Whether you are starting an import business or have an established importing business, it can be a very profitable venture if you have the right financing to grow your business. Imports are defined as: a good that crosses into a country, across its border, for commercial purposes; a product, which might be a service that is provided to domestic residents by a foreign producer; or a combination of the two. (more…)
Buy to let – it is a very old concept that existed in the times of landlords in Britain. Though the concept is still prevalent, it now exists with certain minor changes. The boom in the real estate industry in the mid nineties has made the ‘Buy to let’ system surface again. Being a good medium to get returns on property, many people are interested in investing in buy to let properties.
In a recent government study that was done, it was found that fully 85% of people who had 401K tax differed savings plans have made no adjustments to their portfolio for the past five years. What makes that fact so astounding is that even as the stock market crashed, they still didn’t make a move to change things.
In this day and age, it is very important to know how credit works. Credit is very important because it affects not only what you want now, but also what you can have in the future. Your credit also affects things that you probably did not even realize. Did you know that it can possibly affect whether or not you get hired for a job? It’s true and believe it or not it can affect what you pay for car insurance, house insurance and sometimes even health insurance, and of course, getting a mortgage. This is why it is so important to keep good credit ratings instead of bad credit ratings.
You get bad credit ratings by having missed payments on things such as loans, mortgages, and credit cards. Most people are in the 60% sub-prime sector with a less-than-perfect credit score. The way your credit rating is scored varies greatly when you are in this group.
Because these mistakes are so critical, they are nothing to laugh at. Are you making these mistakes with your hard-earned income?
1. They haven’t figured out how much income they really need each week to exceed just paying their bills. They haven’t worked out a budget.
The correct definition of BUDGET is: the calculation of the amount of money necessary for an organization to function and achieve its purpose. If you are satisfied to just pay your bills, and you never pay yourself first into a savings plan, you will make other people wealthy and you will stay poor. Every vendor that you pay is in business to make a profit. Shouldn’t you be running your business to make a profit? The income target must include enough profit or the enterprise will go broke and fail.
2. They don’t work out ways to earn more income than they currently need, and then willingly do whatever it takes to execute their plan.
By incorrectly estimating the amount of income necessary to exceed breaking even, they almost always set their income target too low and lose more money existing on credit instead of going into action to raise their income. Anyone can discover different ways to make more money; it is often the ‘willingness to do whatever it takes’ that seems to be the problem.
3. They habitually spend more money than they make.
Using your income to purchase the ‘appearance’ of having wealth is a deadly activity. I call this breed of spender a Gratification Groupie. It can catch up with you fast and eventually can drown you in debt. This situation causes constant stress about money and brings on lots of sleepless nights. Money does not buy happiness. But, doing something worthwhile and productive and being appreciated for it will make you feel like you are on top of the world.
4. They never figure out what they need to buy in the future and set aside a little money each week in order to pay cash for the purchase later.
Buying something with a credit card because you are short on cash is committing your future earnings to the credit card company. You are then working for the credit card company as an economic slave. The right way to purchase things, especially high dollar items, is to set aside a small amount each week until you have enough cash to buy the item, and then negotiate a big cash discount. The guy with the CASH IS KING!
5. They purchase services and products based on WANT rather than on NEED.
Purchasing decisions must be based on how your buying the service or product can assist you to produce additional income for you. Let’s be honest here, do you want the latest cell phone that features email retrieval and text messaging because your friends have one, or do you need it to increase your work productivity because you are traveling to close the next business deal?
6. They never contribute to a retirement savings plan so they have it for use later in life.
If you are relying on other peoples’ future production to pay you Social Security payments so you can retire, that is really taking a gamble. Despite the fact our government reports the annual cost of living is rising 3 - 3.5% a year, the truth is that it is going up 8 - 12% a year. You have to make that much more income just to break even. Why does our government report that it is only 3 - 3.5%? Regrettably, it’s because the government has to increase Social Security payments each year by the percentage they report. Our Social Security system is already bankrupt and those living on Social Security alone are headed in that direction.
7. They never develop multiple sources of income. If one source dries up they are in trouble financially.
The expression ‘don’t put all your eggs into one basket’ is true today, especially when it comes to income sources. Research profitable services or products you can add, or business ventures you can participate in that are ethical, and have a great opportunity to producing a residual income.
8. They get stressed out about how little interest their bank pays on savings accounts while they are getting killed with much higher interest charges by carrying balances on their credit cards.
If you have high credit card debt, you are better off using excess cash to reduce the debt and stop the high interest payments rather than trying to earn interest from the bank. As you pay off your debt, it is wise to keep enough cash on hand to cover a few months of basic living expenses. Once the debt is gone, or will be soon, then start investing the excess cash where you can get real growth.
9. They worry about ‘the economy’ in general.
I’m surprised that most people actually worry more about ‘the economy’ than about their business or household failing financially. They worry about what the media is reporting about ‘the economy’ when that is something they can’t control, while never confronting how they are affecting the economy of their own business or household, which is what they CAN control. A rise in unemployment is no reason to worry. Small business’ creation of new jobs greatly exceeded the number of jobs lost in major corporations, according to the latest ADP report. A bank failure is no reason to panic. Banks get bailouts from the FDIC and other investors. Nobody is standing by to bail out your failing business. That is entirely up to you. So keep promoting your business, put aside some cash, and sleep like a baby while the bad news about ‘the economy’ rages around you.
10. They anticipate surviving financially without taking full responsibility for controlling their financial future.
Money problems have a simple solution. Increase your income, cut expenses, and correctly manage what income you do get. It’s not only about how much money you make, it’s what you do with it that determines your financial condition.
Correct money management is not taught in educational institutions. People get bad advice and false information about how to handle money. Then they make silly mistakes, get into trouble, try to solve the problem by using credit, wind up in more trouble, and then go looking for debt relief.
The good news is that there is an inexpensive, proven, money management software system that can reverse all the money management mistakes a person has made in the past, and keeps them from making those same mistakes again. It is an old-school system that your great grandparents used prior to the days of credit cards. Very rich people understand and use this system today.
Paying bills is never an enjoyable task (except when they are all paid and you feel caught up) but having your paperwork, bills, and other items in complete disarray will only complicate matters. Simple and easy organizational tools will help you keep everything together and spend less time looking for thing when it’s time to pay bills.
The Bill Binder
I keep a binder right on the counter in my kitchen. In that binder, I have a couple of sleeves with pockets as well as some loose leaf paper. Anytime I get a bill, I put it right into the sleeve labeled “bill.” I have another sleeve for “taxes” and a third one for “receipts.” Anytime I have something come in the mail that is applicable to taxes for the year, like a deduction receipt, my W-2 for work, or anything else that I may want to save it goes in the taxes file. The receipts sleeve is a little different. I have envelopes in there to organize receipts of gift purchases. They are labeled “Christmas 2008? or “Rachel Birthday” and kept separate. I keep the envelopes as general as possible so I can reuse them the following year. I also keep receipts from general shopping - groceries, clothing purchases, items for the house - all in an envelope as well just in case I have to return something.
The binder also has some loose leaf paper in it that I record things like bill schedules, account numbers, phone numbers of utility companies, etc. I keep all of this in one place for easy access. For security, I don’t write out full credit card numbers on this sheet. I keep any credit card numbers in another place in case my home is ever broken into. But I still record the payment due dates and main contact phone numbers in that binder. I use it as a checklist every month as I am paying bills to make sure I didn’t skip or miss anything.
Set a Bill Paying Schedule
If you can afford to do direct withdrawals from your checking account to pay your bills each month, that is probably the easiest way to take care of payments and not be late and have to pay late fees. If you cannot do that or you are just not comfortable with it, I recommend setting up a schedule to pay your bills.
I divide my bills into two groups - bills that are due between the 3rd and the 17th of each month and bills that are due between the 18th and the 2nd of the next month. On the first of each month, I sit down and pay all the bills in the first group. On the 15th of each month, I pay all the bills in the second group. This system works well for me and my family. Set up a schedule that works for you. Perhaps you need to sit down three times a month and take care of bills. Or maybe it needs to happen every Tuesday. Whatever you need to do, just be sure to set it up and then follow through.
Keep your Paperwork Together and Organized
When I pay a bill, I take the invoice that is left and just put a note that says “paid” and what date I paid it. If I used a check, I’ll jot down the check number as well. Then I file it. I am waiting for a filing cabinet, but in the meantime I am using a simple box to keep my file folders organized. I label the folder with the company or service for each set of bills. For instance, my folders say “Honda” or “water bills.” I try and keep this as simple as possible.
I also include files for my 401k, big purchases, home improvement documents, and bank statements. I also keep my personal and business financial paperwork separate. Ideally, these go in separate drawers in a filing cabinet or another file box entirely.
The next big question becomes “How long do I keep bills that are paid?” Here are my general rules of thumb:
* Taxes - 7 years at least
* Paid Bills - at least one year; 7 years if the bills are related to taxes
* Receipts for large purchases - Permanently or as long as I own the item (washing machine, new windows for the home, expensive jewelry, etc)
* Paycheck stubs - at least one year (until my W-2 arrives)
* Bank Records - at least one year
Every year when we have completed our taxes, I celebrate by cleaning out these files and sending the documents through the shredder.
Stick With the Plan
Whether you take these ideas or come up with a system of your own, the key to keeping your finances organized is to stay consistent. As soon as the bill comes in, put it in your Bill Binder or whatever system you have created. As soon as it is paid, put it in the appropriate location. Keep to your bill paying schedule. Little things make a big difference and staying consistent will eliminate a lot of headaches when it comes time to pay your bills or do you taxes
Life as an Identity Theft Victim could be stressful and intimidating. Stressful as you need to ensure that all financial and credit accounts are in order or closed and opened new again. Negotiation with bankers and lenders could lead to less favorable terms and conditions should you not be in a financially stable situation.
Here we outline the fundamental reactions if you should find yourself becoming the victim of Identity Theft:
Immediately call the related bankers or lenders whose bills contain the bad charges. Essentially, in most situations, you are given a grace period of about a month to notify the credit company or lender should your find the transaction suspect. You will then be legally protected.
Inform them that you suspect the transactions are fraudulent, that you have become a victim of identity theft and request that the fraudulent charges be removed from your accounts. You will be required to provide documented proof to support your claims. If many of your accounts are involved, the is a high probability that your may be required to close all the affected accounts and open new ones. Report the crime to the police should your checks have been stolen and used, and obtain a copy of their report to forward to your bank and the merchant who cashed the fraudulent check.
Staying focused and organized with a cool head at this juncture is very critical. Keep a clear log of all the phone conversations, with whom you spoke to and what are the resolutions proposed or agreed upon. Collate all related correspondence in folders for easy reference. And the most critical aspect is to ensure that all correspondence must be certified return receipt requested so as to ensure that the relevant parties truly received your mail. Remember that at this juncture, how ever you react to the situation will reflect your maturity or inability to cope with the difficult situation ahead.
Contain all your correspondence within your bank or lender’s fraud investigation officers and never discuss with the customer service or bank managers. Limiting discussion to the fraud investigation department would ensure security and lessen confusion on the progress of investigation.
Access Security is critical. Whether you use ATM or Online Banking to access your accounts, there is need to add a new layer of security to your existing or new accounts. Contact you r banker or lender and request that they create an additional layer of security in the form of password for your account access purposes.
Understand that if you ID or SSN has been accessed and used, nearly all facets of your identity would be infringed. Imagine someone living your life, spending your money and credit. Hence, it is critical that you comb all your financial accounts and statements until you have fully cleared all outstanding fraudulent cases. Even at the aftermath, you should keep up the good habit of frequently reviewing your credit reports from the big 3 and ensure that your credit scores are maintain at a high level.
The pain, agony and stress associated with Identity Theft far outweigh the financial devastation at times extending over a period stretching from months. Hence, you need great patience and time to ensure all your Identity Theft problems are eventually weeded out.
Author: Credit Repair Tips
ou may have heard the idiom “green with envy”. It refers to a strong feeling of desire to experience the same good fortune experienced by someone else.
I must admit: that’s exactly how I feel with respect to what I call the “Green Stock Boom”. And what better time to examine green energy investments, than today, Blog Action Day?
It’s starting to feel a lot like 1999 in this industry, and it would pay to have some insight into who might be the next Amazon.com (AMZN), rather than a glitzy second-tier competitor who ultimately fails to grow its profits. At its very roots, I think, the Green Stock Boom is about human survival: we must avoid the fate of the Easter Island civilization, and many others like it, whose population collapsed amid resource wars spurred in the wake of exponentially expanding consumption in the presence of limited resources. But a growing segment of the population has been “thinking green” for decades. So why has the Green Stock Boom materialized, in earnest, in only the last few years?
I think the key is oil prices, and to a lesser extent, the backlash against CO2 emissions. Oil prices started to escalate in earnest early in 2003, as the invasion of Iraq migrated from rhetoric to reality. At the time, oil was around $32 a barrel. Now it floats around $85 a barrel — a 166% increase in just under 5 years, which amounts to a compound annual return of roughly 22%! Almost in lockstep, Exxon (XOM) has followed with approximately the same return (or a bit more, if you account for dividends):
But what’s the red line? That’s Winslow Green Growth Fund (WGGFX). Winslow invests in green companies generally, not limited to the energy sector; it’s the best proxy I can find for a green index with several years of history. As with XOM, Winslow’s returns are artificially low due to the exclusion of dividends from the chart. But the implication is unchanged: the Green Stock Boom has tracked oil prices. And more recently, investors have made it clear that they see much more upside in its few profitable heroes, such as SunPower (SPWR), than Big Oil:
No doubt this relates to the concept of “Peak Oil”: while it’s true that “oil will never run out”, oil production (that is, the rate at which it is extracted from the ground, in barrels per year) will inevitably reach a maximum. When this occurs, the world’s economies will need to have some other way to sustain the usual few-percent-per-year growth in gross domestic product (GDP). At the same time, computer models of oil production in the years after Peak Oil suggest an annual decline rate on the order of 2% — that is, only 98% as much oil will be produced in the year following the Peak Oil year, and so on in subsequent years. Without a viable alternative energy source, this could quickly become a catastrophic economic problem: how can we expect to sustain even modest GDP growth, while consuming a few percent less oil per year?
In this scenario, the gap between normal GDP growth and shrinking oil supply is around 5%: we want to continue to grow GDP at a comfortable 3%, while using 2% less oil. For the first few years following Peak Oil, this may not amount to much of a challenge. But the catch is that the problem compounds exponentially: the second year, we need to grow GDP by another 3%, while reducing oil consumption by another 2%, and so on. It doesn’t take a math genius to understand that, at some point, without a sufficient alternative energy source, we’ll be saving our pennies for the next grocery trip (in an electric car, by the way). Granted, oil supply and demand vary greatly over the course of a year, so these are only rough projections which pertain to multiyear time periods; the important part is that our traditional energy supply will grow with a negative exponent, relative to demand in the absence of an alternative, following Peak Oil.
Most Peak Oil proponents assume that it will occur in the 2008-2018 timeframe. Based on the numbers I’ve seen, I would have to agree. It is, in any event, inevitable. The question is, will we have sufficient affordable alternative energy in time?
But the financial urgency to find alternatives may explode much sooner than Peak Oil arrives: oil traders are well aware of the phenomenon, and have bid up the price of a barrel year over year at a superinflationary rate, occasional price drops notwithstanding. Oil wars, plant shutdowns, and rig-crippling ocean storms emboldened by a warming atmosphere don’t provide price relief, either. The traders may become increasingly willing to hold their positions through downturns, realizing that until a viable alternative is found (or we all become backyard farmers who telecommute to work), the price will inevitably surpass its previous high.
If all this sounds like crazy talk, it’s worth noting that it already happened. And I’m not talking about the American gas station lines of the 1970s, which were a modest inconvenience by comparison: when the Soviet Union collapsed in 1991, Cuba lost its main oil supplier. Fossil fuel input to the country was cut to about half of previous levels. A GDP collapse followed, dropping by about a third from 1989 through 1993. Even for a socialist state, the economic repercussions were staggering — comparable to the travails of America’s Great Depression. Today, it’s little wonder that the country is a leader in local organic farming.
Today, ethanol is probably a key component of our escape from Peak Oil. At the moment, it’s produced largely from corn, which is problematic because corn feeds humans and livestock. Other proposals for production include switchgrass, sugar beets, yard waste, and even sewage. But before you buy stock in an ethanol producer, consider that most of them appear to be stuck in the research phase, not unlike most Internet startups of the late 1990s. Established producers are generally dependent on commodities such as corn and sugar; as traders accumulate positions in those crops in anticipation of Peak Oil, they actually undermine the viability of ethanol producers by increasing the cost of their raw materials. Normally, the reduced demand would force traders to sell their positions and give way to lower prices. But unlike lumber, oil is not a renewable commodity subject to normal business cycles. Traders know this, and are therefore more willing to hold onto their positions (whether in oil, or obvious alternatives) until the energy crisis is firmly under control, perhaps decades from now.
So if the business case for corn-based ethanol is unclear, the case for solar is more compelling. With tremendous innovation occurring in the field, it seems inevitable that costs will soon become competitive with electricity generated from other sources, especially after accounting for the tax incentives. The problem is, among public solar companies, you find stratospheric P/Es, if earnings exist at all. And this early in the game, it’s entirely possible that a no-name startup will invent a dirt cheap alternative to photovoltaic cells and capture the marketplace. Without a triple PhD in chemistry, electrical engineering, and economics, it’s a very hard field to navigate.
So what to do? Buy oil? At around $85 a barrel, it seems to have moved too far from OPEC’s apparent $60-something comfort zone to sustain this level. But ultimately, oil prices are not under OPEC’s control; it’s the consumer vs. geology. Guess who wins.
The real winner is set to be alternative energy. If I’m wrong, we’ll go extinct, and you won’t need to worry about your investments. But I must confess: I’m stumped. How can I possibly find a winner among the thousands of unprofitable startups, plus a few established companies selling for enormous earnings multiples? For the meantime, I think there are better green investments closer to home.
If you’re looking for a new house (which, in America, it’s clearly a great time to do anyway), take time to learn about the energy efficiency and solar power options available, including any tax breaks that you might receive. Likewise, next time you purchase a car, think hard about how much it will cost you to operate it if gas prices continue to spiral out of control. If you have a job, see if you can arrange to telecommute a few times a month, like I am right now. (It helps to check out Google Docs, where you can edit the same document with several other people at the same time over the Web, for free. That’s how we produce these blog entries.) Eat healthy and smart: buy locally grown organic veggies, which are free of the oil inputs required for pesticides, excessive packaging, and global distribution. Start a ride sharing program at your company, for which there are tax benefits in many states. Run a Google search for Peak Oil, and learn about ways to save serious money and reduce your dependence on external energy inputs. Even if Peak Oil doesn’t arrive for another century, remember that the sooner you save money, the longer it can compound through investment.
As always, to keep things unbiased, I have no positions in any of the securities discussed. Like many investors, I do have oil positions which have enjoyed a good run. But I’d be much richer, had I invested in the heroes of the Green Stock Boom instead. So at this point, I would do well to heed my own advice