Personal ISA

Where Can You Find Sources Of Funds For Your Business?

If you need help to fund your business, there are some things you need to do first, that can make your business more attractive to investors. The followings are an easy way to improve your business image and make it become good-looking in investors eyes.

The most important thing, you should always talk to a qualified business attorney. There are a lot of laws pertaining to how equity capital can be raised from the public, and the laws change often. You need someone who understands not only these laws, but also how to make sure that any business contracts are written to protect you and your business, especially the fine print.

1. Using your savings or credit cards. This is the most common way for entrepreneurs to raise needed business capital. Before choosing this method however, talk with your financial advisor. You want to look at the long-term consequences of using your savings, life insurance or credit cards, especially in the event that your business venture fails, or does not bring in the projected return on investment (ROI). If you do end up financing your project using credit cards, make sure that you shop around first, and find the card that will offer you the best rate and gives you the most “bang” for your buck.

2. Venture Capital and Angel Investors. Before even looking for venture capital, look at your company from an outsider’s point of view. Ask yourself these questions: Does your company have a solid track record? (Most venture capitalists don’t invest in start up companies). Does your company have the potential of becoming very large in the next five to seven years? (People don’t invest in your company out of the goodness of their hearts. They’re looking for a return on their investment — the larger the better.) Does your company own a good percentage of its market, or does it stand to gain a large percentage in the next 12 to 18 months? (Contrary to popular belief, your company doesn’t have to be involved in high tech to attract venture capital). If you can answer yes to the above questions, your next step is to find a venture capital firm whose ideals and goals are in line with yours. Your next step should be to look at your “circle of influence” and see if you know someone who can give you a personal introduction to someone at the venture capital firm. (People invest in people, not just companies.)

3. Taking your company public. Although security laws in the U.S. have made it easier for companies to go public, and offer stock as a way to raise needed funds, this is still probably the most risky choice. It is usually not a recommended option for very new or very small companies. Because of the number of legal issues involved, consulting with a knowledgeable attorney beforehand is vital. There is also a lot of stress involved in running a public company, and a considerable loss of autonomy and control. Before making this choice, be absolutely sure that this is the wisest course of action for your business.

4. Potential or Current Employees. Surprisingly, one of the most common ways (especially for new companies) to raise equity capital, is by inviting your potential or current employees the opportunity to become investors. With this method, not only do you get a really committed workforce, but many equity employees are also willing to accept a below-market wage in the beginning (especially if you do the same). There are other benefits, but this choice is not without its pitfalls as well. Again, before going this route, talk to your business attorney, and put policies into place that plan for potential problems. For example, what do you do if an employee’s work becomes substandard? Or an employee quits and goes into competition with you after learning all of the company secrets? Putting a risk management plan into place and considering all contingencies is your best bet for this option.

5. Getting money from relatives. Yes, it can seem like begging, and it’s a difficult thing to have to swallow your pride. Surprisingly, in a recent survey, almost 30% of entrepreneurs said that they raised all or part of the capital they needed through family members. If this is your choice, make sure that you have your attorney draw up a regular business contract. When approaching family members, talk to them about their investment the same way you would any other outside investor. Tell them about how much money they can make, not about how much you need their help. And make sure that you keep to your end of the agreement.

It is mot crucial which source you decide to use. What important is that you spend time on planning and following the advice of your personal. With this strategy, you will increase the probability of raising the money you need and making the relationship between you and your investors a profitable one.

A structured settlement often follows a life changing incident, whether it be positive or negative. Due to these circumstances, you may be faced with the need for a large lump sum payment rather than small monthly payments over a number of years. So, where do you turn? To a company that can buy your structured settlement from you and turn it into an immediate payment that you may use on whatever you see fit.

Each individual has different reasons for wanting to sell their structured settlement, however, first you must decide if it is the right decision for you.

The Benefits of Selling Your Structured Settlement

A large portion of those who receive a structured settlement can benefit from selling it for a lump sum payment. The situations listed in this section represent possible circumstances of individuals that may get the most rewards from selling their structured settlement.

If you cannot wait to receive small, spread-out payments over a long period of time due to a dire financial situation or hefty medical bills and/or lawyer fees. Many of the situations that can bring about a structured settlement can also stick the individual with such obligations.

If you and your family decide that this is the time to finally make that large purchase that you have had your eye on. For example, if you have previously been denied mortgages or loans and would like to take this opportunity to buy that dream home you have always wanted. Or if you have a child or children who are preparing to go off to college and you fear you may not have the financial means to support that dream otherwise.

If you have talked with a financial advisor and both of you feel that you could profit more by investing a lump sum payment, rather than waiting on monthly payments. If the money is invested properly, there is a chance that you could end up with more money in the end than your settlement was ever worth. However, this should not be a plan that is entered into lightly. You should work closely with a financial specialist and feel confident that you have found a great opportunity to invest in.

If you are of older age and feel that you may not be around long enough to receive a fair amount of your structured settlement. You may want to the chance to enjoy the benefits of your settlement or may want to secure part of it for your family after your passing. This way you can distribute the funds as you see fit instead of relying on lawyers or courts.

If you dont plan to use the money right away, but would rather put it into a savings or money market account to draw interest. This would be best suited for someone who has a very hefty settlement, can find an account with large payoff terms, and plans to keep the majority of the money in the account for many years.

No matter what your reason for wanting to sell your structured settlement, choosing this option puts you back in control of money that is rightly yours. The problem that many individuals have with their structured settlements is that the control over their money is left to lawyers, courts, and the company or persons paying out the settlement. You are now able to say where, how, and – most importantly – when you spend your money.

The Drawbacks of Selling Your Structured Settlement

For a few individuals, selling their structured settlement and receiving a lump sum payment may not be in their best interest. One must also evaluate these situations and determine if they outweigh the reasons you are considering selling your settlement.

First and foremost, selling you structured settlement means that you will receive less money than you would if you were to keep it. However, for many people considering this option, this seems like a win-win situation – they will get one large lump sum payment and the company they sold it to will make a profit in the end. The good news is that since you have several companies competing for your settlement, you can choose the one that will give you the a portion of the full settlement that you can live with.

Because you may lose out on a substantial portion of your settlement by selling it, if you are in a financial situation where regular monthly payments will only be a bonus on top of what you already make, waiting out your settlement may be in your best interest. However, if youre a senior, then you should also take your age and the length of your structured settlement into consideration. This would be the ideal situation for someone who is young enough that they have a great chance of living out the life of their settlement.

If you are a person who is poor at managing large sums of money, then selling your structured settlement may not be right for you. For example, if you are the kind of person who gets a large paycheck every two weeks and finds themselves running low on available cash at the end of those two weeks, then that may be an indication that needs to be closely looked at. In this type of circumstance, having your settlement portioned out to you on a monthly basis may keep you from spending it too quickly. Once your settlement is gone, you will be back at square one.

For those reasons, you should also not consider selling your structured settlement if you have an addiction to gambling, shopping, or drugs.

If your settlement was due to an accident that has put you out of work and the funds from it will replace your monthly income, then keeping the payments on a monthly basis may help your family keep your finances in order. However, even in this situation selling your settlement may be best for you if you would like to renegotiate your payments into a larger sum each month to shorten the life of the settlement.

Most individuals receiving a structured settlement can benefit from selling it to a company that can give them a large lump sum payment or shorten the life of the settlement, especially if they are older persons, an individual who has enormous expenses due to an accident or court case, someone in a critical financial position, or one who wishes to make a large purchase for themselves and their family. Finding the right company with terms that fit your needs is a key component of making your experience with selling your structured settlement a positive one.

Gas prices just keep going up, and our wallets keep decreasing in size. This how-to will teach you many ways to save money at the local gas station.

Steps

1. Take out a credit card. Some credit cards offer gas savings when you use the card for purchases. This works in much the same way that some credit card companies give you frequent flyer miles when you use their card for purchases.

2 Get a gas membership card. Look for membership benefits. In addition, department and grocery stores give discounts at the fuel pump when you use their store membership cards. Shopping at Giant Eagle grocery store and using their membership card, its possible (at the time of this writing) to fill a cars tank for .79 cents a gallon, with savings of $1.36 per gallon.

3. Give your car a good tune up. While giving your car a tune up wont actually save you money at the pump, it will save you in gas. Using less gas saves you money over all. Have the oil changed, and have a certified mechanic give your engine a twice over.

4. Check the WWW for deals. Web sites let you find the best deals in your area.

5. Buy a hybrid car. Not only do hybrid cars give you immediate savings at the pump, the U.S. government and your local state offer tax breaks for people that use gas saving cars. Federal deductions for using gas saving cars can be as high as $2000. If you cant afford the growing number of hybrid cars out there, consider getting a regular car with good MPG (miles per gallon), like the Toyota Echo.

6. Turn off the AC. Running the cars air conditioning puts extra strain on your cars engine. This translates into you car eating up more gas per mile. Use less gas, save money. Depending on the car you drive, at highway speeds, the AC might put less drag on your car than if all the windows are open. Therefore, you might want to keep it cool on the highway.

7. Use the cheaper stuff. Most modern cars run just as well with the cheap gas as they do with the more expensive gas. In fact, engineers assume the car buyer is going to use the cheap gas, and so, they design the cars engine accordingly.

8. Dont fill the tank when prices are higher. Gas suppliers and gas station owners can charge high prices for gas because they know people will pay for it. The owners monitor how much gas people are putting into their cars each day. If they hike up the price a few cents and people are still filling up their tanks, this tells the owners that people are willing to pay the high price. Adding only a few gallons to your car when prices are high sends a message to the owners that people are not happy about the high prices.

9. Dont drive. Dont drive when you dont absolutely have to. Carpooling, walking, taking the bus, and riding a bike not only saves you gas, but these are better for the environment and may be better for your health. Do you really need to drive to the store when it is only a couple of blocks down the street?

10. Check the tire air pressures weekly. Buy an inexpensive manual air pump and an accurate tire gauge (not a pencil gauge as they are not accurate). Keep all tires inflated to the same pressure as recommended for your car but not for your tire. Go by the sticker on the doorframe and not the tire wall.

11. Drive at a consistent speed and keep the windows up tight. Keeping the windows closed reduces the drag on your car. Sticking to the speed limit also helps. So, will using less gear changes and revving the engine less. Avoid accelerating fast or braking suddenly. Use cruise control when you can.

12. Clean out any unnecessary items in your car. If you have heavy objects in your car that you dont need – remove them. If your car is lighter, it will use less fuel to get you to where youre going.

13. Avoid leaving your car idle. If you are going to be stopped for more than one minute, you will save gas by turning the car off and restarting when you are ready to go.

14. Buy on cold days. Buy fuel on cold days and if you can, drive on the hot days. When you buy on cold days, and pay for volume, you buy more mass of fuel for the same price. Never fill the tank completely or it will overflow when it becomes hotter.

For all people shop around for the best rate, there are few who have taken the time to sit down and add it all up. After all, why would you bother? The answer is that understanding just how interest rates work can help you see how important small differences in rates and payment amounts can be.

Interest Rates are Compound.

It is important to remember that what you owe is compounded – that means you pay interest on the interest you owe from the month before. That means that if you’re paying 2% per month in interest, you’re not paying 24% per year – you’re actually paying 26.82%. Charging interest monthly instead of yearly is a trick to make it feel like you are paying a very low price for your borrowing.

A Thought Experiment.

Here’s a question: would you rather have $1 million, or $10,000 in a savings account earning 20% per year in compound interest?

Well, let’s see how that $10,000 would grow. After 10 years: $61,917. 20 years: $383,375. 30 years: $2,373,763. 40 years: $91,004,381. 50 years: $563,475,143.

So after fifty years, you’d have over $500 million?! Well, not so fast. Of course, you have to take inflation into account – if we say inflation is 5%, then that money would have the buying power that $10,732,859 does today. Still, that’s not a bad return on your investment of $10,000, is it?

That’s the power of compound interest, and the way the credit card companies make their money (it’s also the way pensions work, and the reason the prices of things seem to rise massively as you get older). Be very, very afraid of compound interest. Or, of course, you could start saving, and be very glad of it

Compound Interest Adds Up.

Let’s work through an example on a more real kind of scale. Let’s say you have an average unpaid balance of $1,000 on a card at 15% APR.

You will owe $150 in interest for the first year you borrow. However, this amount is then added onto the balance, and interest is charged on that. The second year, you’d owe another $172.50, for a total of $1322.50. It goes on, with totals like this: $1,520.88, $1,749, $2,011.35.

After just five years at 15%, you’d owe double what you borrowed. And after 10 years, you’d owe four times what you borrowed! Bet you weren’t expecting that. If you let something like that carry on for long enough, you’ll end up paying back that credit card for years afterwards, paying back what you borrowed many times over and still not clearing the debt. Most people don’t work this out, and feel that the payments must simply be their fault for spending too much money to begin with.

One Percent of Difference.

One more thing. You might think there’s not that much difference between a card that charges 15% APR and one that charges 12% APR. Let’s see the difference the lower rate would make to that $1,000 borrowed for five years. Remember, after five years at 15%, you owed $2,011.35.

At 12%: $1120, $1254.40, $1404.93, $1573.52 $1762.34 after five years. So you’ve saved $249.01 from that 3% difference in APR – in other words, you’ve paid almost 25% less interest.

A mortgage that is properly suited to an individuals needs when buying a home can save the individual thousands while a mortgage that has not been properly tailored to their needs can place the house and the individuals financial future in jeopardy. And because there are so many types of mortgages and mortgage products available, its essential to have a basic understanding of mortgages before choosing which one is the right one.

First one needs to understand the different options available to them. For people who have good credit, a fixed rate mortgage is usually the best option. These types of mortgages offer the same interest rate for the entire life of the loan so the monthly payments will always be the same. One may also choose an adjustable rate mortgage (ARM) after a one, five, or ten year term. These mortgages have a fixed rate for a certain period and they then move to a variable rate after the one, five, or ten years. This means that the monthly payments could be more or less, depending on what the interest rate currently is. Rates dont generally have dramatic increases or reductions so there are usually no large surprises. However, over the course of a thirty-year loan, the interest rate could be considerably more or less by the end of the mortgage.

Individuals who have no or bad credit will have a higher interest rate on their mortgage. They may also have to look into the sub-prime lending market where the loans will have much higher interest rates and many different structures. When looking at the different loan options available, its important to make sure there is no prepayment penalty, which have a fee associated with paying off more of the mortgage in advance. These loans should be avoided as the goal is to pay off the debt.

A mortgage consists of two major components: the down payment and the interest rate. For people who are very active in investing in different things such as the stock market, and real estate, its best to pay as little down payment as possible. If the individual has a good credit rating, its best to try to get a 100% mortgage. The interest on these mortgages is generally higher but the cost of borrowing will be less than the returns the individuals will receive on their investment.

For individuals that are not active investors, the mortgage can be a great investment tool. Paying off a mortgage with a 6.5% to 7.5% interest rate makes more sense than savings accounts that offer a 2.5% interest rate.

Everything in the mortgage process is negotiable. The goal is to lower the down payment and the interest rate. The higher the down payment is, the lower the interest rate will be and the sooner one will be able to pay off the mortgage. Using a mortgage broker can help one find the best mortgage for the specific situation.

That is a good question and one that unfortunately there has not been an answer that everyone agrees upon. The term is a general description of the decreasing value of a unit of money over time. Therefore if you were to have 5 dollars now and went out and buried it and left it there for fifty years you would not have as much purchasing power with that 5 dollars that you had back when you buried it.

This is what scares lots of people into investing. You see in order to beat inflation and actually have something of their retirement savings when they need it most they will have to beat the rate of inflation with their money. One of the only ways to do this is to is to invest at a rate that beats the rate of inflation. This is often more than the rate that a typical savings account will get you even when you take into account the concept of compounding interest.

So what determines inflation? It can either be described as the increasing prices for goods or services as measured by the consumer price index. Or it can be viewed in terms of the overall increase in the supply of money. This is often created by the government printing more money in order to meet the demands of a larger and larger (more global) demand for US dollars (for example). The government prints and ships this out to the world in order to better meet the demand and stop prices from falling.

Who else, other than the government, has the power to change the rate of inflation? Well who else would it be other than the federal reserve. The federal reserve is a consortium of some of the top banks in our country who serve as a committee that decides where to set interest rates in order to enhance the economy and prevent recession. Lowering interest rates tends to promote buying and selling of goods and services on credit or loan. Increasing the interest rates on the other hand promotes the savings of dollars in the bank and is a sign of a stronger economy when this all happens.

So what is the moral of the story? Well invest to beat the effects of inflation for one thing. And secondly dont get bent out of shape by the increasing prices that are just a fact of life. No one can explain them and eventually they will probably be reset lower and that will be like the fall back of daylight savings terminology.

You can never have enough money to buy everything you want. It doesn’t matter if you make $150,000 a year or if you make $35,000 a year. You can still be just as broke. In fact, those with the higher incomes may be even more broke.

The simple truth is that it isn’t how much you make, it is how much you spend. If you make $100,000 and spend $120,000, you are just as broke as someone who makes $40,000, but spends $48,000.

With easily accessible credit it has become very easy to overspend and not even know it. Years ago, when you were out of money, you were out of money. But today, you can dig yourself a nice little debt.

I understand that sometimes events happen that are out of our control. People get ill, loose jobs and face other emergencies. But the majority of people with debt and money problems out there haven’t faced these emergencies. And if they do in the future, they will have very little to fall back on.

What you have to learn is how not to spend your money. Not where and when to spend, but how to not spend at all.

The more you make, the more you spend. Have you ever noticed that as soon as you get a raise, you have it spent? I know plenty of people that are planning on getting a raise, so they go ahead and buy the new car or bigger home.

And it goes beyond the large spending. There is a whole new attitude with a higher income. You think that you can afford the little things now. The grocery bill doubles. You splurge more often.

And it all adds up quickly.

Over the years, you get no further ahead. You find yourself struggling even more than you did at twenty. You make more, but you can’t see where all the money has gone.

The key to controling your spending is found in setting goals. When you have a concrete financial goal that you are working towards, you are better equipped to avoid temptation. You may be more willing to drive your older vehicle a few more years, if you know that the money saved will help you retire one year earlier. Not buying that sweater may seem like a little sacrifice next to realizing the goal of remodeling your kitchen.

When you are faced with the temptation to splurge, think about your goal. Find other ways to spend your time instead of shopping. If you never go in the store, you won’t spend the money.

Remember, each dollar you spend that you don’t have is costing you hundreds of dollars in the long run. And if you count the time it is taking off of building your retirement savings, you are actually losing thousands. Spending is the problem, not the money.

The most important thing you can do for your finances is to learn to budget. Take the time to make a budget work for you. A good budget will let you plan for the future, while keeping you aware of exactly how much money you have right now. It will help you see what you are spending your money on and what you could be spending it on.

One of the rules of life is that, sooner or later, everyone has to stop working and retire. For some, this is a golden opportunity to enjoy life and do things they never got the chance to do while they were busy with working and raising a family. For others, however, retirement can be a very scary prospect, with no money coming in and yet some of the biggest expenses still needing to be taken care of. Even though work stops, the truth is that life (and your bills) doesnt. Here are some ways to plan ahead and develop a secure source of income for when you retire.

The most important factor in planning out your retirement income is to plan ahead- the sooner you start to plan, the better. As soon as you reach that stage of life where you are receiving a secure income, you should begin to put money aside in order to draw off of when you retire. You can do this by diversifying your investments- small contributions to several areas will add up when you retire to provide you with a comfortable living- if you are very wise and frugal you may find that your retirement income is actually more than your regular working income was!

The best places to put this money are in areas where they will be able to accrue interest, especially of the compound variety. Some safe investments include mutual funds and saving bonds, in which an investor agrees to leave the money aside for a stated amount of time in order to earn the interest that will often be guaranteed. In some areas, it is also possible to invest in Registered Retirement Savings Plans (RRSPs) which will not only accrue interest until the time you retire, they are also usually tax deductible in the present.

You should also look for a job in which a regular contribution is made by both the company and by yourself to a pension plan. Ask your employer if it is possible to have some money deducted from each paycheck and deposited to a specific pension plan- many employers will meet the contributions made by the employee.

The most important thing when you are planning out your retirement income is to make sure that the money you invest for that purpose remains there. Many people lose their retirement nest egg in emergencies or even investing in opportunities that seem iron clad, but arent. When you make investments towards your retirement, do not touch them. Remember that this money will be all you have at that time in your life, and if you lose it you are going to be in for some hard times, with no chance at recuperation. Any risks as far as investments go should be undertaken with money that you budget for that purpose, and not with any of the money that you plan on setting aside for retirement purposes.

Prudence and long-term planning are the watchwords when you begin to develop your secure retirement income. Make a plan and stick to it, and your golden years will be the best time of your life.

Interest rates are a complex subject. In some cases you will want them to be high, in others you’ll want them to be as low as possible. But, what they are is not something that you or I can change. It is determined on many things especially on the way the economy is moving. So, how much you will pay for that car or the home you wanted and how much you will make on your savings accounts is determined by interest rates and factors that you can not control.

But, there are many ways in which you can do well with interest rates. One of the most important things that the average consumer can do to lower interest rates that will effect them is to simply shop around. There are many deals to be had when it comes to these rates. You should consider looking not only at your bank and those in your area but also (and especially) at the banks and lending institutions on the web. You can truly save money by shopping around.

It also helps considerably to get a low interest rate if you have good credit. While this is not something that you can instantly fix, it is something worth working for. Improving credit by lowering debt and making payments on time helps to increase your credit worthiness. This is very important when it comes to banks and lending institutions in determining whether or not you are a good risk to take.

But, how are interest rates set? For the most part, the determination of what the rates are has a lot to do with what the Federal Reserve says it should be. This determination is based on many things but one of the largest is the economy. Should the economy be doing well, interest rates tend to go up to help increase profitability and allow your savings dollar to do more. Likewise, when the economy is doing poorly, it is necessary for the interest rates to fall slightly to help encourage people to open new businesses and purchase more homes. This will then strengthen the economy in the long run.

Being smart about interest rates is essential to living a profitable life.

How To Avoid Bankruptcy & Get Out Of Debt Faster Using Debt Negotiation!

Has credit card debt got you thinking about bankruptcy?

Youre not the only one these days. Even with the new bankruptcy laws, credit card debt continues to climb. Unfortunately for most of us, our paychecks dont climb as quickly.

If youre on the verge of bankruptcy, you may have another alternative.

Debt negotiation is a process where you negotiate with your creditors to pay off your debts at a reduced amount for example, if you owe $12,000, you can negotiation a payoff of $5,000. The benefit for the creditor is that they get more money than they may have through bankruptcy, and they get the money sooner. The benefit for you is obvious you get out of debt faster, and save lots of money in interest.

Where do you get the money to pay off the debt?

Take the money you would have normally used to pay your credit card bills, put it aside, and when you accumulate enough to pay off the debt, send in the reduced amount you agreed to.

If this sounds confusing, thats ok. Its really not.

There are many professional companies that will do all the work for you, and charge you a percentage of the savings.

I can speak from experience (I built up a lot of debt trying to start a sporting goods business, which didnt quite work out) that even with the fees, this is a good deal plus you save a lot money by not having to pay the high interest rates on your credit card bills.

Sure, it is a more aggressive approach to getting out of debt than making minimum payments, using credit counseling, getting a debt consolidation loan, or borrowing from a friend or relative. But in the end, youll get out of debt faster

And avoid bankruptcy!

If youve never heard of debt negotiation (also called debt settlement), thats ok too, not many people have. I didnt until I began to seriously consider bankruptcy.

One reason many people are hesitant to consider debt negotiation is that it goes on your credit report. Sorry to tell you, but having lots of debt (even if you pay on time), making payments late, even credit counseling all go on your credit report and can negatively effect your credit. And (of course) bankruptcy is a big negative!

In my case, getting out of debt, removing all the financial stress, and being able to live a normal life were well worth it. With so much debt, having good credit was meaningless anyway.

Plus, I was able to get all but one of the negative items off my credit report (thats a topic for another discussion), and my credit is now back to normal. In fact, I now get more credit card offers than I can handle and fortunately, I can now throw them all in the trash!

When money is tight, and debt is high, there arent many simple answers.

But if you are already considering bankruptcy, then debt negotiation might be the right alternative to help you get out of debt faster!