Monthly Archives: January 2017

Archive of posts published in the specified Month

Jan
20

Whole Life Insurance – Tips For Shopping For Coverage

There are numerous types of life coverage policies to choose from, but one of the most popular types of coverage is whole life insurance. Michigan carriers will, of course, help potential policyholders purchase coverage, but there are a few steps that they need to take themselves before it's time to buy.

First, make sure you want whole coverage.

Even though it offers perks that term coverage does not, not everyone wants whole life coverage. It tends to be on the pricier side, and the "perk" of a forced savings investment component is not always desirable.

Before they start taking steps to purchase whole life insurance, Michigan residents must first decide if it's the coverage they really want.

Then, do some research.

Once they've decided they want whole life insurance, Michigan residents need to do a bit of research. This may include talking to family members, friends, and co-workers about their experiences with various insurance agencies, as well as checking any reports other policyholders have filed with the Better Business Bureau.

The goal is to find out what actual customers have to say about their experiences. Remember, sometimes the best form of advertising is word of mouth, and people are not likely to recommend a company they've had bad experiences with.

Finally, contact insurance agents and make comparisons.

Now that they've talked with others and conducted some preliminary research about the various carriers of whole life insurance, Michigan residents are ready to choose a few companies and compare those companies' premiums. Shopping for life protection is much like shopping for any other coverage, after all; not every carrier is going to provide the same coverage for the same price. …

Jan
19

The Target Capital Structure

Firms can choose whatever mix of debt and equity they desire to finance their assets, subject to the willingness of investors to provide such funds. And, as we shall see, there exist many different mixes of debt and equity, or capital structures – in some firms, such as Chrysler Corporation, debt accounts for more than 70 percent of the financing, while other firms, such as Microsoft, have little or no debt.

In the next few sections, we discuss factors that affect a firm’s capital structure, and we conclude a firm should attempt to determine what its optimal, or best, mix of financing should be. But, you will find that determining the exact optimal capital structure is not a science, so after analyzing a number of factors, a firm establishes a target capital structure it believes is optimal, which is then used as a guide for raising funds in the future. This target might change over time as conditions vary, but at any given moment the firm’s management has a specific capital structure in mind, and individual financing decisions should be consistent with this target. If the actual proportion of debt is below the target level, new funds will probably be raised by issuing debt, whereas if the proportion of debt is above the target, stock will probably be sold to bring the firm back in line with the target debt/assets ratio.

Capital structure policy involves a trade-off between risk and return. Using more debt raises the riskiness of the firm’s earnings stream, but a higher propor- tion of debt generally leads to a higher expected rate of return; and, we know that the higher risk associated with greater debt tends to lower the stock’s price. At the same time, however, the higher expected rate of return makes the stock more attractive to investors, which, in turn, ultimately increases the stock’s price. Therefore, the optimal capital structure is the one that strikes a balance between risk and return to achieve our ultimate goal of maximizing the price of the stock.

Four primary factors influence capital structure decisions:

1. The first is the firm’s business risk, or the riskiness that would be inherent in the firm’s operations if it used no debt. The greater the firm’s business risk, the lower the amount of debt that is optimal.

2. The second key factor is the firm’s tax position. A major reason for using debt is that interest is tax deductible, which lowers the effective cost of debt. However, if much of a firm’s income is already sheltered from taxes by accelerated depreciation or tax loss carryforwards, its tax rate will be low, and debt will not be as advantageous as it would be to a firm with a higher effective tax rate.

3. The third important consideration is financial flexibility, or the ability to raise capital on reasonable terms under adverse conditions. Corporate treasurers know that a steady supply of capital is necessary for stable operations, which, in turn, are vital for long-run …

Jan
18

Accounting Finance – The Heart of Any Successful Business

At the core of any successful business is a well organized management. Financial accounting is a very important tool for business. Aside from knowing strategies such as bookkeeping, marketing, advertising and production, a good and stable business must also have a competent system for accounting finance.

Whether you like it or not, accounting finance is one thing you cannot dispense with in the world of business. It is a very important tool in determining where and how exactly your money is being spent. Also, it is most important in terms of taxes and other pecuniary obligations.

Good Accounting Means Good Business

Accounting ensures you how much you have, how much you owe, and helpful in assessing the value of your business. Are you generating any profit or operating at a lost? Accounting records will answer your questions. Accounting serves as the proper recording tool of the financial status of any business. Fiscal dealings are best kept right on track with an effective accounting department.

A good accounting system within one’s business is a great help in making business decisions. This also shows how credible you are with other companies. Accounting does not only place you in a very knowledgeable stance, but it gives you that confidence by being armed with the facts and figures revolving around your business. Knowledge is power.

Professional Accountants

It is to your advantage if you are an accountant by profession. But if not, you can still do your own accounting if you are operating a small-scale business. However, if you have a big company it is advisable to hire a professional accountant especially if you do not have the time and the skill for it. You must realize that there are various strategies in keeping various kinds of accounts in a business.

It is also best to check the accounting firm’s competence, credibility and confidentiality issues. It is very important that in any business, you would be able to trust your accountant with sensitive information, including profits and sources of income your business is accumulating.

Accounting standards you should know

To the untrained and unsuspecting eye, accounting principles might seem hard, intimidating and complicated, but it is in reality very simple if you get past all those figures. All you have to know in accounting are these: Accounts are always divided into three types, namely assets, liabilities and equity. Each account is unique and simple yet forms part of the very foundation your business is operating on.

“T” accounts can be managed by drawing a T like figure with a left and right section divided by a vertical line. On the left side, you can place all your debits or the so called assets. On the other side, you can list down all your liabilities or what we call credits.

The general rule is that for every liability, there must also be a corresponding asset so that a balance will be achieved. If the credit is more than your debit then perhaps you are already …

Jan
18

Legal Malpractice Insurance – Quick Overview

With the customer's exposure and awareness towards legal malpractice, many legal professionals have to face lawsuits frequently. If we look at the statistics, every four to five law professional out of hundred have to face a lawsuit in a year. For law firms, which typically employ more than 20 lawyers, are likely to face at least one lawsuit every year. Well, the figure is pretty impressive to make one realize that one must have a Legal Malpractice Insurance for good risk coverage in this profession. Let us have a quick look at the various aspects of it.

How does this insurance protect a legal practitioner?

When a legal practitioner defends himself against a lawsuit, he not only loses money but also valuable time. The average figure may vary from 250 to 300 hours per case that can be billed. This insurance protects a lawyer for each lawsuit he has to face.

Is it like other type of insurance?

The difference between regular insurance and this insurance is that a regular insurance gives coverage in case a certain event like hospitalization or accident occurs while this insurance covers a lawyer only for a lawsuit against him within a policy period. So, that means this insurance company may overlook the case history except for policy duration.

What is the cost of buying a policy?

The cost of a policy is directly influenced by the degree of risk involved in your profession. For example, if you are into banking or real estate, the cost may be quite higher than a regular cost of a policy. But, in my view, you should focus more on the fact that policy covers your areas of operations.

How do I get one policy?

There are many insurance players available in the market that offers such insurance. Ideally, there are two ways to approach these companies. First, you can find a broker; second, every company has its Managing General Agent (MGA). You can search for an MGA online as well. …

Jan
17

Authority Vs Power

Successful leaders are individuals with high levels of personal power. Understanding the difference between personal power and granted authority is a significant distinction. Many people have the tendency to use the words authority and power interchangeably; however, these terms refer to two very different aspects of leadership.

Authority is the right granted from a person or organization to another to represent or to act in a specified way. For example, a CEO of a company is given the authority by the Board of Directors to run the company. In turn, the CEO places managers in positions of authority over the various divisions, business units, or departments of the organization.

Power is the capacity or ability to direct or influence the behavior of others. Former United States President, Dwight D. Eisenhower, captured the essence of this definition when he said, “Leadership is the art of getting someone else to do something you want done because he wants to do it.” Everyone possesses the potential to be powerful. Power is a personal talent that you can develop and use to achieve worthwhile goals. It does not depend upon title, rank, position, or authority. It’s simply the ability to motivate others to take specific actions.

Authority is granted but always has defined limits. Power is earned and can be limitless. Authority is derived through the position. Power is derived from an individual’s personal influence, which increases effectiveness. Two leaders in exactly the same position of authority can and will have different amounts of power. A person can possess a great deal of power and absolutely no authority. Conversely, someone can have authority and absolutely no power. Leaders who have not earned sufficient power sometimes make the mistake of trying to influence others by overexerting their authority. But excessive use of authority can cause employees to rebel in much the same way that children rebel against restrictive parents.

Effective leaders recognize authority as a valuable and necessary tool when used judiciously, and they invoke their authority extremely sparingly. Instead, they use the power they have earned to create a climate of trust, cooperation, and accomplishment in which people are positively motivated to pursue their own goals and the goals of the organization. In fact, the amount of responsibility you take on is directly linked to the amount of power and influence you possess. One way to further increase your personal power is to seek additional responsibility.

To be a successful leader, you must always be yourself. Be intentional about shaping your life according to your values and priorities. Trust yourself, believe in yourself, and be honest with yourself. Others will then trust, believe, and be honest with you. It is this foundation which enhances personal power. Excellent team leaders establish healthy open relationships with others. They foster mutual commitment in the pursuit of shared goals. Effective leadership is founded on cooperation never coercion.…

Jan
16

If Your Girlfriend Left You Over Money Problems, You Need to Take Action

What is the number one reason most relationships break up? Terrible sex? Too much nagging? Incompatibility? Another lover? You just drifted apart? It’s none of these. By far, the biggest reason that relationships fail can be summed up in one word: Money.

If you have money problems, then you have big problems. Nothing creates tension and hardships like persistent hassles with bills, paying rent, making a car payment – or maybe even not being able to afford a car at all! If your girlfriend left you over money problems, then you have one of the most difficult situations to remedy. Getting an ex-girlfriend to come back to you is hard enough the way it is. It’s even harder when you are hard up for cash.

But before we get all depressed about this situation, let’s get some perspective. Many guys think that if only they were rich, or at least well off, their girlfriend would have never left them. It’s not as simple as that. If you don’t believe it, just tune into what is happening with the rich and famous around the world, be it movie stars or royalty. It quickly becomes apparent that people with a lot of money have no better luck – an obviously sometimes a lot worse luck – with staying within a relationship. How many movie stars can you think of in the next five minutes who have two, three or maybe four divorces under their belts?

The fact is, having a lot of money is no guarantee of relationship success. If you are feeling sorry for yourself because your girlfriend left you over financial problems, then it’s time to start rethinking the whole situation. You could be filthy rich, and she might have left anyway.

What does this tell you about money? Clearly, it makes no difference how much you have or how little you have. If the fundamentals of your relationship are strong, even a terrible money situation should not be an excuse for your girlfriend to leave. Money is only a convenient excuse, an outward factor.

Okay, but let’s also recognize that while money may not be the ultimate reason she left you, it certainly was a contributing factor. That’s because constant stress over money creates an overall climate of tension and struggle. It is very difficult for any relationship to thrive in an environment of constant struggle.

Incredibly, many guys do exactly the opposite thing they should do when they have money problem, and their partner leaves – they plunge themselves into even more debt! That’s right!

There is something about relationship problems that can drive many men to lose all common sense. For example, they think that if they only had a nicer car, maybe their girlfriend would come back to them. So they pull out all the stops, marshal all of their resources, and take out a huge loan to get some new wheels. So now they have a shiny new car, and even more debt and payments …

Jan
15

Affordable Overseas Car Insurance Information

Looking for an affordable rate of travelers car insurance can be difficult unless you find the right quote. Many insurance companies will charge a higher premium if you wish to be covered while abroad or driving overseas for break and collision cover. You can avoid this by finding the best quote available to you online, which is often cheaper than the off-line or telephone quotes you may find.

To make the most savings, the most effective thing to do is to compare several quotes from several different providers. Be warned though, some comparison sites are front ends for established insurance companies which means that you may not really be obtaining the best deals as the comparison site will certainly be promoting their sponsor. The most affordable rate of foreign car insurance will be available to those who are experienced drivers and are driving moderate rather than overly powerful cars. You can also make savings by arranging your breakdown or collision cover well in advance of your trip or vacation to abroad rather than at the last minute. You will find that the premium charged by the insurance company increases expecially if the cover needs to be provided in an emergency.

Foreign breakdown cover and motorcar insurance becomes more affordable the more you plan for it. Last minute planning or not comparing enough quotes could leave you with a large premium to pay rather than an inexpensive charge that you can easily include in your budget, making your trip abroad a worry free and enjoyable experience. …

Jan
13

Rich Dad Mentality Vs Poor Dad Mentality

This is the second in a series of articles based on the groundbreaking best-seller “Rich Dad, Poor Dad” written by Robert Kiyosaki. As stated in the first article, the book compares the mindset of Kiyosaki’s father-who held several degrees and an important position in the government, but struggled financially–, with the mindset of his best friend’s father-who never even finished high school but left his son a financial empire. In his book, Kiyosaki explains that the mindset held by each of these two men, his “poor dad” and his “rich dad”, was largely responsible for each man’s financial destiny.

The following quote by T. Harv Eker, author of “Secrets of the Millionaire Mind”, refers to the concept of a rich person’s mindset: “Rich people have a way of thinking that is different from poor and middle class people. They think differently about money, wealth, themselves, other people, and life.” Kiyosaki expounds this same principle in “Rich Dad, Poor Dad”.

Below you will find seven mayor differences between the “poor dad” and the “rich dad” mentality:

1. The “poor dad” mentality states that your wealth depends on your family of origin. That is, to be rich you have to be born rich. “Rich dad” espoused the view that being rich or poor is something that you learn. You can learn to think in ways that will support you, and you can raise your financial IQ by reading books on finance, talking to financially successful people, and attending seminars and lectures. When you have the right belief system and the necessary knowledge on how to create, build, and protect wealth, you will become rich even if you were not born into a wealthy family.

2. “Rich dad” taught Kiyosaki that he should get a job to learn and to acquire the necessary skills so that he could go on to start his own business. “Poor dad” saw his job as his source of income for life. While “rich dad” taught Kiyosaki to strive to become financially independent, “poor dad” taught him to depend on his employer for his financial well being.

3. When faced with an opportunity, “rich dad” would ask himself: “How can I afford this?” This forced his mind to think and to come up with creative solutions to be able to take advantage of the opportunity that had presented itself. Instead, when presented with an opportunity, “poor dad” would dismiss it by saying: “It’s too bad I can’t afford this.”

4. While “poor dad” stressed scholastic education, “rich dad” always stressed financial education.

5. For “rich dad” the main cause of poverty or financial struggle was self-inflicted fear and ignorance. “Poor dad” blamed the economy and the job market. That is, “rich dad” always took responsibility for himself and felt that he created his circumstances, while “poor dad” often felt like a victim of the outside world.

6. As for risk taking, “rich dad” taught Kiyosaki to learn to manage risk. “Poor dad” taught him that when it came …

Jan
13

The Best Way to Make Money From a Blog

While it's not garnering quite as much interest as a few years ago, blogging is still very hot. Millions of people already have blogs, and thousands starts them every day. There is a buzz about the money making potential of blogs, too, with countless guides, articles and e-books on how best to do this.

Most of these center around these basic methods: serving ads such as AdSense, Performancing Ads, and Widget Bucks; putting affiliate links up; and writing reviews.

While these are all tried and true methods, all except the last need a lot of traffic to bring in some cash. AdSense in particular will only be profitable if the blogger is drawing in thousands of hits per day.

So now, with so many people starting blogs and using these techniques in the hope of earning an income, the market is becoming increasingly scheduled. There are many people who work hard for months and end up with nothing to show for it. Understandably they are bitterly disappointed. Some subsequently give up blogging entirely.

That's unfortunate. Just because you're not making money directly off your blog it does not mean you've failed. In my opinion the best approach is to look way ahead, and stop seeing your blog as an end in itself. Instead, think of it as an adjunct to something else; a branding tool and a profile raiser.

You've got all that material up there, remember. You can rejig it somewhat and turn it into a book through one of the blog-to-book sites such as Lulu, and start promoting that. (And even if it does not sell one copy, you've still got a book to your name!)

You might not want to do this. But you can still take your blog posts, rewrite them substantively and turn them into articles. If you post these to article directories you can lift your profile even higher.

Your blog posts and articles will keep appearing occasionally in various searches and you'll start to get known for your knowledge and skills. You'll gradually develop a kind of niche-related internet fame. Subsequently, every now and then people will start Googling your name directly. They'll see your blog and article directory profile, listing all your articles. People will be impressed at all the knowledge you've accumulated. Needless to say this will confer fundamental credibility.

This is extremely valuable for anyone selling any kind of product or service. And even if you are not selling anything yet, you may end up doing so when you realize your knowledge is so respected and in demand.

So, do not give up that blog just yet. It does not matter what you do, just keep posting about what you love and know about. It will pay off now, quite probably in ways you have not even thought of yet! …

Jan
12

Causes and Effects of Deficit Financing

As we know, the major sources of public revenue are taxes, fees, prices, special assessments, rates, gifts etc., etc. If during a given period of time, the government expenditure exceeds government revenue and the deficit is met by borrowing, it is called deficit financing or income creating finance. In order to have a significant expansion effects therefore, a program of public investment should be financed by borrowing rather than by taxation. This kind of borrowing or loan expenditure is popularly called deficit financing.

Deficit financing is said to have been practiced if state adopts any one or all the methods mentioned below:

(a) The government draws upon the cash balances of the past.

(b) The government borrows from the central bank against government securities.

(c) The government creates money by printing of paper currency and thus meets the expenditure over receipts.

(d) The government borrows externally.

Deficit financing was considered to be a very dangerous weapon by the classical economists. The modern economists are, however, leaning towards it and recommend it to be used for accelerating economic development and achieving high level employment in the country.

The problem to be solved here is:

(i) Whether income creating finance should be adopted for increasing total effective demand.

(ii) If deficit financing is desirable for ensuring high level of employment, then to what extent should it be carried out.

(iii) What are its good and bad effects?

Deficit financing is being practiced by advanced as well as underdeveloped countries. The advanced countries use it as an instrument of increasing effective demand whereas the underdeveloped countries employ it for increasing the rate of capital formation.

The scope of deficit financing for accelerating economic growth in backward economy is very bright as they are caught in a vicious circle of underdevelopment. They use funds for investment when the resources of the country are not adequate to initiate the processes of take off. So arises the need for deficit financing.

The underdeveloped countries are confronted with the following problems:

(i) The rate of growth of population is faster than the rate of economic development.

(ii) The state revenue received through taxes, fees, etc., is not sufficient to provide full employment to the labor force.

(iii) The per capita income is extremely low and so is the capacity to save.

(iv) Foreign loans for development purposes are not without strings and are also not available in desired quantity.

(v) There is a dearth of stock of capital in the country.

(vi) People lack initiative and entrepreneurial ability.

(vii) People are mostly extravagant and there is less voluntary savings.

(viii) A greater portion of the population lives in villages and are contended with their lot.

(ix) The government cannot incur the displeasure of the people by enhancing the tax rates beyond a certain limit. It cannot also impose additional taxes for the same reason.

(x) Thus there is too much evasion of taxes.

Under the conditions stated above, the reader can easily visualize the state of affairs …