Archive for: ‘November 2014’

Importance and Sources of Finance In Business

November 26, 2014 Posted by admin

Finance is a key driving factor in any business. The importance of finance can be briefly described by the statement, �Finance is the Blood of Business�. It can be understood that as the human body cannot function properly without blood in the body, the same way a business cannot function properly without sufficient finance. As like human body would get sick the business would also turn out to be sick due to lack or improper management of finance. The important of finance is largely understood in the business and thus there are special departments generated within the business to look after the proper management of finance. The role of the finance department in the business is to look after the ways to get funds in business and also to constantly look after the proper utilization of existing profits in the business.
It is very important to keep the profit cycle on track for success of business. There should be a proper agenda for business to use its profits for a proper purpose as decided by the company. The company should have a rule that a certain portion of its profit would be ploughed back in business. The profit which is wisely ploughed back in business would be an investment in the company. There are several options for external sources finance, a company has to decide depending on its needs to select a proper source. There are short term and long term capital requirements of the company. A company can explore internal and external sources of finance for its needs. Internal sources of finance include Retaining Profits, Debtor Finance, Sale of existing assets and cutting down on stocks. Another external source of finance for business can be broadly divided in long term, short term and mid-term requirements. A long term financial requirement includes Shares, Debentures, Long term bank loans and Grants. Mid-term financial needs can be satisfied with Leasing, Hire Purchase and Medium term loans. On the other hand Short term financial requirements are met with Bank Overdraft, Bank Loan, Creditors and Debt Financing. A company has to wisely choose from the different sources depending on its requirement and also on its ability to repay it.
Other than the sources of finance a company can take help of trade finance and subsidies that are available to facilitate trade in the business. Fund management and financial management can determine the success and failure of the company. If a firm is wise enough to manage its funds then it can succeed with a small amount of funds and if a firm is does not take care of its finances then it would fail even after having more than sufficient finances.

Free Yourself Through Debt Consolidation Finance

November 24, 2014 Posted by admin

People…some rich…some poor…everybody is not equal in terms of finances. People with sufficient monetary support easily fulfill their dreams and desires, but….what about the people lacking funds??? Such people usually take the help of loans increasing their debts. Further again financial requirement arise, again these people go for debts. Lastly what happens is… they get surrounded by the trap of debts which becomes difficult for them to repay… This further increases trouble for them in form of a bad credit tag which gets attached to them for making defaults in repayments. There comes debt consolidation finance to the rescue.

Debt consolidation finance is meant for the consolidation or combining of all your existing debts into a single monthly repayment. This means debt consolidation finance can help you reduce the numerous repayments you make every month at variable rates to several lenders. With the loan amount, you can pay off these debts with ease. Debt consolidation finance serves you with much lower rates than what you may be paying now with large number of debts. Also, it gives you a chance to improve your credit score Debt consolidation finance offers you larger amounts between �5000 to �75000, when it is secured against some collateral. However, you can also apply for debt consolidation finance without any collateral in form of an unsecured debt consolidation financing. This type of financing comes with quicker approval and is available to people lacking security to offer to the lender. These people include non-homeowners, tenants, PG’s, people living with their parents etc. In addition to all these benefits, debt consolidation finance gives you freedom from the threatening calls from the lenders and creditors.

Debt consolidation finance works better for you when it is combined by measures such as credit counseling, debt education, hiring the services of debt consolidation agencies to manage your debts. Besides these, you can take measures from your side also such as controlling your credit card spending, working out a budget plan etc.
You can search for debt consolidation finance providers through online websites. These websites offer you free quotes from numerous lenders. You can compare these quotes through comparison tools to get the best deal out of the rest. Finally, you can fill an application form with the details about you, loan amount required, residential and employment status etc. After going through your application form lender himself will contact you with his services.

Make it a point to read the terms and conditions of the loan agreement before signing it. With its unique features and advantages debt consolidation financing will surely help you to breathe easy without the stress of debts.

Understanding Large Cap, Mid Cap and Multi Cap Mutual Funds

November 21, 2014 Posted by admin

Understanding Large Cap, Mid Cap and Multi Cap Mutual Funds
Mutual Fund pools the savings of the investors, who share a common financial goal and then invest the corpus collected into a number of financial instruments to maximize the returns.
One of the ways to divide or identify a mutual fund is the criteria of market capitalistion.
The market capitalisation or Market Cap is the total no. of shares of a company outstanding in the stock market multiplied by the market price.

The major three types of mutual funds are Large Cap, Mid Cap and Multi Cap mutual funds.
Below we shed more light on the three types of the Mutual finds based on market cap.

Large Cap
Mutual fund houses have different parameters for choosing a large cap fund. Mostly, the companies which have got more than 1000 crore of market capitalization are taken as large cap companies and then the mutual funds invest in them accordingly. These companies have got maximum potential to grow and earn higher profit since they have large amounts of money at their disposal which can often be used.
The primary objective of the large cap mutual funds is to seek robust capital growth by investing into the stocks of large corporations and frontline blue chip companies.
Large cap mutual funds are generally less volatile than their counterparts which are Mid Cap and Multi Cap mutual funds.
However, the returns are generally low when compared with other classes as they are exposed to lesser risk, but on the long term, these funds have outperformed its peers. It is advisable to invest in Large-cap Mutual funds during volatile market conditions.

Mid Cap
The Mid-cap mutual funds invest into the midsized companies that have the potential to generate higher returns. The investors have to take higher risks as compared to the large caps. The Mid cap companies are directly related with the market movements and provide solid returns during market upswing.
Normally, companies with a market capitalization of more than Rs 500 crore limited to Rs 1000 crore are classified as mid cap companies. However, once again different fund houses have different parameters to choose the mid cap companies.
Fund houses generally invests into the mid cap space because the mid cap sector offers a vast growth opportunity when compared to other sectors.
The mid cap mutual funds invest into the mid cap companies since these companies are flexible, agile and adaptable to the ever changing market scenario.
Midcap funds are very unstable and it comes down very fast when the markets head downwards, so utmost attention is needed while investing in this category of funds. Investors who want to diversify their portfolios and willing to take a certain amount of risk should definitely pump in money into these kinds of funds for a longer period of time.
Multi Cap
Multi Cap funds give a wider choice to investor. There is no particular criterion for multi-cap funds. The fund houses generally invest the funds into various companies whose market capitalization can be large, mid or even small. It’s a perfect investment opportunity for investors who want to see their investment grow and as well as they want it to be stable.
The advantage with these kinds of funds is that they invest the funds into a number of sectors with different market capitalisation, so even when a sector is making losses, other sector is expected to counter balance the loss by making profit.

Cheap Used Car Finance – buy a car with a burden less loan

November 21, 2014 Posted by admin

You can buy a used car easily as it comes at low price. However, you may require a loan as the amount is still too high for sourcing it from own income. So, cheap used car finance becomes necessary. Cheap used car finance is called cheap because the finance is approved at lower interest rate. You can buy a used car of any make or any model through cheap used car finance.

The best way for availing lower interest rate on cheap used car finance is to offer the lender some security of the loan. The security may be any valuable asset of the borrower. Apart from the security, if the borrower has a good record of paying previous loans, his chances of getting cheap used car finance increase. So check your credit score first. An amount approved as cheap used car finance will depend on equity in the property placed as collateral. Your current repaying capacity also plays a role in determining the loan amount. Since you are buying a used car, lender will approve cheap used car finance for short repayment duration of few years. You can avail cheap used car finance without collateral but in that case the interest rate will be comparatively lower only when your credit score is excellent.

Sourcing part of cheap used car finance is important. Though you can get finance for used car from car dealers but they usually charge higher interest. It would be better therefore to go for a personal loan specifically meant for car buying. Such used car finance comes at cheaper rate of interest. You can contact cheap used car finance providers on their websites. Compare their individual interest rates for picking up a suitable lender offering cheaper rates.

After getting the finance, while buying used car make sure that the car has no mechanical defects and so hire a mechanic for ensuring the quality. Pay off the loan in time for escaping any debt and this way your credit score also will move higher.

Types of Mutual Funds

November 20, 2014 Posted by admin

Over the years a diverse range of mutual funds has emerged to meet a very broad range of investment objectives among the investing public.

A fund’s prime investment goals are stated in the fund’s offering prospectus and generally cover the degree of safety or risk that is acceptable, whether income or capital gain is the prime objective, and the main types of securities in the fund’s investment portfolio. From their differing investment objectives, the following main types of funds emerge:

1. Bond Funds – whose main investment goals are income and safety of principal. Investment by such funds is primarily in good quality, high yielding government and corporate debt securities, some high-yield preferred and common shares and mortgages. Their degree of volatility
is related to the degree of interest rate fluctuation.
Example: Altimira Bond Fund.

2. Mortgage Funds – investment goals are similar to those of bond funds, and unit values are affected by similar economic factors. Investors hold a share in a group of mortgages (much as bond fund investors hold a share in a group of bonds) rather than holding title to a particular
property.
Example: Royfund Mortgage Fund.

3. Money Market Funds – became very popular with investors during the 1980s and are now the largest category of mutual fund. The objective of this type of fund is to achieve a high level of income and liquidity through investment in short-term money market instruments such as treasury bills, commercial paper and short-term government bonds. These funds have limited opportunity for capital gain: many funds keep the net asset value at a set level (e.g. $10) by distributing monthly income to unitholders in cash or new units.
Example: Bolton Tremblay Money Fund.

4. Balanced Funds – whose main investment objectives are a mixture of safety, income and capital appreciation. These objectives are sought through a balanced portfolio of fixed income securities for stability and income, plus a broadly diversified group of common stock holdings for diversification, dividend income and growth potential. The balance between defensive and aggressive security holdings is rarely 50-50; rather, managers of balanced funds adjust the percentage of each part of the total portfolio in accordance with current market conditions and future expectations.
Example: Investors Mutual of Canada Ltd.

5. Common Stock or Equity Funds – These funds are primarily invested in common shares. Short-term notes or other fixed income securities may be purchased from time to time in limited amounts for diversification, income and liquidity, but the bulk of assets are in common shares in the pursuit of capital gain. Because common share prices are typically more volatile than other types of securities, prices of equity funds tend to fluctuate more widely than those funds previously mentioned. Some equity funds invest in a variety of overseas markets as well as Canada and the United States. These funds invest in markets perceived to offer the greatest opportunity for
growth on a global basis.

As with common stocks, equity funds range greatly in degree of risk and growth potential. Some are broadly diversified, heavily invested in blue-chip, income-yielding common shares and may, therefore, be classified at the conservative end of the equity fund scale.

Many common stock funds adopt a slightly more aggressive investment stance as, for example, Industrial Growth Fund which invests principally in securities with an objective of above average growth of capital. Other equity funds are of a more speculative nature, aggressively seeking capital gains at the sacrifice of some safety and income. Example: United Venture Fund Ltd.

6. Specialty Funds – are those which concentrate portfolio holdings on shares of a group of companies in one industry, in one geographic location or in one segment of the capital market. While still offering some diversification in their portfolios, they are more vulnerable to swings in the industry in whose shares they specialize or, if they have a portfolio of foreign securities, in currency values. Many, but not all, tend to be more speculative than most types of common share funds.
Example: AGF Japan Fund Ltd.

7. Global Funds – seek gains and diversification by investing in markets that offer the best prospects, regardless of location. Some global funds are invest in bonds, others are equity funds and still others are money market funds.
Example: Templeton Emerging Markets Fund.

8. Dividend Funds – are those that invest primarily in high quality preferred and sometimes common shares of taxable corporations in order to obtain maximum dividend income.
Example: Allied Dividend Fund.

9. Real Estate Funds – are those which invest in income-producing real property in order to achieve long-term growth through capital appreciation and the reinvestment of income.
Example: Investors Real Property Fund.

10. Ethical Funds – Investment decisions are guided by moral criteria. These criteria vary from fund to fund. One ethical fund may avoid investing in companies that profit from tobacco, alcohol or armaments, while another fund may invest according to certain religious beliefs.
Example: VanCity Investment Services Ltd.’s Ethical Growth Fund.

Useful Advice For Managing Your Finances And Keeping A Budget

November 19, 2014 Posted by admin

Being on top of your finances can be confusing and hard at times. By planning ahead and tracking all of your financial details, though, you can head off any upcoming difficulties before they affect you. Online banking can be a great way to start this process, but you will need to be responsible.

Include quality health insurance in your personal financial plan. Everyone will get ill at some point. Start with a good health insurance that corresponds to your needs. Doctors and medical bills can climb into the tens and hundreds of thousands. If you aren’t insured, you will be paying a large amount of money.

Having a college education can be helpful in finding a job and making a good salary. Research has shown that a college graduate earns almost twice the salary of high school graduate. Investing in your education is an investment that will pay for itself and then some throughout your adult life.

Overdraft protection is a valuable tool to have if you are always on the brink of a zero balance. Yes, it is a few extra dollars every month, but just one unprotected overdraw can cost you $20 or more in fees each time that it happens.

When budgeting, be sure to allot a bit of cash for pocket money. It’s important to have a little spending money for unexpected, spur of the moment purchases. You can use your cash allowance to treat yourself with things like eating out, new shoes or a book you want, but limit yourself to your allowance. It will help you stay on your budget and still enjoy the little things.

Make contributions to an IRA, or individual retirement account, if you have eligibility. This can better your future personal finances. Various financial institutions, such as banks, credit unions or brokerage companies, can open IRA accounts for you. This can definitely help your financial situation when you retire, but only if you make regular contributions!

To make progress in fixing your finances, you need to evaluate them like a bank does, with a cold and calculating eye. This means you should figure out exactly what you are spending and what you are bringing in. Estimate the cost high, so you can take the money you have set aside to pay it and deposit any extra amount into a savings account.

Thrift store shopping is no longer just for those with low incomes. You can save money and find quality items such as clothing, furniture and books at any local thrift store. Kids also love shopping at these stores, searching for fun and interesting clothes or shoes. In order to find the best variety of items, shop first thing in the morning!

If you want to make thoughtful decisions with your money, reduce your alcohol intake when you are out. Limit the number of alcoholic beverages to only one or two and switch to water or soda to keep your head clear and avoid decisions that will haunt you later.

Tracking how you spend your money helps you to avoid overdrafts or other fees from the bank. You’ll be able to feel great about where you are financially if you know exactly where you stand instead of letting a bank do it.

Finance Debt Consolidation Chop Down Monthly Outgoings

November 17, 2014 Posted by admin

Finance for debt consolidation should be availed after a careful thought. Any unwise borrowing of the loan may lend you in another trouble and its very purpose will be defeated.

When you intend to consolidate your balance payments on credit cards, store cards, any other bills and unsecured loans, then it simply means that you want to get rid of the higher rate payments immediately. Other usual intention is that you want to make low monthly payments towards the new loan.

Prior to applying for the new loan, check your credit report, which you can get free from the major credit rating bureaus. Make sure that the report has correctly mentioned all the past payment and has no errors. Know that the lenders will study the report. You should also know as to where you stand on FICO credit rating. If your rating is low, then apply for the loan with improved rating after few months.

You should assess your debt position, including the interest rate payments. Avoid borrowing greater amount of loan as it carries larger repayment duration and you end-up making high interest payments.

Finance for debt consolidation comes in secured or unsecured option. The secured loan should be preferred for its lower rate of interest as you borrow the loan against your valued property. Depending on value of the property, you can borrow greater amounts for larger duration of say 25 years. However, prefer repaying the loan in short for saving interest payments. Tenants and homeowners both can opt for unsecured loans if they need only smaller loan, without collateral. Interest rate goes higher on these loans and the repayment duration is in the range of few months to 15 years.

For bad credit history people, interest rate on these loans will be higher. Therefore, they should make a good comparison of as many Finance Debt Consolidation offers as they can. This is the way of finding a suitable deal with comparatively lower rate and with less additional charges. Make sure to repay the new loan installments in a regular manner.

Understanding Zero Percent Financing

November 13, 2014 Posted by admin

Technically, zero percent financing is really in existent. The low rates offered by lenders are in fact incentives they offer in lieu of rebates or money saved from the difference between a car’s actual selling price and its manufacturer’s suggested retail price. The lender receives the cash discount and buys down the rate instead.

Factors such as the overall cost of the loan and the credit score of a lender determines the amount that the bank might make in profit. Often if not all the time, zero percent financing on cars is only offered on limited models and price ranges and available only to borrowers with good to excellent credit scores. The manufacturer of the new car pays in advance all the interest charges that the lending bank imposes in order to be able to offer zero percent financing. Banks are preferably a new car lender or are the manufacturer’s bank, so that the manufacturer can get some sort of discount. This is buying down the discount.

In lieu of rebates and/or cash backs, the zero percent financing is then offered. In most cases, the savings on the rebates and the cost to buy down the interest rate from the lending back are of the same amount. A very handy tool, the car loan calculator, is used for the manufacturer to be able to accurately compute the overall cost of the loan and how much is the cost to buy down the loan. The information needed for the computation are the car’s selling price and the standard rate that will be used to decide the amount paid back over the term of the loan. For the zero percent financing to be offered, the optional rebate should offer the same discount and this is most likely in all cases.

When car manufacturers provide rebates or zero percent financing the one that benefits with the most profits is the car dealership because they are reimbursed by the manufacturer for any rate incentives or rebates that they provide their clients. What many buyers do is to go for the rebate or zero percent financing instead of trying to negotiate the price of the vehicle. The car dealer is able to maximize his profits if the buyer doesn’t try to negotiate any discounts or deductions on the car’s selling price. Rebate discounts are also the same. This is why dealerships love zero percent offers because it increases their business.

Car dealerships with smaller operations do not usually offer zero percent financing. Smaller dealerships that do offer zero financing should first be able to earn enough profit on the price of the car so they can cover their expenses in buying the rate down first. Before purchasing a car, check first for as much information as you can about its price because when you go to the dealership it is most likely that the prices are marked up by the dealership. The ones that make the most profit of all are the pay-here and buy-here lots.Sometimes just a little more cash is needed at times like this you might count yourself out due to your bad credit instead you should consider a bad credit loan from a company like BHM Financial.

You Against The World – The Most Important Personal Finance Tips Available

November 13, 2014 Posted by admin

There is no better time to get your personal finances in order than right now. This article is filled with useful tips to help you manage your finances more wisely. You should not have to waste money on expensive finance classes or training to help you better your skills at managing money. Learning what you need to do will help you out.

A member of your family who keeps an excellent budget, or happens to work in the finance industry, can be a great help when you need to learn how to budget your money. If one doesn’t know anyone who works in the financial sector, a family member who manages their own money well could be helpful.

If you need to save some cash, disconnect your cell phone. This may not sound like a good suggestion, but many people have survived before without cell phones. While these phones may feel like essential parts of our lies, in reality, they are just a convenience item. If you feel that you can’t ditch the phone, then review your usage history to determine if you can switch to a cheaper plan.

Don’t be fooled by claims that a company will repair your credit history. Most companies make blanket statements regarding their ability to fix your history. However, this is a misleading claim because the cause of your poor credit may differ from the cause of someone else’s poor credit, and these varying factors require different treatment methods. To claim that they can clear your credit completely is definitely a lie and they are most likely committing fraud.

By having a savings account that you deposit into regularly, you will be building financial stability. This could mean that you may not need a loan, and that you can handle unknown circumstances if need be. You should save as much as you can, even if it is not possible to contribute a lot each month.

Put some money into your IRA if you’re able to do this. This can help you build a nest egg for your financial future! Anyone interested can open an individual retirement account with a bank, brokerage firm, or credit union. This can certainly help supplement your retirement, if you contribute to it regularly!

The easiest way to keep your finances clean is to avoid consumer debt like the plague. Give serious consideration to adding any new charge to your card. Carefully consider how much time paying it off will take. If you can’t pay off the charge in a month, and it’s something you don’t really need, avoid it.

Thinking about replacing your linens? Check out a discount retailer for bargains on bedding, bath towels and other textiles. Not only will you save money and time during a whole year, you will not sacrifice quality. Buying things for the lowest possible prices will help you improve your finances.

Make sure you have a checking account that works for you. Do not keep the same old accounts, especially if you are charged for features you never use. Find out how much you are charged and get a checking account with lower fees.

Large fees should be a sign for you to stay away. Long-term investment comes with a variety of fees. These fees can take a big bite of your returns, though, if they are large. Keep your investing costs down by staying away from funds with pricey management fees and brokers that take large percentages in commissions.

Tired of failing to qualify for a credit line or other major purchase? Take a few minutes to go over your most recent credit reports. It is not uncommon to find inaccurate or unexpected information that could damage your credit score. You can clear up any mistakes with a phone call or letter.

Should you find yourself having a breakaway month where you feel like you are finally pulling away, remember that this is the time to boost your savings rate, not your expenses. Don’t do this; stick to your budget so that you will be less likely to have money problems in the future.

As stated in the beginning of this article, having to manage your personal finances is often stressful. Getting your personal finances under control will also help you to control money-related stress. The information that was provided in this article should give you greater peace of mind now that you understand the steps you can take to improve your financial situation.

Benefits of Mutual Fund Investments

November 11, 2014 Posted by admin

Investing in mutual funds has become a common practice amongst many investors. Investing in these funds is all about calculative approach which is looked after by fund managers. The professional management and systematic approach brings in additional benefits to mutual funds, below mentioned are a few of them.

Diversification: In order to grow and expand the gains, a financial portfolio needs to be diversified. Sticking to the traditional investment options will only bring in limited returns. When an investor opts for this investment there is immense scope for him to multiply his returns over a period of time. There isn’t any stagnancy in these funds. This investments are smartly done wherein the focus is always kept on dividing the risks and not putting all the capital in just one company. So if you decide to invest in the real estate sector your mutual fund manager will purchase securities of two or more companies. Thus the risk is not attached to a single company and even the gains you would receive would vary depending upon the profits respectively.

Commitment free: Investment in mutual funds is most of the times free from lock-in period. They can be liquefied at any point of time, so if the investor feels he isn’t making enough money out of a particular fund investment he can choose to sell it off. This is however not possible in case of options like fixed deposits, insurance plans etc. When a financial emergency arises withdrawing FD fund or discontinuing an insurance plan will prove to be of no benefit to you and will also make your future plans tumble, with the flexibility of mutual funds this will not happen.

Professional management: With mutual funds there is always a dedicated fund manager who is dealing with your money wisely. All the calculations and allocation of your money is looked after by him so that you are not left alone to decide where to put your money. Since fund managers are experts, they analyze the markets well and then come to conclusions about where their clients should invest in. Be it a sector altogether or a particular company, their research is vast and in depth which investors cannot do themselves.

Mutual fund investment thus will give you no reason to worry about your funds. The well analyzed and calculative approach taken by fund managers, immense scope for diversification and liquidity they come along with are prime reasons for their popularity. Not just this, the returns on mutual funds can be good if the correct choices are made and as there are a lot of divisions made, the risks are got down to a high extent. If you haven’t invested in it, now is the right time to begin and reap the benefits.