Archive for April, 2010
Wednesday, April 28th, 2010
UK buy-to-let investors are being tempted by offers of guaranteed rents on property deals around the world, but how good are these deals in real terms and will there be any rental demand once the guaranteed period ends?
Worldwide opportunities
Investors are looking beyond the overcrowded UK market for untapped property hotspots in Eastern Europe, the Middle East and out to the Far East.
Deciding on the best foreign markets to invest in is a case of weighing up the potential for growth and rental income against the risks and costs.
For example prices of residential homes in Beijing rose by 20% in 2005 (according to the Beijing Municipal Construction Committee), however there are many issues regarding the transfer of funds out of China, a 5% tax on rental income and the possibility that the Chinese government could claim the land back.
Latvia on the other hand presents a lower risk to foreign investors, with membership of the EU and the ability to borrow up to 90% of the value of the property making it a more appealing choice.
However, this is not to say that an investor can simply buy any property in Latvia and expect to make easy rental returns. Like any foreign market, the risks are generally higher than buying in the home market.
Incentive to buy
To help encourage potential landlords to overseas markets, a number of investment companies are offering guaranteed rents for anything up to 5 years. Rental guarantees, it is argued, provide a reliable safety net for riskier markets, however many experts warn they are merely a marketing tool and advise investors to look very closely at the deal being offered.
Key issues
One of the biggest issues with guaranteed rentals is a lack of demand for the property once the period has finished. Guarantees are often used to market properties that otherwise would not sell and many investors are shocked by the resulting drop in income.
In addition to this, it is often the case that investors end up footing the rental bill themselves, when developers inflate the price of the property to cover the guaranteed rent. This can provide a further shock when the investor tries to sell the property and realises that it is not worth as much as they originally paid for it.
If you do opt for a guaranteed rental deal, make sure that it is properly underwritten by a bank. Otherwise you would be at risk of losing the guarantee if the developer were to go out of business.
Poor regulation means that it is also worth checking the small print for any hidden clauses that enable the developer to avoid paying the guaranteed rent and it is always a good idea to seek expert advice.
Tags: Beijing, Chinese Government, Construction Committee, Eastern Europe, Foreign Investors, Foreign Markets, Guarantees, Investment Companies, Landlords, Market Incentive, Marketing Tool, Middle East, Municipal Construction, Overseas Markets, Property Deals, Property Hotspots, Property Investment, Rents, Safety Net, Worldwide Opportunities
Posted in Personal Investment | No Comments »
Tuesday, April 27th, 2010
Get out of credit card debt by changing your mindset
1: Get a grip
It is estimated that Americans will charge $148 billion to their credit cards during Christmas period. A new poll also found one in four Britons felt they were struggling with debt as the UK annual interest bill for credit hit 93bn
Dont just sit back and wait for the postman to deliver those credit card statements before you start to think about how you are going to pay them. If you have to borrow money to pay off your credit card debts, youre in big trouble!
You also need to look at your debts objectively, if you are paying out between 15-20% of your monthly income on your debts than you need to revaluate your finances. If that figure is higher than 20%, you may need to enlist the help of a professional.
Financial experts say that paying off this years credit card debts are going to be particularly hard with rising fuel and food costs, allied to a double hit of rising mortgage payments and falling house prices.
2: Prioritize
There are many different types of debts you can have such as personal loans and mortgages. Credit cards may be one of the most convenient sources of money but is definitely one of the most costly. Credit card rates can vary from 14% to an unbelievable 35%.
If you realize that credit card debts are so expensive you need to prioritize this debt first. If you persist on just paying the minimum payment it could take you 30 years to pay off the debt. Considering most mortgages are base on a 25 year term, 30 years to pay off a credit card debt is not sensible financial management.
Ask yourself wouldnt the money you save from your credit cards be better on funding a holiday or new car?
If you want to calculate how much interest you are going to pay with minimum payments use this rudimentary but effective method: Take your balance and multiply it by your APR. Take that number and divide it by 12. Thats the amount you will have to pay in interest
If you could consolidate your credit cards debts into a low interest rate personal loan than this would save you a load of money. But make sure you rip up your credit cards or hide them away as you do not want to be in the same situation again.
3: Watch the rewards
Everybody likes presents or rewards but remember why they are giving you these rewards. Credit card companies team up with other providers to offer everything from air miles to points to spend at a retail shops but remember the reason for them giving you these rewards, its so that you spend more money!
If you have a balance on your credit card your monthly interest charge will far out weigh any benefit from these rewards.
Look at the rewards objectively, if you have to spend 40,000 or $75,000 to earn enough reward for a airline ticket that you would have cost you cost 800 its really not worth it.
The moral of the story is that reward cards can be good for people who pay off balances in full and for those who use the card for business purposes but if you have balances that you are struggling to pay off, stay away from them.
4: Roll over debt with caution
Taking out a loan using your house as security to pay off your credit card debts can be a smart move for some people. The loan may have a lower interest rate compared to the several credit cards you have so you could save a lot of money. But it is important that you consider all the possible downsides that come with this option.
First of all, when you stop making credit card payments, the credit card companies are not going to come and take your home away from you. If you stop paying instalments of a loan that is secured against your house than repossession is a risk.
The solution is not paying off your credit card debts with a personal loan and then continue using your credit cards. The solution is addressing the underlying problem which is your spending habits and having far more control over your budget. The credit card should be your last resort not your first option.
5: Change your thinking
At their essence, credit cards are 30-day loans that should be paid back in full. It’s a convenience. Not a way of life. Credit cards are not a license to shop.
And although more and more people are doing this, you shouldn’t put your mortgage payments on your credit card. This will just compound the trouble that you’ll have down the road.
Tags: Big Trouble, Britons, Changing Your Mindset, Christmas Period, Credit Card Debt, Credit Card Debts, Credit Card Statements, Falling House Prices, Financial Experts, Financial Management, Food Costs, Interest Bill, Many Different Types, Minimum Payment, Minimum Payments, Mortgage Payments, New Poll, Personal Loans, Postman, Prioritize
Posted in Credit Finance | No Comments »
Sunday, April 25th, 2010
Loans in todays world are a great help to people in fact it would be almost impossible to think of a world without giving and receiving of the loans.
Loans are a great help to people these days as well and one of the popular options is that of the personal loans. Personal loans are a greater help to people who have had bad credit history i.e. people like:
CCJs
IVAs
Defaults
Arrears
Late payments
People who have filled for bankruptcy
People with these profiles are considered to be ones who have bad credit history.
Bad credit history is a result of people not being able to make scheduled repayments or not being able to make any repayments when they took the loan previously. Bad credit people were previously not provided with loans but growing competition customer is the king. A person can easily apply for bad credit personal loans.
A potential borrower may need a bad credit personal loan for following reasons:
For home improvement
For business reasons
For debt consolidation, or for many other reasons
There are many lenders which are available to provide you with the bad credit personal loans. All a borrower on his part needs to do is get his credit score calculated which is an estimate of the financial credit worthiness from any credit rating agency available. A score which gets the bad credit rating is one which is below or at 600. However even in bad credit if you have a respectable score you can get decent terms from your borrower.
A borrower looking for bad credit personal loan can get loan in two forms i.e. secured bad credit personal loans or unsecured bad credit personal loans. The difference between these two loans is that in secured loans the borrower needs to provide collateral to the creditor and in unsecured loan there is no such requirements. The benefits of those loans are similar apart from the fact that in secured loans you may be offered better terms than in unsecured loans due to absence of risk factor for the creditor but then in unsecured loan there is no risk for the borrower.
A borrower may choose any form of bad credit personal loan one offer he is definitely going to get is that he can improve his credit score and get normal terms for the loan next time.
A personal loan is wanted by most people that is why lenders in order to maximize their earnings are offering these loans but with such stiff competition customer gets all the benefits. That is how it has become easier for people with bad credit history to apply for personal loans.
Tags: Arrears, Bad Credit History, Bad Credit Personal Loan, Bad Credit Personal Loans, Bad Credit Rating, Business Reasons, Credit Personal Loan, Credit Rating Agency, Credit Worthiness, Creditor, Debt Consolidation, Late Payments, Loans Personal, People Profiles, Repayments, Risk Factor, Secured Loans, Unsecured Bad Credit Personal Loans, Unsecured Loan, Unsecured Loans
Posted in Personal Finance | No Comments »
Saturday, April 24th, 2010
Business Banking Getting The Right Account For Your Business
While many people turn to their usual bank when opening a business account, its advisable to shop around. There can be some advantages to using the same bank for personal and business accounts your manager may be more supportive if you are known to the bank and have a sound financial track record. However, each bank offers different services and has different bank charges.
Many banks are currently offering free business banking for a set period six months or a year as an incentive. There are also a variety of support packages, such as free business software and dedicated advisers to help with your business plan. Choose a bank that will give the best all round deal for your particular business you may also want to consider corporate ethos and ethical banking when deciding which bank to take your business to.
Choosing Your Accounts
Depending on your business type and size, you may need different accounts. If you are likely to be making frequent transactions, for example, you may be better off with an account that charges a fixed monthly fee, rather than a fee per transaction. If you need to process debit and credit card payments, you will need a merchant account.
For overseas trading, you may want a foreign currency account. As with personal accounts, it may be worthwhile to hold more than one type of account for example, a current account for day-to-day banking and a deposit account for investing profits. Theres nothing to stop you having different accounts with different banks although you might get a better deal if you hold all your accounts with one.
Opening Your Account
You will need to set up a meeting with a business advisor to open an account. In order to prevent money laundering, you will need to provide certain information at this point including proof of identity such as driving license or passport, plus proof of your address and signature. The advisor will want to see a business plan and details of your financial planning. There are many schemes that offer help with putting together a business plan. Make sure you have as detailed a plan as possible when presenting it to your advisor this will help him or her to offer the best services for your needs.
You will also need an account opening mandate the bank will provide this.
For limited companies you will need a certificate of incorporation.
Tags: Bank Charges, Business Account, Business Accounts, Business Advisor, Business Business, Business Type, Corporate Ethos, Credit Card Payments, Currency Account, Current Account, Debit And Credit, Different Services, Foreign Currency, Free Business Banking, Free Business Software, Merchant Account, Money Laundering, Opening A Business, Personal Accounts, Proof Of Identity
Posted in Banking Finance | No Comments »
Saturday, April 24th, 2010
Making a profit in a business is derived from several different areas. It can get a little complicated because just as in our personal lives, business is run on credit as well. Many businesses sell their products to their customers on credit. Accountants use an asset account called accounts receivable to record the total amount owed to the business by its customers who haven’t paid the balance in full yet. Much of the time, a business hasn’t collected its receivables in full by the end of the fiscal year, especially for such credit sales that could be transacted near the end of the accounting period.
The accountant records the sales revenue and the cost of goods sold for these sales in the year in which the sales were made and the products delivered to the customer. This is called accrual based accounting, which records revenue when sales are made and records expenses when they’re incurred as well. When sales are made on credit, the accounts receivable asset account is increased. When cash is received from the customer, then the cash account is increased and the accounts receivable account is decreased.
The cost of goods sold is one of the major expenses of businesses that sell goods, products or services. Even a service involves expenses. It means exactly what it says in that it’s the cost that a business pays for the products it sells to customers. A business makes its profit by selling its products at prices high enough to cover the cost of producing them, the costs of running the business, the interest on any money they’ve borrowed and income taxes, with money left over for profit.
When the business acquires products, the cost of them goes into what’s called an inventory asset account. The cost is deducted from the cash account, or added to the accounts payable liability account, depending on whether the business has paid with cash or credit.
Tags: Account Receivable, Accountant, Accountants, Accounts Receivable, Accrual Based Accounting, Asset Account, Assets And Liabilities, Fiscal Year, Income Taxes, Liability Account, Money, Personal Lives, Receivable Asset, Receivables, Several Different Areas
Posted in Asset Management | No Comments »
Wednesday, April 21st, 2010
Right now couldn’t be a better time to invest in a home in Spokane. In 2007, Spokane was one of only a few cities nationwide where the median price of a home increased in value. Contrary to many major markets, “Most of Spokane’s speculative builders dramatically reduced the number homes they will build in 2008,” said Robert Henry, President of R&D Construction and board member of the Spokane Home Builders Association. The result of declining home starts means that at the current rate of market absorption (the rate at which new homes are currently selling), the current inventory of new homes will have been purchased by the first quarter of 2009. Production builders are likely to continue with far fewer home starts well into 2009. Many builders have dramatically reduced the pricing of homes that have been completed for several months. Now is the time to find and negotiate great deals on new homes. Buyers who have a decent credit rating and are pre-approved are in excellent position to negotiate with motivated sellers. For a complete search of homes for sale in Spokane, visit Donna Henry’s site at: http://www.donnasellsspokane.com
Tags: Better Time, Board Member, Contrary, Credit Rating, Current Rate, First Quarter, Great Deals, Home Builders Association, Homes For Sale, Housing Market, Invest, Investment, Market Absorption, Median Price, Motivated Sellers, Nationwide, New Homes, Robert Henry, Spokane Home Builders Association
Posted in Personal Investment | No Comments »
Tuesday, April 20th, 2010
Getting a credit card, use a couple of times a month, and pay it off any other time, and 3 / 4 the other half. Every two months to call the company credit card and ask for an increase in the credit line. Correcting errors on your credit report. It must demonstrate its report to the lender that he will get his money.
Some retail petrol and credit card – are not in rotation (not carry a monthly balance), and sometimes are easier to get a regular card. Over time, they can help to establish the story. If you don ‘t have a checking account, open one. She has very little credibility with donors if don ‘t have at least one bank account and, preferably, a savings account as well. Just as important, be sure not to overdraw your bank account. Bouncing control sends a signal to potential donors that you can ‘t handle your everyday finances and therefore are not a good credit risk.
With careful planning and some ‘knowledge of how donors problem credit, you can establish a credit history fairly painless. There are many companies in line waiting to take advantage of you for charging exorbitant fees or interest rates, so be careful out there.
Tags: Advantage, Build Credit, Checking Account, Company Credit Card, Credibility, Credit History, Credit Report, Credit Risk, Donors, Establish Credit, Exorbitant Fees, Interest Rates, Money, Petrol
Posted in Credit Finance | No Comments »
Tuesday, April 20th, 2010
Making a success of your business depends on planning and judgement. The bottom line is all about managing your finances wisely, whether that means sourcing the funding you need to start up or keeping on top of your accounts.
Setting up or running a business calls for a separate account. Not only will this make your accounting a lot simpler, but also business accounts are tailored specifically to the needs of business clients. Many have a specialised team to deal with business accounts, and can offer help in the form of start up packs and individual advisers. Business accounts differ from personal accounts in that you will normally be charged for transactions for making deposits and withdrawing funds, for example.
This guide gives you a broad overview of how to open and manage your business account, including:
1. Getting The Right Account For Your Business
How to choose and open your account what factors to consider and what information you will need.
2. Finding The Finance You Need
Common ways to source funding to set up and run your business, including grants, borrowing, loans and overdrafts.
3. Keeping Your Accounts Healthy
Good practise for managing your account, including info on online banking and finding an accountant.
4. Professional Advice
How to find expert advice on accounting and tax issues. This section includes web addresses for professional bodies.
Having a good relationship with your bank will make a big difference to the success of your business, whether that means extra support when youre setting up or negotiating an overdraft to smooth your cash flow. Bank business managers can provide a useful source of advice and support its likely they have a good knowledge of the market as well as insight into businesses similar to yours. Based on your individual needs, they should be able to suggest ways to make your business banking more efficient, as well as offer practical solutions to make the most of your account.
As well as your banking contacts, there are a wealth of other sources of help and advice. The government runs several schemes to help businesses get off the ground and keep running from enterprise loans to business mentors who can guide you through the early stages of your project. Starting a business is a real challenge, but with good planning and sound management, you could turn your dreams into reality!
Tags: Bank Business, Business Account, Business Accounts, Business Banking, Business Clients, Business Managers, Good Relationship, Judgement, Managing Your Account, Managing Your Finances, Overdraft, Overdrafts, Personal Accounts, Practical Solutions, Practise, Professional Advice, Professional Bodies, Running A Business, Specialised Team, Web Addresses
Posted in Banking Finance | No Comments »
Friday, April 16th, 2010
When looking to get a new credit card, there are many things to watch out for. Whether this is your first card or youre simply looking to transfer your balance of an old card onto a new one, there are many items youll want to beware of, including how long your 0% interest will be. One of the main issues of transferring your balance is what happens when you apply purchases onto the same credit card you transferred a balance on.
If you are in the market for a credit card to transfer a high-interest rate balance, there is one particular thing youll want to watch for. For example, a credit card company may claim to have a 0% interest rate for 6 months on a balance transferred from another card. This, in fact, is quite common. However, the catch is simple when explained.
Use this card for any purchases and youll be paying an interest rate of approximately 16.9% interest on your purchases. The 0% interest does not apply to any purchases you normally use a credit card for and if you have your transferred balance on the card, as well as purchases, your repayments will go toward paying off the balance transfer first. Therefore, youll be accruing interest on the purchases and have no way to repay them unless you pay off the balance transfer first.
Unfortunately, this is why the majority of these companies offer cash backs and rewards. They want you to put purchases and increase your balance. In this particular case, they make a lot more money from you, while you spend years trying to pay it off.
Does this mean this is the death of the 0% balance transfer offer? No, it does not. To get around this, youve simply got to be aware of the fine print within each particular programme. If the offer states that it is 0% interest on balance transfers, cheque for how long it will remain 0% and what the interest rate will be once the time is up. Youll also want to know and evaluate what the minimum transfer balance is. Most credit cards are approximately 100. You must decide at this point if you believe the balance will be paid by the time period is up and if not, can you handle the interest rate.
The next step is to keep this card only for this balance transfer. Do not put any purchases or draw any cash from this card, no matter what kind of offer they give you for rewards or cash back. If you can do this, the 0% balance transfer will be beneficial to you.
Another thing to watch out for on credit card offers is if there is a handling fee. There are some companies that will charge a one-off 2% fee for balance transfers and they also put a minimum charge of 2 and a maximum of 50. While there are still some offers that will not charge a handling fee, they are becoming rare.
When looking to use a credit card for a balance transfer, it is very important to read the fine print on each and every offer before you make a decision. Look at what the interest rate will be and after what time period, as well as any handling fees involved. Evaluate each 0% balance transfer offer and go with the one you feel would work best for you.
Tags: 0 Interest On Balance Transfers, Balance Transfer, Credit Card Company, Credit Cards, High Interest Rate, Many Things, Money, Repayments, Rewards, Transfer Balance
Posted in Credit Finance | No Comments »
Thursday, April 15th, 2010
One of the most difficult decisions that you can face is whether or not to file for bankruptcy. For individuals, there are basically two types of personal bankruptcy, which includes Chapter 7 and Chapter 13. Designed to give the filer a fresh start in life by wiping out certain debts, a Chapter 7 bankruptcy will rid the filer of credit card and other unsecured debt. A chapter 13 bankruptcy, on the other hand, is a court-approved payment plan in which the filer is required to repay a predetermined percentage of their debt. The determination of which chapter to file will be based on the filers disposable income, if any, after paying their necessary monthly bills.
When many people file for bankruptcy, their first thoughts are of their assets and whether or not they may lose their home. In a Chapter 13 repayment plan, the majority of filers are allowed to keep their property in exchange for repaying a portion of their debts. A Chapter 7, however, is designed to be a liquidation process that often results in the sale of non-exempt property. Which property is non-exempt in a bankruptcy proceeding? Each state has its own laws pertaining to the amount of property that an individual or married couple can keep without having to worry about it being liquidated.
The official bankruptcy process begins upon filing a petition with the local bankruptcy court. This can either be done individually, also known as pro se, or with the help of an attorney. For most, hiring an attorney is the best way to make sure that every form is completed accurately and in order to make sure their assets are protected as much as possible. Upon the filing of a bankruptcy petition, the court will assign a trustee to the case and will set a date for a Meeting of the Creditors. Although creditors of the filer are invited to attend, they are not required to do so. The filer, however, is required to attend and will be questioned by the trustee, under oath, while having the meeting recorded. This meeting is typically the only appearance required of the filer unless special circumstances are present.
Following the Meeting of the Creditors, often referred to as the 341 meeting, the creditors will have 30 days to object to the filers property exemptions and another 30 days to object to the discharge if the filing is a Chapter 7 bankruptcy. In a Chapter 13 proceeding, creditors may object to the payment plan but the discharge will not be granted until the payment plan is complete. A Chapter 13 bankruptcy can last for up to 5 years before the payments are completed and a discharge is issued. Following the discharge, the bankruptcy case will be closed and the process will be complete.
This article is to be used for informational purposes only. It should not be used as, in place of or in conjunction with professional legal advice regarding bankruptcy. Anyone who is considering filing a petition for either personal or business bankruptcy should consult a licensed attorney in their area for additional information and/or legal advice.
Tags: Bankruptcy Court, Bankruptcy Petition, Bankruptcy Process, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Creditors, Difficult Decisions, Disposable Income, Exempt Property, File Bankruptcy, Filer, Filers, Filing A Petition, Filing Bankruptcy, First Thoughts, Fresh Start, Married Couple, Personal Bankruptcy, Repayment Plan, Unsecured Debt
Posted in Personal Finance | No Comments »