Posts Tagged ‘investment’
I was having this conversation with a business coach colleague yesterday. She deals with a lot of business owners, especially those starting out and those experiencing rapid growth. She’d been doing some research and one article she read suggested that a major reason that businesses fail is because of a lack of capital. This got me thinking about how people fund their ventures and whether they need a lot of capital to start their own business.
To be honest this really depends. If you are a product based business obviously you will need capital to invest in product but, if you were to start a service based business, you can often times get your business started with little or no investment plus time. You will need some capital though and there are some options available to you:
Friends and Family- Many people look to family and friends to fund their business ventures, especially if the funding required is small. Family and friends will generally offer you generous repayment terms on your business loan but make sure everything is done professionally. You don’t want to ruin relationships with friends and family for the sake of a few dollars. Also, if you get money from family and friends, make sure you allow them to share in your business successes.
Business Credit Cards- Business credit cards are another popular option that people look at when they aim to grow their business. Business credit cards can help with cash flow and, if you pick the right card, you can sign up to a rewards program and get points that can be redeemed for flights, accommodation or a variety of other rewards that may be useful to you. These rewards can be a pleasant little bonus for all of your hard work.
Investors- If your business idea is groundbreaking, or if your business plan is solid, you may be able to pitch to investors and get some investment in your company. If you expect rapid growth or you have a ground breaking product, then this may be the option for you. The problem with investors is that you may lose some of your decision making power as you give away part of your business to an investor.
At the end of the day, the most important factors for business success are clearly defined goals, the dedication to achieve them and then a marketing plan that will get your business in front of people. If you do need business finance there are options available to you. I have outlined three of these above.
Credit cards for bad credit are one of the best methods available to overcome your financial black marks. Having a poor score for whatever reasons can be a serious problem for individuals trying to re-gain financial stability and secure loans for mortgages or other long term financial investments. Hundreds of thousands of people in the UK suffer from negative credit ratings with 6% of the population having to make rent or mortgage payments using these cards in 2010 alone. The average UK adult has over 30 thousand pounds of unpaid debt and more than four million people missed a monthly card payment in 2010. With such dramatic figures it is not surprising that more than 10% of the adult UK population has some form of bad credit rating in their financial history. The good news is that there are credit cards for that are specifically designed to help those with poor credit ratings get back financial stability.
A poor credit history is likely to prevent individuals from getting most unsecured loans, credit cards and also will often prevent an individual from successfully applying for a mortgage. Due to the recession increasing the cost of living, prepay cards for bad credit are becoming increasingly prevalent as a means to repair ratings as they offer a number of advantages in building credit history.
Credit cards for poor scores are the best way to repair credit ratings, provided you keep up with the payments, as they show that individuals have regained control of their finances and are exercising good financial monitoring on a regular basis. There are of course downsides to using cards for bad credit which will become apparent as we discuss the pros and cons of these cards.
The advantages of credit cards for bad credit
The key advantage of cards that aim to improve your rating is that you can show a financial stability history to future creditors. This allows you to slowly improve your reputation over the course of months, or years, if you have a particularly bad credit rating to begin with. Gaining a good repayment reputation will encourage creditors to trust you with in the future and therefore you are much more likely to receive mortgages and other unsecured loans.
Other advantages of cards aimed at those with poor credit history are that they are essentially the same as those for normal cards. You get the freedom to make payments immediately for purchases and bills, and get to spend money you otherwise wouldn’t have. In this respect cards for bad credit work in much the same way to normal credit cards.
The disadvantages of credit cards for poor credit history
Cards for poor credit obviously come with severe disadvantages as the companies providing them must secure debt against the risks of non-payment that bad credit entails. For this reason cards for lower scoring citizens will typically have a very high APR (Annual Percentage Rate). The average rate is typically over 20% so if for any reason you fail to make a payment you need to be prepared for a large additional fee. The other disadvantages are that you typically do not receive any of the benefits that other cards offer which takes away some of the advantages of having a credit card.
So should I use credit cards for bad credit?
Cards for bad credit are one of the easiest ways to absolve yourself of bad credit so should consider applying for one if you are secure in your current finances and will predominantly be using it as a means to improve your credit rating; rather than as a means to support yourself or cover unpaid bills.
The great depression of the 1930s is still a powerful memory in the minds of many people. As a result, the present economic situation scared the majority of the people who have directly or indirectly felt the negative effects of the Great Depression. These two episodes are similar to some extent, but we have to admit that there are some aspects that haven’t been present during the economic downturn of the 20th Century. Thus, it is important that we only adopt those measures from the past that might work for the current situation.
One important factor that contributed to the re-balance of the economic situation back in the 30s was the fact that people were willing to change their lifestyles in order to save money and cover their debts. This is a good example that we can follow these days as the current economic recession was determined primarily by the numerous credits that have been registered. If you want to purchase something, you better wait until you raise all the money you need; don’t get a credit unless it is really necessary.
The second measure that helped in the 1930s was the fact that people oriented themselves towards do-it-yourself activities. Nowadays, we have forgotten how inspiring and satisfying it is to create our own food, clothes or even furniture, so there is a lot of money that people waste on products and services that they can very well do themselves. Unleash your hidden talents and you’ll see that you will be able to produce products that are just as good as the ones on the market, yet much more affordable and resistant.
Being a wary consumer will enable you to use less money on food and other commodities. As a matter of fact, during the Great Depression people would reuse materials and objects to create new items. Thus, you should not throw your old clothes or your electrical devices on the window; take the functioning parts and create new objects instead.
Finally, the economic recession is a period of investments, even though this may seem strange to you. As experts have noticed during previous economic downfalls, it is very convenient to invest your money in tangible products that are very likely to become more expensive after the recession. Such is the case of the gold and the oil market which are likely to register an amazing increase in the years to come.
Investing in foreign nations is becoming more popular. In the true sense, offshore investing is investing outside of the home nation of the investor. This is primarily undertaken by investors for earning better returns on investment and tax planning.
There are many overseas businesses offering equity assets as well as bonds that are financially strong. The investment plans made available by these types of businesses are normally proven and they’re legal. Many investors have a technique of investing twenty five to thirty percent of their income in other nations. That is generally done in order to avoid taxes as well as to get higher earnings on their investment.
The key benefit of this can be tax reduction. A lot of small nations which have really limited resources allow men and women or corporations to set up a company. Generally, these businesses are not going to have any kind of operational facilities in the nation in which it’s hosted. Using this method the person or the corporation needs to pay out very little tax or absolutely no tax for the investment produced in a foreign land. Simply because this is much more profitable from an investor’s point of view, many of them desire to make investments in overseas countries.
The second benefit in offshore investing is it can be one of the best methods to diversify an investment portfolio. There are excellent chances to obtain greater returns from these kinds of investment since investors get the chance to gain access to potentially lucrative markets. Essentially the most preferred strategies adopted by investors in making investments in overseas countries are through incorporating a business.
Investment in overseas countries provides investors complete protection for their assets. On the other hand, it really is necessary to pick a profitable country to make a good investment in. This can help in safeguarding the investment in addition to the assets. By investing in a legal entity, the investor really gains from the implicit protection of both international and domestic laws. Aside from setting up a company inside a foreign country for tax advantages and increased returns on investment, yet another alternative offered is establishing a foundation or even a fund. Offshore investing may be done by setting up a trust in the investors name or in some other name.
The investment on the offshore banking process will offer services for all worldwide customers of the institution with very low tax rates. The law does permit financial holding companies to establish offices in foreign countries. They are entitled to undertake business that handles an international investment portfolio and provides career opportunities to the regional populace and results in financial growth.
Minimal tax rates prevailing in smaller nations is a crucial issue that assists financial institutions to make revenue on foreign investment. On the other hand, effort must be taken in figuring out the correct area for foreign investment in which the investment returns tend to be substantial and at the same time the investments are secured.
Every trader should know that are only two types of options: calls and puts. That’s it, simple and plain as that. It really is that simple and anyone that cares to make it more complicated is just fooling around. Put and call options behave pretty much the same as stocks, bonds, or mutual funds: you can earn everything you would with those other investments. Therefore, options should be treated as a direct investment and that is a very important fact to remember.
When you start a trade with options it is usually composed of all call or all puts, but sometimes you can get a combination of the two. Astute traders know that you can initiate a selling trade as easy as a buying trade, and that makes a world of difference when it comes down to earn money in the markets. You can find different strategies that include both selling and buying, but the majority involves selling strategies. A lot of people frown upon that because they have once heard that “selling options is risky”. That is not true, you just have to know what you are doing. A great aspect of the markets is that you can reverse the order and “sell high, buy low” instead of the classic and common known “buy low, sell high”. Many times, the sale transaction can and will come first.
Call and put options are “derivative” investments since they derive from other sources that can range from stocks, bond, etc. Like pointed before, you can pretty much buy and sell stock options pretty much like any other stocks, bonds, etc.; the only difference is that you should research more about what exactly you are buying since that options have some unique characteristics that you should pay attention – one is that options, unlike stocks, expires, and that make a big difference in your strategy. Options expirations can play in or against you, it really depends on which side you are when you started the trade. But make no mistake, you can make money both ways.
Leverage is a (in)famous word nowadays since the crisis that started with the Lehman Brothers. Options involve a lot of leverage and that you should be aware of. BUT, leverage doesn’t necessarily mean a bad thing. When improperly used, yes, it is a bad thing; but use it properly, and you could discover a whole new world inside the financial markets. Leverage pretty much means that you are obtaining more money with less money of your own. That means that it is like buying a house with only your 10% down payment instead of committing all your money in your endeavors. Just do your due diligence beforehand and then, you will be able to use leverage in your favor, not the opposite.