08 Mar

Should You Move To Actively Managed Assets?

It’s very likely that the Federal Reserve will start with raising interest rates. This will cause the interest rates to rise very quickly, although I can’t say when will this happen.

It’s quite possible that the Fed will take action in the first half of 2015. But in case stock markets become unstable or if the economy doesn’t show signs of improvement, the Fed might not act at all.

The Fed keeps printing money because it expects this will speed up the economy and reduce the unemployment rate.

If you remember, the Fed bought treasury notes and mortgage-backed securities in November 2008. Bank debt was $2.1 trillion by the end of June 2010. $30 billion was printed, each and every month.

2011 was the year when the Fed started buying Treasury securities in amount of $600 billion. September 2012 saw the Fed printing $40 billion per month. This was increase just 3 months later – to $85 billion per month. The Fed’s balance sheet increase to $4.5 trillion.

All this money printing should generate inflation, but that didn’t happen. Since there’s so much money being printed, each and every month, we are bound to experience the inflation. Currently, it’s the 0% cap on federal funds rate that keeps the inflation at bay. But when this cap disappears and when interest rates start to rise, increase in inflation will occur.

As inflation rises, interest rates and capitalization rates will rise. Real assets will decrease in valuations, which will have a negative impact on real estate assets with single tenant leases. These assets will be sold at a higher rate and they will lose value. Therefore, the investors will take a hit as well.

This is why investors should shift their investments to actively managed assets that have inflation protected leases. Also, they should look for real estate assets that can be redeveloped, remarketed and repositioned.

At least 77% of the nontraded REITs have triple net leases with no rent increases. In case REITs have to dispose of these assets within a certain timeframe, they will take a hit.

22 Feb

How to Ramp Up Cash Flow Without Taking a Bank Loan

Growing your business is a challenge, and many entrepreneurs have faced cash flow crunches. In a word, it takes money to make money. Growing businesses need to pay employees, stay current on vendor invoices, and cover day to day expenses from business locations to inventory. But if you’re finding yourself running short on funds, there are several creative approaches you can take to maximizing cash flow. Here is a closer look at how to improve capital without using a bank.

Evaluate your inventory: Are you sitting on inventory that’s not selling? Then it’s time to take a hard look at your assets and get creative about ways to get them moving. For example, could you offer a discount or other incentive to get merchandise selling? Is it time to spearhead an advertising campaign? Could you offload the inventory at a loss, which you can take on your taxes, to a partner or competitor to generate short-term revenue? If you’ve got product to sell, the best way to improve your cash flow is to be creative about how you convert that into cash.

Look at what you’re spending: Do you have current levels of debt that are being charged at a high interest rate? Paying those off faster or finding a way to refinance them at a lower interest rate could free up hundreds in interest payments each month. Another important question is whether you have fixed expenses that could be reduced or eliminated entirely. For example, do you need to pay the expensive month to month rent on a fancy office space when today’s collaborative tools enable remote productivity? Finally, do you need to slash costs by eliminating some positions and taking on more yourself or consolidating positions?

Go after accounts receivable: Do you have customers or clients that are slow to pay? If so, you’re basically giving them a loan and floating their businesses. Look at your terms. If your contracts are currently net sixty or net ninety, try reducing your terms to net thirty or paid upon demand. The more you can shorten the time between a sale and a collection, the better your cash flow will be. If you have delinquent payments from customers, make collecting them a priority. Personally call each overdue client and follow up on payments. Consider using a collections agency to pursue truly overdue bills.

Look into factoring: With accounts receivable factoring, you essentially take a portion of the invoices that are due to your business and sell them to a third party. The third party either advances you a portion of the cash or charges a processing fee. Principally, that lets you access cash ahead of your net terms in order to keep things operating smoothly or enables you to invest in growth. Since factoring isn’t a loan, users avoid the detailed credit inquiries and long approval times associated with bank financing.

Obtaining business financing can be a challenge. But there are a number of ways, from improving your internal sales and collections processes to taking advantage of accounts receivable factoring, to make the most of your cash flow without dealing with a bank.

22 May

What is the ‘Brexit’?

Brexit

On June 23, the United Kingdom (U.K.) will hold a dramatic referendum to determine whether it should withdraw from the European Union (EU). Essentially, the British electorate will be responding to the following question: “Should the U.K. remain a member of the EU-or leave it?” Read More

08 May

Bookkeeping Courses in London

Bookkeeping Courses in London

London has a huge Banking and Finance industry and this means that it is a City with lots of jobs for Bookkeepers, Accountants and Finance professionals. However, many people are failing to get into these types of jobs because they lack the skills or relevant qualifications needed to be getting a Job in Finance. Read More

21 Feb

Advantages of Outsourcing Your Finance Department

If you are curious to know how the small business owners do the accounting related activates, you will be amazed to know that most of the small business owners and the owners of new start ups so it by themselves. This is a good idea because they have limited costs and they can manage the finance of their business very easily. Next is the stage of making the business reports. At the start it is easy to maintain the reports, but as the business grows the owner has to spend more time on other activities like marketing and operations. Read More

14 Feb

Tips to Meet the Financial Needs of Your Business

There are a lot of different things that should be considered in the early stages of a startup, but the most important thing that should be calculated before even starting your startup is that how much finance you will need to launch and run your business. If you don’t calculate it before anything else, you might get short on finance right after you launch it. If you have calculated the right amount of finance for your business, the next step is how to run your business. Read More

30 Oct

Payment Methods through Ages

Trade was invented together with human ability to communicate and it taken place through most parts of human history. During this unbelievably long period of time, payment method, that is the most essential element of trade, changed significantly. From this point of view it is hard to compare bartering and obsidian stones with PayPal accounts and finger print payments. The purpose of this article is to summarize whole payment method history and present it in the way you can easily understand. Read More

21 Jun

30s – Time for Big Financial Decisions

money rules

Every age comes with certain responsibilities, and 30s are definitely the time for big financial decisions that will shape the future of each individual. In 30s most people already found a dream job and some people even have a family to care about. It is very important to deal with decision making in the right way, since even the smallest mistakes can easily influence the financial future of individuals and their families. In this article we tried to list some of the biggest financial decisions a person can make during this age.

money rules

Start Choosing Employers by Employer Match Programs They Offer

Although most people already have jobs when they are thirty, this is the right time to start thinking about how much companies pay for worker’s 401(k) plans. During twenties people mostly don’t care about these things, but search for the job that gives them competitive salaries and enough free time. Importance of 401(k) plans is enormous and it is one of the most important parameters that decide how much retirement money is each professional going to save for the years to come. Company match programs are not required by law, so there are companies that offer no money at all. On the other hand there are very generous companies that add money to worker’s retirement funds. Most common practice for the companies is to pay “100% of the first 6%”.

Examining Insurance Needs

Most people do see the need for buying insurance before they start a family. Since thirties became the next twenties, the decade when most people start settling in with the family in a newly bought home, there is need to reassess their insurance needs. Life insurance policies will insure financial security of the family if something happens to the person paying it and it can also be used as savings account. Accept life insurance there are also some other policies that may interest young couples with kids. Insurance policies now offer many different policies that cover short and long-term disabilities and illnesses that prevent people from earning income. These can be taken as group policies together with colleagues or can be bought from individual brokers. Each new insurance policy should be well examined and discussed with other family members.

personal finance

Choosing the Right Mortgage

30s are the age when most of the family oriented people choose good mortgage that will provide them with less interest, more equity and a roof over their head. Choosing between different mortgages can be a little bit tricky. Fixed rates are good if family plans to stay in the house for more than 10 years. If the mobility is what they need they may choose the more affordable mortgages with adjustable interest rates. These are good if they are planning to leave the house in less than seven years from the moment they start paying mortgage. Choosing bi-weekly mortgage plans can also save a lot of money, since these plans provide one additional monthly payment delivered annually. This way, debtors spend less money on interests and pay off their mortgages more quickly. Benefits of these mortgage plans can be easily counted with bi-weekly mortgage calculator that can be found online.

Start Making Kid’s College Fond

When it comes to collecting money for kid’s college expenses it is important to start collecting as soon as possible, even when kids are still at very young age. One of the most common ways to start saving money for kid’s higher education is by choosing 529 plan. This plan can be prepaid or saving one. Prepaid one allows parents to purchase tuition fees at today’s rates that can be used in the future when their kids reach collage age. The only way how money invested in prepaid plan can grow is by tuition inflation, while with savings plan growth of the investment depends on market performance of the mutual fund in which parents invest their kid’s college funds.