Low Interest Rates Have Negative Impact in Credit Growth

Low Interest Rates Have Negative Impact in Credit Growth

The decision of the Reserve Bank of Australia (RBA) to lower interest rates resulted to a failure for possible credit growth in the country since households are racing to finish off their debts rather than adjust their monthly payments, Australian Banking and Finance reported.

When the decision was made, RBA expected that demand for credit will be stimulated. What happened was the opposite since households were more conservative after the global financial crisis.

Supposedly, when interest rates were decreased, households will also lower down their mortgage payments to save some cash. But ever since the global financial crisis, households are racing to lower or finish off their mortgage so that they will be readier when a similar crisis happens.

From October 2011, the extent of prepayments of housing credit growth was decreased by at least 0.5 to 0.75 percentage points. According to a research made by Marc-Oliver Thurner and Alexandra Dwyer, credit should be increasing especially when interest rates fall down.

But the research mentioned that the last two years showed a modest growth when it comes to housing credit. This was compared in the increase in the value of housing loan approvals.

Making Prepayments

Households are prepaying their mortgages more quickly than when the interest rates were higher, another report in The Australian noted. Apparently, only about half of Australian households lowered down their mortgage payments when the interest changes happened.

It means that a considerable portion is making prepayments to end their debts early. Mr. Thurner and Dwyer, working at RBA's domestic markets department, found out different results from the two sets of data they gathered.

Because of this, they decided it prudent to also undertake two different simulations.
Analysts expect the impact of the prepayments to be felt by middle of next year.
However, under the first stimulation, the effects of the partial prepayment will be tapered off by the expected strong flow in new loan applications.

Banks should make sure though that there will be new loans since if there only a small number of housing loans, it may not be able to taper off the effects of the prepayments.

In the second stimulation, the two authors pointed out that the cumulative effect of prepayments from the 165 basis point reduction in the standard variable rate--from October 2011 to June 2013--will cut the housing growth by 1 per cent.

In 12 months to June, the cut will be 0.8 percentage points, the Australian Banking and Finance report stated.

Financial Literacy - Ways of Making People Aware of Financial Services

Financial Literacy - Ways of Making People Aware of Financial Services

Everyone needs financial services, even if they do not have a single penny. This is because it is impossible in this day and age to live without money and, hence, without financial services. However, a tiny fraction of the world population uses financial services, because outreach of banks and other financial institutions is small and also because people simply do not know about this 'need'.

Urban dwellers often use formal financial services offered by banks, insurance firms, small credit agencies, but people in rural areas, especially those in developing countries, rarely do. Instead, they rely on informal financial services, which have plenty of downsides.

For instance, loan sharks are rampant in areas where formal financial services are lacking, and these opportunistic lenders simply rip money off the borrowers. In many areas, where formal saving account services are scarce, communities have come together to form informal saving groups, however, they lack proper book keeping and security is a concern.

It is all the more important, as a result, to teach people about the benefits and variety of financial services available to them, but that is not an easy task. In less developed countries, the main question is, how can we reach all these people, scattered over large geographical areas? To make matters more difficult:

  • They have different levels of formal education,
  • Speak a variety of languages, and,
  • Have disparate access to media.

Here are some basic ideas that can help convey some measure of utility to different audiences at a national or regional level.

Channels for Financial Literacy Campaigns

Training sessions, workshops, ads, etc., can be delivered through the following channels:

  • Radio - ubiquitous nature helps reach the masses
  • National TV network - good geographical reach and low cost of subscription
  • Mobile phones - especially useful in countries with mobile banking
  • Local convenience stores and post offices - suitable for distribution of pamphlets.

While it may be easier to develop ads and place them on the media, training sessions that involve personal contact, entertainment and proper explanation of pros and cons of various financial services will have a lasting impact on the audience.

Financial Literacy Tools

Money management should be fun. Some tools trainers can rely humor on to engage the audience as well as ensure they understand and remember the training content. Here are some tools that can come in handy, when training sessions are not the answer:

  • Ad campaigns - run on radio, TV, newspapers, magazines, and other media,
  • Group discussions in community centers to determine the kinds of problems financial services can solve for households,
  • Mobile phone games are an easy way to train newcomers in this field.
  • Books and pamphlets - in local language, accompanied with pictorial depictions where necessary.

Good literacy campaigns should lead to an increase in usage of banking services of the community. This will not only benefit the individuals in the community, but also help grow the local industry.

Financial Planning - Helping For Your Future Goals

Financial Planning - Helping For Your Future Goals

Do you picture yourself owning a new home, starting a business, or retiring comfortably? These are a few of the life goals that may be important to you, and each comes with a price tag attached. That's where financial planning comes in.

It is the process of meeting your life goals through the proper management of your finances. Life goals can include buying a house, new car, advanced career training, saving for your child's higher education and self sufficiency during working or retirement years. To achieve these clear cut goals, people need to carefully plan your finances.

How SMART are your Goals?

It provides direction and meaning to your financial decisions. To set clear-cut goals, make them SMART:

  • Specific - Clearly defined and described in details.
  • Measurable - track your progress toward a definite endpoint.
  • Attainable - realistic and reachable
  • Relevant - to your needs and values
  • Timely - subject to clear deadline.

Why Financial Planning is Important?

A comprehensive financial plan serves as a framework for organizing the pieces of your financial picture. With a plan in place, you'll be better able to focus on your goals and understand what it will take to reach them. It helps you to understand how each financial decision can affect other areas of your finances. One of the main benefits of having a plan is that it can help you balance competing financial priorities. A plan will clearly show you how your financial goals are related-for example, how saving for your children's college education might impact your ability to save for retirement. Then you can use the information you've gleaned to decide how to prioritize your goals, implement specific strategies, and choose suitable products or services. Best of all, you'll have the peace of mind that comes from knowing that your financial life is on track.

Financial Planning Process

This process consists of six steps that help you take a 'big picture' look at where you are currently. Using these six steps, you can work out where you are now, what you may need in the future and what you must do to reach your goals.

1) Establish and define the client - planner relationship

2) Gather client data, including goals

3) Analyze and evaluate the client's Current financial status

4) Develop the recommendations

5) Communicating and Implement the financial planning Recommendation

6) Monitor your planning recommendation.

Role of Financial Advisors

A basic inference that can be drawn from the results of consumer surveys is that people need help in managing their personal finances to achieve their financial goals. Moreover, many people seem to realize that they would benefit from professional help, and with better education, most others would reach the same conclusion. A major part of the challenge facing advisors who are doing financial planning is to help clients overcome obstacles by educating them and motivating them to gain control of their own finances.

What Are The Alternative Financing Channels For SMEs? (Amended Version)

What Are The Alternative Financing Channels For SMEs? (Amended Version)

The Singapore's Government has for a long time been trying to cultivate a spirit of entrepreneurship among Singaporeans. But it recognises the difficulties SMEs may face in securing financial aid from banks; hence it has come up with a host of schemes to assist SMEs.

Government Assistance Schemes

There exists a number of loan and insurance schemes co-funded by the Government [specifically, IE (International Enterprise) Singapore and Spring Singapore] and administrated by participating financial institutions. For more information visit the EnterpriseOne website.

But here, we present you the gist of these schemes.

Spring Singapore

Micro Loan Programme (MLP)

  • Singapore-registered firm and at least 30% local shareholdings and maximum sale turnover is $1 million OR 0 - 10 employees
  • Further maximum group turnover is $100 million OR 0 - 200 employees
  • Maximum loan of $100,000
  • May be used for daily operations or automating and upgrading factory and equipment
  • Minimum interest of 5.50 % p.a. for loan tenure <=4 years

Local Enterprise Finance Scheme (LEFS)

  • At least 30% local shareholdings and maximum group sale turnover is $100 million OR 0 - 200 employees
  • Maximum loan of $15 million
  • Factory Loan
  • Machinery Term Loan / Machinery Hire Purchase
  • Min interest of 4.25% p.a. for loan tenure <=4 years and min interest of 4.75% p.a. for loan tenure >4 years

Loan Insurance Scheme (LIS) and Loan Insurance Scheme Plus (LIS+)

  • For both local and overseas facilities
  • LIS insures your loan against default risks. Insurance premiums co-shared between the government and your firm
  • For domestic trade: at least 30% local shareholdings and maximum group sale turnover is $100 million OR 0 - 200 employees
  • For overseas trade: Singapore-based, at least 3 strategic business functions in Singapore and maximum group turnover is $500 million ($300 million) for trading (non-trading) company.
  • For LIS, 50% of premium is payable
  • For LIS +, 1.5% p.a. of premium is payable

IE (International Enterprise) Singapore

Internationalisation Finance (IF) Scheme

  • Company's size: for trading (non-trading) company's maximum group turnover is $500 million ($300 million)
  • Maximum loan of $15 million
  • Asset-based financing: up to 90% loan quantum. Maximum loan duration of up to 15 years (Land/Factories/Buildings) and 6 years (Other fixed assets)
  • For raising working capital for secured overseas projects/confirmed overseas sales orders
  • Structured loan: loan duration and quantum up to 3 years and 90% respectively
  • Banker's guarantee: loan duration and quantum up to 5 years and 100% respectively

Trade Credit Insurance Scheme (TCIS)

  • Singapore-based exporter
  • LIS insures your goods against non-payment from buyers. Insurance premiums co-shared between the government and your firm
  • Singapore-based, at least 3 strategic business functions in Singapore, maximum group turnover is $100 million, at least $50,000 paid-up capital, annual total business spending of at least S$250,000 over the past three years and at least three managerial staff who are Singapore citizens or PRs
  • 50% co-sharing of insurance premiums between the Government (with a cap of $100,000) and your firm

Alternative Avenues

Still short of funding after applying for all the eligible loans? Try getting funding from business angels or venture capitalists through Dealflow Connection.

Established by Spring Singapore in 2007, Dealflow Connection (and now managed by DP Information Group) matches SMEs with individuals or entities that have funds to offer, such as business angels or venture capitalists.

Visit the Dealflow Connection to find out more.

Do You Have An Economic Plan?

Do You Have An Economic Plan?

If you are the type that follows economic news closely, you know that things have been a little wild as of late. Banks are moving to a new Bail-In program that could cost depositors a portion of their savings if the banks should find themselves insolvent. The U.S. and Japan have been printing money like mad as Japan kicks it into high gear with its announcement to double its money supply in less than two years.

The National Federation of Independent Businesses, say that 0% of their members plan to hire over the short-term. Gold and silver are being manipulated; Bitcoins are going parabolic, and look to be a large bubble in the making. North Korea is threatening to go to war with South Korea, and even the U.S. for that matter.

Now the seasoned consumer of this type of economic news knows that drama is no doubt baked into this cake. Nothing sells more financial news subscriptions than telling you that the world is going to end tomorrow. However, even if you take just a portion of what is reported, and research it for the truth that lies behind the headline. The question then becomes, if some of these events do take place, do you have a plan?

I'm not talking about something someone told you to do. Or a convenient check list you downloaded off the internet. I'm asking if you have a plan that you are comfortable with and you think is reasonable for your personal situation. Maybe you have a lot of cash and not many assets; perhaps you have many assets and not much cash lying around. If you could not get at your money that's in the system, banking or otherwise, would you be okay for a while. Do you have some spare cash stashed close by or something you can barter with? Do you even know how to barter?

If you lost half of your assets overnight, could you recover from that? Are you young enough to earn it back? Do you have the skills? Are you able to adapt to new systems if things should change very quickly? Are you nimble in heart and mind? Can you adapt?

There are many ways to hold and preserve wealth. Many use precious metals or real estate, some use art work and diamonds. Some even use antique automobiles. The question is do you know what is right for you and your situation? What do you have trust in? And does it hold value?

There is a lot of hype in the news about what is going on in the global economy. Some of it is designed to sell that very news, and some of it is to move the markets in certain directions. But there is no doubt that there are also many bad things happening in the world all at once, both economic and political. Call it a one hundred year event or just a turbulent cycle that we just happen to be living through, as it is unfolding.

Regardless, most people on the street will tell you that they have an uneasy feeling about things in general. That the world seems to be at some sort of tipping point, for better or worse still seems somewhat unclear. There is a lot to be said about trusting your intuition and that feeling you have in your stomach. Maybe you would be best served if you listened to it. Maybe you should have some sort of plan on how you would adapt to a fast changing environment that could test your very belief in the system you have grown to know so well.

It is important to do research and see what the experts say; after all they are the experts, right. But at the end of the day the decision is yours and you have to work with what you are comfortable executing if and when the time ever comes. Don't wait until it's too late to act. If you feel something is not right, do something about it. Better to be one hour early, than one second too late.

Participation Of Banking And Financial Sector In Competitive Landscape

Participation Of Banking And Financial Sector In Competitive Landscape

Banks and financial institutions are increasingly participating in the economic development and business aims. They are consistently exploring newer ways to support development initiatives and specifically focusing on the advanced mechanisms to mitigate risks. They are regularly paying particular attention to find growth drivers and key role players of advancement. This has allowed them to broaden their reach and capabilities. In fact, banking and financial institutions are closely observing local business and their functionalities to support them. They are also trying to harness local profit opportunities and reducing entry barriers in the developed economical mechanisms.

In both developing and developed countries, banks and financial institutions are taking greater initiatives, irrespective of the risk involved. This has its own positive influence on the economy. As a result, business owners are getting more and more opportunities for growth and transformation. In fact, it is also bringing stability to banking sector. The scenario is also focusing continuous market research and trend evaluation for better understanding of the customer needs. Today, banks are more concerned about the subjective objectives like cloud computing, big data, data warehousing, business intelligence, predictive analysis, cyber crime, digital transformation, business process engineering, and other security agendas.

Many cross-country studies have suggested that banks need to look into the security issues to clarify their transactions. Banks are also developing sound systems to prevent virus attacks and security breaches. They are safeguarding public assets through better vigilance and hyper-advanced mechanisms. This has built their stronger reputation in the society. In fact, it has prompted customers to rely on banking functionalities and infrastructures.

Banks are also developing their technical skills and knowledge to develop specific solutions to help business owners so that they can reap profits. Irrespective of the prevailing competition, banks are continuing their efforts to keep their customers through online and offline promotion. However, online promotion is increasingly become the way to deal. Banking and finance institutions are educating and informing their customers about the rising trends, fiscal deficits, ratio analysis, phishing websites, unknown threats, online banking vulnerabilities, currency exchange, security measures, and digital transformation.

Through exhaustive efforts in the field of advancement, banks are steadily achieving greater place in the society and assisting business structures. Domestic banks are also fueling their resources to support a major stratum of society through better loan products, banking services, transactional ease, and simplified banking operations. Without any barriers, banks and financial institutions are discussing their agendas in the global conferences. In banking conferences, economic experts are discussing technology and innovation challenges and other customer related issues to solve them and bring better game plans for future.

Banks, Emerging Markets, and Devaluating Economies

Banks, Emerging Markets, and Devaluating Economies

Banks have been the main player in discussions on the prospects of economic structures around the globe. Slacking recovery from the fiscal crisis has triggered a new wave of depression in the community. In the light of same, banks are continually focusing on the symmetric models to support economic wheels. They are striving to execute different qualitative and quantitative efforts for tight fiscal stimulus that could bring back the culture of prosperity. No doubt, banks and financial institutions themselves are facing growth challenges and need a steroid boost up. At this juncture, they need to raise their growth potential by forward thinking and deep rumination on the prime economic aspects from foreign currency accumulation, loan products, talent acquisition, land acquisition, gold accumulation, and wealth management, to insurance technology.

Today, domestic market is increasing at a rapid pace and asking banking authorities to produce more products and services to restructure and reframe degrading economies. There is a high need of loan products, wealth accumulation, and asset management for total fiscal stimulus. These elements are vital for growth and can stimulate economic growth. As both rural and urban structures are changing, banks need to surface new banking technologies and innovative strategies to bring drastic changes. Of course, it is difficult to satisfy the rapid emerging demands of the market, but conscious efforts will result in powerful growth.

Townships and districts are becoming powerful markets for banks. They have started flourishing with burgeoning infrastructure, electricity, and sanitation. They have complete facilities, now they need help hand from banking and financial institutions so that they too have unlimited supply of revenues. Banks have already perceived the growing scenarios and are developing correct and absolute products that could help people looking for unparalleled help. In fact, banking experts and economist are striving to infuse entrepreneurial spirit in people so that they bring the needed change and illuminate the path to growth.

It is true that severe changes are about to unfold that will foster economic wheels and rejuvenate debasing currency values. Banks need to become more and more instrumental to expand the boundaries of fiscal growth and productivity. In addition to that, banks and financial institutions need to educate common people so that they become aware of their rights and take real initiatives in elevating their standards of living. However, banks are regularly producing banking conferences to discuss and address the public issues. They are discussing future agendas and initiatives that are good for wholesome reforms.

Today, banks have started eliminating unwanted resources and keenly focusing on newer fiscal rules, risk management techniques, banking technologies, insurance technologies, performance budgeting, accounting measures, and financial management aspects. Such aspects will acts as a cushion for further economic shocks and improve the stumbling episodes.

Spiritual Reasons for the Economic Downturn

Spiritual Reasons for the Economic Downturn

Have you ever thought deeply about the recession? What brought insurance companies to a point where they defaulted? They are meant to cover losses so what made them lose?

Upbringing and Counselling

We all tell our children and family that stealing is bad and being honest is good, but how many of us teach the kids that staying within our resources is the best? We ought to tell our family and children that having lots of money to spend is great, but spending 900 bucks when you have 1,000 is even greater! What is the point? Well, you won't have the habit of spending more than you should. Secondly, you would always have a spare 100 bucks for the unforeseen.

What is the Unforeseen?

Accidents, unexpected guests, parties or any other occasion that falls but you don't expect to receive your paycheck for another few days. What most people do is that they take payday loans on as much as 350% interest rate. That is paying 350 more for every one dollar that you don't pay on time. Have you ever thought that if you don't have hundred bucks now, where would the next 350 come from?

Looking Above and Ignoring Below

When you keep looking towards at the best friend who just bought a new car and the brother who always has grands to spend on leisure; you forget that there are people around you who are succumbing to mortgage installments. You're talking about new cars when they don't even have a car. You want leisure trips when those people don't earn enough to afford commuting costs. Doing that would never satisfy you. You got to strive to maintain your living standards but hoping for betterment all the time will turn you into a machine that is constantly worrying about producing more.

Be Within your Covers

If it is freezing and you stretch so much that you keep your feet out of the sheet, you would catch cold. So what do you do? You stretch the sheet and fold yourself a bit that you fit under it. the analogy is that the sheet is yor finances and you are the expenses. A little bit of discomfort today can save you from a lot of discomfort tomorrow. When you start depending on credit "every" month, it means that you are a good length out of your sheet!

So it boils down to the fact that when people forgot counselling and kept looking above them, they came well out of their sheets. They had to borrow when they knew they don't earn enough to return it. Their defaults on loans led to an increasing pressure on companies that insured the loans. We all know what happened next.

So, be thankful that you have two arms and two feet. Be thankful that you have a family and pretty kids. So what if you don't have a cool car now? For the car, are you going to ruin your family life for the future? Think about it!

Our God Sees Our Financial Struggles And Strains

Our God Sees Our Financial Struggles And Strains

Does it ever feel like God has disappeared? A trial comes into our lives unexpectedly, and suddenly, we no longer feel God's presence. In an effort to maintain our sanity, we begin trying lots and lots of different possible "fixes," hoping that one will result in a solution that we can live with.

The interesting thing about many of our solutions is that they often don't solve anything. Rather, they dig us deeper into the hole or they create a new problem. What should we do when hardships arise? Let's consider Jacob's example in Genesis 31:42.

Remember that you are not alone

While it may feel like God has disappeared, He really hasn't. Jacob knew that God was with him through every challenge that Laban sent his way.

When Joshua was afraid of being chosen to lead the Israelites across the Jordan, Moses reminded him, "The LORD Himself goes before you and will be with you; He will never leave you nor forsake you. Do not be afraid; do not be discouraged." (Deuteronomy 31:8 NIV)

If we feel alone, it may be that we have pulled ourselves away from God's presence. We may have pushed God out of the driver's seat of our lives and tried to direct our own paths. But life is much too difficult to travel alone.

Be still

In addition to recognizing God's presence, we also have to be quiet enough to hear from Him. God cannot direct our paths if we are too noisy or too busy to listen for His direction.

Daily, we should spend time with God so that we can be in tune with His will for our lives. His direction may not be what we thought, hoped, or planned, but it is what is best for us.

Even if we find that we are off of His path, all hope is never lost. He can work with us in all of our mess. Romans 8:28 tells us that God works in all things for the good of those who love Him. He can turn it all around.

Allow God to fix it

If God never leaves us, then He has seen all that has happened to us. Nothing can be hidden from God. We don't have to worry about avenging those who have wronged us or our family. God wants to guide our lives, and He is definitely capable of fixing our issues.

Jacob didn't try to get even with Laban for all of the pain that he caused him over his 20-year employment. He took every challenge in stride, knowing that God would look after him.

When work feels too impossible to bear or the bills become too overwhelming, we should pull back and get out of our own heads long enough to seek God. If we pray for God's guidance before reacting to the situation, we may find that His solution is a lot better than anything we would have tried. Lord, not our will, but Your will be done, on earth as it is in heaven.

How to Open an Offshore Bank Account As an American

How to Open an Offshore Bank Account As an American

With the world in chaos and bankrupt governments everywhere dreaming up new schemes to get their hands on your hard-earned money, more and more people are looking offshore for a place to move some of their assets.

I don't encourage you to sit around and wait for some three-letter agency to swoop in a decide to dip into your retirement funds or bump up your tax rates or devalue your money by firing up the printing press. In a connected world, opportunities out of your home country are everywhere, and to make the most of your money and your freedom, you should explore those options.

There's nothing illegal about having an offshore bank account. At least for now. While Hollywood has created a scene where those who bank out of the country are briefcase-carrying criminals or guys in Tommy Bahama shirts flying prop planes onto tiny island landing strips, nothing could be further from the truth. Your government doesn't want you to move money to another country because it makes it more difficult for them to tax.

When I said it's not illegal "for now", I mean that you can never tell when things will get so bad that any loose change that can be grabbed to prop up a failing country will be grabbed without a second thought. The debacle in Cyprus has shown us just how desperate things could become. Sure, the EU can spin it as a tax on the Russian mob, but you know the government will always make up an excuse for their dirty deeds.

As an American, you're at a disadvantage thanks to FATCA - the Foreign Account Tax Compliance Act. Washington wants you to believe that the only people keeping their money offshore are rogues and scoundrels. Never mind the six million Americans living and working in other countries. As such, they've imposed a draconian set of rules on foreign banks, basically making them as well as their sovereign governments a bunch of tattletales for the IRS. Some banks have given up on Americans altogether. But there is still hope.

First, put out of your mind the idea that "offshore" means somewhere where you can sit on a shore. Islands with crystal blue waters are not high on my list of offshore jurisdictions. If you're an America, anywhere out of the United States is an offshore jurisdiction. Think Hong Kong, Singapore, Chile, and so on. While it is also associated with offshore banking, Switzerland is no longer available to Americans, thanks to IRS crackdowns there that have led most banks to shun US citizens.

Second, know that the days of numbered bank accounts and intense secrecy are over. Just ask the millionaires who got turned over to the US government. There are several short forms you will need to fill out each year, one with your tax return, another sent in separately. If you're a US citizen or resident, you must declare any accounts - or combination of accounts - with a value of at least $10,000 at any time during a calendar year.

Third, focus on your goals. Once you've moved beyond the cliches and propaganda about offshore bank accounts, you can focus on what you really want. No, you're not going to be able to hide a bunch of money from the tax authorities. Yes, you will have to pay tax at home on any interest you earn. But while your account won't be a secret to your home government, you will have separation from them. Some bureaucrat with a fat finger won't be able to freeze your account with one keystroke. It will be harder for an ambulance chaser to get at. And while you will have to pay tax in the US on interest earned, that interest rate could be double, triple, or even fifteen times higher than what you're earning now.

Determine what you're looking for in a bank account. Do you want a simple place to store savings away from the grubby hands of your local government? Do you want to hold part of your money in a different currency or currencies to diminish your sovereign risk? Do you want to earn a higher interest rate or benefit from appreciation of a foreign currency? Or do you want sophisticated wealth management tools and private bank service?

Fourth, once you know what you're looking for, find the right environment for you. The good news is that most of the goals above can be had with just about any offshore account. Just having a portion of your assets out of your home country gives you more freedom. If the government here goes Argentina on you and imposes capital controls, you'll have a nest egg you can access somewhere else. Any good offshore bank will give you a debit card to access your cash, as well.

Unlike in the United States, most foreign banks offer accounts in a multitude of currencies. Think the Australian dollar will go up thanks to a resources boom? No problem; you can hold it in your account. With most banks, you can swap out to another currency later if you change your mind. You can often times hold multiple currencies in the same account at once.

In Andorra, for instance, you can actually write checks in any currency the banks offers. If you need that kind of flexibility, Andorra is a great place to bank. It's also one of the most stable jurisdictions in the world, with liquidity and capital ratios that blow away the US or most other "safe" banking jurisdictions. Banks are locally run by banking families that provide personalized service.

Because offshore banks offer multiple currencies to bank in, you can also choose your interest rate. While rates in the US are near zero, making savers suffer, rates in Australia and New Zealand are much higher. The governments there didn't play the race-to-the-bottom game that their western counterparts did. Banks both in Australia, and those offering Australian dollar deposits, routinely offer near 5% interest rates on savings - even short-term savings - at a time when you're lucky to get 0.75% in an online account in the US. If you want to branch out to an emerging destination like Mongolia, you can earn up to 15% on your money.

If you like the stability of the US dollar but want higher interest, places like Georgia, a small but economically robust emerging nation in the Caucasuses offers as high as 7-8% interest on medium-term deposits not in their local currency, but in US dollars. Georgia is one of the twenty most economically free countries in the world (the US is tenth) and not a bad place to earn some extra interest.

Fifth, consider the risks. Americans are used to $250,000 in deposit insurance from the FDIC. Some countries, like Mongolia, don't offer such insurance at all. Others have lower limits, or don't insure deposits in certain currencies. For the most part, countries around the world have enacted deposit insurance plans of some type to keep peoples' money safe. But it's up to you to do the research on each jurisdiction and each bank and determine where you're most comfortable.

Keep in mind that the FDIC, for example, has less than the equivalent of 0.5% of all bank deposits in its fund. To me, that's not very safe when you consider how thinly capitalized US banks are. While local banks in Hong Kong and Andorra have very conservative lending practices and high liquidity ratios, US banks get money from the Federal Reserve and go right out and loan it indiscriminately and then come running to the government when things go bust.

The FDIC may pay out if your bank goes bust, but consider the decline in the US dollar over the last few years and over the last decade. The dollar just isn't what it once was. If the US banking sector had another run of bank failures like it did in the recent recession, you'd see more "Too Big to Fail" type nonsense, and as a result, more money printing to pay off depositors. So you might get your money, but it wouldn't be worth as much.

Of course, deposit insurance wasn't of much use in Cyprus, where the European Union basically forced the country to dip into bank accounts - first for 7 to 10%, then for much more - to keep from going bankrupt. Tens of thousands of dollars of your money could have been wiped away in an instant, with no way to get it out as the government kept banks closed until they could figure out just how much of your money to steal.

The good news is that having an offshore bank account isn't shady, scary or difficult to open. In some cases, you can open one with a couple hundred dollars or even less. In some cases, you have to visit the country, which could be easy if you live near the Canadian border, for instance, or are taking a vacation sometime soon. There are, however, banks in Norway, Gibraltar, the Channel Islands (UK), and elsewhere where you don't need to visit to open your account. You can do it all through the mail.

When you realize all of the things going on in the world today, you just might wonder why you didn't look into getting a bank account out of the country earlier.

Are We Being Way Too Negative on the UK Economy?

Are We Being Way Too Negative on the UK Economy?

In the UK, things are looking a lot brighter than they have for some time. Recently the IMF upgraded their UK GDP forecast for 2013 from 0.9% to 1.4% and for 2014 from 1.5% to 1.9%. That's a big move, and compares to the consensus (as compiled by the UK government) of 1.3% as of the last publication.

Are those forecasts realistic? Well, we know from official data that the UK economy grew by 0.3% in Q1 and 0.7% in Q2. Q3 figures have yet to be published, but the NIESER estimate, widely respected as a predictor of the official data, printed 0.9%, for a year-to-date total of 1.9%. If that's anywhere in the ballpark, real GDP would have to FALL in Q4 to get to the forecasts. That just doesn't look realistic, if anything UK growth appears to be accelerating (and in any case, clearly positive).

But why the pessimism?

So why are the economists continuing to publish 2013 forecasts that look at least percentage point too low? Is it because forecasts are published relatively infrequently? Perhaps, but there is nothing to stop forecasts from being published more regularly if forecasters wanted too. But they don't, and here's why. As a trader, you can usually change your position or your short term view on a very short term basis, without having to tell the world. Salespeople have less flexibility, but can change their call from day to day as markets move back and forth.

But as an economist or analyst, your call is announced to anyone in the world that cares to listen to it, and if you're senior enough you might well find yourself discussing it on CNBC or Bloomberg. You can't credibly move your forecast one way, then back the other, without losing credibility, regardless of what your model tells you. Success moves in forecasts look better if they're in the same direction. As such, they are usually 'behind the curve' relative to market pricing.

Forward guidance

This helps to explain why some central banks are having trouble getting anyone to believe their forward guidance. In many cases, the GDP forecasts look too conservative, for all the reasons above. This is then compounded by the fact that several, include the Bank of England, have attached 'terms and conditions' to their guidance, which have widely been interpreted as a cop out.

To conclude, the forecasts are behind the curve, and by more than normal because of the turning point.

Employees Need Direct Education To Eliminate Mistakes

Employees Need Direct Education To Eliminate Mistakes

The Employee Benefit Research Institute tells us that more than 50 percent of all 401(k) plan participants have yet to complete a retirement needs calculation, even as more responsibility for retirement outcomes shifts to employees. What's more, only 17 percent of workers are very confident that they will have enough to retire comfortably.

Education is the key to enable employees to make informed decisions and be comfortable with their financial retirement preparations. Participants in 401(k) plans can count on an experienced financial advisor to help them build a realistic plan for saving money. The most common mistakes, which financial advisors help you avoid, is overestimating the worth of Social Security benefits or underestimating how long you will live.

A feature unique to small business retirement specialists who comprehensively care for client is the advisory support provided to your plan participants. Your best 401(k) plan for employees can be found with a financial planner committed to partnering with you to provide both a comprehensive retirement plan and individual planning assistance to help your employees build the bridge from career to retirement. MFG is not only concerned with the investments of its clients but also the value that successful investment plans can add to a fulfilling and worthwhile lifestyle post-retirement, focused on the achievement of your dreams.

Trustworthy financial planners should follow similar steps to ensure that plan sponsors keep employees educated and informed about their personal financial options and goals.
- Pre-enrollment Memos and Announcements build plan excitement and anticipate questions prior to group enrollment.
- On-Site Group Enrollment or Individual Meetings scheduled at your convenience.
- Group Investment Education Meetings help existing participants make informed deferral and asset allocation decisions.
- Group and Individual Investment Advice offers hands-on assistance to help participants select funds based on a customized risk profile questionnaire.
- Bilingual Capabilities allow us to serve diverse workforces and ensure clear understanding during enrollment.
- On-Demand Education presents customized, pre-recorded education modules via company intranet on a range of topics: Plan Basics, Asset Allocation, Pre-Retirement Planning, Loans or Market Timing.
- Gap Analysis Program identifies lifestyle needs and delivers meaningful retirement planning guidance.
- Individual Financial Planning Services are also available and delivered to employees in an environment of privacy and trust.

If your employees, like those surveyed by The Employee Benefit Research Institute, need assistance planning for their retirement, seek help from a comprehensive financial advisor. You need a retirement plan specialist that utilizes a process to evaluate your business, understands your needs, recommends a long-term solution, and commits to ongoing education for you and your employees.

Essentiality of a Professional Auditing Company in Expense and Overhead
Cost Reduction

Essentiality of a Professional Auditing Company in Expense and Overhead Cost Reduction

Finance is the spinal element of every organization. Without adequate financial stronghold, organizations are likely to miss out on opportunities of huge commercial accomplishments. Business owners prefer to keep a tab on their financial records. They have to deduce efficient and working conclusions from observation of statistical data of the organization's financial facet. However, it is not their burden to bear. The necessity of a professional auditing company arises here. They scrutinize the genuineness of the financial statistics of an organization. Auditing personnel verify the transparency in quite a few transactions of the firm. The procedures implied by auditors are to ensure accuracy of financial statements without traces of deception.

Auditing services are applicable in diverse sectors. Modes of operation of auditors are varied depending on the requisites of clients. Internal auditors work as job holders in a particular organization. They work on demands by higher authority in the firm. External auditing involves non employees. The candor of the enterprise's financial scripts is validated and a report is prepared in external auditing. Vivid depiction of auditing data of an organization facilitates prospects of effective cost reduction. Cost cutting is mandatory in the present times of critical economic crisis. Business executives are facing the utmost need to diminish their expenses. Investing capital in the appropriate sectors is not a cakewalk for business personnel. Expensive investments capable of profits in the future and unproductive investments without any returns are the prime factors of concern for business executives.

Cost reduction analysts facilitate feasible opportunities for budding investors. What is better than minting profits out of nominal investments? Expenses on primary factors of initiating a business setup such as electricity, wages, rent etc. may seem trivial. However, their consistent indulgence in the financial scheduling of your organization can cause substantial failures in the consequent years. Investments of an organization must be aimed towards primary objectives of the same. Superfluous investments in less significant facets of the organization reduce the possibilities of the organization's augmentation in the financial market. Cost cutting can be performed by the professionals in the organization or expense reduction analysts are hired for advanced cost decrement techniques.

Capable executives can run business in any scenario. However, it is defiant in nature to neglect key processes such as cost cutting and overhead cost management. Overhead costs are derived from the mediating processes which consume money and have optimal significance in the services provided to the consumer. Without eliminating the excess of overhead costs, an organization has to remain content with a meager performance. Noteworthy processes of overhead cost management can be discussed as:

1. Signing MOUs with the regional government and experience lightening of regulatory or overhead costs.

2. Provision of percentage bonuses on product sales of the enterprise rather than raising wages of workers.

These overhead cost reduction methods vie for an organization's smooth and long term business. Cost cutting and overhead cost management are the essential responsibilities of business managers and executives. Being economic in your organization's financial decisions aids your organization in attaining sky heights of financial triumph.

Crucial Details To Realize About Chapter 11 Bankruptcy

Crucial Details To Realize About Chapter 11 Bankruptcy

Chapter 11 bankruptcy is comparable to both Chapter 7 and also Chapter 13 bankruptcy in that it shields the general property and house of the people in financial trouble and/or the corporation. Much like within Chapter 7 bankruptcy, somebody or enterprise is offered charge of belongings and also assets of the individual in question, and settlement of dues is watched over directly by the individual in power.

Even so, within Chapter 13 bankruptcy, it is the debtor that keeps control over the assets, as opposed to a bankruptcy trustee. There could be cases where a bankruptcy trustee will be assigned, particularly if the borrower owning the particular property is found to be incompetent.

Why File For Chapter 11 Bankruptcy?

It is typically best to apply for Chapter 11 bankruptcy in the event the said debt is past the regular array Chapter 13 bankruptcy addresses. Generally, filing for Chapter 11 bankruptcy offers you the chance to put your business back into the black via careful organization as well as assets administration. In many extreme situations, it may also be employed to sell your assets and also pay off the debts more efficiently.

Once you have properly declared bankruptcy through Chapter 11, you will not be pressured by lenders for the property. An automatic stay is put into effect and you'll no longer need to worry about having your banking accounts raided, or maybe your property repossessed.

The automatic stay remains temporarily legitimate. Within this time, you are given the option to repay both creditors that are secured and lenders who're unsecured to the best of your ability. When you can meet up with the installments owing, you might eventually become discharged from Chapter 11 bankruptcy and regain total control over the possessions. Nonetheless, failure to pay can lead to a removal of protection as per the regulations established within Chapter 7 of the US Bankruptcy Code.

How To File For Chapter 11 Bankruptcy

The entire process of filing for Chapter 11 bankruptcy is rather similar to other forms of bankruptcy. To begin with, the disclosure statement is produced by the borrower as part of the filing forms. The individual in financial trouble makes a conventional assertion regarding how he or she will pay off the debts in question, as well as describes the overall procedure for taking care of her or his possessions or perhaps organization.

Once this is done, the lenders will examine the statement of disclosure and determine the merit of the file. If the creditors think the particular declaration to be sound, they are able to choose to accept it by a vote. A legal court will be hence given the ability to accept the assertion and confirm it.

When affirmation is finished, the automatic stay is put in order, and the debtor-in-possession is offered protection. Soon after protection is put in place, the debtor is required to commit to a payment strategy.

This particular payment plan, as earlier agreed upon by the lenders as well as the debtor-in-possession, can serve as the actual parameters that the debtor ought to satisfy if he or she desires to pay off the debts totally. Total repayment of the debts will result in a discharge of the person from bankruptcy.

Watching Out For Your Own Welfare

Watching Out For Your Own Welfare

This is an incredible world full of remarkable people who have achieved great things. It is also a world which contains a lot of dishonest people and criminals who would do anything to make life miserable for their fellowmen.

Although the hope would be to engage with people who have integrity who want to do honest work and provide for themselves, there are many who would cheat, lie, and steal to get what they want. In that category of people fall those who resort to stealing another person's identity and money.

Needing money is not unusual, and most people will try to earn money honestly such as with regular employment or possibly a home based business (online work or network marketing also known as MLM or multi-level marketing) or find an extra part time job. There are many ways to earn extra money. Some people, however, are regularly committing dishonest acts against others. They are willing to try to improve their own station in life by doing criminal acts instead of working honestly to earn money.

Yet there are those who have mastered the techniques used by the perpetrators of these crimes. They do not seem to often be caught so they keep going. If they would be pursued more aggressively by the companies which may be losing money due to the fraud and law enforcement personnel who become aware of the crimes, these dishonest individuals might be deterred or caught and incarcerated.

So many people are suffering from the crimes of these criminals who are not being caught. It becomes extremely important to watch out for your own welfare. Some ways of doing it are:

• Check your credit report at least once a year
• Have fraud alerts available which alert you to unusual charges
• Check your charges online regularly
• Be careful with your credit card receipts and personal information
• Possibly sign up for a service to protect you in case someone steals your identity

Things can be going along just fine, and we may never imagine that identity theft would happen to us. We are not immune.

Restaurants and gas stations are easy targets for use of someone else's credit card if a person finds or steals a credit card. While checking her credit card charges online, Mary noticed two charges in a far away state. They were for gas and for a restaurant. She had not lost her card so she wondered how those charges could have been approved. She alerted the company that those were not her charges, and she was not held liable for them. She was told that an employee at some establishment might give the credit card number to a friend who uses it. How they can get away with such a thing in this day and age of machine approvals is still unknown. Criminal minds work in devious ways.

Being honest and working hard is admirable, and protecting oneself from those who do otherwise is smart. Being aware and watching out for yourself is important as you are on the quest to earn money and protect the money you have.

Who Do You Trust More - Your Accountant or Your Financial Advisor?

Who Do You Trust More - Your Accountant or Your Financial Advisor?

There have been many articles that I have read and poll results I've seen through the years that place the accountant and/or CPA at the top of the "most trusted advisor" ladder over other such notable professionals as the banker, financial advisor, and even attorney. Why is this, you ask? It comes down to a simple matter of TRUST. That's it - so why are the other professionals not trying to do something about raising their trust factors higher in the eyes of their clients?

I believe that the recent events in the banking industry hamper the overall perception of the banker and their former place as a trusted advisor from the early U.S.A. business growth days. Banks have been perceived by many in the public eye (some unfairly mind you) as greedy and unnecessary risk-takers - something business owners and savvy financial types want no part of at all. Since a lack of regulations allowed a gunslinger mentality to run rampant in the banking system (not just here mind you, but worldwide), trust seems harder to come by in this profession.

Likewise, attorneys have also gotten a bad rap these days (some unfairly mind you) due to our sue-happy society in the United States. Attorneys can often be at the center of many important financial issues facing business owners, families, and individuals - helping to resolve them as needed. The cost of an attorney can often be a detriment also to those who may desperately need the legal advice that only they can truly provide. With many lawyers who are average at best, how can you be sure that you can trust their advice... is it the best possible advice, and is it worth it?

Financial advisors, much like bankers, have faced much more scrutiny (some unfairly mind you) over the past decade-plus with 2 bear markets that have wiped out a lot of accumulated wealth. With the glut of advisors who are average at best, and those who may not want to deal with or be competent in financial matters that they don't get paid for due to traditional pay structures (debt payoff strategies, credit issues, etc.), people often are disillusioned as to why the financial advisor is only truly focused on the investments when they have other financial needs that need tending to. A fiduciary with proper training and adherence to matters in financial planning, investment advice, and wealth management is a better choice than a financial "advisor" who is a broker and acts under the suitability standard is interested in selling you the latest flavor of the day to make a commission. With all of the advisors who've been caught ripping off client funds, they make it harder for the honest ethical practitioners to been seen in a more trusted light.

The CPA/accountant seems to be held in greater esteem by those they serve simply because their clients feel that the CPA's/accountant's advice is straightforward and in their best interests. The clients feel that there is no hidden agenda or question as to why this or that was recommended - they simply follow the advice given to them. Now, whether that is true of most CPAs/accountants is hard to say, but repeated polls and surveys surely have some validity. Not all accountants/CPAs are as ethical (they have been some here who have steered clients in the wrong direction) but the perception is that you can trust an accountant/CPA more than any other advisor. Finding a worthwhile CPA who is very knowledgeable in investment matters, business matters, and tax matters and knows when to refer business to other avenues when it falls outside of his/her specialties is priceless - you can take that type of trust and build a successful business with it.

For all professionals out there - raise the value level you provide to your clients, communicate it clearly, and the trust (and business) you desire will find its way to you... deservedly so.

Advantages Of Invoice Factoring

Advantages Of Invoice Factoring

Improving one's business is such a complicated job. Business owners need to cater to their business needs and ensure that their employees can provide them with the services to help their clients. Moreover, with the increasing number of businesses, owners must be sure to provide better and more efficient services to ensure that their clients' needs are properly addressed, giving them the benefits to help make their lifestyle better.

However, with the increasing prices of business needs such as devices, supplies and even expenses, some business owners cannot accommodate all these expenses, leading to undesirable outcomes. With this in mind, some owners now opt for loans from financial institutions. This option is one of the most common decision owners make to ensure that cashflow will be continuous and that their needs will be properly catered to. However, there are some cases when businesses cannot get loans from banks due to a bad history, making their financial burden worse.

Fortunately, there is another option that business owners can opt for, invoice factoring. It is an option where owners look for the services of financial companies where they can get immediate cash from their buyer's purchase. This is more efficient since businesses can get finances in case that the payment will be given after a certain period of time. Moreover, by opting for invoice factoring, business owners can obtain better benefits for their business. Listed below are some of the efficient benefits one can enjoy.

Improved cashflow - Since financing companies can provide you with instant cash after opting for their services, owners can improve their cashflow to cater to their needs. For instance, business owners will have the chance to integrate new solutions, devices and even software to make their business more efficient.

Better financial control - With the use of invoice factoring, owners can also enjoy better financial control. They can even make financial decisions promptly to ensure that their businesses ventures can yield better results.

Minimise debts - Getting loans from financial institutions have certain interests you need to pay. Hence, in case that you cannot pay the loan in time, interests can increase and it can be one reason for businesses to have substantial debts.

Enhanced business function - Since you have the finances for your business, you can ensure that you can find the ideal solutions that can enhance your business functions. These improvements can also help you provide the services your clients need to obtain better features and make their life better and more efficient.

With these benefits, businesses can provide better services and enjoy better financial status, helping them make more efficient services to help individuals. To know more, click here.

First Rule of Investing - When Everyone Else Panics - You Don't!

First Rule of Investing - When Everyone Else Panics - You Don't!

The world woke up Monday morning to a sound of crashing gold; down from $1700 to less than $1400 because once again, that little country of Cyprus is causing problems. Due to their enormous financial problems, the government of Cyprus decided to sell its strategic gold reserves and that sent the markets reeling. Would Spain & Greece follow suit? The impact of this on investors world-wide is being felt and the question on everyone's mind is "what do I do?"

OK, so you're a gold bug, or you've followed the advice of the Society and created your own strategic reserve of commodities (up to around 20% of your portfolio) and you're seeing gold drop precipitously today. Some have said "I've never seen anything like this before" referring to the gold sell off. Should you jump on the band wagon and get out before the price drops to zero? Simple answer - NO. Here's the reality; in the near term prices of commodities can fluctuate widely due to near term supply & demand imbalances. Clearly, Cyprus flooding the market with gold creates a supply glut which drives prices down, and if Greece & Spain do it, well, there's more available gold. But remember while the economic basket cases are fire-selling their gold, Russia and China are buying. The reason, although the price is dropping in the near term, inflation is still a real possibility because the fiscal policies of western governments hasn't changed.

Here's the point of course, if you purchased gold or other commodities as a strategic inflation hedge in your portfolio, the reason you purchased that hedge has not changed; has it? So don't be in such a rush to sell your position; take a breath and relax first. Remember how many people got hurt when the DOW fell by almost 50% in 2008, only to recover and go to new heights just five years later. The strategic benefit of commodities in your portfolio is still in place so even if you see declines in the short run, that doesn't mean you jump on the band wagon and sell.

There are of course other things to consider; which commodities do you own, what is the long-term outlook for that commodity, or can you hedge your positions. The answer on both fronts is interesting. Regarding the first, the strategic outlook for commodities, when it comes to gold the development of Graphene could make a huge difference. This is one of the super-materials just discovered and its' stronger than steel, lighter than aluminum, more conductive than gold and its dirt cheap. This is far more important to me than is the short term Cypriot sell off. The discovery of this first ever 2-dimensional material is a game changer and causes me to think hard about which commodities I own. Frankly, as a result of the development of Graphene, we could see water eliminated as a strategic concern which would create a revolution in agriculture as large as or perhaps even larger than we saw in the 20th century; the result, food prices come down. It could replace gold and other metals in manufacturing which would result in prices coming down. This has not yet commercialized to a point where I would necessarily change the underlying concept of holding commodities to protect against currency devaluations, that's a likely nearer term effect than is the "G" revolution.

The second issue is hedging. As Society Members know, you can buy insurance on things using the options markets and if you're truly concerned about the prices of stocks, commodities, or anything else you own declining, you can choose to participate in the options markets which allow you to fully hedge your positions.

The bottom line is that you can never allow yourself to panic when investing. Think rationally and coldly about your positions and when considering selling (or buying) think about the reasons you have for doing so. If you own an asset like gold for example, if the reason you bought it hasn't changed don't let a short-term hiccup in the market causes you to do something you otherwise wouldn't have. Define yourself, are you a trader, or an investor.

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