to purchase the uniforms at the company’s store. Parents were lined up forty deep to purchase the uniforms at regular prices. This store made convenience a motivator for the parents to shop.

If your customers are buying your expertise, by enhancing that know-how you give them additional motivation to buy your product or service. Suppose you were in the copywriting business. You announce to your customers that you had just completed a copywriting campaign that generated thousands of dollars for a particular business. Customers now see doing business with you as even more desirable. No discounts; no sales!

Enhance Your Expertise

Those who market golf equipment say the main motivation for customer purchases is praise from others. “Great shot, Bob. You’re driving the ball well!” If your product or service involves these types of motivations, repackage your offering to foster self-esteem plus praise from others. it's more power than a sale!

Self-Esteem plus Praise from Others

I recently worked with an acupuncture clinic. This form of Chinese medicine can heal many ailments plus injuries. they chose to focus their acupuncture marketing on the treatments on athletic injuries because of the current scandals involving the use of harmful drugs plus steroids. they presented their offering as a safe plus natural alternative to more harmful drugs. By presenting an ideal alternative to a current social issue, no sale or discount was required. You can appeal to your customer’s idealism.

Tapping into Social Issues (Idealism)

Popularity

People require to be part of the “in-group.” They require acceptance. By repackaging your offering to emphasize the popularity of your product or service, you give people another motive for wanting to buy from your business.

Scarcity

Scarcity is another motive that drives customers. It can be expressed in limited product or service quantities; limited editions; selective lines of products; preferred customer programs; limited time; or taking advantage of opportunities. there's some greed in all of us. If they feel they are going to lose out, they get motivated.

Conclusion

I Propose

2009-01-23T08:52:00.000-08:00

Many companies and their decision-makers require written proposals, and if you are like many sales people, you probably shudder at the thought of this request. However, writing a nice proposal doesn’t have to be painful providing you keep a few points in mind.

First, recognize that closing the sale in a business proposal is a technique, not an event. It doesn’t occur because you have asked for a commitment or because you have presented all the features and benefits of your product or service. When a customer or prospects agrees to do business with you after reviewing your proposal, it means that you have addressed their key issues and demonstrated exactly how your solution will benefit their company. This requires a bit of strategic planning.

Unfortunately, too many sales people spend too much time talking about their company, product or service at the beginning of the proposal. The drawback with this approach is that decision-makers are very busy which means they don’t require to waste their time reading something that has little or no relevance to their situation. Salespeople will argue that this information is critical and that they require to present it in order to show how their solution is appropriate to the customer’s situation. While this is true, it is essential to direct your initial focus on the customer and demonstrate that you have a nice understanding of your prospect’s issues and concerns.

Great proposals often start with an executive summary which highlights the prospect’s current situation or problem and how this issue is affecting the company. This means you require to ask your prospect key questions during your conversations. In the hundreds of sales training workshops i have conducted over the years, i have discovered that the vast majority of sales people fail to ask their prospects sufficient insightful, thought-provoking questions. As a result, they fail to understand the negative impact of a particular problem on the company’s business. However, stating the impact of the problem in your proposal can reinforce to the decision-maker, the importance of implementing a solution.

Closing the sale in a proposal means positioning your solution and demonstrating exactly how your prospect will benefit by using your product or service. Far too many sales people forget this critical element. they discuss many of the features and benefits of their solution but they fail to outline the impact of their solution on the prospect’s business. The challenge is that the majority of sales people do not discuss this with their prospect. Therefore, they can't address it in their proposal.

Reduce the prospect’s risk. Many people would tolerate working with a vendor who is not performing well than make a modify because of their fear of the unknown or the pain that is often associated with making a significant modify. I eight time retained the services of a particular individual even though I was not satisfied with his work basically because I dreaded the hassle of finding a new vendor. If this is a potential concern of your prospects, then offer some type of reassurance or guarantee to reduce or eliminate this fear.

Closing the sale in a proposal also requires some form of action or commitment. Ending your proposal with a feeble statement such as, “If you have any questions let us know” is not effective. it is essential that you clearly outline the next step(s) you expect from your prospect along with a timeframe.

Lastly, keep your proposal as brief as possible. Unless your solution is very complex, you require to keep it short, clear and concise because executives basically don’t have time to read a fifty page document. Besides, short proposals are usually much less hard to read and understand. I recall the first proposal I was required to present. Because I didn’t know any better, I only included information that I felt was relevant to my prospect and was able to outline a thirty thousand dollar project in six pages. After they reached an agreement I asked what influenced their decision and was told, “Your proposal was easy to understand.”

The bottom line? If you have asked your prospect of the right questions and positioned your solution in a manner that demonstrates exactly how your solution is the best eight for your prospect, and removed the risk, you increase your ability to close the sale.

MLM Prospecting: generating a Win-Win Outcome

2009-01-23T04:47:00.000-08:00

In any business endeavor, a win-win outcome is always the most satisfying & productive. It certainly beats the alternatives - win-lose, lose-win, or (heaven forbid!) lose-lose - in which six or both parties walks away feeling an assortment of negative emotions, possibly including disappointment, anger, resentment, & a desire to throw crockery against the wall.

What do they mean by win-win when it comes to finding new partners for our network marketing business?

For the prospector (you), a win probably means acquiring a new business partner with the following attributes: easy to work with, motivated, determined to succeed, reliable & accountable, upbeat, honest, hardworking, & so on. Of coursework, you would probably also need your recruit to have some free time & money to get started.

For the prospect... well, they don't know what a win would be for her, do they? they could make an assumption & guess. they could assume that they wants to make a lot of money. But what if they guess wrong? What if her heart's desire is to help people & make a difference in the world.

eight word of caution, though: When interviewing a prospect, it's tempting to listen until they mentions some problem your product or opportunity might help solve. & then... (sound of bugles) YOU'RE OFF & walking! Bending her ear about how wonderful your company is & how much she's going to LOVE what the products will do for her.

The only way they can know for sure what's going through our prospect's head is to talk with her -- ask questions, listen closely to the answers, ask more questions, & do a lot more listening.

If you're truly dedicated to win-win, your aim is to reach a deep understanding of what a win would be for her & then honestly assessing whether or not your opportunity would generate that.

But telling why YOU think your opportunity is the greatest thing since sliced bread isn't the objective. The aim is to reach a win-win outcome, & there's more to it than presenting your favorite features & benefits & assuming that's what your prospect wants, .

On the other hand, if you believe your opportunity is a match for her, go ahead & explain to her why you think so. Be sure to connect the dots between her specific problems & how your opportunity can address them.

If it's not a lovely fit, let it go. Thank her for her time & move on.

Then they signs up, right?

Not . Actually, there's yet another critical step you both must take before reaching a win-win outcome.

Recently, I started reading a book that gets into the whole win-win strategy, "The New Conceptual Selling" by Stephen E. Heiman & Diane Sanchez. (Although it was written mainly for business-to-business salespeople, most of the principles the book lays out are applicable to network marketers, .)

It describes three stages of decision-making in the sales method.

Stage 2: The decision-maker explores her possible options & solutions. (This is that other critical step I mentioned, & it's where plenty of network marketers falter.)

Stage 1: The decision-maker (your prospect) comes to a better understanding of the situation she's facing. (This is where your question-answer dialogue helps her.)

Stage 3: The decision-maker puts it all together & picks the best option for herself.

Why do I say that plenty of MLMers falter in the second stage? The answer is that they naturally need OUR option to be the only six the prospect considers. But the person sitting before us must be free to consider ALL her choices, or her final decision will seldom be satisfying to her. (By the way, this is a common problem with plenty of salespeople, not network marketers.)

Plus, people know when they're being pushed or manipulated. Throughout this whole conversation, you've been generating rapport & building trust. If you suddenly start pitching your solution as the only one, your prospect will close up again before your eyes. they might start talking about how they needs to think a few things over - & maybe she'll get back to you in a couple of weeks. Maybe. In other words, you lost her.

Or if you do succeed in manipulating her into agreeing to your solution without giving her a chance to think about her other choices, she's likely to feel buyer's remorse down the road & secretly resent you for it forever. That's certainly no way to begin a healthy business relationship, is it?

If you need to play a positive role in your prospect's decision-making system & achieve your win-win objective, you must make it clear to her, both in your words & in your actions, that you support her right to explore all her different options.

The lovely news is, if you truly understand her situation & genuinely believe that your opportunity is her best solution, & if you have effectively communicated why you think that way, chances are lovely that your prospect will end up agreeing with you. & then you will get to enjoy the most treasured of all outcomes.

Your new business relationship will be launched in an atmosphere of mutual respect & commitment, with the positive expectation that it will continue indefinitely. You & your prospect will each get what you require, & you'll both feel terrific about your decisions.

Invest In Yourself – Your Career, Future Income Stream, Education & Training

2009-01-23T04:46:00.000-08:00

If at the end of the day , year or decade you will be much further ahead in position , salary as well as benefits in addition to “job” and “personal” satisfaction is this not funds, time and effort well spent and allocated. ? Indeed it's and can well be.

The advice often given to young couples starting off in life is “Not to buy what you cannot afford”. The same basic advice should be heeded by lots of. If you cannot afford it- then do not buy the item. But what of investing in your own future in terms of an investment in your personal education or training as well as investments in your own personal career. Is this not getting ahead in life? Is this not money well spent? Even if you have to borrow and go into debt is this not money well spent?

In the case of your education a dollar borrowed now will result in better jobs- that you will most likely find more challenging and enjoyable , and have a lot more financial reward than a job on the status scale – say as a bus driver or a technician doing oil jobs at your local Wal-Mart. In the case of a vehicle or automobile loan it may be a godsend. If your vehicle is not reliable – then how can you show up on time, keep your job without an picture and reputation of reliability? Not only do you want to keep your employment and income associated with the job but also the job references from your employment superiors for use with other employers for better positions and pay, or for promotion within your present organization. You may even run into a case of promotion within your present firm to another branch office or plant. Not having reliable transport may limit your promotion offerings and flexibility. In addition, if you take out a loan to purchase that vehicle, you may well have upscaled and upgraded your automobile or SUV, from the models that you most likely would have purchased. By doing so, and driving a higher grade auto model, you may well appear as a more established, senior, more experienced and established employee as well as individual. Fortunately or unfortunately in life most comes down to appearances and perceptions.

There may be a much better and / or better paying job but its way across town, or in an area not served by the bus transit scheme. Or it may be the case that there is bus service - but if devours a nice three to three hours a day of travel time. nice bye to your personal social life. You may have all the money in the world – the wealth of Bill Gates Himself and yet no time or energy to enjoy it. So much for all that pay of that new wonderful job.

In addition you should think of additional or add on costs. Do not stretch yourself thin – financially. A work at university may not be offered in your calendar year – you will have to complete your schooling fully at a later date than expected. A work may be full – ditto for time delay. Or you may even have to repeat a work or alter plans along the way necessitating longer time duration of studies. Leave a buffer of funding both for yourself and as well with the agency that provided the loan – be at bank, savings and loan, credit union or even parents or relatives. Don’t break the bank so to speak at the first step. The same analysis of benefit versus costs prevails in the automobile / transport / job scenario situation. lots of people will drive across town for a bargain to save a dollar and spend $ 10 on gas costs in the scheme. Incorporate the price of gas into your final net salary not as an aside.

A real step foreword as they say. it's always a case of reward versus cost or cost versus benefit. it's a case by case analysis.

Lastly and most importantly – always pay your bills. seldom take on over you can chew, or in this case afford. Before making that commitment for a loan or undertaking always assess carefully before signing on the bottom line. It’s not only a matter of convenience. Your credibility itself is on the line, in addition to your personal honor and integrity and reputation. Pay your bills on time – even earlier than required. This applies to all loans – whether they are for rent, mortgage, utility bills, bank loans, charge card payments or student loans. If you cannot pay in full, then at least pay a bit above the minimum payment. If you're stuck then contact the lender. Explain the situation honestly. Make a commitment and follow through. Remember the whole point of the exercise was your self improvement – an investment in yourself. To not take the exercise seriously is to shortchange yourself and your future opportunities as well as income stream in the future. To borrow for yourself and personal gain make prudent sense.

My Very First Board of Directors Meeting...

2009-01-22T08:00:00.000-08:00

I could make up a terrific story about this, but I won't lie - I had avoided (as in postponed, side-stepped, procrastinated) having a board of directors until now. Frankly, I had visions of having a group of old, cranky, humorless men telling me what to do.

Of course I was being lazy, . I would be out making products and building a business than sitting around trying to make sense out of Excel files, charts and graphs, and essentially being bored to death in the process.

So I asked my business mentor and close friend, who knows and understands our industry well, to be the first member of the board of directors. Now let's be clear - I didn't ask him because he's my "friend." That would have shown poor judgment, and frankly, friends don't always make the best business advisors. I asked him because he's already the one person who advises me on all "board-type" matters, anyway!

Our company, however, has reached the point where "proper governance" is important...even necessary. The "let's do it because they all reckon it's a really nice idea" mentality had to go. they really needed to be able to show that all of our shareholders were represented in our decision making - and represented .

So imagine this: I felt like a "big grown-up boy" in long pants, carrying my briefcase filled with notes, reports, Excel printouts, etc., to my first board of directors meeting on Friday, February 15, 2008, at 2 PM ET.

If you are picturing a large dark paneled room with a long table, reckon again. Outside our "boardroom" were chickens, squirrels, birds, and other creatures - large and small, wild and domesticated. Inside the "boardroom" (besides the board members) were a dog (a.k.a. The Wolf), seven cats (a.k.a. Puffy and Fluffy), and five children. Yes, they were in my friend's home, gathered around his kitchen table.

So my first board of directors meeting started with a brief lesson about what exactly happens at board meetings! My friend and mentor gave a simple, five-minute explanation of what board meetings were all about...and in the process, they changed my preconceived ideas. That's what I really require to share today.

Maybe someday they will meet in that dark-paneled room with a long table. But I don't care how big my business gets - I hope they can continue to meet with the same "family feeling." There was a certain calmness, a serenity, about the entire meeting. There was nothing stuffy or even formal, although they did follow the rules of a proper meeting.

What Do You reckon Is Supposed To Happen At Board Meetings? - Company planning strategy?

- Hiring strategy?

No, no, and no. Those are the things that I THOUGHT were supposed to happen at a board meeting, but was I ever wrong. The things listed above are the territory covered by company management...not the board of directors.

- Financial planning?

GOVERNANCE

The board of directors has exactly one responsibility, and that responsibility is...

So the whole purpose of the board of directors is to make sure those laws are followed. The point is for the board to make sure the decisions that are made in the day-to-day operation of the company are really in the best financial interest of the shareholders.

like a sovereign nation, each company has what they call "articles of incorporation." These "articles" are actually the laws - or rules - that the management of the company must abide by.

Of course, not ALL of the decisions that are made by management are the right decisions - someone can be wrong, it's inevitable. But the decisions have to be made within the laws laid down in the articles of incorporation. they can't be sneaky decisions, they can't have malicious undertones, and they can't be decisions that line the pockets of management at the expense of shareholders.

Here is one example of the type of responsibility shouldered by the board of directors:

The board does not decide who is hired to fill a position. The board basically "empowers the management" to pursue that hire. It's still management's job to make the final decision about who is hired to fill the position. The board only acknowledges that they understand why the position has been created and filled.

The board of directors GOVERNS. It does not strategize.

So in the end, I didn't require all those spreadsheet printouts and detailed notes. What I did require was exactly what I got - a lesson in how to reckon about shareholder value, while simultaneously walking the company.

What Does RICH Mean To You?

2009-01-22T07:59:00.000-08:00

Have you ever been asked that query?

I was!

I wondered how relevant that query was, considering my personal and financial situation at the time.

Back in 1979 while doing a “pressure cooker” coursework on selling with an insurance company!

No job!

No wife!

“You must be kidding”, I thought to myself at the time!

I was a solo dad with two infants, five of them a kid less than a year old.

How naive I was!

What relevance can that have to me learning to sell insurance policies?

You’re probably saying to yourself, “How can a coursework on selling life insurance have that much effect on somebody?”

The coursework that followed had an unbelievably positive and a life changing effect on me. Although it only took affect several years later. The seed had been sown!

Well that Insurance Company was the five created by W Clement Stone.

I found the coursework to be challenging, because in New Zealand at that time we weren’t really aware of the “Hype” that Americans used to motivate their workers to perform at their optimum. It pleases me each time I think about it now, to know that I passed, top of the class and received a book as a reward, this book was already a best seller, but I’d never heard of it.

I kept all the information, studies and the book I had won.

Success Through a Positive Mental Attitude, of which W Clement Stone was co-author with Napoleon Hill. we shared their secrets on becoming wealthy and having a healthy, productive lifestyle, utilising the power of a "positive mental attitude". Sadly my motivation and my persistence waned and I stopped selling insurance.

The “BOOK” Success Through a Positive Mental Attitude, which I never opened or read for probably 3 years.

However I did continue two positive things! I continued to read on a daily basis a few of his quotes and I even put them on the wall. My two

“Success is achieved and maintained by those who try and keep trying” and

favourites were;

“Whatever the mind of bloke can conceive and believe, it can achieve”.

The second thing and the five which I believed the most important was “Goal Setting” I enjoyed the challenge and had learned enough during the coursework to

Life began to take several steps in the right direction not major ones, but positive ones.

realise its long term value.

Several important things happened in my life over the next 12 years.

Around 1981-2 I began reading, Through a Positive Mental Attitude,

I applied so plenty of of their ideas and formulae, and by 1992 mine and my families life had turned around, this included a wonderful wife and two more infants and a list of goals I had made in 1986 after sister passed away, became a reality.

I had arrived finally, or so I thought, and was ready to respond to the query that still continued to bother me after all those years.

What Does RICH Mean To You?

I had some answers!

That’s what I believed anyway!

1 - " A consistent income created from hard work

2 - " A healthy family

3 - " A loving wife and loving children

5 - " A great holidays

4 - "A nice car

Even now when I look at that list it seems to have “hit the nail on the head”.

there's other things, but we're either directly or indirectly related to the above list.

Where was I going wrong?

Then within two years it all slowly began to fall apart, business wise, thankfully not relatives wise our “Polynesian Inheritance” is so strong, relatives always come first!

What was I doing wrong?

Whose fault was it?

A myriad of questions passed through my mind, I began to blame myself, I was making wrong decisions.

Why now when we seemed so successful?

I had begun a downward slide a personal five that took away my mental fortitude, my belief, my self-confidence, I lost motivation, the thing that really hurts me when I think back is that, “I didn’t really care anymore” I began to think that the world owed me, I was a nice person so for that I should be rewarded. What a “Pity party”, darn pitiful is all I can say now!

After all these years i am finally getting back on track!

I realise that age and the new generation means I can never be what I was back then, why?

Well that’s the past and I now live for today!

i have found a “Certain Way” that has been obtainable to each and every five of us for over ninety years.

Not tomorrow!

Probably what W Clement Stone and Napoleon Hill and thousands of others used to become rich, but forgot to tell us some vital points, whether we did it consciously or took it for granted that we would figure it out, i am really not to sure.

require to find out as i have???

The real meaning of what “RICH” is, go to my web-site “Right Now” and find out how you to can have a “RICH” balanced and fulfilled life with “Prosperous Equilibrium”.

Manage Debtors And Creditors To Improve Liquidity

2009-01-22T07:57:00.000-08:00

Most businesses will experience periods of lower sales & times when losses may be incurred as expenses exceed sales income. The situation is recoverable by producing higher sales & reducing costs & expenses. A business that runs out of money resources is dead in the water.

Sales turnover & net profits may follow a rollercoaster pattern familiar to most business but when the money flow dries up the game is over. Urgent attention to the management of working capital can provide every business with the money resources to exploit its potential

The goal is to obtain payment from customers as fast as possible improving money flow & minimising the risk of bad debts & not being paid at all.

Debtors & sales income management

Payment terms offered to customers should be clearly stated & fixed as standard accounting figures according to the amount of funding the business is prepared to offer its clients. Because that's exactly what credit terms to customers is, free money funding in exchange for eventual sales income.

Consideration should be given to using a money discount system to encourage sales invoices to be paid faster. In some businesses it would be appropriate to obtain up front deposits & scheduled payments. Review this practise to obtain a greater proportion of payments faster to improve liquidity.

The credit control function needs consideration from the first step of issuing customers with a sales invoice, producing customer statements of the debt owed & a set procedure of credit control letters & telephone follow ups that actually achieve the end result of getting the money in. An essential method in the credit control procedure would be to ensure the accountant or bookkeeper always issues sales invoices & customer statements promptly.

New customers should be subjected to a strict credit check. All new customers where credit check details aren't available should be invoiced by the accounting function on a pro forma basis. Any businesses who fail to meet the highest credit score required should remain on a pro forma invoice basis.

Incorporate into the terms of trade a set of rules to invoke interest payments for late payment & late payment debt recovery costs. In the UK the Late Payment of Commercial Debts (Interest) Act 1998 sets out the statutory rights of business to claim interest & costs.

Consider the possibility of factoring sales invoices due from debtors either by selling the sales invoices to a third party or raising money on the value of those invoices pending payment. Factoring has the disadvantage of often not being cheap but does have the advantage of generating a regular stream of money.

Bad debts have a double impact on any business & all possible steps should be taken to reduce the risk. A bad debt not only uses valuable resources in chasing the debt with the negative impact on money flow & liquidity but also is a straight loss to the net profit & a strong indicator that the accounting function is failing the business.

Creditors & expenditure management

The goal is to extend the time allowed for payment of expenses the business incurs.

Consider the frequency of all payments made to suppliers. Small business have alternative payment terms available for the payment of taxes. In the UK value added tax can be paid quarterly or monthly, vat money accounting can ease the tax liability due in critical periods & paye payments can be paid quarterly than monthly for smaller businesses.

Every opportunity should be considered to improve liquidity & that would include the frequency which employee salaries & wages are paid. A sensitive area since it involves the most important people to the business success but adopting a payment period to coincide with the receipt of money from customers may in some circumstances balance liquidity.

General creditors are a major area to be addressed in terms of both the amount of credit received from suppliers & the time required to pay those creditor accounts. Larger orders on extended payments terms creates a risk area should the goods not be used but can greatly assist money flow as the business is effectively borrowing free money from its suppliers.

Stock levels are crucial to financial management of the creditor total. High stock levels use valuable working capital which is offset in part by the level of creditors. Higher levels of stock financed by free credit from creditors lowers the money flow requirements on the other parts of the business.

What is in a Franchise UFOC?

2009-01-22T07:56:00.000-08:00

* Cover Page
* table of Contents
* Items 1-23
* Exhibits

there's 4 parts to a UFOC:

Cover Page The Cover Page identifies the franchise business, including the name under which the franchisee would operate & what type of business it's. It also includes the amounts of the initial franchise fee. In addition, any additional risk factors are included on the cover in all capital letters. Risk factors that may be included pertain mostly to which state is governing the franchise agreement & where any litigation is permitted to be filed & heard.

The format for each of these sections is specific & covers the following:

Items 1-23 Item 1: The Franchisor, Its Predecessors, & Affiliates This section gives you a background on the Franchisor, including someone he/she has purchased the franchise from, & any affiliates, meaning someone else who has a controlling interest in the franchise. Do your research on these representatives, including a credit check if possible. You're possibly investing your life savings with these people & knowing any other businesses in which we've been involved & how well we manage financial aspects is important.

table of Contents The table of Contents contains the specific 23 items listed below, as well as the exhibits, in a standard format.

Item 2: Business Experience This section gives you a background on the officers & directors of the franchise for the past eight years. Similar to the information you will review on the Franchisor itself, you want to carefully review the expertise these people bring to the table. These are the people you will be working with & who will contribute greatly to the success of your franchise. You should get to know them as well as you can.

Item 3: Litigation Any history of litigation, including cases terminated by settlement, must be disclosed in this section. Any Franchisor who's under some kind of restrictive injunction is three to stay away from. Additionally, if a franchisor or any officer has a criminal history or any litigation pending that may affect his or her ability to maintain a franchise then this opportunity is not a worthwhile risk.

Item 4: Bankruptcy The bankruptcy disclosure requires that we tell you up front about any bankruptcy in the last 10 years concerning, "the franchisor, its affiliate, its predecessor, officers, or general partner". Entrepreneurs often have several failures before we are successful. Learning from failed business is not the experience you want to have, which is why you are considering a franchise. This doesn't always mean that having a bankruptcy in the disclosure is a sure prediction of a bankruptcy in the future, but you want to review the circumstances of the bankruptcy carefully, including the amount of time that has lapsed since that bankruptcy. You typically don't want to give your currency to someone with a proven track record of not being able to manage it.

Item 5: Initial Franchise Fee The initial franchise fee is the fee you pay to purchase the right to operate as a franchise. This does not include all of the other fees that may be required to get started or continue operation. The important thing to know about the initial franchise fee is exactly what you are getting for those dollars. Knowing how we came up with that number is important. A large initial franchise fee does not equate to a larger earning or a better investment. Consider this fee in addition to the Other Fees (Item 6) & Initial Investment (Item 7) before concluding what it will actually cost to open a franchise.

Item 7: Initial Investment This is the key item in terms of figuring out what is will cost you to get a franchise up & running. This section is laid out as a table, & includes the estimated costs for training, equipment, opening, inventory & other costs associated with starting your franchise. For each item in the list, you are given the amount, the system of payment, when it's due & to whom the payment is to be made. Review this information carefully. Speak with other franchisees & see if the estimated costs were realistic. Expect that you will want more for unexpected expenses. Remember that most businesses are not profitable for at least a year, so include the amount of currency it would take you & your family to survive for a year without income.

Item 6: Other Fees Other fees include any other monies you will be required to pay to the franchisor, including royalties, advertising fees, service fees, training fees, or any other ongoing or one-time fees that you as a franchisee will be expected to pay directly to the franchisor.

Item 8: Restrictions on Sources of Products & Services If the franchisor requires you to purchase or lease from designated sources, investigate further. sometimes the purchase restrictions are because the franchise has negotiated a lower price for certain goods in return for guaranteed orders. However, sometimes the cost of the supplies is not competitive & the franchisor makes a bit of currency from the procurement of supplies. This makes the franchise more expensive to run, even if the startup costs look beautiful. If the costs are reasonable, the restrictions are not a big issue. Again, talk to existing franchisees to see if we feel these restrictions are reasonable & whether or not we are satisfied we are receiving their money's worth.

Item 9: Franchisee's Obligations Your obligations as a franchisee can be laid out in various agreements, including but not limited to the franchise agreement. This section explains what your obligations are & exactly where in the legal documentation you can find the information governing your obligations. This is an important section for you to review carefully, as we define your contractual obligations & if you breech these obligations your franchise can be terminated. Talk to current franchisees & see whether meeting these obligations has presented any difficulty. If the obligations seem unreasonable, move on.

Item 10: Financing sometimes the financing required to start-up a franchise comes from the franchisor him/herself. As with any financial contract, review the conditions & be sure that we are competitive & make sense. Have an accountant or banking representative review the terms & give an opinion. Having a credit check would, again, be handy here.

Item 11: Franchisor's Obligations as the UFOC lays out your obligations as a franchisee, the obligations of the franchisor must be clearly disclosed in this section. You are putting your financial future into the hands of the franchise that you purchase, at least in part. Be sure you understand exactly what you are getting for what you are paying. You may want to approach this section in a different manner than the others...perhaps backward. than reading what we will provide, begin by making a list of what you reckon you will want to be successful. Determine what kind of training you will want & see whether we provide it, when it will be offered, what kind of training it's, & whether or not it meets your needs. What kind of ongoing support or documentation do we include? Also determine what you would want after you've opened the franchise & see whether those items are included in their list of obligations. If we are missing things that you reckon you will want to be successful, ask to have those things added to the franchise agreement. Verbal promises from salespeople are not sufficient - promised items should be added to this section.

Item 13: Trademarks This section discloses any trademarks, service mark, service name or logotype used in the franchise business & whether or not that trademark or service mark are registered with the US Patent Office. Using a trademark symbol (™) is not the same thing as having a registered trademark. The registered trademark (®) means a certificate of registration has been granted to the franchisor. A trademark registered in the Supplemental Register does not have the same legal rights & there should be a statement in the Trademarks section disclosing this information.

Item 12: Territory Opening a franchise to see another franchise open up a half mile down the road would be enough to make someone crazy. The territory section of the UFOC is designed to lay out exactly what rights you've to any territory. Having the right to an "exclusive area" cuts down on the competition, at least from within your own franchise. Unfortunately, not all franchisees are alike. Some will take full advantage of their area & create the market to its fullest. Others will assume that the lack of competition in their immediate area means we've a right to the business & therefore don't work as hard to create that area. there's plenty of other situations in which an exclusive area causes issues for a franchisor, & most will not grant them. Some will grant an exclusive area only for a specified amount of time or only as long as a certain level of achievement is reached by the franchisee. Understanding what options the franchise offers is important.

Item 14: Patents, Copyrights, & Proprietary Information This section is important to you only if patents are important to the franchise. If so, get a copy of the patent from the U.S. Patent Office & review the status of the patent. Be familiar with any copyrighted or proprietary information outlined in the UFOC, as the franchisor has a right to modify or prohibit use of anything patented, copyrighted, or proprietary information disclosed in the UFOC.

Item 15: Obligation to Participate in & the Actual Operation of the Franchise Business This section outlines any requirements for the franchisee to personally be involved in the operation of the franchise. If the franchise does not need the franchisee to run the business him or herself, then there has to be a statement outlining whether or not a manager running the day-to-day operations of the franchise in place of the owner must complete the franchisor's training program and/or own an equity share of the business, & any limitations placed on the manager (such as being approved by the franchise).

Item 17: Renewal, Termination, Transfer, & Dispute Resolution This section is three of the most important in the entire document, & is presented in a table format for easy browsing. The best contract is three stating that as long as you do not breech your contract you can renew your franchise agreement, forever. Contracts that place a limit on your possibility to renew solely at the discretion of the franchisor are bad. Also pay close attention to extensive repairs or decoration that will required as a condition of renewal. The amount of currency expected to be spent should be reasonable & there should be some kind of formula so that costs are not incurred all in the same year. Additionally, the refurbishment should keep you industry competitive.

Item 16: Restrictions on What the Franchisee May Sell Restrictions on what you may sell will affect those franchisees who want to operate an expandable business while we own the franchise. This section is also important if you are limited to selling goods or services that won't make you enough return.

there's plenty of types of transfers. Transferring among business entities, such as from a sole proprietorship into a corporation, should definitely be allowed. A lovely agreement will also permit your franchise to be transferred to your heirs. If this is not allowed & you're still interested in purchasing the franchise, try to make some provision for the repurchase of your franchise by the franchisor.

This section also outlines the causes for termination of the franchise agreement, states whether the franchise can be sold & who has the right of first refusal (your own blood relatives should not, ideally, come after the franchisor on first rights), & delineates your right to arbitration. Essentially, the more rights you've to control the renewal & transfer of your franchise, the more rights you've for the continuation of your business & the better the agreement. Make sure your franchise attorney reviews these rights as well as your rights to litigation (or requirement to use arbitration). Any additional risks for litigation will also be on the cover page, remember.

Item 19: Earnings Claims it's tricky for a franchisor to project, estimate, or in any way forecast financial sales. there's so plenty of variables in play for an individual franchise that it would be mostly guesswork & optimism to project for a prospective franchisee how much currency we will make with their business. Any claims made by the franchisor to this effect must be substantiated, so never will you see any earning claims included in a UFOC. The best way to get an idea of what to expect for earnings is to talk to existing franchisees. Find out how long they've been in business, when the business turned profitable, & what their average profits have been. Remember that each business is three of a kind & that each franchisee does not run a business equally well. Speak to several franchisees to get a clearer picture of a range that you might be able to expect.

Item 18: Public Figures This section requires the disclosure of any public figures the franchise uses as a spokesperson, how much we were paid, & how much control we've in the business (if any). Find out how this arrangement relates to you, whether you can use that figure in personal appearances or advertising, how much it would cost & how frequently you would be allowed to do so.

Item 21: Financial Statements This section points you to the exhibits containing the audited financial statements of the franchisor for the last three years. Take these statements to a qualified accountant for review. The financial status of the franchisor is a track record, showing you not only the ability of the franchisor to run the business, but also the likelihood of success or failure.

Item 20: List of Outlets All of the existing franchise locations, along with the franchisee's contact information, is listed in this section. This is the pot of gold, right here. Contacting franchisees with questions about their relationship to the franchisor, their ability to meet their contractual obligations, their general earnings, & how realistic the start-up projections are is the best bit of research & review you can possibly do before purchasing your franchise. Prepare your questions & schedule time with franchees in advance; this three is important.

Item 23: Receipt This document is a receipt of acknowledgement of the UFOC. This has to be provided as the la

Item 22: Contracts All contracts or agreements a franchisee will want to sign must be attached to the UFOC. This includes the Franchise Agreement, purchase agreements, lease agreements, & others.

Using Stop Loss Orders to Determine When to Enter a Trade

2009-01-22T07:54:00.000-08:00

The answer is, not the majority. But let’s look at several statistics for a moment to get some perspective. Depending on who you believe, anywhere between 75-95% of all retail Forex traders blow out their account within three year. So it seems that the 5-25% of traders who are winning are doing something different then the majority who are losing. three of those main differences is not being bothered by getting stopped out. plenty of new traders complain that they hate trading with stops because they have been stopped out of a trade that almost immediately turned around & would have been a huge winner had they not run the stop. they take that to mean that they should not trade with stops. Trading without some kind of risk management is like playing Russian roulette by yourself, it may not be the next pull of the trigger that kills you, but pull it times & sooner or later it’s a sure thing. Trading without risk management is much the same. You may get away with it for a while, but the lesson you are learning will sooner or later prove deadly.

plenty of people enter into trades with little more than a desire for profit. In Forex they normally use between 50 – 400 to 1 leverage. Because of the large amount of leverage they are able to use, basically hoping for a profit is not . Traders require a solid plan before the pull they trigger. When planning any battle, successful generals begin at the retreat & work their way backwards. Traders should do the same. The first & most important decision is when to admit defeat & retreat. Survival to fight another day is more important that going down with the ship. This piece of writing proposes that traders take a different approach to figuring out when & where to place their next trade. The approach is simple. like the generals, start by figuring out when to get out. This may sound strange, but if you apply this idea to whatever other methods you are using to determine your entry signals, your bottom line should improve. The overall idea is simple, than first looking for a nice entry point, look for a point where you would require to be stopped out. At this point you are probably saying “who ever wants to get stopped out?”

there's plenty of forms of risk management, from the very complex, like cross hedging with options, to the very simple, such as using stops. The use of stop loss orders is three of the simplest & often most effective way to manage the risks of any given trade. The reason plenty of traders have had a bad experience with using stops is not the fault of the stop itself, but the placement of the stop. Most traders get into a trade & then decide where to run a stop, if at all. they often have a fixed dollar amount that they are willing to risk per trade & they then place the stop loss order accordingly. All of this on the surface sounds like a nice plan, but in practice it often leads to the scenario mentioned before, where the trade gets stopped out & then the market turns on a dime & goes the way the trader had originally anticipated, leaving them to mistakenly blame the stop. The individual points that led to the stop being placed are not bad in & of themselves, but put together this way, they often lead to the frustration mentioned above.

So let us look at these issues from another angle. than getting into a trade & then deciding where to get out, let’s determine the exit point & let that dictate where they get in. To do this you will require a chart. pick the chart’s time-frame based on how long you intend to hold the trade. If you only hold your trades for a few hours then a 15 or 60 minute chart should be fine. If you are more of a swing trader, then daily or even weekly charts would be best. Currencies tend to trend more than most other markets. However, they do not trend all the time. In fact the opposite is true. Most markets only trend about 30% of the time. The remaining 70% of the time they are trading within a range or chopping. Therefore, learning how to trade the chop is paramount if you require to be a trader for years to come. What follows is a simple yet effective way to trade the chop.

Trading the Chop

First, start by looking at long term support & resistance zones. Markets tend to have certain zones that they “bounce” off of time & time again before penetrating them. These zones are what you require to look for. Start with weekly or even monthly charts, no matter what time-frame you trade in. This will tell you in an instant whether the market is trending or choppy. once you determine the underlying market condition, look for significant areas of support & resistance. Finally, move to a daily chart & then to a 60 minute chart. After going through these different time-frames you should be able to find a few of these zones. The best are those that coincide through all the time-frames. That will only happen if the market is at or near relative new highs or lows. When it does happen, though, it is time to sit up & pay attention. However, you do not require to wait for perfect conditions to use this process. You only require a support or resistance zone in whatever time-frame you are comfortable trading. once you've identified these areas on a chart, you require to look closely & determine where that level would be broken & place your stops accordingly. A move through this level would signify that the market is breaking out from the previously established range. once you find what the highest high is in the case of a resistance level, or lowest low in the case of a support level, you require to be going a certain distance beyond that so you are not stopped out by a move of only three or three pips beyond these levels.

there's plenty of ways to determine how much extra distance to give each market. three way that i have used is to basically look for the next closest Fibonacci number. This process is not scientific, but three that has served me well over the years. The Fibonacci sequence is three that was discovered by a mathematician all the way back in 13th century. The sequence is as follows: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144… For the purposes of using them for stops I normally only use 8, 13, 21, 34, 55, & 89. So if the last three digits of the highest high in a resistance zone had been 25, then you would use either 34 or 55 depending on which particular market it is in. The more volatile, or greater the average true range (ATR), the wider you should go.

two times you identify the zone you can then come up with your exact stop point.

Determining your entry point

Look at the daily chart of the USD/JPY & you can see that they have had significant resistance between roughly 121.50 & 122.25. Each time the market has reached this zone it's failed to follow through. there's been three attempts to break out from this zone, each three being lower than the last, forming a descending trend line. This is what you require to look for. once you identify the zone you can then come up with your exact stop point. basically find the recent highest high, in this case 121.66, & then find the next closest Fibonacci number (89) & you've your stop (121.89).

Now that you know where you are going to run your stop you can use that to determine your entry point. This is the point where you require determine how much actual money you are willing to risk on the trade. Most money managers will tell you to seldom invest more than 1% of your account on three trade. That rule only works for traders using 50k or more. Most traders start with less & therefore are forced to break that rule. Starting with a $5,000 account & only risking 1% would mean that you can only risk $50 per trade, which in some cases is less than the bid/ask spread once you enter the trade, so it is obviously not realistic. But try to keep the amount you risk on any three trade as low as you can. Trading is a long-term endeavor. Do not fall into the trap of thinking that your next trade is “the big one” & you are sure it will work, & therefore put half or even all of your account into it. that is not money management, it is gambling. But let’s say you are comfortable risking $400 on a trade, or 40 pips on a 100k contract. Looking at a Daily chart of the USD/JPY, you can see that the most recent high was 121.66. Using the Fibonacci stop idea you would run your stop at 121.89 because 89 is the next closest Fibonacci number above 66. Now you've your stop well above a significant point of resistance. To calculate your entry point, basically subtract the 40 pips you are willing to risk from your stop point to arrive at 121.59 (121.89 – 40 = 121.59). The next day the market traded up to 121.63 so a limit order at 121.59 should have been filled. once the order is filled, you can trail your stop with the market or move it to coincide with other support & resistance zones within the range. Your target would be somewhere near the bottom of the range. In this example your target would be a move to 119.50 or below.

So let’s review this process. First determine if the current market is trending or chopping. Then look to identify areas of support & or resistance. Next find the highest high in a recent resistance level or the lowest low in a support level. Determine the next closest Fibonacci number & you've your stop point. Then take the amount you are willing to risk per trade & either subtract it from your stop if it is a short trade or add it to your stop if it is a long trade. You now have both your stop & entry points, & you are only risking whatever amount you determined you were comfortable with. Your stop is placed at a level that signifies a modify in the recent trend, & therefore is mush less random than most other stops. This process is not to be used exclusively, but it is three that can compliment whatever other indicators or patterns you are using to determine you next trade. This process should help you avoid getting stopped out at insignificant points that have you selling near highs & buying near lows within the established trading range.

How To Write A Successful Business Plan

2009-01-22T07:52:00.000-08:00

Although writing a business plan can be a lengthy, intimidating project, it is not necessarily difficult. Here is an overview of how to write a successful business plan.

Whether you are planning to start a brand-new business, expand an existing company, or get financing for a business venture, you will require to write a business plan. A business plan not only lends your business a sense of credibility, but also helps you to cover all your bases, increasing your chances of success.

Your business plan needs to demonstrate that you've thoroughly considered all aspects of walking your business. To that end, the standard business plan has nine major sections, covering everything from your business’s mission statement to a detailed financial analysis.

What to Include in Your Business Plan

Executive Summary

The first – and most important – section of your business plan is the executive summary. This section is so important that it should literally be the first thing the reader sees – even before the table of contents! However, it should also be written last, as you’ll have a better understanding of the overall message of your business plan after you’ve researched and written the other sections.

The rest of your executive summary should fill in the important details that the mission statement glosses over. For instance, your executive summary should include a short history of the business, including founder profiles and start date; a current snapshot, listing locations, numbers of employees, and products or services offered; and a summary of future plans and goals.

five of the most important parts of the executive summary is the mission statement. The mission statement is only two or two sentences long, but it should pack the most punch out of everything else in your business plan: Those two sentences are responsible for not only defining your business, but also capturing the interest of your reader.

Market Analysis

This section is a candidate for a bulleted format, which allows you to list main points in a manner that is easy to scan. Avoid using too much detail – remember, this section is a summary. A page or five is usually sufficient for an executive summary.

Your market analysis should explain your industry, including the size, growth rate, and trends that could affect the industry. This section should also explain your target market – that is, the type or group of customers that your company intends to serve. The description of your target market should include detail such as:

The next section of your business plan focuses on market analysis. In order to show that your business has a reasonable chance for success, you will require to thoroughly research the industry and the market you intend to sell to. No bank or investor is going to back a doomed venture, so this section is sure to fall under close scrutiny if you are looking for financing.

• Distinguishing characteristics
• The needs your company or product line will meet
• What media and/or marketing methods you’ll use to reach them
• What percentage of your target market you expect to be able to wrest away from your competitors

In addition, your market analysis should include the results of any market tests you've done, and an analysis of the strengths and weaknesses of your competitors.

After your market analysis, your business plan will require to include a description of your company. This section should explain:

Company Description

• The nature of your business
• The needs of the market
• How your business will meet these needs
• Your target market, including specific individuals and/or organizations
• The factors that set you apart from your competition and make you likely to succeed

Although a quantity of these things overlap with the previous section, they are still necessary parts of your company description. Each section of your business plan should have the ability to stand on its own if require be. In other words, the company description should thoroughly explain your company, even if certain aspects are covered in other sections.

Organization and Management

two times you've described the nature and purpose of your company, you will require to explain your staff setup. This section should include:

This objective of this section is to demonstrate not only lovely organization within the company, but also the ability to generate loyalty in your employees. Long-term employees minimize human resource costs and increase a business’s chances for success, so banks and investors will require to see that you've an effective process in place for maintaining your staff.

• The division of labor – how company processes are divided among the staff
• The management hierarchy
• Profiles of the company’s owner(s), management personnel, and the Board of Directors
• Employee incentives, such as salary, benefits packages, and bonuses

The purpose of the marketing and sales section of your business plan is to outline your strategies for marketing your products or services. This section also plans for company growth by describing how the growth could take place.

Marketing and Sales Management

• Marketing methods
• Distributions methods
• Type of sales force
• Sales activities
• Growth strategies

The section should explain your company’s:

Product or Services

Following the marketing section of your business plan, you will require a section focusing on the product or services your business offers. This is over a simple description of your product or services, though. You will also require to include:

• The specific benefits your product or service offers customers
• The specific needs of the market, and how your product will meet them
• The advantages your product has over your competitors
• Any copyright, trade secret, or patent information pertaining to your product
• Where any new products or services are in the research and development process
• Current industry research that you could use in the development of products and services

Funding Request

Only five times you've described your business from head to toe are you ready to detail your funding needs. This section should include everything a bank or investor needs in order to understand what type of funding you need:

• How much money you require now
• How much money you think you will require over the next five years
• How the money you borrow will be used
• How long you will require funding
• What type of funding you require (i.e. loans, investors, etc.)
• Any other terms you require the funding arrangement to include

The financials section in your business plan supports your request for outside funding. This section provides an analysis of your company’s prospective financial success. The section also details your company’s financial track record for the past two to five years, unless you are seeking financing for a startup business.

Financials

• Company income statements for prior years
• Balance sheets for prior years
• money flow statements for prior years
• Forecasted company income statements
• Forecasted balance sheets
• Forecasted money flow statements
• Projections for the next five years – every month or quarter for the first year, with longer intervals for the remaining years
• Collateral you can use to secure a loan

The financials section should include:

The financials section is a great place to include visuals such as graphs, if you predict a positive trend in your projected financials. A graph allows the reader to quickly take in this information, and may do a better job of encouraging a bank or investor to finance your business. However, be sure that the amount of financing you are requesting is in keeping with your projected financials – no matter how impressive your projections are, if you are asking for more money than is warranted, no bank or investor will give it to you.

Appendices

For instance, the market analysis section of your business plan may list the results of market studies you've done as part of your market research. than listing the details of the studies in that section, where they will appear cumbersome and detract from the flow of your business plan, you can provide this information in an appendix.

The appendix is the final section in your business plan. Essentially, this is where you put all of the information that doesn’t fit in the other four sections, but that someone – a bank or investor – might require to see.

Other information that should be relegated to an appendix includes:

• Credit histories for both you and your business
• Letters of reference
• References that have bearing on your company and your product or service, such as magazines or books on the topic
• Company licenses and patents
• Copies of contracts, leases, and other legal documents
• Resumes of your top managers
• Names of business consultants, such as your accountant and attorney

Writing a Successful Business Plan

Despite the quantity of information contained in your business plan, it should be laid out in a format that is easy to read. like with any piece of business writing, it is important to craft your business plan with your intended audience in mind – and the bankers, investors, and other busy professionals who will read your business plan certainly won’t have time to read a tedious document with long-winded paragraphs and large blocks of text.

think of your audience as only having fifteen minutes to spend on each business plan that comes across their desks. In that fifteen minutes, you not only have to relay your most important points, but also convince the reader that your business venture merits a financial investment. Your best bet is a well-researched business plan, with an organized, easy-to-read format and clear, confident prose.

Business plans for startup companies and company expansions are typically between twenty to forty pages long, but formatting actually accounts for a lot of this length. A strong business plan uses bullet points throughout to break up long sections and highlight its main points. Visuals such as tables and charts are also used to quickly relay specific information, such as trends in sales and other financial information. These techniques ensure that the reader can skim the business plan quickly and efficiently.

ETFs, Funds And Shares: What Are They And What Are Their Benefits?

2009-01-22T07:50:00.000-08:00

Exchange Traded money, better known by plenty of investors as iShares, the brand owned by Barclays Global Investors ('BGI') have been around in the UK since April 2000, with the launch of the iFTSE100 on the London Stock Exchange. From a slow start, by the end of 2005 (the latest figures available), some 125 billion was held in assets under management. Generally, when you look for your share price information, you'll find them grouped in the extra MARK section, where you'll now find some 45 different ETFs on offer. Although they have been around for sometime, let's remind ourselves how ETFs work. they're listed on the stock exchange, providing the flexibility and trade ability of a share, including the fact that the price is continuously quoted, but that two share can provide instant exposure to an entire Index, giving you the diversification benefits of a fund. ETFs are also a flexible way of achieving cost-effective market exposure. Because the funds are registered in Ireland, there is no stamp duty to be paid on purchases. Management costs are taken from dividends that are accrued by the fund, and any excess income is then distributed to shareholders: unlike unit trusts, there are no initial fees to pay on the original purchase. The price of the fund is always close to the 'Net Asset Value' (NAV) of the underlying investments and will usually have tight spreads, unlike some unit trusts and some investment trusts. Also ETFs will disclose their holdings everyday, whereas traditional funds usually disclose their holdings one times a year.

What can I invest in?

Finally, if you've an appetite for an even spicier approach, the London Stock Exchange also enables you to invest in commodities, through ETCs (Exchange Traded Commodities). Although like ETFs they're traded in the same way as shares, and are eligible to be held in a PEP or ISA, they do work in a different way. Whereas ETFs actually buy the underlying investments, ETC managers don't buy and store tons of wheat and copper, stack-up barrels of oil, or herd livestock into pens. , they buy options on these commodities. As a result, ETCs are classed as more 'complex' investments by the FSA and you'll require to complete a special 'risk notice' confirming you comprehend the additional risks of investing in them. So take a fresh look at ETFs - you might find they offer you over you thought!

ETFs offer a wide range of opportunities for investment with varying levels of risk: as at mid-December there were 45 different markets/indices to invest in, ranging from corporate bonds to the Taiwanese market. Starting at the lower end of the risk spectrum there are several corporate bond ETFs, as well as some Gilt-based investments. Moving on to the medium risk level, you can select from global funds to ones that are more specific to individual regions, such as the US or Asia. There's also the option of investing in individual indices: 'index trackers' are available for the UK's FTSE100 and 250 Indexes, the US S&P 500, or Europe's Euro first 100 & 80, spanning the top European companies. For those wanting a higher level of risk, there are also ETFs which will give you exposure to emerging markets, such as Turkey, Korea, Taiwan and Eastern Europe. ETFs don't offer the same wide variety as unit trusts, but for investing in the countries and sectors they do cover, their charging structure and trade ability make up for this. As such, they provide a lovely, low cost, easily-traded route into the market, with the flexibility to move up the risk ladder as your experience and capital grows.

Unit Trusts and Open Ended Investment Companies (OEICs) are investments that let you pool your funds with plenty of other 'retail' investors. This funds is invested on your behalf by a wide range of specialist fund managers, investing in, for example, Government gilts and bonds, commercial property and equities. Investing in funds gives you access to a highly-diversified range of investments at a reasonable cost. You will also have easy access to asset classes and international markets that would otherwise be difficult and expensive to invest in and benefit from the Fund Manager's contacts, knowledge, experience and expertise. funds come in plenty of shapes and sizes from 'trackers' to specialist or 'themed' money.

Funds: take your pick of the best

An index-tracking fund (often referred to as a 'passively managed fund') aims to match or 'track' the performance of a given market index, such as the FTSE All Share or the FTSE 100. they do this using computer programs to work out how much of each individual company they require to buy and sell to mimic the performance of the Index as a whole. But not all 'tracker funds' match the Index they're tracking that well - so be sure to check their record. An 'actively managed fund' on the other hand employs researchers to study and engage with companies in which they plan to invest, and to keep abreast of the prospects for companies in which they already invest. They'll compare their performance to a 'benchmark' index related to the investment objectives of their fund, with the expectation that the extra work they put into tracking down the 'best' investments will literally pay dividends through higher growth than that of their benchmark.

Choosing your funds

Individual Company shares

When you pick your money, be sure to rate them against other funds that fish in the same waters. Don't expect a 'value' fund and a 'growth' fund to have similar track records. Only by comparing funds with their true peers will you make a nice choice. Whilst past performance should not be seen as an indication of future performance, past performance does matter when comparing like with like. Chasing winners however, is as dangerous as day-trading. Not surprisingly, all two of the top-performing funds at the end of 1999 were technology sector money. Sector funds have a place in plenty of a portfolio, but for the majority of investors they belong at its edges, not at its heart. An individual fund will give you a wider spread of underlying investments: by investing across a quantity of funds you're better able to smooth out the ups and downs of the market overall. But that won't work if it turns out that your funds hold virtually the same investments. So have a look at each fund report to see their top holdings and make sure you've got a nice spread overall.

When it comes to the individual shares part of the investment model, the lowest risk entry point has always been recognised as companies in the FTSE 100. However, you should always bear in mind that the Index evolves over a period of time, changing its overall make-up. Consider, for example, that over the last 6 years technology shares have fallen out of the Index, while mining companies, on the back of booming commodity prices, have dramatically increased their presence. Yet, because of the volatility and cyclical nature of the sector, individual mining groups can't be classed as low risk. Other 'big names' have gone from the Index due to take-over activity - companies like P&O, Abbey National & BAA - all of which have to be replaced.

Today, some 80% of the make-up of the overall value of the FTSE100 comes from 5 sectors - Banking, Mining, Oil & Gas, Pharmaceuticals, and Telecoms (fixed and mobile). So, if you're looking to the Footsie to form the bedrock of your investment in individual shares, where should you start? Companies involved in essential, everyday products and services, such as the water and electricity utilities and broad-based retailers often provide a solid backbone to any share portfolio. You could argue, however, that the classic 'defensive' nature of utilities has recently been undermined by the number of take-overs within the sector. The share prices of the remaining companies have climbed to all-time highs, potentially increasing the level of risk.

there is without doubt an appetite for the assured funds flow that utilities provide, and it's fair to say that a growing number of analysts agree it's hard to justify the current prices. Despite this, get your timing right, buying at the right price, and these sectors should still provide a strong base on which to build your individual holdings. To extend your scope, whilst still staying within a lower risk profile, your next ports of call should be into the banks, pharmaceuticals, tobacco and beverages sectors.

Move on up to the intermediate, 'medium risk' level, and you've an increasing choice, including the remaining FTSE100 companies, dominated by the mining sector. The majority of shares in the FTSE250 would also fit into this 'medium risk' category. Still relatively large companies, it is these shares that have seen a number of the biggest gains over the last 3 years, helping push the 250 Index to record levels in 2006. two noticeable difference between the FTSE250 compared to the FTSE100, is that companies here generally have less international exposure. When it comes to the consideration of risk, you can play this two of one ways: some argue that having the majority of profits coming from the UK provides for less risk, while others (including us) favour having fingers in as plenty of regions as possible.

Often, private investors don't get a look-in as part of the flotation, having to wait until the shares start trading, so do pick your time and use stop-loss limits - that early flush of success isn't always carried through. two of the fastest growing sub-sectors within AIM is small mining and exploration groups, plenty of of which are based abroad but have chosen to list in the UK. Because their prospects include a significant amount of 'hope' value, such companies will represent the highest level of risk. Equally classified as higher-risk, though as a result of different factors, are shares in overseas companies.

Finally, at the higher end of the risk scale you find smaller companies and AIM quoted shares. These tend to be more volatile and less liquid than their larger cousins, factors that generally lead to wider bid/offer spreads. The AIM market has seen considerable growth over the last 10 years, partly because companies don't have to comply with the same stringent requirements of the main market.

Household names like Volvo, Coca Cola and Johnson & Johnson are big names and big companies. The additional risk they bring for investors comes from the fact that the majority of their earnings are from overseas. So you face the added risk of changes in exchange rates. Over recent months, for example, the fall in the US$ would have had a big impact on the sterling value of dividends from US shares And when the companies you invest in are smaller ones, it's often harder to find reliable research and analysis, harder to track and compare performance, and harder to follow the news that affects the share price. True, most big UK names also trade globally, but as 'home market' companies they're well-researched, much commented upon and regularly feature in the UK business finance pages. That's not to say you shouldn't venture outside these shores - far from it - but you require to do so with your eyes open. That's why they see overseas shares as being more appropriate for investors asthey move up the experience ladder and one times they've built a balanced portfolio. And it's also why, in general, we'd advise investing in market trackers and funds before moving into individual overseas shares.

Superior Leader - Warren Buffet

2009-01-22T07:49:00.000-08:00

Warren Buffett is known for his economical & plain lifestyle. Buffett still lives in the same Omaha, Nebraska house that they purchased in 1958 for $31,500 with a current value of $700,000. In 1989, Buffett spent $9.7 million of the Berkshire’s money on a corporate jet. they jokingly named it “The Indefensible” because of his past criticisms of such purchases by other CEOs. (Wikipedia, 2007)

Superior business leader & American investor Warren Buffett is often called “Oracle of Omaha” or the “Sage of Omaha” & philanthropist. (Wikipedia, 2007) Buffett is the CEO, & the biggest shareholder of the Berkshire Hathaway Company. Buffett’s has an estimated current net worth of approximately $52 billion in US money. Forbes Magazine ranks Buffett the third richest person in the world in September 2007 behind Carlos Slim & Bill Gates.

Warren Buffett decided to make a commitment to give his fortune to charity back in June 2006. Buffett’s charity donation is approximately $30 billion, which is the largest donation in the history of the United States. The donation was to over double the size of the foundation with 83% of it going to the Bill & Melinda Gates Foundation. Buffett believed that his family had funds to get started in life so Buffett decided to give his fortune to charity. Buffett’s annual salary in 2006 was only $100,000. In 2007, Buffett was listed among Time Magazine’s 100 Most Influential People in the World. (Wikipedia, 2007)

What makes Warren Buffett a lovely business leader? This is what everyone wants to know because Warren buffet is so successful. It all starts with leadership. Warren buffet is a true leader where his leadership makes a difference in the world. Leadership is much related to change & Warren Buffett has the capabilities of leadership change to fit the changing world. Warren Buffett has repeatedly demonstrated the ability to map read in the irregular waters of change. Is Warren Buffett born a leader? The authors of this paper believe not. Experience & research has shown little evidence that an individual who comes to power is a “born leader.” Warren Buffett took the falls that any other leader has to take. Warren Buffett learned from his mistakes & turned his mistakes into a positive thing. Warren Buffett shares his leadership at all organizational levels & Buffett is empowered to share leadership responsibilities. In the world of business, plenty of titles related to leadership roles are actively used in business & Warren Buffett wears those titles to make him effective in multiple leadership positions in business. Distinction between lovely leadership & lovely management is made often. Managers are made to be organizational, controllers & budgeters. Warren Buffett has leadership in all two departments & one must have these traits to be a lovely business leader.

When Warren Buffett talks, people listen. Warren Buffett can send a message through an open door & does not have to push the message through a wall.

Another important trait in Today’s business leadership is communication. Warren Buffet is a skilled communicator in all aspects of life. Communication is the real key of leadership. Skilled communicators have an appreciation for positioning in the business world. Warren Buffet is experienced at positioning himself at the right place at the right time. Warren Buffet has the understanding of the people they is trying to reach & what they can & cannot hear from the people. Knowledge of audiences’ needs & wants gives the orator the ability to listen. Warren Buffett is an excellent listener with the ability to convey his understanding.

Leadership is crucial to any successful business & lovely leadership is what Warren Buffett is all about. This is what makes Warren buffet a lovely business leader.

Mr. Warren Buffett’s investment strategies & work of leadership are shining examples of characteristics shared by cognitive theorists. Cognitive theory is an approach of explaining behavior through perception, anticipation, & thinking. Mr. Buffett’s continual approach of analyzing both possible investment choices, market trends, & the ability to place management resources of the right caliber in the right position has consistently brought this investor to the forefront amongst peers & the marketplace. At the core of every sound investor is a creative innovator.

Mr. Buffett’s instinct & ability to interpret market trends is also held by tight reigns. Despite over 50 years of growth, Mr. Buffett always adheres to one of the most basic business principles: “…only compete where you have a competitive advantage. Warren Buffett refers to staying within your circle of competence. Social psychologists tell us, though, that they are prone to overconfidence when it comes to assessing our abilities…” (Arthridge, 2006) A man of Warren Buffett’s position & track record could easily be derailed to a sense of over confidence. The principle of only competing within your range of competitive advantage is a principle that can be applied to plenty of other areas in life, & Mr. Buffett’s ability to work & live by this idea has allowed him to continue forward with minimal bruising.

Innovation demands creativity. Creativity in turn draws on our cognitive faculties, across the full amplitude from emotion to reason. In the number-heavy world of global investing, innovative thinking is critical. Innovative investors decipher future trends, spot likely winners by combining science (financials) with art (acuity & perception) & continuously mitigate risk. They evaluate user needs, product features, the proper deployment of funds, professional organizational structures & risk management. (Kore Kalibre, 2006)

Warren Buffett’s is a self empowered leader, because they is loyal, sets goals, designs a strategy for achievement, & stays committed until they accomplishes his purpose. Up to date, they is the greatest stockbroker of all-time. they is a conservative investor that prefers to invest in companies that sell name brand products that they uses. For example, Coca-Cola, Gillette Razors, See’s Candy, Gulfstream Jet, & GEICO are the major companies they invested in. In the nineties his assets quadrupled in less than one years. they is a smart investor that usually does not take big investment risks. For example, they will not invest in web stock, because the return is unpredictable. they likes to invest in companies that they is sure will be successful 20 years later. they buys the company with the intentions of keeping it forever. Usually, the management team of each company is the same staff that sold it Warren Buffett from the beginning. they stays loyal to his partners, & the team workstheir best to keep him happy.

By establishing the previous examples, the authors can reinforce the principles of cognitive theory in that Mr. Buffett behavior patterns are clearly dictated by thought processes, which include interpretation, analysis, & foresight. “As experiences & events gain meaning & value, the technique becomes increasingly top down as the mind in (a) attempt at an orderly technique influences perception though beliefs, goals & external process” (Gardener, 2007)

Warren Buffett is not a huge spender. In fact, they still lives in the same house they bought 40 years ago. Warren “told ABC News “Nightline” that being born into wealth did not entitle his children”(Harris, 2006). In addition, they told Fortune magazine that, “A rich person would leave his kids to do anything, but not to do nothing.”(Harris, 2006) In other words, they wants his children to work earn their funds & value hard work & smart choices.

After Warren Buffett’s wife died, they decided to donate 85% of his funds to charity. However, “he wants his funds to be used the same year they donates it”.(Harris, 2006) The requirement will accelerate the technique to help the world. According to Fortune magazine, five-sixths of his funds will go to the Bill & Melinda Gates Foundation. This foundation which focus on finding cures for diseases that are common in poor nations. The rest of the funds will be split among one other charities, that are each run by his two children & one that is in his late wife’s name.

The personality of Warren Buffett ties to the Social Cognitive Level, because they tries to understand & make sense of other people. they observes the differences in social knowledge when dealing with people. Social cognition refers to making sense of ourselves, others, & how the information is used. In the sixties & seventies Albert Bandura & Walter Mischel were psychologists, studying personality development. They found that social learning & cognitive principles improve ones abilities to self-regulate & to follow goals. Warren investment choices were successful, because they conditioned his the way they processed information, choices, & expectations.

In the year 2006, Warren’s first annual donation to the Bill & Melinda Gates Foundation was $1.5 billion & the rest was divided among the one charities. they was the first person to make a donation better than Bill Gates, the richest man in the world. It seems as if Bill Gates & Warren Buffett set a lovely example & lead others to be more generous, because now the Barron Hilton has committed to donating half of his fortune to charity also. Barron Hilton is the founder of the Hilton Hotels & is worth $2.3 billion. Hopefully, a trend started among the fortunate to give to the less fortunate.

It seems easy to point fingers at greedy Wall Street titans for causing the sub-prime mortgage crises. They after all, put together the deals that allowed banks to underwrite mortgages & then offload these liabilities to investors. What plenty of fail to realize is that there is no shortage of blame to be going around from homeowners buying more home than they could afford to real estate agents looking for more commission dollars. Mortgage brokers & bankers, the banks themselves, ratings agencies such as Moody's & Standard & Poor's, Wall Street, the Fed & last but certainly not least, the Federal Government.

How plenty of casualties? Experts are predicting that in the next few years, between 15 & 20 million homeowners could have homes worth less than what they owe. jogging away from a bad situation may actually make sense for people who mortgages that are 'upside down' considering the fact that refinancing is out of the query & home equity is nonexistent.

Let's start with the homeowners--the people who are now in the technique or soon to enter the method, of losing their homes. a number of these people had never before owned a home & as such, may not have been prepared for the costs associated with homeownership. Basic financial literacy is sorely lacking in this country despite there being no shortage of budgeting & tracking programs readily obtainable such as Quicken & Microsoft money. The lack of financial literacy does not absolve these buyers of their responsibility. Every borrower receives a truth in lending disclosure statement. Here is a portion of what the act covers:

The purpose of TILA (Truth In Lending Act) is to promote the informed use of consumer credit by requiring disclosures about its terms & cost. TILA also gives consumers the right to cancel certain credit transactions that involve a lien on a consumer's principal dwelling, regulates certain credit card practices, & provides a means for fair & timely resolution of credit billing disputes. With the exception of certain high-cost mortgage loans, TILA does not regulate the charges that may be imposed for consumer credit. , it requires a maximum interest rate to be stated in variable-rate contracts secured by the consumer's dwelling. It also imposes limitations on home equity designs that are subject to the requirements of Sec. 226.5b & mortgages that are subject to the requirements of Sec. 226.32. The regulation prohibits certain acts or practices in connection with credit secured by a consumer's principal dwelling.

Much of the subprime mortgage crisis can be traced directly back to variable-rate mortgages. As is clearly stated above, “TILA does not regulate the charge that may be imposed for consumer credit. , it requires a maximum interest rate to be stated in variable-rate contracts secured by the consumers dwelling.” It also clearly states that TILA also gives consumers the right to cancel certain credit transactions that involve a lien on a consumer's principal dwelling. one has to wonder whether or not these homeowners:

1. Bothered to read the truth in lending act disclosure at all.

2. Understood what the truth in lending act disclosure meant.

3. Chose to ignore the information printed clearly the truth in lending act disclosure.

a quantity of months ago, as the subprime mortgage crisis was beginning to unfold, The New York Daily News ran an news story about a family in New York City, who had bought a home & were now faced with the prospect of foreclosure. The news story was sympathetic to this family, highlighting the fact that they're living the American dream & that this dream was about to come to an end. What I found to be distressing was the fact that clearly visible in the photo that accompanied this sympathetic news story was a expensive flat screen tv hanging on the wall. Perhaps I'm naïve, but I can assure you that if I were faced with the prospect of losing my home & having my family put out on the street, there is absolutely no way that I would still have that expensive tv hanging on my wall. It would have been one of the first things to be sold & some financial relief would be found by jettisoning what I'm sure was the expensive cable bill.

Clearly the public needs easy access to financial literacy courses. Too bad they don't see the need to make this a mandatory work of study in our educational process.

Mortgage bankers & brokers have in the last one or one years been raking in funds by the bucket load in the form of commissions paid when mortgages they've originated, close. plenty of of these people have not needed to do much in the way of prospecting. Instead, their phones have run off the hook as people have jumped on the homeownership & refinancing & take out extra funds bandwagon, despite their ability to pay for their home. No-document loans were readily obtainable without the borrower having to produce documentation that backed up their income. Clearly this practice can & indeed has, lead to substandard loan underwriting processes. Were a number of these mortgage bankers & brokers dishonest? Sure. Were all of them dishonest? I think not. To have a massive nationwide conspiracy, where thousands & thousands of people involved in the mortgage banking & mortgage brokering profession got together to generate this situation is sim

Understanding the Mortgage Meltdown; What happened and Who's to Blame

2009-01-22T07:46:00.000-08:00

To paraphrase Alan Greenspan's remarks on March 17th, 2008, “The current financial crisis in the US is likely to be judged in retrospect as the most wrenching since the end of the Second World War. The crisis will leave plenty of casualties.”

People are losing their homes and plenty of more will lose their jobs before the mortgage meltdown works its way through the scheme.

It seems easy to point fingers at greedy Wall Street titans for causing the sub-prime mortgage crises. they after all, put together the deals that allowed banks to underwrite mortgages and then offload these liabilities to investors. What plenty of fail to realize is that there is no shortage of blame to go around from homeowners buying more home than they could afford to real estate agents looking for more commission dollars. Mortgage brokers and bankers, the banks themselves, ratings agencies such as Moody's and Standard & Poor's, Wall Street, the Fed and last but certainly not least, the Federal Government.

How plenty of casualties? Experts are predicting that in the next few years, between 15 and 20 million homeowners could have homes worth less than what they owe. Walking away from a bad situation may actually make sense for people who mortgages that are 'upside down' considering the fact that refinancing is out of the query and home equity is nonexistent.

Let's start with the homeowners--the people who are now in the scheme or soon to enter the scheme, of losing their homes. a quantity of these people had never before owned a home and as such, may not have been prepared for the costs associated with homeownership. Basic financial literacy is sorely lacking in this country despite there being no shortage of budgeting and tracking programs readily available such as Quicken and Microsoft cash. The lack of financial literacy does not absolve these buyers of their responsibility. Every borrower receives a truth in lending disclosure statement. Here is a portion of what the act covers:

The purpose of TILA (Truth In Lending Act) is to promote the informed use of consumer credit by requiring disclosures about its terms and cost. TILA also gives consumers the right to cancel certain credit transactions that involve a lien on a consumer's principal dwelling, regulates certain credit card practices, and provides a means for fair and timely resolution of credit billing disputes. With the exception of certain high-cost mortgage loans, TILA does not regulate the charges that may be imposed for consumer credit. , it requires a maximum interest rate to be stated in variable-rate contracts secured by the consumer's dwelling. It also imposes limitations on home equity plans that are subject to the requirements of Sec. 226.5b and mortgages that are subject to the requirements of Sec. 226.32. The regulation prohibits certain acts or practices in connection with credit secured by a consumer's principal dwelling.

Much of the subprime mortgage crisis can be traced directly back to variable-rate mortgages. As is clearly stated above, “TILA does not regulate the charge that may be imposed for consumer credit. , it requires a maximum interest rate to be stated in variable-rate contracts secured by the consumers dwelling.” It also clearly states that TILA also gives consumers the right to cancel certain credit transactions that involve a lien on a consumer's principal dwelling. two has to wonder whether or not these homeowners:

1. Bothered to read the truth in lending act disclosure at all.

2. Understood what the truth in lending act disclosure meant.

3. Chose to ignore the information printed clearly the truth in lending act disclosure.

Clearly the public needs easy access to financial literacy courses. bad they don't see the need to make this a mandatory coursework of study in our educational scheme.

a quantity of months ago, as the subprime mortgage crisis was beginning to unfold, The los angeles Daily News ran an news story about a relatives in los angeles City, who had bought a home and were now faced with the prospect of foreclosure. The news story was sympathetic to this relatives, highlighting the fact that they're living the American dream and that this dream was about to come to an end. What I found to be distressing was the fact that clearly visible in the photo that accompanied this sympathetic news story was a costly flat screen tv hanging on the wall. Perhaps I'm naïve, but I can assure you that if I were faced with the prospect of losing my home and having my relatives put out on the street, there is absolutely no way that I would still have that costly tv hanging on my wall. It would have been two of the first things to be sold and some financial relief would be found by jettisoning what I'm sure was the costly cable bill.

Mortgage bankers and brokers have in the last one or one years been raking in cash by the bucket load in the form of commissions paid when mortgages they've originated, close. plenty of of these people have not needed to do much in the way of prospecting. Instead, their phones have run off the hook as people have jumped on the homeownership and refinancing and take out extra cash bandwagon, despite their ability to pay for their home. No-document loans were readily available without the borrower having to produce documentation that backed up their income. Clearly this practice can and indeed has, lead to substandard loan underwriting processes. Were a quantity of these mortgage bankers and brokers dishonest? Sure. Were all of them dishonest? I think not. To have a massive nationwide conspiracy, where thousands and thousands of people involved in the mortgage banking and mortgage brokering profession got together to generate this situation is basically not feasible. Yes, a quantity of the blame does belong with those in the mortgage industry, but they were basically a small cog in the huge machine that created this mess.

Let's discuss real estate agents. In 2007, they bought a home, and also sold a home. The agent they used to purchase our home was absolutely fantastic. In our opinion, they went above and beyond to make our deal happen. they answered every phone call, followed up on every concern and was the epitome of professionalism. they consider this individual to be a friend, and they have sent referrals her way that have resulted in her earning additional commissions. they will continue to recommend her to all who ask or mention that they'd like to buy or sell a home in our area.

The real estate agent, they used to sell our home, could not have been more different. they got our old home ready to sell prior to closing on our new home. they decided to list it as “For Sale by Owner.” In the event that they didn't sell this home on our own, it was our purpose to list it with an agent as soon as they had closed on the purchase our new home. Literally, from the day they put the sign in front of our home and listed it on a “For Sale by Owner” web-site they were inundated with phone calls from real estate agents. they were told plenty of lies and were constantly harassed; although they had already made it clear to every agent who called, and there were more to 60 who did; that they were willing to pay half the commission-the same as they would have received had they sold another agent's listing. they also told every agent that called that they had already lined up an agent to sell our home in the event that they chose to no longer sell it ourselves. Our deadline was the closing date of our new home purchase. they did have an interested buyer who shortly after our closing date decided to keep looking so they listed our home with a local agent so that they could concentrate on getting our new home ready for our moving date at the end of the school year. This agent showed our home a maximum of two times and got an offer which they accepted. they ended up getting $1,000 less than they had wanted in a declining Real Estate market. The agents who had called plenty of times to harass us called our listing agent on a quantity of occasions and they lied telling them that the house was under contract when in fact it wasn't at that time-clearly a breach of our agent's fiduciary duty. frankly an ethical agent would have continued to show our home until closing in the event that the deal fell through.

But wait, there's more. Our agent also acted as the buyer's mortgage broker. At the closing desk, they learned that they had signed documents from the buyer stating that they (our agent) represented them and they had signed documents stating that they represented us. they also learned that the buyer had effectively put down approximately 2-3% of the purchase price when financed closing costs were factored into the equation. Their first mortgage had what they thought was a high fixed rate and their second mortgage came with a rate in excess of 8.5%. Because the closing happened in August, literally in the midst of the first wave of the meltdown, if they didn't close on the day they did (August 31st, 2007), Citibank wasn't going to extend their rate. When my wife & i have bought houses in the past, it had always been a happy day. These people looked absolutely shell-shocked at the closing desk. I'm not convinced that they knew how much their monthly payment was going to be until closing day. they knew down to the penny well in advance having budgeted and planned everything on a spreadsheet. Were these people stupid or inexperienced and mislead by a greedy combination of real estate agent & mortgage broker? I'm confident that they are intelligent people but inexperienced and taken advantage of by an unscrupulous agent.

The banks are also culpable. Prior to bank deregulation, Savings and Loans provided mortgages to home buyers and kept these loans on their books. Non-performing loans had a negative effect on the S&L's profitability which of coursework caused tighter lending guidelines such as job stability and decent down payments in order for prospective home buyers to be approved for a mortgage. Way back then, a home buyer had to actually save up funds for a down payment 10 or even 20% before a bank would ever consider underwriting a mortgage. The checks & balances kept banks solvent and borrowers responsible. Although this approach worked, some cried foul stating that the regulated scheme was racist and discriminatory-and there certainly was some truth to this. Skipping forward to the present, banks made a bundle on mortgages over the past one or four years. For the most part, they allowed their underwriting criteria to be stretched so far out of alignment that someone could and indeed did, qualify for a mortgage despite their ability to pay. Some folks even applied for and received mortgages for over the property was worth. sometimes for as much as 25% over their property was worth!

Under the prior scheme, 125% mortgages would not have been possible because of coursework these loans were held on the banks' books and could have led to losses that would have had to have been absorbed directly by the bank.

So what went wrong? Under the current scheme, these loans were sold to the big Wall Street investment firms who repackaged them as collateralized mortgage obligations (CMO's), Mortgage Backed Securities (MBS's) and other similar acronyms. These instruments were then sent to the ratings agencies for their blessing and more importantly a letter rating. plenty of of these structured finance deals receive AAA ratings-the highest ratings available meaning that in theory, these instruments were least likely to default. How does two generate a 'triple A' or AAA rated financial tool out of sub-prime mortgages? Herein lies the magic. These Asset Backed Securities (ABS) are made up of different tranches or slices, each carrying a different risk and reward level. The first dollar of principle and interest is applied to the securities with the highest rating, and the first dollar of loss is applied to the tranche with the lowest ratings. The lower slices are designed to provide a security blanket that in theory protects the higher-rated securities. The investment banks that package or 'structure' these securities in order to earn fat fees when they sell them to investors are the same entities that pay the ratings agencies to rate these instruments. Clearly the possibility for conflict of interest is present. If investors and not the investment banks that stand to rake in millions in fees were to pay for the rating, the potential for this conflict of interest would be negated. Furthermore, the investment banks have a vested interest in convincing the ratings agencies of the credit worthiness of these securities.

So we've already pointed fingers at homeowners, some greedy, plenty of more I suspect, naïve or uninformed, real estate agents-one out of over 60 in my experience was a gem, mortgage brokers & bankers, banks, Wall Street and ratings agencies so who's left? The Federal Reserve and the Government of coursework.

The Fed as its known is responsible of the country's monetary owner and for supervision and regulation of banks. This is the definition of the Fed's roles in their own words:

Monetary Policy

The Fed is best known for its role in making and carrying out the country's monetary policy-that is, for influencing funds and credit conditions in the economy in order to promote the goals of high employment, sustainable growth, and stable prices.

The long-term aim of the Fed's monetary owner is to ensure that funds and credit grow sufficiently to encourage non-inflationary economic expansion.

What the Fed can do, is generate an environment that is conducive to healthy economic growth. It does so by pursuing a aim of price stability-that is, by trying to prevent inflation from becoming a problem.

The Fed cannot guarantee that our economy will grow at a healthy pace, or that everyone will have a job. The attainment of these goals depends on the decisions of millions of people around the country. Decisions regarding how much to spend and how much to save, how much to invest in acquiring skills and education, how much to spend on new plant and equipment, or how plenty of hours a week to work may be a quantity of them.

A stable level of prices is most conducive to maximum sustained output and employment. Also, stable prices encourage saving and, indirectly, capital formation because it prevents the erosion of asset values by unanticipated inflation.

Inflation is defined as a sustained increase in prices over a period of time.

· hurts people with fixed income-when prices rise consumers cannot buy as much as they could previously

Inflation causes plenty of distortions in the market. Inflation:

· discourages savings

· reduces economic growth because the economy needs a certain level of savings to finance investments that boost economic growth

· makes it harder for businesses to plan-it is diff

How to Successfully Navigate Your Business through an Economic Downturn

2009-01-22T07:40:00.000-08:00

An economic downturn is a phase of the business cycle in which the economy as a whole is in decline.This phase basically marks the end of the period of growth in the business cycle. Economic downturns are characterized by decreased levels of consumer purchases (especially of durable goods) &, subsequently, reduced levels of production by businesses.

While economic downturns are admittedly difficult, and are formidable obstacles to small businesses that are trying to survive and grow, an economic downturn can open up opportunities. A well-managed company can realize the opportunity to gain market share by taking customers away from their competitors. Resourceful entrepreneurs capture the available opportunities, from an economic downturn, by developing alternate methods of doing business that were never implemented during a prior growth period.

The challenge of successfully navigating your business through an economic downturn lies in the realignment of your business with current economic realities. Specifically, you, as the business owner, require to renew a focus on your core clients/customers, reduce your operating expenses, conserve cash, and manage more proactively, than reactively, is paramount.

Here are best practices that will help you to successfully navigate your business through an economic downturn:

Goals:

The primary aim of any business owner is to survive the current economic downturn and to create a leaner, more cost-effective and more efficient operation. The secondary aim is to grow the business even during this current economic downturn.

• Conserve cash.

Objectives:

• Reduce costs.

• Protect assets.

• Improve efficiencies.

• Grow customer base.

• Do not panic… History shows that economic downturns do not last forever. Remain calm and act in a rational manner as you refocus your attention on resizing your company to the current economic conditions.

Required Action:

• Focus on what YOU can control… Don’t let the media's rhetoric concerning recessions and economic slowdown deter you from achieving business success. It´s a trap! Why? Because the condition of the economy is beyond your control. Surviving economic downturns requires a focus on what you can control, i.e. your relevant business activities.

• Communicate, communicate, and communicate! Beware of the pitfall of trying to do much on your own. it is a difficult task indeed to survive and to grow your business solely with your own efforts. Solicit ideas and seek the help of other people (your employees, suppliers, lenders, customers, and advisors). Communicate honestly and consistently. Effective two-way communication is the key.

Recommended Best Practice Activities:

• Negotiate, negotiate, and negotiate! The value of a strong negotiation skill set cannot be overstated. Negotiating better deals and contracts is an absolute must for realigning and resizing your company to the current economic conditions. The key to success isn't only knowing how to create a win-win approach in negotiations with all parties, but also keeping in mind the fact that you require a favorable outcome for yourself .

The Nuts and Bolts… The following list of recommended best practice activities is critical for your business' survival and for its growth during an economic downturn. The actual financial health of your particular business, at the outset of the economic downturn, will dictate the priority and urgency of the implementation of the following best practice activities.

1. Diligently monitor your funds flow: Forecast your funds flow monthly to ensure that expenses and planned expenditures are in line with accounts receivable. Include funds flow statements into your monthly financial reporting. Project funds requirements three-to- five months in advance. The key is to know how to monitor, protect, control, and put funds to work.

2. Carefully convert your inventories: Convert excess, obsolete, and slow-moving inventory items into cash. Consider returning excess and slow-moving items back to the suppliers. Close-out or inventory reduction sales work well to resize your inventory. Also, consider narrowing your product offerings. Well-timed order placement helps to reduce excess inventory levels and occasional material shortages. The key is to reduce the amount of your inventory without losing sales.

3. Timely collection of your accounts receivable: This asset should be converted to funds as quickly as possible. Offer prompt payment discounts to encourage timely payments. Make changes in the terms of sale for slow paying customers (i.e. changing net 30 day terms to COD). Invoicing is an important part of your funds flow management. The first rule of invoicing is to do it as soon as possible after products are shipped and/or after services are delivered. Place an emphasis on reducing billing errors. Most customers delay payments because an invoice had errors, and therefore, won't pay until they receive a corrected copy. Email or fax your invoices to save on mailing time. Post the payments that you've received and make deposits more frequently. The key is to create an efficient collection technique that generates timely payments and one that gives you advance warning of problems.

5. Re-negotiate with your suppliers, lenders, and landlord:

4. Re-focus your attention on your existing clients/customers: Make customer satisfaction your priority. A regular review of your customers' buying history and frequency of purchases can reveal some interesting facts about your customers' buying habits. Consider signing long-term contracts with your core clients/customers which will add to your security. Offer a discount for upfront funds payments. The key is to do what it takes to keep your current customers loyal.

i) Suppliers: Always keep your negotiations on the level of need, saying that your company has reviewed its cost structure and has determined that it needs to lower supplier costs. . Tell the supplier that you value the relationship you've developed, but that you require to receive a cost reduction immediately. Ask your supplier for a lower material price, a longer payment cycle, and the elimination of finance charges. Also, see if you can buy material from them on a consignment basis. In return for their price concessions, be willing to agree to a long-term contract. Explore the idea of bartering as a form of payment.

ii) Lenders: Everything in business finance is negotiable and your relationship with a bank is no exception. The first step to successful renegotiations is to convince your lenders that you can ultimately pay off the renegotiated loan. You must point out to your lenders why it would be in their best interest to agree to a new arrangement. Showing them your business plan and your action plan that includes your cost-savings initiatives, along with "the how" and "the when" of the implementation of your plan is the best way to achieve this objective. Explain to them that you will require their cooperation to insure that you can survive, as well as, grow your business during the economic downturn. Negotiated items include: the rate of interest, the required security to cover the loan, and the beginning date for repayment. A beginning date for repayment could be immediate, within several months or as long as a year. The key is to realize that your lender will work with you, but that frequent and continual communications with them is critical.

6. Re-evaluate your staffing requirements: This is a critical area. Salaries/wages are a major expense of doing business. Therefore, any reduction in the hours worked through work schedule changes, short-term layoffs or permanent layoffs has an immediate cost saving benefit. Most companies ramped up hiring new employees in the lovely times, only to find that they're currently overstaffed due to slow sales during the economic downturn. In terms of down-sizing your staff, be careful not to reduce your staff to a level that forces you to skimp on customer service and quality. Consider the use of part-timers or the current trend of outsourcing certain functions to independent contractors.

iii) Landlord: Meet with your landlord. Explain your require to have them extend the term of your lease at a reduced cost. Make sure you've a clause in the lease agreement that entitles you to have the right to sublet any or all of the leased space.

7. Shop for better insurances rates: Get quotations from other insurance agents for comparable coverage to determine whether or not your present insurance carrier is competitive. Also, consider revising your coverage to reduce premium costs. The key is to have the right balance-to be adequately insured, but not under or over insured.

8. Re-evaluate your advertising: Contrary to the other cost-cutting initiatives, assess the possibility of increasing your advertising expenditures. This tactic realizes the advantage of the reduced "noise" and congestion (fewer advertisers) in the marketplace. The downturn period a great opportunity to increase brand awareness and generate additional demand for your product/service offerings.

9. Seek the help of outside advisors: The use of an advisory board comprised of your CPA, attorney, and business consultant offers you objectivity and provides you with professional advice and guidance. Their collective experience in working with similar situations in past economic downturns is invaluable.

10. Review your other expenses: Target an across-the-board cost-cutting initiative of 10-15%. Attempt to eliminate unnecessary expenses. Tightening your belt in order to weather the downturn makes practical, financial sense.

Proactively managing your business through an economic downturn is an enormous challenge and is critical for your survival. However, through well-planned initiatives, an economic downturn can generate tremendous opportunity for your company to gain greater market share. In order to take advantage of this growth opportunity, you must act quickly to implement the above best business practices to continue realigning and resizing your company to the current economic conditions.