Collection Solutions During the Recession

Collection Solutions During the Recession

Just because a recession assisted in putting more consumers in debt doesn't necessarily mean the debt collections industry is booming. Just like other industries, the collections industry has been hit pretty hard, too.

Prior to the recession, the third party debt collection industry had about 155,000 people working in it. That number dropped to around 148,000 in 2010. The accounts receivable market also took a hit with a nearly five percent drop in employment from before the recession to 2010.

This drop might surprise the general public when there is so much debt out there to collect on. But working against the industry is the need to reduce commission rates these companies charge to clients, like banks and creditor clients. For instance, in 2005, about three years before the start of the recession, third party collection agencies had commission rates of nearly 24 percent for their collection solutions. But by 2010, that rate dropped to just below 19 percent. The industry saw around $12 billion in commissions in 2005, but only $10.3 billion in 2010.

Looking at the income margins for debt collection solutions doesn't paint a brighter picture. The average after-tax net income margins rose steadily up to 2008 when agencies were taking in an average of 6.7 percent margins. But by 2010, that percent had dropped to just over five percent. The earnings before interest, taxes, depreciation and amortization (EBITDA) also dropped over that same period, from 11.8 to 8.2.

To compensate for these loses, companies that offer collection solutions had to cut back on the number of employees that they had on the payroll. Some industry experts believe that the industry hit its low point in 2010 and that 2012 should show increasingly positive numbers, once they're available.

There are fewer collectors on the payroll today, but there is plenty of work out there for them. The Federal Reserve said in one of its reports that the number of charge-offs rose more dramatically than any other time in history from 2008 to 2010. Companies specializing in debt collection sought out more innovative solutions to establish partnerships while maintaining their edge on technology that helps them deliver professional services that stay in compliance with federal, state and local rules and regulations.

While companies like Omega RMS, which provides debt collection solutions for clients, are thriving today, it's not due to an influx of bad debt that needs to be collected. It's because they are able to offer flexible solutions that fit their clients' needs.

Diluent Shortage on the Horizon

Diluent Shortage on the Horizon

The growth in Alberta's oil industry has reached numbers that it hasn't seen since the 1960's as Albertan oil companies can finally make use of the oil that they previously thought was inaccessible due to modern technology. Alberta is rich in oil, and much of it can be found in the oil sands, close to the industry and housing of Fort McMurray. The Energy Resources Conservation Board (ERCB) said energy companies extracted 556,000 barrels of oil a day in 2012 from conventional zones, which is up 4% from 2011. The ERCB forecasts oil output to continue to grow in the coming years, and make a 7% leap in 2013.

The increase in Alberta's oil production may cause chronic transportation bottlenecks and weigh on prices for Albertan companies. Al Monaco, chief executive officer at Enbridge notes, "We're in the midst of a massive increase in North American crude oil supply. That's generally good news, however the lack of sufficient pipeline capacity is causing significant regional price disparities. We're all concerned about the short-term and longer-term effects this could have on energy development."

The oil that is extracted from Alberta's oil sands is bitumen which must be removed from the sand in a modern extraction process. The conventional process includes horizontal drilling coupled with multi-stage hydraulic fracturing techniques. The ERCB forecasts a dip in conventional oil production in 2014 if there is no further advancement in technology. Scott Saxberg, president and CEO of Crescent Point Energy Corp is hopeful despite ERCB's warning, he stated, "We're just at the front end of the technology change," he said. "In the next five to 10 years, we're going to see even more advancements in that technology and the knowledge we have around developing these assets using the multistage fracking horizontal drilling."

Due to the nature of the pipelines and regulation, Alberta's bitumen is too thick to be transported through pipelines, so it must be blended with a lighter hydrocarbon to make it into ultra-light oil commonly referred to as diluent. With the increased output of bitumen in Alberta, where production is expected to double by the year 2022, the demand for diluent could increase from about 330,000 barrels a day last year to roughly 935,000 barrels per day according to the Energy Resources Conservation Board. However, several major oil companies are reluctant to invest in the high-cost of processing in their own region, and instead have opted to send the crude oil directly to Asia and to the U.S Gulf Coast for processing.

The reluctance of oil companies to invest in processing may cause a significant shortage in diluent in the future. Chris Cox, an analyst at AltaCorp Capital Inc, noted "For each new barrel of oil sands production going forward, there's going to be greater demand for condensate than we've seen historically. That could trigger price spikes and squeeze margins if demand outstrips available supply."

Financial Institutions Crossing Traditional Ethos

Financial Institutions Crossing Traditional Ethos

With ever-so incrementing pressure from all the facets such as customer demands, tumbling economies, reducing trusts, rising living standards, escalating business needs, tightening regulatory framework and increasing technological usages, it is the time for financial institutions to think big and bring out solid technology-based solutions that will cut the operating cost of businesses and improve their performances. One of the excruciating challenges faced by financial bodies is resource allocation, asset evaluation, upcoming technologies and particularly the prevailing community vibes. This is the reason they need to revamp their facets from banking technology to product offering, making them to fit for business demands. They need to have fully structured framework to mitigate risks and nurture clients. There is a high need of utilizing technological platforms to actively take part in growing advancement.

In order to enhance the overall value of financial products and service offering, financial institutions need solid strategies for business consulting, business analysis, project implementation, project support, and hardware and software requirements. This will help them in smooth planning and addressing complex business infrastructures and their needs. This will drive their solutions for more powerful support and networking.

Today, banking and financial bodies are coming from a long way from traditional rules to technology-driven internet banking. Really, banks have changed the way and pacified the risks involved. They have nullified the ill effects of global competition and economic slowdown. This has resulted in explosive commercial growth under real pressure. They boost innovation, technological competence, and creativity. They are resolving the lasting issues of online payments, online transactions, business banking and insurance technology. Even, they are managing their data and other information resources to enable process transparency and complete control. Banking and financial institutions also put their agendas and issues in banking and finance conferences.

One of the major factors behind the continuous success of banking and financial institutions is constant innovation, technology adoption and business service stimulation. They are busy in strategic planning, managing and following holistic approaches toward research, assessment, communication, IT, integration, & collaboration, computing and business development. This focused planning will help in aligning comprehensive resources to better catering for the rising corporate demands. It will delineate the fine baking goals, mission and future corporate strategies for forecasted growth.

In essence, with multiple challenges in the banking sector, banks are floundering towards next ripple of growth, advancement and innovation. They are regularly encouraging investors, business owners to systematically define their process criteria and business logic so that banking bodies can partner with them for achieving greater profit margins, customer satisfaction as well as regulatory compliances. In fact, they organize banking conferences to discuss & represent their issues about banking and fiscal products.

Beware of the Cost Monsters!

Beware of the Cost Monsters!

Reducing investment costs can have a major impact on expected returns in your retirement and/or investment portfolio, more so than many people realise. Investing in a fund where the manager is paid big bucks to speculate on individual stocks and market timing (a technique known as "active" management) is not only hit-and-miss in terms of the final results, it is also expensive.

Studies show that 7 out of 10 Active managers fail to achieve their remit of beating their index benchmark. The 3 managers that did achieve their remit often then fail to do so for the subsequent period. Active funds also typically cost up to 100% more than index investments that aim to pay you the returns the overall market has to offer. Those fund manager salaries involved in active fund management don't come cheap and somebody - usually meaning you, the final investor - has to pay for them in charges. Total expense ratios or TERs (meant to show final cost to investors) of an active fund are typically around 1.8% annually. Okay, that might not sound like much at first. But bear in mind that for every £10,000 invested you are paying out £180 in fees. Again, while £180 may not sound like so much, those figures mushroom as people invest greater sums and do so over a period of years. Another major impact on returns are the hidden costs, known as Portfolio Transaction Ratio (PTR), that are not included in the TER but which the investor also pays for.

An FSA study into PTR costs concluded that on average this can add a further 1.8% per annum to your total costs. When added to your TER this gives you a Total Cost of Investing (TCI) of 3.6% per annum. Say you choose to invest £100,000 in an actively run fund. You would be paying out £3,600 in fees in the first year alone, potentially wiping out any performance gains. Paying out that much in fees swallows up a big chunk of any potential returns generated by the active manager. Academic research suggests that high investment charges mean investors might be better off simply investing to capture the market returns on offer through index-based solutions. Typical Total Cost of Investing (TCI) for an index-based solution are only around 1.50% per annum.

Let's see how an index-based solution's TCI compares to active fund solutions. On £100,00 invested in a fund guaranteed to give you virtually the same returns as the market of 7%, you would pay out only £1,500, compared with £3,600 for the active fund. As the years go by, of course the effect of investment fees multiply via compounding. After 20 years, the active fund value would be £195,168 compared to the index fund solution value of £291,773. That's a difference of £96,605 or 50% in just costs alone. In the investing world, costs are one of the only factors that are in your control.

Charges can eat into your investment returns and can reduce your final pension or investment pot significantly. Not only do you pay out less in charges by investing in index-based solutions. You are investing your money - your hard-earned money, remember - into an investment strategy that applies techniques pioneered by some of the worlds' leading economists, academics and Nobel Prize winners. Even the world's greatest investor, Warren Buffet, endorses index investments as the most sensible equity investment for the great majority of investors. In contrast, active management gives the individual manager discretion to gamble or speculate in how they invest your money. Performance from active funds, as you may have guessed, can be more unpredictable than their costs might have led you to hope.

The Next Ten Investment Bubbles

The Next Ten Investment Bubbles

MarketWatch recently ran a piece titled The next 10 investment bubbles by Wallace Witkowski, and I thought this would make a nice follow-up to last week's commentary on the Two-Term Presidential Curse where two-term presidencies appear to end in bubbles and busts.

Bubble # 1: U.S. Stocks: The U.S. bull market is now almost five years old with the S&P 500 up 170% since its March 2009 low. The last 10% correction ended in June 2012 and the S&P is up another 40% since... and while corrections normally reset markets, what's different this time is the environment of extremely low interest rates and the $85 billion in monthly stimulus that's fueling the rally in stocks. Of course, solid earnings have also reassured investors but talk of the Fed slowly ramping down its stimulus - is beginning to worry some market watchers. However, there are many like Warren Buffett who don't think stocks are overvalued at current levels.

Bubble # 2: Momentum stocks: Now - there most definitely are a few stocks such as Tesla Motors and Facebook, to name a few that have surged beyond fundamentals. Over the past year, Tesla is up about 336% and Facebook is up about 135% with many analysts in agreement that shares of momentum stocks such as these have risen to levels well above fundamental value.

Bubble # 3: Bitcoin: Some of you may have heard of Bitcoin - an alternative currency not controlled by central banks (which adds to its allure). As you would expect many, including the underworld, like Bitcoins as a nationless currency in which they can freely transact business away from government controlled banks. Believe it or not, bitcoin prices are up almost 2,500% in 2013, with a gain of nearly 76% in November alone to about $400 per Bitcoin... Even Internet giant Baidu (China's Google) recently started accepting Bitcoins as payment for services. Several Bitcoin startups have also received significant venture funding - so something new is afoot here.

Bubble # 4: Investment Grade Scotch: Wow - who would've thought scotch whisky would make the list... but turns out investors have significantly bid-up prices of rare whiskies as a must-have collectible. A Scottish company that tracks whisky auction prices says prices have soared 170% since the end of 2008 with rare scotches fetching four- and five-figure sums per bottle! Of course, high prices have prompted many distilleries to release their own limited-editions that could push up supply and cool prices... but skeptics think prices could go even higher because newer limited editions may not meet connoisseurs' high standards for a good scotch.

Okay, I'm going to collapse a few categories now in the interest of time, so here they are.

Bubbles #5 and 6: Property values in London and China: Property prices are on a tear in London, with prices up 10% in October alone and set to rise higher on positive UK economic data. London sees higher demand for homes than supply, partly with turmoil in the Middle East driving money into London property as a safe-haven investment. While rising interest rates may curtail domestic demand, they're unlikely to dampen demand from foreign moneybags.

Similarly, property prices in China were up almost 11% in October - the highest growth rate since June 2011 - reigniting fears of a fresh bubble and prompting the government to tighten credit and stabilize growth. Lack of confidence in China's murky stock markets is also driving money into U.S. real estate that could well boost property prices at home.

Bubble #7: U.S. Farmland: Prime U.S. farmland has seen a 20% jump in price over the past year to $8,400 per acre - continuing steep upward gains since the late 1980's, almost without a meaningful correction. Prices are particularly high in the heartland where corn and soybean crops grow well - with land price gains fueled by soaring commodity prices and low interest rates. However, farmland prices look like they may avoid a bust as commodity prices retreat from earlier highs and as interest rate increases weaken credit availability. So U.S. farmland appears to be headed for a smooth landing, not a crash.

Bubble #8: Cattle and beef futures: Cattle futures are at an all-time high since November 1984, to $1.34 per pound from slightly over a dollar a pound at the beginning of the year. Prices have spiked because - over the past few years - farmers trimmed their herds due to droughts and high feed costs that made cattle farming unsustainable. Now, supply lags demand, but rising beef prices may slow beef consumption in favor of cheaper alternatives such as chicken and pork. With feed prices dropping in 2013, ranchers may start to build herds and stabilize supply and demand by the end of 2015 - so, again, a crash is unlikely.

Bubble #9: Student loan debt: Over the past ten years, federal student debt has tripled to over $1 trillion in June 2013, with default rates rising sharply since the financial crisis in 2007 with jobs hard to come by for new grads. Default rates are up from about 5% in 2007 to over 10% in 2012 and rising and even Ivy League grads are part of the growing default trend.

Bubble #10: Tech start-ups, IPOs: The market for IPOs has been very frothy of late with first day gains of 100% in some cases. Of recent IPOs - Twitter is up 64% - to $42 from its IPO price of $26 - even though it is yet to report a profit. Potbelly Corp., a sandwich restaurant chain, went public at $14 and now trades at about $30, up over 100%. Encouraged by this highly receptive market, many other start ups without profits - such as Chegg that just went public on Wednesday - are also hitting the market - raising hundreds of millions in cash and garnering billion-dollar valuations on zero profits. It's sort of like the go-go dot-com days and many analysts are wary of these eyebrow-raising valuations.

So there you have it - 10 potential bubbles... which I plan to follow through the end of Obama's term. And while we've identified these ten, I wouldn't be surprised if there's something completely out of left field that hits us and takes markets down... only time will tell.

Steve Pomeranz is a Managing Director for United Capital Financial Advisers, LLC, "United Capital", and owner of On The Money. On The Money is not affiliated with United Capital.

Child Poverty: Advice for Parents on Income Support

Child Poverty: Advice for Parents on Income Support

According to gingerbread.org.uk, 50% of children in a single parent family are being brought up in a state poverty, as opposed to 25% in two parent households. I suppose it is to be expected: one parent equals one income.

There does seem to be a lot of support available from charities and various government schemes, however, finding out what's available to you isn't always that easy. I've looked at some of the issues surrounding child poverty in the UK and whether help is on-hand.

Utilities

I asked my youngest sibling, who is a single parent on benefits, what her biggest expense is, she informed me that it's gas and electricity because she's on a pre-paid meter. Would you believe that people on meters are actually charged more? Unfortunately, the poorest often pay the most for their utilities:

  1. You can refuse to have a meter installed; if you're struggling to pay your bills give your provider a call and work out a payment scheme. They may try to persuade you to go on a meter, but avoid it like the plague!

  2. Ask your provider if they offer discounts to customers on Income Support. According to Gingerbread, some companies discount up to 15% off so it is well worth asking. In fact make it a habit to ask all of your service providers for discounts, you may be pleasantly surprised.

  3. In an attempt to regain some credibility, certain utility companies are offering free activity vouchers. British Gas is offering 'free swim passes' for families, and other energy companies are following suit; take a look at your utility provider's website to see what's on offer.

Childcare Vouchers

Working parents may be able to save over £1,000 a year on childcare using special PRE-TAX vouchers. It's a scheme run via your employer and entails you for-going £1,000 of your gross (pre-tax) income, which amounts to around £700 take-home after NI and Tax. In return you get £1,000 of childcare vouchers, leaving you £300 better off. Basic rate tax payers are entitled to pay up £243 of childcare with vouchers each month, so if there are two working parents that can amount to £486 per month paid in vouchers. It's a huge saving over a year.

Child maintenance

Child maintenance is, on average, 20% of the absent parent's salary, so if you are working things out amicably you have this benchmark to work towards. It is your responsibility to procure your child's maintenance; if your ex-partner refuses to pay then Income Support will not redress this for you. You will need to go retain the services of the Child Support Agency and that can take at least six weeks to before you see any money.

Training and Qualifications

There are a number of charities providing free or subsidised training and education courses for those wishing to better their chances of securing employment. Many charities also provide free childcare whilst you attend. One such organisation is Onespace.org.uk, they've helped plenty of single parents back into work; take a look at the inspiring testimonials on their website.

Charities

If you are really struggling to make ends meet you can contact a local charity, such as Barnardo's, who are committed to helping children in poverty. They organise support workers who make home visits and advise on how to better manage finances, help steer you back into employment and offer support for those struggling emotionally. There is a legion of ways in which support workers can offer a helping hand - ways you may have never even considered.

How To Pay Off Your Debts Using Your Income Tax Refunds

How To Pay Off Your Debts Using Your Income Tax Refunds

If obtaining help with debt is among your primary plans for the year then, you should consider using your tax refund to pay back your current debt responsibilities. Still, to enhance the use of such resources, we suggest you create financial budget on an Excel spreadsheet. After all, this will aid you come up with an excellent strategy on how you should manage the funds you've just received.

Now, to find out how you can do this, we suggest you pay close attention to the steps we have enumerated and discussed below.

How to Develop a Budget Spreadsheet Step 1: Install Microsoft Excel on your computer. To enjoy the maximum benefits of this application, we suggest you download or purchase the latest home or professional versions of the software suites offered by Microsoft.

An excellent alternative to such program is the Open Office Calc. It functions just like Microsoft Excel; however, you can simply download free versions of this application from the website of OpenOffice.org.

Step 2: Create a spreadsheet. This will contain the details of your debt repayment plan as well as your budget for the succeeding months. Fill out the top-most row of the worksheet with the following headers: Date, Description, In, Out and Total. Then, save it as a master copy, which you can modify whenever the need arises.

You may also decide to come up with new worksheets. To do this, scroll down to the bottom of the page you're viewing, right click on your mouse, and select the "copy sheet" option to automatically copy the details found in your master copy to a new spreadsheet. Then, save it using an appropriate filename.

Step 3: Key-in the details of your personal budget plan. After creating spreadsheets, the next thing you should do is to input the information for the columns marked with Date, Description, In, Out, and Total.

In the "In" column, enter the income you've generated for the month, as well as the income tax refund you received at the beginning of the year. Then, list all your recurring bills and expenses in the "Out" column. Just see to it that each value begins with a "-", to indicate that each item must be deducted from your income. And don't forget to fill out the Date and Description columns with suitable information, so that you'll know when each entry went in and out of your pocket.

Step 4: Calculate your budget. In this step, you will be using the AutoSum function of the Excel spreadsheet. First, you need to determine the total values for the "In" and "Out" columns. To do this, simply select the box after the last entry for each column. Then, click the AutoSum button (the sigma symbol, ∑ on one of the tool bars). This function will allow you to choose the items that must be included in the computation. After obtaining the column totals for "In" and "Out", use the AutoSum function, once again, to determine how much disposable income (In minus Out) you have.

Step 5: Evaluate your budget. The final amount you will obtain, after performing the necessary computations, represent the total sum of cash you have left at the end of the month - that is, if you've adhered to the details of your budget. If you see a negative amount then, it's an indication that you're actually spending beyond your means. Moreover, you need to make adjustments on your spending habits or else you may soon find yourself knee-deep in debt.

On the other hand, if you discover that you have more than enough funds left after covering your expenses then, you may set them aside to gradually settle your credit card bills, loan payments, and other financial obligations. In time, your good payment habits will help you attain relief from all forms of debt.

Learn Stock Trading From Playing Poker

Learn Stock Trading From Playing Poker

To become a profitable trader, the first step is usually to try and pick good stocks. Most people are aware of the fact that selecting good stocks without thinking of a good exit strategy is a near impossible task.

An exit strategy is the most difficult part for many investors and traders in the market today. To trade profitably, many people say that you need to develop a good mentality. The only problem is that for you to develop such a profitable and winning mentality, you must have a good experience. However, there is a small and perfect way to learn this experience without using thousands of dollars. This good way is playing POKER. Yes, this is a very short and interesting way through which you can learn.

Did you know that by investing in stocks and playing poker there are a lot of similarities? One of the most important similarities is the fact that both of them have a relationship with money, uncertainties, and risk. It is important for me therefore to try and explain in this article the differences and the similarities between poker and stock trading. You have to make sure, before proceeding that you know all of the rules of Texas Holdem and you are conversant with all of the terminologies. The reason for this is because there is a huge similarity between stock picking and having a good hand to play.

As is the case in Texas Holdem wherein you can look at the whole selection of cards before deciding to play or not, the same applies in selecting stocks. You will need to start by analyzing the stock before deciding on whether or not to enter an option. For most traders fortunately, you only have to pay the commission. No one will raise pre-flop. However, you need to pay the commission if you want to exit the position, which implies that the cost of entering a position is more or less two times the commission.

You must proceed like a good poker player in the event that you are looking to invest in stocks. Before you invest, you always have to make sure that you conduct an effective research. While trading however you never really have to wait for good stocks as in poker where players have to wait for a good hand. However, you can conduct a search on the stock picking websites to find a good stock. Besides that you can also find them yourself by using screeners. In poker, you get to see the flops and two more cards once you call the blinds. Think of these cards as the performance of your stock after you enter the position.

In poker, the flop can make tree hands, a good hand, a medium hand, or just a bad hand You have to use the same vision in trading, and you should judge both: the upside and the downside potential of the stock. In poker, sometimes you have a good hand but you know that you are losing because your opponents have a better hand than yours.

IT Leasing Can Streamline Your Budget Sheet

IT Leasing Can Streamline Your Budget Sheet

When it comes down to it, most business owners, CFOs and CTOs have objectives to streamline the business and keep unnecessary costs to a minimum. Here, we answer the important questions around the impact of leasing on company finances:

"If we have cash shouldn't we just buy our own equipment and services?"

At times of uncertain interest rates and inflation, cash, just as any other asset, is liable to change in value. In contrast, lease rates tend to be flat - making it much easier to predict your cash flow over the duration of the lease period. Cash is best used to reinvest in the business or saved in case of emergency and spares you from having to delve into your company overdraft.

"Why not purchase equipment and services using a bank loan?"

The benefit of leasing over a bank loan is that bank facilities should be utilised for cash flow purposes. If a company takes out a bank loan to acquire assets, then they are reducing any facility that they might require from the bank to fund day-to-day business activity - they might, for example, win a contract that requires large initial outlay, they might need to fund stock purchases or they might want to grab market initiative with a marketing campaign - if they have tied up bank facilities in assets, then that company is not able to use the bank when their business needs to react quickly to market opportunities. By leasing, you are leaving their bank facilities intact.

"How will a lease affect my balance sheet?"

Some types of leases can be recorded off-balance sheet. This can help improve some of your financial indicators such as debt-to-equity ratio or earnings-to-fixed-assets ratio. The knock-on effect of this is an improvement in your compliance with Basel II capital adequacy requirements and an overall reduction in your borrowing costs.

"Do IT leases carry any tax benefits?"

Yes. Currently lease payments count as operating expenses and are therefore fully tax-deductible. On the other hand, when using capital to fund equipment purchase, only the depreciation costs are deductible from your tax.

"Are there any other financial benefits of leasing?"

In creating a predictable and tax-deductible monthly payment structure, leasing also ensures you don't encounter redundancy or obsolescence difficulties. Selling your used equipment on the secondary market can be a difficult and long-winded process that does not regain you a great deal of capital.

IT leases are also much more flexible when it comes to changing your existing IT infrastructure and some will even ensure you are provided any updates or upgrades as they become available. No more expensive IT items on the balance sheet.

Checklist For Meeting With Your CPA

Checklist For Meeting With Your CPA

Inevitably, it's that time of the year again when you need to prepare to meet with your CPA to discuss taxes. You need to take stock of your investments, any financial transactions undertaken, and, most importantly, the paperwork to support these.

Typically, the biggest challenge revolves around locating and compiling the relevant paperwork when it is needed. To make the most out of your meeting, it makes sense to locate these documents and papers before you head out to the CPA.

Following is a short list of some common documents you should have before rushing off to your CPA.

Income Records
-Invoices
-Bank Statements
-Brokerage Statements
-Investment Account Statements
-Schedule K-1

Invoices, Bank Statements and Investment Accounts
As a small business, you need to carefully track your receipts and invoices. Any record of income, such as bank statements and investments need to be provided. The form 1099-INT which reflects your savings and interest is also required by your CPA.

For this reason, it is important to perform timely reconciliations of your bank statements and to keep your income receipts, investment account documents, and brokerage account papers easily accessible.

Schedule K-1
If your business is classified as a partnership or corporation, you are also required to report any income or loss in the form of a Schedule K-1. This form carries details of individual shares of income within a partnership or corporation.

- Expenses
- Miscellaneous office related expenses
- Mileage
- Payroll documents
- Mortgage interest statements
- Rent
- Interest expenses
- Insurance

Office Expenses:
Your expenses could range from direct office expenses, such as supplies, to more significant expenses, such as travel.

Mileage Expense
If you use your car for business purposes, you can claim it as a deduction or at least miles driven for business purposes as a deduction. Make sure you also track receipts for any tolls incurred while driving for business purposes.

Payroll Expense:
If your company hires employees, then you need to provide documentation of their salary or wages. There is also the Form W-2, W-3, and other state payroll returns such as Form 940 that you will need to keep updated.

In fact, the Social Security website has the capability of online W-2s, where you can create and print up to 20 W-2 forms for your employees. Check this URL: http://www.ssa.gov/bso/bsowelcome.htm to access the service.

Do you have people assigned to specific tasks in your company or hired for a specific expertise or duration? If so, then you need to report their earnings from you via a separate form such as a 1099-MISC which contains details of payments made to agents contracted by you.

You can also claim tax deductions if you are providing retirement plans to your employees. Keep this documentation on hand.

Mortgage Interest:
Many small businesses or enterprises operate out of the owner's home. If you are using your home for business purposes, you can include documents to support your mortgage interest, insurance, and other maintenance-related expense documents for the purpose of deductions. If you are self-employed, you may need to use Form 8829 for claiming this deduction.

Office Rent:
If your office premises are rented, you could claim deductions on the rental taxes related to real estate and other utilities.

Interest Expense:
Some small business owners have taken loans for business activities. Any money borrowed for business purposes can be deductible, if you have valid documentation supporting its usage.

Insurance:
Insurance policies taken for the purpose of business coverage can be reported as a tax advantage, so be certain to keep track of these insurance papers.

Use this checklist to prepare for your next tax meeting with your CPA.

Are Forex Markets the Biggest Trading Platforms?

Are Forex Markets the Biggest Trading Platforms?

Forex markets provide individuals with the single biggest trading platform in the world. Each day there are billions of dollars that are traded in different currencies. One of the biggest advantages of trading in forex is that it is open for twenty four hours. Apart from this liquidity is also a major factor that has made forex trading so popular.

There are different time zones that are available and traders can choose the forex markets of their choice. Different currencies are traded in pairs and this is a very fluctuating market where they go up and down each day. Some of the most popular pair of currencies that are traded daily includes U.S dollar/Euro and U.S dollar/Japanese Yen and U.S dollar/British pound.

There are various factors that determine their movement and it is important that traders are aware about them. A very interesting aspect about trading in forex markets is that they are both simple and complex at the same time. It is very simple for traders who have gained adequate knowledge about the techniques and terms used in forex trading and complex for those who trade on an impulse.

Most people who trade in forex are unable to make profits as they are not aware of the various aspects that drive this market. Lack of knowledge prevents people from making profits. The forex markets provide enormous opportunities for the savvy investor to make money consistently.

It is always advisable to start small in forex trading till you gain enough experience to take bigger risks. One of the best aspects of forex markets is that it is not controlled or dominated by any one single institution. Each day millions of traders participate in the trading that is done worldwide. It provides an equal opportunity for everyone to make profits.

There are many websites that offer traders the opportunity to open demo accounts where they can learn the various skills that are needed to trade live in the forex markets. As currencies are traded in pairs, you will be buying one currency and selling the other.

As the forex markets are open for twenty four hours daily, it offers traders a perfect opportunity to do many trading sessions and make small profits all through the day. Nowadays there are many online tools that are available to make the trading process easy.

There are various reasons due to which currencies of different nations fluctuate and traders will be able to respond to them immediately to minimize risks and increase profits. The number of people who have started to invest in forex markets has been on the increase. Although it is very popular a majority of people tend to lose money in it as they are not aware of the basic concepts of forex trading.

Most investors who are disillusioned with the low returns of the stock market have also started shifting their investments towards forex trading. Compared to the equities market the forex market has seen phenomenal growth over the past few years.

Steer Clear of Conflicts of Interest

Steer Clear of Conflicts of Interest

In other articles, we've been discussing the new fee disclosure regulation and now it's time to chat about retirement plan conflicts of interest. Consider these circumstances when designing your plan to avoid conflicts of interest that could hinder your retirement savings efforts.

Big NO-NO! Avoid arrangements where the employer receives payments or incentives from the provider.

Quid pro quo transactions. Steer clear of arrangements where the plan sponsor or fiduciaries receive anything in exchange for plan transactions, assets or services. In an effort to create transparency, the U.S. Department of Labor proposed a regulation in 2007 which would require fiduciaries to declare any conflicts of interest. Though this regulation has not been finalized, it reflects the goal of the DOL to provide security for participants against conflicts of interest.

According to C. Frederick Reish and Joseph C. Faucher in their 2009 article on Fiduciary Duty, "The fundamental fiduciary duties are set forth in the so-called 'prudent man' rule, the duty of loyalty and the 'exclusive benefit' rule. These duties require fiduciaries to carry out their duties as would 'a prudent man engaged in a like capacity and familiar with such matters,' to act 'solely in the interest' of plan participants and to act for the exclusive purpose of providing retirement benefits to participants."

Additionally, revenue sharing creates an incentive for providers to suggest funds with higher revenue sharing payments, even if those funds are poor performers or have higher participant costs. Revenue neutral funds will avoid this conflict of interest.

Biased advice. A fiduciary with a conflict of interest may steer 401(k) plan sponsors toward investment funds that increase the service provider's compensation. Another big NO-NO!

I'm not a fiduciary. The Employee Benefits Security Administration can recover losses related to conflicts of interest when the service provider functions as a fiduciary. Many service providers structure their contracts with 401(k) plans to attempt to avoid meeting one or more of the five parts of the current definition of a fiduciary.

Recruiting rollovers. Conflicts of interest also arise when 401(k) providers sell non-plan products and services, such as IRA rollovers, to participants outside their 401(k) plan.

Miseducation. Fiduciaries who offer education materials and brochures to 401(k) participants may have financial interests in the investment options available.

Bundled funds. A provider that suggests its own investment funds or has an affiliated brokerage arm has an incentive to steer 401(k) plan sponsors to select their proprietary funds.

Brokerage repayments. An investment adviser can direct a broker-dealer to use commission revenues to pay the fees of other service providers or to purchase services of value to investors. These arrangements can create an incentive for the service provider to recommend a more active trading strategy to increase the number of transactions and consequently the amount of commissions.

Why The Dollar Will Collapse

Why The Dollar Will Collapse

How many times have you wished you could print money to pay your bills like our government does? Wouldn't it be great if you could? Of course, we are not allowed to print our own dollars to pay our bills like the government does to pay its bills.

Whenever private citizens do print money, it's called counterfeiting. When the government prints money it's called funding. Either way, whoever prints it, paper dollars are still worthless pieces of paper.

The only reason paper dollars remain in demand is people still trust them. Most of us have "faith" the dollar has value, when in truth no value exists.

At one time in our country's history, paper money actually had value. Called Certificates, Every paper dollar was redeemable in silver or gold at any bank. Those days are long gone.

Today, paper dollars created by the Federal Reserve System are called Debt Notes. They're called Debt Notes because that is what they are. Each Note has an outstanding debt owed against it which must be paid back with interest.

Since our government spends what it does not have, it must borrow from the Federal Reserve ever-increasing amounts of Debt Notes to remain solvent. It can do this only by rolling over old debt (including interest) into new debt.

This in turn creates ever-increasing amounts of debt which can never be paid back. There are simply never enough Debt Notes in circulation to pay back what is owed against them.

Consequently, the Federal Reserve System is a classic Ponzi Scheme made legal by an Act of Congress back in 1913.

It is an ever-growing mountain of debt and paper Debt Notes in circulation that creates monetary inflation. This mountain of debt and paper Debt Notes has been growing for over 40 years. It cannot continue much longer.

The time is very near when, by rule of monetary order, this Ponzi Scheme will implode, and the dollar will collapse on itself.

Politicians cannot stop the collapse or prevent it from happening. So it is incumbent on each of us to do what we can to prepare while there is still time to do so.

When the collapse occurs those left holding paper dollars, and dollar-based paper assets will suffer the greatest. 401Ks, Stocks, Bonds, IRAs and the like will become worthless overnight. And that's just the beginning.

We will wake up one morning and find we are in a very different world. Few people will have the where-with-all to make it through this mess unless they are prepared ahead of time going into it.

How Being Married Can Affect Your Insurance Premiums

How Being Married Can Affect Your Insurance Premiums

The institution of marriage is one of the oldest social institutions in the world. It has historically been encouraged for the many positive aspects it brings to our society. Children who grow up in a two-parent home are viewed to be more stable and have less instances of delinquency than their single parent home counterparts. Marriage has shown to reduce stress and increase longevity. One area of your life that benefits from marriage but is seldom mentioned is your auto insurance.

But why would insurance companies offer lower premiums to married couples? The answer may be summed up in two general ways:

Married people are considered less risky

When you are married, your priorities change to include those of your spouse. You no longer have only yourself to think about. Be it consciously or subconsciously, married people tend to be more cautious than their single counterparts. Most individuals with children tend to drive more carefully especially when the children are in the car with them.

Insurance companies are aware of this and introduce driver discounts for married people. Now, being married does not automatically negate other important factors such as your driving record that may affect your premiums and may not necessarily translate into paying less for your insurance. Check with your insurer to see if you may get this advantage in your policy.

Married people tend to have more stuff to insure

Typically, when you have a family, the chances of having more than one vehicle are higher. If you and your spouse choose to use the same insurer to cover your vehicles, you may qualify for a discount on your premiums. If you are insuring more than one driver i.e. your spouse and eligible children, you may also get a discount for the same. If your insurance agency covers more than just automobiles, you may get discounted rates for insuring your other valuables such as your home.

You can reap lots of benefits if you fit several of the demographics that insurers typically award discounts to. For example, if you are a male individual who is over 25 years old working as a scientist in a metropolitan region with lots of public transportation, and is married, there are several discounts you can glean from your insurance agency. If you have all these and a good driving record, you will reap even more rewards from your auto insurance.

If the reverse is true, that is you are married but have a poor driving record or have many traffic violations, live or work in an area where public transportation is not reliable or available, then being married may not give you as much benefits as you would like.

Before you go rushing to the altar with the aim of lowering your premiums, do your research first. Find companies that offer these kinds of discounts within your geographical region. Once you have found a few of these, compare their rates to get the best one that suits your needs. All in all, comparisons will help you reap great benefits.

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