Your Guide To Selecting Payment Processing Companies

Your Guide To Selecting Payment Processing Companies

Payment processing companies can help businesses to accept credit card payments. However, as a business owner, there are a few questions that you can ask any of the payment processors before you choose a provider.

Perhaps one of the most important factors that will influence the choice of a processor is the costs, and since the industry is not regulated, costs can and will vary. By getting the needed answers to the right questions, you can determine which of the payment processing companies will be most suitable for your situation. Your first task is to get a firm handle on the discount rates that will be charged to your merchant account.

The discount rates are charged by the issuing credit-card companies, and are usually based on a percentage of your monthly sales. They can vary from 1.5% to over 5%, and may depend on the type of business, the volume, average ticket prices, or average sale per customer. Businesses that are considered as high-risk, such as those with higher ticket prices, or e commerce businesses, are usually charged higher discount rates.

Agreement contracts offered by the payment processing companies usually last for a 3 year period, but you should find out what fees are charged for early termination. In addition the agreements may also state that your contract may be automatically renewed for an additional 3 years at the end of the period, if they are not contacted within a certain time. Although automatic renewal may be convenient, you should be fully aware of the conditions, if you wish to explore other options.

There may be different rates applied to transactions that swiped with cards as opposed to those that are entered via keypads. You may wish to structure your transactions, so that you take advantage of the process with the lower rates, or with recurring billing options.

You may need to determine whether your best option is to rent the Point-of-sale terminal, or if the better option would be an outright purchase. There is also the lease-to-own option, that may be available from some of the privately owned payment processing companies.

When considering a purchase, you should be fully aware of the conditions of any available warranty, and the features of the terminal. With new technologies being developed, you may wish to include features a such as smart card readers or NFC communications, which can add to the cost of the POS terminal, however, at the same time, the purchase, may add an asset to your business. On the other hand, rental will provide a replacement or repair at no additional costs.

The set up fees and application fees may vary. Some companies may offer free set-up, while processing fees may be higher. The set-up fees are one-time charges for programming the POS terminals, or they may be charged to training. The fees for set up may also differ, based on the card issuer, and may also differ based on the type of payment card.

There are several other fees that may be included in the costs. Fees such statement fees, gateway fees, processing fees, or settlement fees can vary, and can have an effect on the profitability of your business.

Benefits Of Direct Debit Via BACS

Benefits Of Direct Debit Via BACS

Direct debit as well as credit transfer has been the most innovative inventions in the money transaction sector and has been part of the banking sector for a long time. There has been a long time initiative to merge the BACS services or BACS payment solutions with the direct debit transfer system and this has been now established with the help of BACSTEL-IP link. This has taken the entire money transaction software and network in a new level of excellence and some of the major features of this scheme have been discussed below.

Features That Are Beneficial For Direct Debit Via BACS Services

* With such kind of merges there is a greater control on the cash flow process. Professionalism in monetary transaction gets improved a lot and the timing of the funds clearance is also on the mentioned dates.

* One of the key aspects of this kind of services is the automated services that it provides. One does not have to go for reminders to make the payments. If you can save the date of the payments on a monthly basis for an entire year the money will automatically be deducted from your bank account and paid on the due date. There are neither fines for late fees nor any requirement of a reminder. This saves money and time both for the customer.

* The entire bank actually comes to your desktop as you can access your account and see the deductions and all kinds of payment records online. In case one wants to change the monetary setting they can do it online and the accredition is later done by the payer's bank. Hence the record keeping can be done by computer.

* In case there is any item that is completely unpaid from your account, the payee immediately gets notified about it.

* The best part of direct debit transfer via BACS payment solutions is that in case there is any discrepancy in the payment, the money is immediately refunded to the payers account without any complications. If such problems occur persistently then the payees account can be disabled. This entire system ensures that that the security firewall in these kinds of systems are much upgraded.

* There are several offers of sponsorship, indemnities and guarantees that make sure that there are benefits to any business once they take up the direct debit transfer scheme via the BACS payment solutions.

Some Essential Requirements When You Enter The Scheme

One has to sign very important legal, financial papers when one enters into such schemes. There are companies that help you in this application of the scheme. To stop and prohibit collecting incorrect payments one has to sign a very standard indemnity to participate in this mutual scheme between BACS service and direct debits.

Advantages of a Payroll System

Advantages of a Payroll System

Understanding exactly what to do for your business when it comes to paying out employees or establishing a given payroll system is no easy task. Payroll systems can be very complicated to especially if you have hundreds of employees or a large business. Establishing a proper payroll system with easy-to-use software for payroll that includes all of your deductions and requirements is very important. Depending on the type of work that you are in you may need to make a variety of reductions to a paycheck for benefits, mutual fund allotments or even your government and state taxes.

If you can find good software for payroll that automatically adds all of these reductions and allows you to create a profile for each level of employee, you can simply input data each week and have the software complete calculations as well as storage of all of this important payroll data.

Manual payroll systems have become somewhat of a thing of the past. There are several small companies that will do manual payroll systems but generally these are reserved for freelance work and very small companies. For larger companies it makes much more sense to opt into a form of payroll software or to higher on a third-party payroll system to take care of financing each and every week. There are a variety of different third-party freelance payroll websites as well as services that will allow you to sign up your company and employees online to have payroll handled by a separate entity. This is an excellent idea if you can afford it as it will leave more time for you to focus on business.

Manual payroll systems continue to be one of the least expensive options however and they are very easy to maintain. Manual payroll however does mean that you will need to keep your own records and do some research into the taxation rules for your industry as well as any deductions that you might need to make off of individual employee salaries. Keeping track of all of these deductions can be difficult but manual payroll is a great way to ensure that paychecks are all completely accurate.

Software for payroll however is not too expensive and is far more efficient than a manual system. Computerized software for payroll also will help you to catch any errors in your payroll system. For the most part you will not be able to publish a paycheck unless it has been deemed accurate by the software.

The software will also come with a variety of deductions and assets that you can automatically add into each check for payroll. This means that you can set up the software for your individual state or government body and be assured that you would adhere to any legal requirements.

No matter the type of payroll system that you end up selecting it is very important that you keep secure storage records of your payroll.

If there is ever a dispute with payroll or with a paycheck is very important that you has employee records on hand from computerized payroll, external payroll or manual payroll depending on the choice that you make.

Beware Of Unwise Spending Habits

Beware Of Unwise Spending Habits

In Genesis 31:14-16, Jacob had been talking with his wives, Rachel and Leah, about his decision to stop working for their father, Laban. Although the working relationship had been strained for years, Jacob did wait until he felt God's call on him to move on. Rachel and Leah were supportive of their husband's decision.

The women's response to Jacob calls to mind two issues that we should all be careful to consider. Both issues are connected because they both pertain to how we handle our finances. One question to reflect on is, "Are we being careful with our own retirement assets?" Another question we should ask ourselves is, "Are we protecting our children's inheritance?"

Blowing through retirement monies

It seems that Laban had not been doing a good job with handling his money. His daughters were able to see that his wealth had been taken away, and that he had used up their dowries.

Given that his daughters are married and having children of their own, we can expect that Laban was more mature. We can probably assume that he was approaching his retirement years.

Retirement years are not a time to find ourselves short on resources. Laban did not have a Social Security system to fall back on, and we shouldn't count on ours either. While we are in our working years, we should be creating a plan that enables us to care for ourselves in retirement.

Blowing through our children's inheritance

Another question that the women raised suggested that Laban's daughters no longer had a share in their father's estate. Granted, in Biblical times, daughters were not in line to inherit anything from their father. Upon marriage, the women were to be taken care of by their husbands.

The fact that we are not living in Biblical times should not change our perspective about how we provide for our children. In fact, Paul gave us some guidance in 2 Corinthians 12:14. It reads, "…After all, children should not have to save up for their parents, but parents for their children." (NIV)

If we read Proverbs 13:22, we can see that we should take it a step further. "A good man leaves an inheritance for his children's children" (NIV)

We were not put here on earth to live in selfish isolation. God designed us to be in families, and to operate like a family. We are all interconnected.

We don't have to look back too far to see great examples of this concept in action. As Americans, our history, our country's foundation, was built upon the ability to worship freely. But, if we study further, we can see example upon example of revolutionary men and women who fought hard for change, to improve the lives of their children and future generations.

Do we share that same struggle? Are we still fighting to make things better for those who will come behind us? Or have we been given so much that we have become complacent and take everything for granted?

These questions extend beyond money. This pertains to every resource that we've been given - our knowledge, our time, our talent, the earth and everything in it. What will we leave behind?

APRA Discusses New Liquidity Framework for Big Banks

APRA Discusses New Liquidity Framework for Big Banks

The Australian Prudential Regulation Authority (APRA) defined a new liquidity framework under which the country's larger banks can turn to the Reserve Bank of Australia (RBA) for emergency liquidity support, the report in Australian Banking and Finance said.

The Basel Committee on Banking Supervision (BCBS) in December 2010 launched a global liquidity standard which it called the liquidity coverage ratio (LCR). A separate report in The Australian said the standard required banks to have enough high quality liquidity assets that can survive at least 30 days of severe liquidity stress.

This is to prevent larger banks from coming to RBA for emergency liquidity support every single time they encounter problems with their liquidity coverage, the report added. Now, the Australian prudential supervisor placed a standard that will determine a cap on how much a bank can get from the RBA in terms of emergency liquidity.

The standard will supposedly also protect the central bank from institutions that can abuse the emergency liquidity fund. However, the Australian Banking and Finance report stated that banks, as long as they meet the right criteria, can turn to RBA if needed.

Criteria for Emergency Liquidity Support

There's a shortage of high quality liquidity assets in Australia right now, the report said, which means banks are more likely to turn to the central bank for support. The criteria imposed by the BCBS is fair enough for the banks and for RBA, The Australian report added.

Under the standard, before the banks can get the support they need from the central bank, they must first prove that they have taken reasonable measures such as lengthening the duration of its liabilities and funding itself from stable sources, the report explained. It added that banks must show it managed itself efficiently and used its funds as conservatively as possible.

In 2011, APRA said it will review each bank's liquidity risk management framework in order to determine the proper cap size for it. It then decided, according to the report, that the cap will depend on the banks' Australian dollar net cash outflow target. There will be an allowance for a well-sized buffer though.

The report was quick to point out though that such a scheme does not apply to smaller authorized deposit-taking institutions such as credit unions and building societies. These institutions, the report noted, are covered by the minimum liquidity holdings regime.

Before banks can get the liquidity support it needs, they have to present a statement of the board's tolerance for liquidity risk, a liquidity transfer pricing mechanism and suitable remuneration arrangements for those who will fund the liquidity, the report enumerated.

How to Get the Working Capital Financing You Need Without the Big Banks

How to Get the Working Capital Financing You Need Without the Big Banks

When running a small business working capital financing is crucial. It is obtaining more funds without having to rely solely on traditional working capital such as day-to-day trading. Small business loans are increasing every year, and are getting easier to obtain, fortunately. The downside to traditional small business loans is that they come with all the things any loan does, dealing with the big banks, mounds of paperwork, and a hefty collateral. Some small businesses may take out a small business loan and be in more debt than when they started their business, which is quite a sad reality. So what can you do?

One of the best options is to get a working capital loan via working capital financing. The approval for these loans is generally quick, and is form-fitted to your business needs. There are five different ways working capital is supplied to business owners. The first is through a line of credit made between the entrepreneur and the bank. It establishes a limit, and can be secure or unsecured. Other ways for these loans are supplied involve what is called an accounts receivable loan, which is a form of short-term financing secured by trade receivables used as collateral. The third is called factoring, which is like an accounts receivable loan, but is accounted for via a third party collector. Next is an inventory loan, in which the bank looks at inventory. The loan amount is derived from a percentage of inventory assets. Last is a term loan, which is a financing option in which the loan is determined by collateral value. This loan lasts from three to seven years.

So how do you know if it is right for you? There are different factors to look at. The first thing to look at is how your small business is doing as a whole. For this loan to benefit you, you must have working capital. Look at a day's sales or production; if it isn't doing well, you may not have a good rate of it. Also look at your business itself. If your business requires a high level of inventory at all times, it may be an option for you. One of the most important things to look at is consistency. The lender and bank want to know that you can maintain your assets, and put it up next to the industry average. If you do not have a steady influx, you may not want to consider a working capital loan.

If you have a high inventory, rate of consistency, and good production rate, a working capital loan may be just what you need to take your small business to the next level. If used correctly, it can help expand your business, make it more efficient, upgrade your business, hire new employees, purchase more inventory, and much more.

Dangerous Forex Trading Beliefs

Dangerous Forex Trading Beliefs

In this article you will find some misleading ideas, widely spread throughout the world of Forex, that lodge in the minds of many traders. These erroneous beliefs become ineffective over time and create patterns of thought that trap traders into a cycle of bad habits. Unfortunately, many of these beliefs are posted on popular websites and media sources and therefore look very much true.

It is Harder and Longer to Trade with Daily Charts

A widespread rumor which is totally misleading is that trading on daily charts creates more risk because of the stop loss that is wider compared to short-term trading.

This implies that you are taking higher risks by trading on H4 or D1 graphics, which just shows a lack of understanding of the position size. If you need to set a stop loss at 100 pips or more, the risk may be identical with a position that has a tight stop. Just adjust the size of your position, for example, a loss of 100 pips on EUR USD with a lot size of 0.10 is $ 100, the loss will be the same with a stop 50 pips and a position size of 0.05 lot.

Another misconception is to say that there is not enough time on higher configurations. The quality of trades is much more important than the quantity. Indeed, most traders lose money, mainly because they trade too often. There are simply not many as many prospect trades with a high probability of success worth risking your hard earned money. The intense desire to make profits quickly and with very little effort, often leads some traders to make trades even when no actual prospects for generating profits actually exist. The amount of trades will not increase your chances of success!

You Should Always Let Your Winning Trades Run

We've all heard the old saying "quickly cut losing trades and let the winners run", but what does that mean? How is it done?

Trying to leave trades run or having unrealistic profit goals, will simply never assist you in generating profits. Many traders end up not obtaining reasonable profits, as they lose any opportunity of winning, simply by choosing to close their trades when the market turns, usually for a much smaller gain or perhaps even a loss. To avoid this problem, some traders use a risk return ratio of 1:2 or 1:3. It is crucial that the exit strategy is planned prior to the trade.

Brokers are Trying to Rip You Off

It seems that many traders believe that brokers are enemies who are constantly trying to cheat you by manipulating the course or chasing stops. There are unscrupulous dealers, but they do not stay in business, most brokers are reputable and look forward to establishing long-term relationships with their customers. Brokers have a financial interest in providing quality service and support to their customers. After all, there is a lot of competition in the forex industry.

I'm not trying to defend all brokers, but let's face it, they are an easy target and they are often unfairly blamed by traders who do not understand that the spread can widen during economic announcements or other similar reasons. In addition, on forums, traders' comments that lost money are usually full of misrepresentations, exaggerations, slander and lies; there is really no reason to pay attention to most of these comments. On various forums, some traders will even post a bad review about their broker after losing a trade (which after all the traders themselves are to be blamed), stating that brokers do not even execute trading orders! Many traders do not want to admit that they are responsible for their losses and unfortunately brokers are the easiest targets. On the contrary, it is very important to make sure that your broker has a good reputation and is regulated by the regulatory agency in your country.

Systems and Trading Strategies are the Most Important Aspect When Trading

There are numerous books on technical analysis, but much less on psychology and risk management. If you do a Google search for "forex trading systems", you will find forex trading software, robots, signals services, etc. You need to be a little smarter and find a solid training on psychology and money management. Why is that? Mainly because most currency traders are anxious and start trading with a strategy they have found on the internet. Regardless of whether it is effective or not, currency traders lose money as they do not have the ability to manage their emotions and risk. Risk management and trading psychology often appear as secondary elements and yet are essential to succeed in trading. The truth is that trading is not very difficult at the level of technical analysis and the various strategies involved, the difference between a business that makes money and a beginner is psychological.

Choosing Quality Paper Products

Choosing Quality Paper Products

You reach a certain age where price doesn't matter because you are getting quality. From a business perspective I can understand why reducing quality will lower price; but as a consumer, I don't want a cheap product because the price is cheap. For example, publications are going digital faster than any former paper-product run business, aside from the actual paper business. However, it is because of this huge industry going digital that paper companies are lowering costs and selling cheaper paper in terms of quality.

Paper products are used for parking tickets, ATM receipts, point of sales, gaming tickets, medical paper (prescription paper), or cleaning products. It is more than just printer paper for at-home computers.

Recycled paper is said to less quality paper, which isn't the case. Recycled paper is made from post-consumer content. It is made from technology that creates high-quality paper, like any other. However, choosing recycled paper gives the environmentally conscious consumer some ease of mind. Another myth I'll debunk is BPA in paper... While I advise double-checking, I wouldn't be too concerned with BPA in paper. Most is BPA free.

Thermal paper is sourced from quality suppliers and is priced appropriately. It fits all OEM makes and models and is BPA free. Long run labels use direct thermal and thermal transfer labels. Labels are produced on any size core. Long-run label features include:

==> 20 inches wide
==> in-line folding
==> Direct thermal
==> Six color presses with three die stations
==> 4 high speed slitter-rewinders
==> Runs of 4 million and larger

Mobile printing is a fashion used by parking attendants handing out tickets. While they are not everyone's favorite person, someone has to do it. Anyway, mobile printing rolls are premium paper with up to 8 colors and have advanced security features to prevent fraud; there is commonly free warehousing and quick turnaround times for on any order sizes.

I often opt out of receiving an ATM receipt, but the financially wiser person wouldn't to keep track of finances withdrawn or deposited. Banks and alive vendors are choosing quality ATM paper for customers choosing to accept the receipt. Options for this paper gives financial institutions ATM audit rolls, teller receipt rolls, bank statements in jumbo rolls or custom coin wraps.

As a customer or consumer, it is up to us to make a fuss or compliment the quality of products. That statement can easily be made by not purchasing cheap products. In a sense we set the standard of what quality is, companies understand that.

Iraqi Currency Purchase Is Definitely a Smart Move

Iraqi Currency Purchase Is Definitely a Smart Move

Becoming a millionaire is a dream shared by many people. In the United States, regular folk are very keen on investing their savings and staking their retirement on good prospects. Iraqi dinar investments have been repeatedly criticized for the needless risks involved. For some, it is not worth the investment. But for believers, the risks are worth it. After all, a very huge yield awaits those who are willing and courageous enough to explore the possibilities.

It is common that people who invest aspire to the possibility that one day they will come into serious money. People who decide to Buy Iraqi Currency Online by the thousands of dollars are convinced that one day soon this now controversial currency will come into its own. Its current value is not very encouraging at all, but investors are looking far toward the future when the dinar's worth will skyrocket.

There are a number of theories currently revolving around the expected hike in the value of the currency of Iraq. But the general idea is that once the Iraqi economy is stable enough it will then be able to maximize its oil export industry. This is not baseless especially since Iraq's oil deposits are real and not mere speculation. Investors are counting on this black gold resource that is Iraq's key to a full economic recovery.

For Americans who have not put their money in commodities such as bonds and stocks or perhaps gold, they can choose to invest in foreign currency instead. The campaign to buy Iraqi currency has reached many prospectors in the United States. People who have worked their whole lives are now ready to invest their life savings for a rather prosperous future. Despite the doubts on the wisdom of this investment strategy, financial advisers are pretty confident that they are giving smart advice to dinar buyers.

A few years from now the doubters will be proven wrong. There are of course scams here and there, and the worries are justifiable. For one, investors need to be sure that they get genuine currency that can be bought legitimately. Many companies might take advantage of people's lack of knowledge on the dinar. When the economy of the Iraqi government gets the boost that the government is currently working for, the dinar's value is expected to rise. The growth of the Iraqi economy is definitely slow because it is a fact that there are elements in the country today that discourage more foreign investors to come in.

The dinar may not be the safest investment but Dinar Currency can provide the confidence that Americans who invest in foreign currencies need, especially those who are just starting out. This company is the firm to choose when someone is finally ready to invest huge amounts with high risks involved. There is needless worry with a partner such as Dinar Currency.

The Elderly And Their Children Must Talk About A Plan For The Future

The Elderly And Their Children Must Talk About A Plan For The Future

Whether you have an elderly parent or you are elderly yourself, you must begin a conversation with your loved ones about how to handle the future. An initial one-on-one conversation between the elder parent and his or her child should begin the process of what needs to be considered. Here's what to ask about...

*Understand one's reticence at losing control:

It's only natural that a person who has been in control of his financial life doesn't want to lose control. Being sensitive to this is first and foremost.

But as time goes on, old age can trigger a sequence of physical and emotional losses such as hearing, eyesight, mobility, memory, as well as friendships. And these can undermine a person's ability to competently handle his affairs and wishes.

It's best to gradually build up to creating a plan that the elder parent can warm up to. Begin by raising questions that the elder can consider for future conversations. Begin before a real crisis occurs.

Make it clear that you're not taking over control, but only want to be aware of how things are handled so when trouble handling things occur, you can help your parent in the way he would want.

*Household finances:

Ask how the household finances are handled. Ask if all the bills are getting paid on time, and are things arranged as conveniently as possible. Are investments being monitored enough and can you help under the control of the elder?

Perhaps you can suggest using automatic teller machines, direct deposit of Social Security benefit checks, and automatic bill paying to improve his security and convenience in handling day-to-day affairs.

*Health care:

Ask how the parent sees the possible growth of long term care needs. How should they be handled as typical care needs arise? How should they be paid for?

Explain the costs they can generate and the effect that can have on the parent's wishes for themselves and what he or she'd like to leave as a legacy. Medicare doesn't handle long term care costs. Perhaps long term care insurance should be bought, or a plan for transferring some wealth so Medicaid can help pick up eventual significant long term care costs.

*Handling estate planning:

Ask how the parent would like financial and medical decisions handled if he or she becomes incapacitated. Ask how he'd eventually like his assets transferred, which ones to whom.

You can suggest updating a will, or use a trust for managing and passing assets. Mention that a power of attorney can allow the parent to designate a specific individual to make financial or legal decisions on his behalf. And a health care proxy does the same for medical decisions when the parent is incapable.

5 Ways Startup Companies Can Make Use of Accounting Firms

5 Ways Startup Companies Can Make Use of Accounting Firms

After starting your company, many of you have to decide on who controls the finances of your company. The number one reason why most of the start ups fail is because they run out of cash. So common reasons are that many entrepreneurs underestimate their costs for the near future and mismanagement of funds. Hence it is imperative for a startup to make sure that its finances are in order. The following are the 5 ways you can use accounting firms to fuel your startup journey.

Reduce your costs

A Startup typically has to hire a CFO, controller, and a bookkeeper to manage their finances. But they not have enough volume of work or the budget. By hiring an accounting firm, you can avail the services of all the above three without having to keep any of them on your payroll. Typically, you save your costs by 50% by outsourcing your finance needs to a professional firm.

Leverage the combined experience of experts

You can leverage the expertise of groups of people that have worked in many different environments, so they bring a lot to the table. Accounting firms serve clients of diverse sectors ranging from Infrastructure, manufacturing to Technology, and knowledge from one sector could be applicable to other sectors

Focus on your core operations

Regular ongoing tasks - payroll setup and processing, bookkeeping, financial statement preparation, financial analysis and budgeting/forecasting will distract you from your core tasks. With their regular use of the latest tools at their disposal, accounting firms achieve great efficiencies and speed in doing the above tasks which otherwise might be painstaking and slow for startups.

Get valuated to improve your pitch before VCs

Venture Capital firms invested $762 million over 206 deals in India during the twelve months ended December 2012, according to a study by Venture Intelligence. These VC firms look for trusted and reputable companies so that their investment is in safe hands. Working with professional accounting firms to have your books audited is an important step in becoming a reputable company in the marketplace.

Stay informed about tax law changes

Tax work is typically a separate function from the back-office accounting function. This is because tax law is complex, and having in-depth knowledge is a specialty. Tax laws change every year through the budget presented on the last day of February. Apart from that, in every law, there will be a minimum of 20 amendments in a financial year which businesses need to be aware of.

All Banks Are Not the Same

All Banks Are Not the Same

When it comes to protecting their money people have several options. There are so many different credit unions and banks for people to choose from, and they usually look for a financial institution that stands apart from the rest.

Banks and credit unions have different criteria when it comes to opening accounts. Most credit unions require membership which may or may not be based on credit. Some people will automatically qualify for a credit union membership if they live, work or volunteer within a certain area. Other financial establishments may just require a credit check and or a deposit of a certain amount based on the type of account you are trying to open.
There are a variety of services offered to customers and there is something to meet everyone's needs whether they are personal or business related.

Many businesses have checking and or savings accounts as well as electronic services such as e-statements and internet financial services as well as direct deposit and electronic tax payments.

Most banks offer a number of personal financial options for their customers. There are a variety of checking and savings account options available depending on a person's needs. Some accounts have minimum balance requirements while others such as interest earning accounts have various rates. Most of these accounts give customers the option of having a debit or check card attached to the account.

Loans and credit cards are two more options that banks offer. Several loan options are available to customers. There are business loans, personal loans, home improvement loans, automobile loans, home equity loans and mortgage loans. Applications can be submitted either in person or online for customer convenience. Loans are based on a person's credit and sometimes people are required to have a co-signer or some type of collateral. Credit cards come with a variety of credit limits and interest rates and all are based on a person's credit. Some institutions may offer a secured credit card which requires users to put down a deposit or pay a fee when opening the account.

Electronic services are making people's lives more convenient every day. From ATM machines to online bill pay customers have a variety of convenient services at their fingertips. Many people like to try to be environmentally friendly by saving trees and receiving electronic monthly statements. A large percentage of people do most of their financial transactions on the internet and having online bill pay is a huge convenience for most people. Being able to have their paychecks directly deposited in to their account saves many people the hassle of having to drive to the bank and stand in line every payday just to cash their check.

Regardless of a person's financial needs there are banks out there that offer something for everyone. Every person just needs to determine what their exact financial needs are and then find the financial institution that offers all of the services they are interested in.

Relocating To a New Business Premise: A Checklist

Relocating To a New Business Premise: A Checklist

Making sure you are prepared and organized well in advanced of relocating to a new business premise, is key to making a smooth transition. Following this simple checklist can help ensure the move will be as efficient and fast as possible, helping you to have a much less stressful moving period.

Approximately 4 to 6 months in advance

This is the time to begin working out your moving budget. If your budget allows, consider taking on a move coordinator, and they will take over the move details for you. A move coordinator can be invaluable and will help reduce stress associated with the move. If a move coordinator cannot be factored into your budget, then now is the time to start seeking out a commercial moving company. Take time to research for a reliable company with a good feedback record. Next, if you own the premises you are leaving, contact an estate agent to arrange the rent or sale of your premises. As for your business contact numbers, fax numbers and internet, begin to set these up in advance for the new site you are relocating to. Work out what your new premise layout will be, and inform your move coordinator or moving company. Sort out any business permits you may require, and work out what business insurance cover you will need, such as professional liability insurance and income protection insurance. Take time to add any of your own itemized lists to this set of tasks.

Approximately 2 to 4 months in advance

Make sure that you have your moving coordinator and/or moving company booked by this stage. Begin arranging for a professional cleaning service company to clean your old (and new premises if required), and set a date for cleaning with them. Order your new business cards and labels, and any other stationary required for your new address. Arrange a connection date for your phone, internet, electricity and other services required. Make a list of any important items required for your new premises and begin to purchase.

Approximately 1 to 2 months in advance

Start de-cluttering your premises. Clearing out your current premises of all unnecessary items will make the move much easier. De-cluttering will also save you valuable time and cost on moving things you really do not require. Make sure to start informing your customers and business contacts of your moving date, and provide them with your new contact information. Take time to get your finances in order and inform your bank of your new address. Update your company website, if you have one.

Approximately 1 month in advance

This last month is the time to check all the final details are in place for the move. This will include confirming dates with the office moving company and cleaning company. Check that your internet and telephone services will be connected in your new premises on time, and that all other services and utilities are scheduled for connection. Purchase packing supplies, if your moving company does not provide them. Conduct an inventory of all your office equipment and furniture.

Approximately 1 week in advance

Back up information on computers. Alert clients about being unavailable during the move period and schedule all meetings until after the move. Give yourself enough of a settling in period. Begin packing items into the packing boxes, making sure to label all the boxes correctly.

Moving day

If you have followed this guide and given yourself enough preparation time, then moving day should not be too stressful. All that will be left for you to do is arrange for your new office layout according to the layout plan you devised one month earlier.

Recapitalization to Raise Capital for Your Business

Recapitalization to Raise Capital for Your Business

What is a recapitalization?

Recapitalization occurs when a corporation reorganizes its ownership structure. For instance, it may divide its stock into two classes: preferred stock and common stock. Preferred stock provides certain advantages and priorities over common stock, which may include a higher dividend rate, preference in the payment of dividends, liquidation preference, and voting rights. After recapitalization, common stock can be made available to investors, while the owner(s) of the corporation retain(s) control of the company by keeping the preferred stock. A recapitalization can basically be described as a reshuffling or rearranging of a corporation's capital structure. While the total value of the company is not affected by recapitalization, the value of each individual share will likely change.

Example(s): Jack and Jane each own 50 of the 100 outstanding shares of Acme Corporation, which has a total value of $100,000. Thus, each share is worth $1,000. Jack and Jane decide to recapitalize Acme, creating two classes of stock. The recapitalization will create 1,000 shares of common stock with a total value of $50,000 (or $50 per share) and 100 shares of preferred stock with a total value of $50,000 (or $500 per share). Jack and Jane will keep the preferred stock and make the common stock available for purchase.

What are the advantages of recapitalization?

Raise capital through the sale of common stock

Recapitalization allows you to raise capital without taking on debt. You will give up partial ownership of your company through the sale of stock, however.

Owner(s) retain control of business

A recapitalization can allow the business owner to retain control of the business while simultaneously raising capital. In a recapitalization, you create two classes of stock: preferred stock and common stock. Preferred stock typically has voting rights, dividend rights, and/or preferential liquidation rights, which are spelled out in your articles of organization. You would keep the preferred stock, which allows you to continue running the company, and make the common stock available for purchase.

Recapitalization considered a tax-free reorganization by the IRS

A recapitalization is an exchange of a corporation's stock for other stock in the same corporation. Typically, the owner of common stock exchanges the common stock for a combination of common and preferred stock. Most recapitalizations are recognized under the Internal Revenue Code as tax-free exchanges. The owner of the common shares does not incur a tax liability when the recapitalization takes place. To qualify as a tax-free exchange, the recapitalization must have a valid business purpose. In general, as long as a corporate purpose for the recapitalization is identified, the transaction should qualify as a tax-free exchange.

What are the disadvantages of recapitalization?

Recapitalization is an extremely complex and expensive process

Recapitalizations have become extraordinarily complex and technical, thanks, in part, to the IRS. To structure and document a recapitalization, you need to hire attorneys, tax advisors, valuation experts, and other professionals to guide you through the statutory maze. Unfortunately, none of these professionals work cheaply.

Adverse tax consequences may result

Distribution of preferred stock through recapitalization may cause adverse tax consequences under Sections 305 and 306 of the Internal Revenue Code. Section 305 deals with the tax treatment of distributions by a corporation of its own stock, which may be taxable as a dividend. Section 306 applies to stock that has been distributed as a tax-free dividend to existing stockholders. Only a competent tax attorney should attempt to analyze the tax impact of recapitalization. In addition, you should be aware that an ordinary loss deduction is available only for common stock. Thus, a loss that occurs on the sale or transfer of preferred stock cannot be claimed as an ordinary loss.

Preferred stock dividends may drain the company of needed cash

In a typical recapitalization, a large, cumulative dividend has to be paid on the preferred stock to boost the value of this class of stock. For many corporations, the payment of these dividends every year may severely drain the company of needed cash. In many instances, it may not make business sense to put the future health of the company at risk just to raise capital. Furthermore, dividends payable to the preferred shareholders are not deductible by the company. Therefore, the money used to pay the dividends will be taxed twice, once at the corporate level and then when the individual receives the dividends.

S corporations may not do a recapitalization

If your business is classified as an S corporation, you cannot do a recapitalization because S corporations are prohibited from having more than one class of stock. For many companies, loss of S corporation tax treatment (which allows the shareholders to be taxed as if the company were a partnership) could be a very large disadvantage, especially since individual tax rates are lower than corporate tax rates.

How is recapitalization done?

Don't try this at home

Recapitalizations have become extremely complex and technical. There are numerous legal, tax, and valuation issues that must be addressed before, during, and after a recapitalization. Failure to follow all of the requirements can have disastrous income, gift, and estate tax consequences. Therefore, you should hire a team of experts to guide you through the entire process.

Hire competent, experienced legal counsel

You should hire a competent and experienced attorney to structure and document the recapitalization. Any attorney you hire should have extensive experience with securities and general corporate law issues. Among the other tasks in a recapitalization, new securities will have to be issued, stock certificates will have to be transferred, votes of the board of directors will have to be taken, and new shareholders will be created. All of these tasks require the assistance of an attorney.

You may have to hire a separate tax advisor

In addition to an attorney to draft all the documents needed to set up the recapitalization, a separate tax attorney or tax accountant may have to be hired to give tax advice before, during, and after the recapitalization. The tax laws governing recapitalizations are also very complex, so only an accountant or attorney who specializes in this area should be hired to give tax advice.

You may need an appraiser to value stock and other assets of company

You may also have to hire an appraiser to value the stock and assets of the company that you will recapitalize. In many cases, this appraisal can be very difficult. There is usually not a publicly traded market for closely held companies, so it may be difficult to find other similar types of companies to do a comparison appraisal. For this reason, you should use a professional appraiser experienced in corporate valuations.

4 Investing Principles of the Rich

4 Investing Principles of the Rich

Compound Interest

Although most people understand what compound interest is, they fail to grasp it fully. The rich understand this principle and seek to let it work for them as many times as possible and at higher returns than regular people (i.e. stocks, bonds and savings). To illustrate, if you invested $100 and made a 5% return on it, you would have $105 in one year. In 10 years however, you would have $162.89 and not $150 which would be simple interest ($5 per year). In compounding you earn interest on the interest. So in year 2, you earn 5% on the $105 not the $100. When you increase the investment amount and return, this formula produces astonishing results. This is the main secret of the rich. This and the fact that they invest in things you've never heard of that produce 15-20% returns.


Rich people know how to use leverage better than anyone else. They can borrow tons of money at a lower rate than they're making money on it to help them accumulate money faster. The power of leverage is one that is not understood by most people even though we use it commonly. Lots of people use leverage to buy a car or a home when they take out a loan. The difference is that these things are for personal use. The rich use leverage to buy investments that yield high returns or kick back cash flow to them in excess of the loan payment.


Velocity of money refers to how fast you turn your money over. For most people this is annually or worse. In our compound interest example above we made 5% or $5 in one year. That may or may not be very fast velocity depending on the comparison. A wealthy person most likely makes 12% on their money several times in one year. This is faster velocity but others still could be faster. Let's say this wealthy person made 12% on his $100 3 times in one year which equals $140.49. That means average Joe has $105 and Rich Guy has $140.49. Not only is the return he made almost 3 times more but he did that 3 times in one year.

Tax Avoidance

The rich know how not to pay taxes better than anyone. They invest in programs that decrease their gross income, hire professionals to make sure they make lots of money in ways that decrease their tax base and do just about anything possible to decrease their overall tax rate. You see, they understand that if you can keep 20-30% more of your money, it makes a huge difference. This is why the antics in Washington make me laugh. You can raise the top tax bracket to 90% but if you still have deductions on certain things, the rich will still only pay 15% of their income in tax like Buffet. Most people are nowhere near as good at tax avoidance as the rich are.

Financial Data Management Is Increasingly Challenging

Financial Data Management Is Increasingly Challenging

The term "big data" is typically used to describe extremely large sized data sets. Financial data management has come to the forefront as service firms looking at ways to control data more effectively. The amount of data continues to grow on an exponential basis, while regulatory requirements force firms to take proactive approaches for issues such as risk management.

Business Climate

More users inside financial firms continue to require access to growing data sets to help uncover market opportunities, product development possibilities and customer trends. Financial reference data has become particularly critical with regard to risk factors and regulatory reporting aspects.

Data management has always been a challenge for capital markets. As such, the industry has spent literally billions of dollars on a collective basis in an attempt to create accurate and complete datasets.

This so-called "golden copy" has improved, particularly for certain asset classes. However, data sharing across financial institutions remains a challenge. Business units often prefer to refer to their own specific set of data for calculations, which makes business-wide data analysis extremely difficult.

Unstructured Data

There are increasing numbers and types of unstructured data for collection, analysis and storage. For example, traders who are interested in the latest news concerning specific companies and industries have developed useful tools to analyze real-time news. Many advanced trading operations have also developed tools to assist in decision making.

More financial reference data is also transmitted using a variety of digitized sources such as video, audio and social media outlets such as Twitter. As a result, some firms have tried to devise various ways in order to analyze these massive amounts of data. Firms have also begun analyzing data from documents, websites, surveys and search traffic, among many more digital media outlets.

Regulatory Issues

For risk management and regulatory issues, users must look at data from across the entire business. Often, it needs to be compared to data from both markets and other data sources. As terabytes have grown into petabytes, the existing structures of relational databases are having difficultly keeping up.

Wall Street financial institutions are continually searching for more effective ways to handle larger data sets. Big data techniques are also being used to manage advanced analytics and regulatory compliance.

Providers of larger databases also offer a wide variety of products at customizable price points based upon applications, data set sizes, processing strength and other variables.

In short, the price tag for developing financial data management systems is high. However, in the interest of technological science, open source developers are working diligently on big data solutions for financial institutions.

How Credit Unions Differ From Other Financial Institutions

How Credit Unions Differ From Other Financial Institutions

Credit unions have been around for some time now. The main goal of this kind of cooperation is to provide a loan for the members when they need one and promoting thrift for the members. A loan is highly sought after, but many people are denied one if they have not established themselves yet. Members of the group can avail of said loan or something similar to this of a smaller scale if they have dutifully established themselves in the group and showed that they can and will pay back said loan. Credit unions also encourage their members to open savings accounts with them in order to encourage to save and have some sort of alternate funding.

One of the major differences that these groups have from banks and other financial institutions is the fact that the members of the said group are themselves the owners of the credit union. This means that those who have accounts in the institution have the right to know what is happening to the finances as well as vote for the board of directors.

The voting is also different from other institutions in the sense that all members of good standing can vote and each member is entitled to one vote. The votes are based on membership rather than on the amount of investment and clout that a person may have in the credit unions. Another significant difference that these have from other financial institutions is that one needs to be a member of the said group in order to avail of the services that they offer.

For loans, a person needs to be a member of the group to get one, and the same goes for a savings account and other kinds of accounts. These establishments are also labeled as a not-for-profit group, which means that they primarily operate for the common good of the members and not for profit. This implies that loans and other borrowing activity will be charged at a much lower rate than banks. The same goes for other services that they may provide for their members.

The members of the credit unions from all over the world benefit from joining or investing in these groups. Their benefit is having an almost immediate loan from said establishment as long as he or she is in good standing. The interest rates of these loans and accounts may also be more beneficial compared to other financial institutions. The members also have a say with regards to the condition and state of the group as well as the goals of the cooperative in the near future.

These are just a few of the services that credit unions offer their members. Many have other services much like those from banks and other financial institutions.

2007-2009 Financial Crisis Cost Tax Payers $30 Trillion

2007-2009 Financial Crisis Cost Tax Payers $30 Trillion

2008 has come and gone and feels like a distant memory. The economy is back on its feet and the banks which were basically devastated because of the crisis or responsible for creating the crisis are in the best of health.

So it begs the question: "How Bad Was It? Well, I just finished reading a research paper from the Federal Reserve Bank of Dallas; entitled: How Bad Was it? The Costs and Consequences of the 2007 to 2009 Financial Crisis." And in the report, the researchers estimate that the recent financial crisis cost our nation $6 to $14 trillion in losses using standard estimates but using other reasonable assumptions, the loss may be closer to $30 trillion if you add in other long term costs directly related to the financial crisis. So what is this loss relative to the size of the U.S. economy? As of the latest figures the size of our economy is over 16 Trillion dollars. So the loss was huge. More on this later.

Breaking down the $6 to $14 trillion loss estimate is based on a differential - between what the economy is and what it could have been without the financial crisis - so, of course, this estimate is based on a lot of assumptions - but even so, it's the first analysis I have seen on the cost of the financial crisis. And it's important because it tells us how expensive... government policy decisions can be... for American taxpayers... because if you divide that cost across all tax-paying American households, it translates to $50,000 to $120,000 per US household at the basic level. And that's just a conservative estimate.

The study also points to a dramatic drop in total wealth due to lower wages as a result of the jobs disruption caused by the crisis - with US household net worth down $16 trillion from mid 2007 through the beginning of '09 - because roughly one-fourth of all household wealth evaporated in a matter of month. How did it evaporate? Through lower portfolio values, lower home prices, lower money in the bank which shook household confidence severely. And on this point - the point of total wealth and net worth - seniors were hit particularly hard - not only from the drop in the value of their stock and bond portfolios, but through the lower interest rates which were necessary to keep the economy afloat. I don't have to tell you how this low interest rate policy represented a significant loss of income.

In addition to the financial impact, there are also the psychological costs of joblessness beyond lost income. During this recession, more than 8.7 million workers lost their jobs and faced extended bouts of unemployment. By June 2009, 12 million working Americans were either unemployed or underemployed - with low paying or part time jobs that were below their skill level - and many became so discouraged that they just stopped looking for work altogether. This creates psychological burdens that go far beyond lost income - burdens-such as the cost of being forced out their homes for not making mortgage payments, having to forcibly split family units to make ends meet, and so on.

Data also shows that the average number of households formed - through marriage or partnership - dropped to a third from 1.5 million per year to merely half-a-million - mostly because many working-age children who would normally go out and stay independent, opted instead to staying with their parents to weather the downturn.

Also consider that this lack of employment has meant more unemployment payouts by the government - the government uses borrowed money which increases government debt just at a time when less tax money is coming in. This causes government debt and budget deficit levels to expand as the Government scrambles to get money to people who don't have jobs.

So while the government did step-in with unprecedented fiscal and monetary action to prevent a full-blown depression, such intervention had significant costs such as a swollen federal debt, an expanded Federal Reserve balance sheet and increased regulation for years to come, which attempts to put in place new banking controls so a similar crisis would not happen again.

So when you add it all up in dollar terms, the loss will likely be closer to $15 to $30 trillion from wealth reduction, with up to $14 trillion more for national trauma and lost opportunity and $12 - $13 trillion in extraordinary government support. And that's without counting the repercussions of this crisis abroad.

The Dallas Fed report also cites damaged public trust in government-supported institutions and the capitalist economic system - where too big to fail financial companies that precipitated the crisis were given massive dole-outs and preferential protection - and walked away largely unscathed by the crisis they were largely responsible for creating/// while losses, unemployment and significant lifestyle disruptions were disproportionately borne by taxpayers.

So, coming back to the question of how much the crisis cost in easier to understand terms, The Dallas Fed puts the loss at 40 to 90 percent of the entire 2007 output of the United States.

Putting it another way, we lost about 1 whole year of economic output. One whole year.

This is basically why the economy has taken so long to recover back to its former levels, and no one knows exactly how long it would take to totally heal from such a devastating blow.

So when collective circumstances and actions - such as bad loans by banks, rating agencies failing to do their jobs, lax regulatory policies, reckless lending, low interest and easy credit - when these collectively cause havoc, they impact the economy over the long run and we all pay a very significant price - individually and collectively as a nation. So my hope is that my listeners - American taxpayers - understand that policy decisions and private actions tremendously impact our lives and it pays to be sure that your own financial house is in order. You may be able to count on the economy for a while, buts it's entirely up to you to understand what is in your control and what is not. And to make the right money decisions to protect you from events that are not IN your control.

This means creating a savings pool, investing wisely, spending reasonably and thinking and preparing for the future. If you had done this well, the distressing circumstances which almost brought America to its knees, may not have had as devastating effect on you as it did on so many others. And this, my friends, is what it means to live your one best financial life.

The Stock Market And Tips To Survive

The Stock Market And Tips To Survive

The stock market is probably the most exciting market in the world. Fortunes are made and lost every second in the market. At any given time, there are millions of eyes avidly watching computer screens to see how the market is going.

Millions of traders keep an eye on the loads of data, graphs and statistics that keep on changing every second. A small swift in the trade can make you an instant millionaire or an instant pauper.

What makes the stock market thrilling is its volatility. The trade can go your side one minute and the other minute it goes against you. If you are planning on investing in the Indian stock market, here are several tips that will ensure that you start the market in the right footing.

Know when to get out of the market

Stock trading is like a game of poker where there is a huge fortune to be made by the player with the right hand. Just like poker, the stock market is a zero sum game where for one player to win, another must lose.

Still just like poker, there is no guarantee that you will win in every trade that you make. That said, its paramount that you protect yourself from making loses and maximize your returns. The best way to mitigate loses is to set goals. For example, you can set a line at 15-20%. If you make a 20% profit, you exit the trade when the getting is still good.

Don't put your eggs in one basket

Many budding stock traders make the mistake of investing in only one stock. This is very wrong. Although, investing in one stock has the potential of making you huge fortunes if the stock is performing well, you need to remember that the stock also has great potential for a huge crushing blow which would be detrimental on your part.

To be on the safe side, spread your bet across the market. Find a few stocks that are doing well and watch them for a week or two. After you are content that the stocks are good, go ahead and invest in them.

Be updated with current news

When in the stock market, you need to pay attention to the latest press releases on the company that you are interested in investing in. Most of times, positive news result to positive returns while negative press equates to negative returns which is a good indication that the stocks are not good to invest in at the time.

These are the tips that you should always remember. Good luck in your trading and may the market be a bull for you!

What Does Life Insurance Securitization Mean To You?

What Does Life Insurance Securitization Mean To You?

Turning life insurance settlements into securities is a natural, next step for the industry. How does that happen and what does it mean to you?

It all started with viaticals; diagnosed terminally ill people could sell their life insurance policies for cash to live on and pay medical bills until they died, presumably within a couple of years.. Later, life insurance settlements for nonterminally ill people began. But you had to be about 65 or older to sell your policy. Settlement companies would analyze your vital health statistics along with your life policy. Based on this, investors would bid to buy your life insurance policy from you.

*Value to sell:

If you cash in your policy to your insurance company, it may pay you the cash value or less. But your policy may be worth a lot more than that.

The size of your policy's death benefit and your chance of dying may workout to make it worthwhile for a buyer of your policy to pay you more than its cash value for becoming the owner and beneficiary of your policy. That's what life settlements are all about - a way for you to get cash for a life insurance policy you no longer need, other than surrendering the policy to your insurance company.

Apparently there's a lot of potential in making money helping people cash in - while alive- on their life insurance policies. So much so that some Wall Street firms think they can offer investors a chance to participate the life settlement arena. Here's how...

Right now, a typical life settlement investor buys your policy and holds on to it - perhaps paying premiums on it if need be - until you die. Then he gets the death benefit. The earlier you die, the better for him since his costs for holding the policy decrease. For analogy purposes, he's kind of like your banker who buys and services your mortgage in return for your payments over the next 25 years or so.

But that banker can resell your mortgage to 'Wall Street' firms to be packaged into mortgage-backed bonds. Your banker gets the money he loaned you and more, while those mortgage-backed bond buyers get to invest too for the return from everyone paying their mortgages.

Likewise, you can package life settlements into life settlement-backed bonds to be a potentially new 'security' to buy on the Wall Street. Your life policy buyer can resell your policy to the bond packagers to get a fast return.

Your ultimate benefit is an increase in the demand for your life policy. That generally works out better for you. It may seem to be a morbid enterprise, but so are funeral parlors.

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