Archive for December, 2011
Although for some personal finance may come natural, for many the idea of balancing their monthly income against their financial responsibilities can be a daunting task. Some find it hard to set money aside that is needed for electrical bills, water bills, insurance and end up unable to pay some of their necessities when they come due.
However, balancing your personal finance sheet does not have to be this hard. Many financial experts suggest one should create a list of all of his or her responsibilities that must be met each month. After making this list, one should take their net monthly income and see how it stacks up against all the bills that he or she has decided are must pays.
After doing this, your personal finance news become relatively simple.
The hardest part is sticking with the list and making sure everything that is considered a necessity is met. After one has an understanding of their monthly needs versus their monthly income, he or she should also add an amount of savings to the list that contains the must pay bills.
“There are no orphan shares …istock_000009147687xsmall”. A lot of what passes as serious investment commentary is simply “gobbledygook”, i.e. nonsense or drivel. It defies share market realities and is at odds with the philosophy that markets work.
Yet, unfortunately, some of the people and organizations generally regarded as finance experts are the main proponents of this gobbledygook. Let’s consider a couple of examples.
In a recent article in the “Sydney Morning Herald”, a private client adviser of a major stock broker explained why the share market had fallen for the past three days, after a period of strong gains, as follows:
“I think it comes down to a bit of profit-taking. I guess the market is acknowledging we’ve had it pretty good for the last couple of months and it’s time to take a breather.”
In a similar vein, the finance reporters on the evening television news will often attribute a rise in the share market, after a period of weakness, to “bargain hunters” taking advantage of lower prices.
Sometimes, more glibly, since they believe they are stating the “bleeding obvious”, they will explain a rise in the market as due to “more buyers than sellers”.
Accounts receivable, Capital Assets, Current assets, Cash flow, Depreciation and Net worth.Do you know what these words mean and where they are being used? Yes, youve heard about them but did you actually try to find out what they mean? Perhaps you are thinking that you wont need them thats why there is no need to learn them. Maybe, you are thinking you can have a lawyer with you to do things regarding your finances. Being unaware of the basic financial terms can cost you a lot of your earnings, dont you know? Having a lawyer or a financial advisor to explain things to you when you need it will surely cost you a lot. You are going to learn today about those financial terms mentioned above and hopefully, youll find them useful.
Accounts receivable are the money you owned. These are the amounts you receive from sales of assets or services you have given. While capital assets are those assets you acquired to start the business. Examples of capital assets are land, buildings or space and equipment. Current assets are items like cash, accounts receivable and inventory. They are assets that can be turned over and can be converted to cash. Stocks and marketable securities are examples.
The most common paradox we come across is ‘money does not bring happiness.’ Then why since time immemorial, people from different civilizations, continents, customs and religions desire to be affluent, prosperous and wealthy. Money is not everything in the world, definitely there are few things, much more important than prosperity, like our health, family and people we love and respect. Nevertheless, money is the binding factor of present age that manages all our needs.
People who say money could never buy happiness are those who either don’t have money or those who have it but do not know how to properly utilize it. The best utilization of money is to invest it, to get an opulent present and future life, without economic worries.
For the success of every mission a strategy is needed. To get the economical freedom and be self sufficient one has to adopt investment strategy.
The strategy mirrors various internal and external factors such as present income, the type of work and industry, age, education, mindset, risk tolerance and so on. There are various avenues of investments: art, antiques, business, property, equity and so on.
A bank or other lender will lend to a borrower based on the lower of the Loan to Value Ratio (LVR) and the Debt Serviceability Ratio (DSR) applying to the borrower’s application.
A bank or other lender will not lend if the amount to be lent is a greater percentage of the value of the security property available than that bank or other lender is comfortable lending. For example, if a lender is comfortable lending, say, 90% of the value of an owner occupied home (as determined by a sworn valuation), the maximum amount it will lend is 90% (LVR=90%). Another lender may only feel comfortable lending, say, 80% on such security. Part of the skill, knowledge and experience of a qualified mortgage broker is knowing which lenders will lend what proportion of the value of each type of security being offered, and the exact terms and conditions that the lender will place on such a loan.
In this way, a broker can be critical to their client in the overall level of borrowing they can arrange for them (and therefore the overall size of the property portfolio they can amass).