E-Journals

It never ceases to amaze me that in the world of banking two different worlds can seemingly co-exist side by side, each oblivious of the other. There are many examples of this, such as “sound risk management” versus “business imperatives”. This particular issue lies, in my view, at the heart of the current financial crisis.

However, we are probably too preoccupied with financial crisis issues at the moment, so I don’t want to dwell on this here. I would rather muse on another paradoxical situation which I often, as a consultant, find so very frustrating.  This is the “world of technology” versus the “world of business”. (more…)

As the recession trudges on, consumers continue to face the consequences of years of easy credit and overspending: Defaults on credit card debt, foreclosures, short sales, and bankruptcies have all been on the rise for months and continue to head toward record-breaking highs.

Those consumers hoping to avoid the full defaults of foreclosure and bankruptcy are increasingly hoping to find at least partial debt relief in limited debt forgiveness, lobbying creditors for principal write-downs on mortgage debt through home loan modifications, for partial write-offs of credit card and medical debt through debt settlement negotiations, and for lower interest rates and fee waivers through credit counseling and debt consolidation programs.

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Dreaming of the day when you can start looking at your bank account balance without worrying about the recession’s effects? Want to be able to apply for loans without the fear of being rejected yet again? It’s safe to say that many people are looking forward to when the economy starts looking up again; however, it’s important to remember a few lessons that the recession has taught us about our personal finances. Just like how the Great Depression shaped a generation of smart savers and savvy spenders, let’s hope that people today learn:

Saving Shouldn’t Be Avoided. Over the past few decades, frugality became a laughable characteristic. Between the excessiveness of the 80s and the boom of the 90s, it seemed as though lavish spending was the latest world sport – and one that many people embraced wholeheartedly. However, now that the recession has taught us the importance of having an emergency fund tucked away, let’s not throw this lesson out the window once the economy eventually recovers.

After all, spending beyond your means isn’t a behavior that you want to start up again – especially as the recession has shown how quickly those means can be taken away in an instant.

Lenders Are In It For The Money. Once upon a time, lenders were a consumer’s best friend. Between instant approval for sky-high credit card limits and 125% mortgage loans, it’s no wonder that people are still shocked at the appalling behavior of lenders during this recession. However, let this be a lesson to us all: no matter how friendly lenders may seem to be, they’re still in business to make money. It can be easy to get approved for a credit card that you won’t be able to pay back, but don’t count on your lender to let you know this important fact. (more…)

Companies and business houses do not always manage to keep track of all their assets, even though the total worth of the assets may run into millions. This also leads to financial losses for the company.

It is possible to get a list of the company’s assets and their worth, but traditional methods of keeping these records were unable to keep additional information like the location of the asset, its cost, maintenance and use. This problem, however, can now be resolved by using asset tracking solutions, which will provide anyone in the company with information about its location, maintenance costs, its depreciation value and the date since it has been with the company.

These asset tracking solutions come in hand held form or can be computer based, and can keep track of all types of assets, fixed and movable, by allotting them a barcode or a distinctive number. Barcodes allotted to assets prove to be particularly beneficial for auditing purposes, as they become easily identifiable. (more…)

If you turn on your local financial news, you’re bound to hear the phrase Dow Jones Industrial Average at some point. Most people assume that this just means the stock market, or that it refers to the New York Stock Exchange. But what is the Dow, and what exactly does it measure?

The Dow is a market average. It is used by investors to figure out how certain companies that are being traded are doing. The Dow isn’t the only market average out there, there is the S&P 500 and The Russel 2000, as well.

The Dow takes into account 30 industrial stocks of well-known companies. The 30 companies are likely ones you’ve heard of, like Goodyear, Exxon, IBM or General Motors. The Dow calculates the rises and falls of these 30 stocks and presents a picture of how the overall market and the overall economy are doing. While it may sound complicated, it really isn’t. The Dow is simply a list of 30 companies that have their estimated values averaged together with a particular formula. (more…)

One of the biggest sources of lost money is unclaimed refunds. While most people are able to keep track of the payments they make, over the years they forget about refunds due to them. While government agencies and companies do make efforts to contact those who have refunds due to them, these efforts are often unsuccessful and the money just lies there until it is classified as above.

The IRS is sitting on a huge amount of unclaimed investments, running into billons of dollars. In 2004 over 1.3 million people did not file their tax returns and, as per the IRS, most of them were due refunds totaling $1.2 billion for that year alone. Excess payments made to state governments or agencies are another huge amount of unclaimed money.

Another common repository of unclaimed refunds are utilities. When people move they often forget to get back the deposit they had paid. This money also lies with the utilities, which are usually unable to contact the depositor since he has moved. (more…)

Just as human beings who are put on life support machine (oxygen) could live temporary, businesses that rely on overdraft, loans, government bailouts, need a rethink. Have you heard about gearing and leverage? Simply defined as the receipts and payments of the operations of a business, cashflow statement is meant to assist or provide an ‘invisible hand’ to the daily operations of a business entity existing and new businesses alike. This is of special importance to small businesses that are unable to raise funds at short notice. A business can make huge profit and yet might not be liquid; it might be starved of cash. Thus, profitability does not necessarily mean liquidity. (more…)

The question of where to invest your money is mind-bogging. With the recent downfall of some established financial institutions, you’re just too cautious of investing schemes. However, all of us want to prepare for the future and one of the easiest ways of making fast money is through handful of investments. If you are quite determined in making investment at this time, I suggest for bond mutual funds. You’ve probably heard of all sorts of negative feedback on the financial world. The economic downturn, higher inflation and the stock market falling can make a big impact on your investment decision.

Putting your money in banks will only give you small returns. Interest rates in savings accounts are too low and income will be lower for you. Meanwhile, trading in the stock market is too risky. That’s why it’s safer to invest in mutual funds. This kind of investment is good especially to first-time investors. If you are just a newbie in the world of investments, better start with safe investments. Mutual funds are exactly what you’ve been looking for, particularly bond mutual funds. Actually, there are different types of mutual funds available in the market. You just have to choose one which can protect you from losses and in the end realize a gain.

In times of unstable financial condition, we all want regular income. If you have lots of money, it’s OK to gamble in order to make huge income. But when you’re intention in making an investment is to generate a steady source of income, better look for a secured one. The best thing about bond mutual funds is the regular income derived from interest payment. Assurance of an income is positive and the said funds are more liquid than bonds alone. The said funds invest in both debt securities and bonds thus ensuring asset protection for the capital invested. Like any other kinds of mutual funds, Net Asset Value (NAV) is also pertinent which is considered as the value of a share of a fund.

The price you’ll be paying when you purchase is according to the NAV. Upon selling the fund, the NAV is what you’ll get as value in return. Basically, there are different kinds of bond mutual funds you can choose from. There’s this corporate bond fund. It is an investment in debt securities which are issued by the government in the form of treasury notes, treasury bonds and treasury bills. Another type is called corporate bond fund which invests in the corporations’ debt securities. The difference between government bond fund and corporate bond fund is in terms of income and risk. (more…)