Ensuring your Personal Safety when Showing Homes
Posted on 13. Mar, 2010 by admin in general
In many jobs that you might possibly work, the biggest problem you might deal with is whether or not you can work with all the other people around you in your workplace. In realty however, you often need to be able to work in an office with other people as well as on your own with prospective buyers. 99.9% of the time, your prospective buyers are just out looking to buy a house, but sometimes an agent gets into a situation with someone who is out to rob them or cause them bodily harm. As a realtor, you need to take steps to keep yourself safe. The first thing you should do when you’re looking at ensuring your safety while house showing is get your prospective buyers to fill out the pre-qualifying paperwork. This should have their names, current address, car model and license plate, as well as home and work phone number. Start the good habit of taking a “file picture” for each buyer to attach to their file as well. If you take the picture with your phone, you can send it to your office so that they know who you’re meeting as well. A basic self defense class is never a bad idea for in case of emergency. A good self-defense class should teach you a set of skills that starts with ways to deal with people who might escalate to violence, better observation skills so that you can minimize your vulnerability, and some physical tactics to help you escape if the incident comes down to that. Another way to be safer, particularly if you’re meeting with people who aren’t pre-qualified, like at an open house, is to have someone accompany you. Most of the time having an extra person in the house when you’re showing it is enough of a deterrent to keep you safe. Modern technology has given us the personal GPS tracker which is also a good way to help ensure your personal safety. These little devices record and periodically transmit their location to some sort of database. Some of these units also come with the option of a panic button or a fall sensor in case of emergency. A handgun can be a comforting back up tool of last resort if you live in the United States. If you live in a state that allows concealed carry and you are comfortable with the idea, you may want to look into the purchase of a handgun to be your last ditch backup in case of emergency. However, you shouldn’t even think about carrying a handgun unless you are going to invest the time into learning to shoot and taking classes on gun safety. Look into classes about self defense with pistols to get more familiar with that particular aspect of shooting as well. If you live in Canada, this is totally a non-issue as you cannot get a license to carry concealed weapons. All in all, the bottom line is that you need to take the necessary steps to keep yourself safe by avoiding putting yourself in vulnerable positions. The reason that agents are sometimes targets of theft or violent crimes is because they work alone with strangers in isolated areas at times. Make yourself less of a target and keep yourself safe.
Ten Year Performance of the Mexican Stock Market
Posted on 13. Mar, 2010 by admin in general
By: Jim Scherrer
Before we analyze the history of the Mexican Stock Market or Bolsa, let’s first consider the strength of the Mexican Peso. Ten years ago, the MX Peso was worth 9.7 cents and today it’s worth 9.5 cents; essentially unchanged. Even though the Mexican Peso is not fixed to the US Dollar, the graph below clearly shows that the Peso has held firm with the Dollar at a rate of approximately 10:1 during the past decade, trading in a range from $.088 US / MX Peso to $.111 US / MX Peso:
(please see graph on the PVREBA website below)
One of the most significant reasons for the firm currency in Mexico must be attributed to the policies of the new governing party that has been in control since 2000. Mexico has been governed by Harvard alumni during most of the timeframe shown above and will continue under the same leadership for at least another four years. The PAN party, led first by President Fox and currently by President Calderon, both Harvard graduates, has brought Mexico from a Third World Country to a Newly Industrialized Country (NIC) standing in a matter of eight short years. Among their numerous accomplishments, they have cracked down on corruption, have promoted free market capitalism while maintaining a firm Peso / Dollar relationship, and have elevated tourism to the top of their list of strategic objectives.
As an NIC, Mexico has joined the ranks with countries such as China, India, Brazil, Turkey, etc. en route to becoming First World Industrialized Countries. Recently, Mexico has changed from being a beneficiary to a full contributor to the United Nations Development Program.
While President of Mexico, Fox established a new Ministry of Security and Police, doubled the pay for police officers, and cracked down on crime by improving the Mexican judicial system which had been rife with corruption and ineptitude. The Human Development Index (HDI) is a comparable measure of life expectancy, literacy, education, and standard of living for countries worldwide. During Fox’s presidency, Mexico maintained an HDI of 0.8 which represents high development. In comparison, many countries such as Canada, France, and Great Britain, generated low increases and even some decreases in HDI figures. Real wages dropped 305% in Mexico from 1976 to 1999, however since PAN has been in office, real wages have not only stabilized, but are starting to increase. Fox represented the Alliance for Change. He was one of the few Mexican presidents to avoid a major economic upheaval during office, whereas previously, the Mexicans were accustomed to devastating Peso devaluations. As shown above, during the past decade the Peso has held firm at about 10 Pesos per US Dollar while the Mexican Gross Domestic Product (GDP), Foreign Direct Investment (FDI), and Domestic Investment have all risen at a brisk pace. As a note of interest, Mexico is now the second largest FDI recipient among developing countries and is also the seventh largest exporter in the world. Obviously, with the rapid growth of the economy, the Mexican Bolsa has virtually exploded in value.
Fox’s term expired in 2006, when his successor, Felipe Calderon, also with the PAN party, won a very close election. He supports balanced fiscal trade, flat taxes, lower taxes, and free trade. His motto is to “Drive Mexico into the Future” which represents privatization, liberalization, political freedom, and market control of the economy. With these fiscal policies and close ties to the US and Canada, it’s no wonder that the Mexican stock market has performed so well, advancing more than six-fold during the past decade per the graph below:
(please see graph)
The above 10 year chart compares the Exchange Traded Funds (ETF’s) of Mexico and Canada to the S&P 500 US stocks. The EWW fund consists of a large basket of Mexican stocks and trades on the American Stock Exchange.
You can see where the 10 year gain of the S&P 500 was only 25% while the Canadian stocks advanced approximately 200% and the Mexican stocks a whooping 600%. If you were to average the gains over 10 years and compound them annually, the US stocks have gained at rate of 2% per year, the Canadian stocks at 7%, and the Mexican stocks at 20% per year.
Put another way, a $1,000 investment in the US after 10 years is worth $1,250 today, in Canada it’s worth $3,000 and in Mexico it’s worth $7,000! A gain of $6,000 in Mexico while only $250 in the US, i.e., 24 times as much! Just imagine, a $200,000 investment ten years ago compounded annually at 20% would now be worth about $1,400,000 or if the gain were taken out each year, you would have had a $40,000 per year income and would still have your original $200,000 principal. Keep in mind that you can live like a king in Mexico on $40,000 per year; even better if you’re retired and have social security income to add to your investment gains!
Just recently, we have witness a very tenuous economy in America and a near crash of the US stock market which has affected all economies and stock markets throughout the world. Below is a chart indicating the affect that the slumping American economy has had on the major economies of the world:
(please see chart on the PVREBA website below)
As you can see, while the US stock market has dropped by 15.4%, the Canadian market fell by only 6.6% and the Mexican market by a mere 4.7%, making it the second least affected market in the world. During the past decade, the Canadian Dollar has strengthened significantly against the US Dollar and the Canadian stock market has far outperformed the US market, falling off its recent highs by a much lesser extent. These facts combined with the cold winters in Canada, provide an explanation for why the Canadians continue to flood the Mexican real estate market.
We were among the first of the fortunate retirees to move to Puerto Vallarta, Mexico in 1997 and have ridden the entire economic wave of growth and prosperity. Not only have our investments in the Mexican Bolsa multiplied by a factor of six but our real estate investments have at least tripled in value.
During the past decade we have witnessed a construction boom in Vallarta and an ever increasing influx of retired North Americans as the population of Vallarta has exploded to 350,000 residents. We have seen a complete revamping of the city’s infrastructure with new water treatment facilities, power distribution systems, new and improved roads and highways, a tripling of the size of the International Airport, a tripling of the size of the Marine Terminal, a huge new Bus Terminal, a huge modern Convention Center, etc. Along with the increased infrastructure, all of the “big box” stores including Sam’s Club, Mega Wal-Mart, Costco, Home Depot, Office Supply, etc. have moved to Vallarta. A half a dozen new golf courses have been built, a number of new yachting marinas have been built and existing ones enlarged, and clubs for all other activities have sprung up throughout the town.
All of this growth has taken place in PV while the city managers have maintained the city’s atmosphere of a quaint Mexican fishing village. The cobblestone roads, the sound of mariachis in the air, the colorful tropical flora and fauna, the magnificent sunsets, the beautiful beaches along the Banderas Bay shoreline, and the majestic Sierra Madre Mountains as a backdrop will always provide the feeling of being in Paradise. This continues to hold true while the explosive growth in Vallarta now provides the creature comforts and conveniences of a large modern city, i.e. the best of everything is available in PV where the average daily temperature from November through May is 73*F with virtually no rain.
In summarizing, if you’re approaching the end of your career, retiring and investing in Mexico is worth your consideration. It was the best decision we ever made; one that we’ll never regret after enjoying eleven years of fun and prosperity. At this time, we see very few signs of a slowdown in Puerto Vallarta and living conditions couldn’t be much better; however, as they say in the investment community, “past performance is no guarantee of future results”!
Jim Scherrer has owned property in Puerto Vallarta, Mexico for 25 years and resided there for the past eleven years. The mission of his series of 47 articles pertaining to retirement in Puerto Vallarta is to reveal the recent changes that have occurred in Vallarta while dispelling the misconceptions about living conditions in Mexico. For the full series of articles regarding travel to and retirement in Vallarta as well as pertinent Puerto Vallarta links, please visit us at Puerto Vallarta Real Estate Buyers‘ Agents and click on ARTICLES.
Brampton – Home to the Lorne Scots
Posted on 13. Mar, 2010 by admin in general
As one of the fastest growing municipalities in Canada, Brampton has a lot to offer. In the modern age, it is a great place for business and tourism, with a population that supports a very active sports life and some of the best education possible.
Brampton is also a city with a long history, one that is reflective of many of the most important occurrences in the history of Canada as a whole. In fact, Brampton is the location of the regimental headquarters of one of Canada’s longest serving military regiments in Canada, the Lorne Scots.
Who are the Lorne Scots?
Simply put, the Lorne Scots are a primary reserve infantry regiment in the Canadian armed forces. What this means for the civilian is that the Lorne Scots are a part of the largest component of the Canadian Reserves forces, one of the first to be called upon in the event of a military situation. This can include combat, peacekeeping, and other missions as determined by those in charge of the armed forces.
History of the Lorne Scots
The Lorne Scots have their roots in the 19th century, when the 36th Peel Battalion and the 20th Halton Battalion of Infantry were formed. Seventy years later, in 1936, the two units were combined to form the Lorne Scots.
World War II was just on the horizon at the time, and it was during this war that the Lorne Scots, like so many other Canadian regiments, first saw combat actions as a unit (various individuals had been involved in the Boer Wars of South Africa previous, but never as a part of the Lorne Scots in unit action). In fact, World War II would see the Lorne Scots representing Canada in every major theatre of action where Canada played a part, with the exception of Hong Kong.
Modern History
The Lorne Scots have continued to be big part of Canada’s military presence in the modern context, wherein Canada has undertaken the roles of peacekeeping, peacemaking, and United Nations support. The various activities have seen Lorne Scots units involved in theatres including Namibia, Yugoslavia, and Cyprus.
As with many other military bodies, the Lorne Scots are very active in civilian life when not on deployment. Units are called upon to help with public emergencies, and the regiment plays a vital role in all ceremonies honouring veterans and Canadian history.
Settlements, Notes, and Lotteries OH MY
Posted on 12. Mar, 2010 by admin in general
Owning a financial instrument which involves receiving a large amount of money in small deferred payments doesn’t necessarily mean that there are no other options when it comes to utilizing the full value of such instrument. There are several monetary packages which offer small deferred payments according to every situation. The most popular are structured settlements, mortgage or business notes and lottery winnings.
Understanding how each one works is crucial to invest or utilize such funds. One characteristic that all these monetary packages have in common is that they are not paid in full through a lump sum, they are paid periodically through small payments until the full amount of such financial instrument has been delivered.
As bad as they may sound in terms of fund availability, each package has it’s useful features ad well as disadvantages. Lets start by explaining what each instrument represents and how they work.
Structured Settlements:
A cash structured settlement occurs when an insurance company provides small schedule payments resulting from the settlement of a personal injury lawsuit or claim settlement. This type of monetary package was first introduced during the early seventies in Canada and then spreading quickly to the United States, Australia and Europe. The reason this payment method is widely used in the US is that it provides tax free installments over a period of time.
Mortgage and Business Notes:
These type of monetary instruments are acquired after the sale of a property or business which results in small payments from buyers. Selling a business note doesn’t necessarily involve selling property as part of the deal, the only object transacted is the business itself. Historically Businesses have a high failure rate and business note holders end up taking back the note, that is the reason why getting a loan approved for the purchase of a business is more difficult than having a loan approved for the purchase of a property.
Lottery Winnings:
Depending on which State you reside in, lottery winnings may be subject to federal, state, and/or local income taxes, depending on jurisdiction requirements. It is widely known that there two payment methods are offered when trying to collect lottery winnings, they are lump sum and periodic installments.
Depending on the type of note you hold you may want to utilize a considerable amount of capital in different ways. The top 5 reasons financial instruments holders may want to get a lump sum payment are:
1. To Eliminate Debt
2. To invest or buy real estate
3. Paying for medical emergencies
4. To fund and plan a child’s education
5. Or just to have enough money to take an amazing vacation
Receiving a lump sum installment basically means that a one time amount will be paid to the recipient instead of breaking the the total of such monetary instrument down into multiple payments over an established period of time. As you can see having a large payment is beneficial in many ways which can definitively help solve financial problems.
Cohousing – is it for You
Posted on 12. Mar, 2010 by admin in general
Along with the move toward smaller housing for smaller (often single parent) families is also coming a move for cohousing communities. It seems nostalgia is returning to the realty market place and some of us are missing the Independence Day Block parties and casual ‘pop-ins’ to the neighbors.
Both USA and Canada have latched onto the Scandinavian idea, and in America there are over 100 communities already in existence. There are more than 100 others in the planning stages, so what is the attraction of these communities?
Since they were introduced in the 1960s, they have gone from a gradual acceptance to a rapidly increasing concern. The fact that they emphasize sustainable living may be one reason, there is also increasing danger in our neighborhoods, yet these reasons alone do not seem to explain their popularity.
Not anyone can sponsor a cohousing community; there are requirements to be met. According to the Cohousing Association of America their six redeeming features are defined like this:
A key factor in cohousing is that the residents have had reasonable input into the design and details of how their community should look and how it should be run.
The design of the complex necessarily emphasizes a sense of community. To this end homes are closer together and may be built facing each other across a courtyard. As yards are smaller, shared spaces are larger.
Each cohousing community has a common house and sometimes all the houses face onto this. The common house has many facilities to bring together a community that wants to spend time together.
For instance there could be a kitchen, exercise room, workshop, sitting and/or eating area, garden areas and children’s areas – in fact any type of area that the group agrees they would like.
These complexes are often built by a developer who organizes meetings with the future residents before construction starts. Any late-comers will have less input into the design for this reason. However, often groups do look for interested parties when they have vacancies, and your local real estate agent can advise you here.
The management of the property is drawn from the residents, although most decisions are made by consensus. Upkeep and repairs of the complex are performed by work parties from the inhabitants.
Often these kinds of work parties are organized with meals in the common kitchen and represent work and fun for all. The division of labor is often decided according to a person’s skills and/or wishes.
Money is not a community asset. Work is done by all and is considered to be an accepted part of co-housing life. Large expensive repairs that need paid expertise are discussed and decided upon if they arise.
These communities were originally founded in Denmark, and although the first ones were only formed as recently as the 1960s, their popularity has continued to grow, world-wide, ever since.
Ytb Press Releases-what are They Hiding Now?
Posted on 12. Mar, 2010 by admin in general
Are you curious about the lack of YTB press releases surrounding the current pending lawsuits, lack of direction or information surrounding the pending litigation?
As former YTB Power Team Leaders, we sure were and we continue to be concerned about the negative impact such tremendous lawsuits would have on our marketing abilities and ability to sell travel – and continue to receive our earned commissions.
It has been recently reported that YTB only has $600,000.00 in cash at the end of the 2nd quarter and a pending lawsuit in the amount of 125 MILLION Dollars! Simple math says that YTB is a sinking ship.
YTB’s response to the lawsuits is to create an enhanced marketing website and charge REP’s and RTA’s an additional $19.95 per month to raise additional capital and sell more marketing materials, while the Coach, Kim and Scott continue to rape the company for millions of dollars each year in cash and stocks.
After experiencing many personal disappointments, broken promises and being kept in the dark regarding pending lawsuits with YTB, we just wanted to “grab our life vests and jump the sinking ship” and basically give up on MLM or relation marketing entirely – that is, until our realtor and banking lender showed US, internet marketing experts, Fortune Hi-Tech Marketing (FHTM).
Never heard of FHTM? FHTM has been in business for approximately seven years and growing like gang busters! It is a company that allows us to earn a residual income on products that we use everyday in our home and current real estate, vacation rental and web marketing business.
We were brought to a FHTM training seminar in Traverse City, Michigan over this past weekend. Every Representative, Manager, Trainer, National Manager and even the owner, Paul Orberson were all ordinary people and very personable and provided a sense of “family”, a feeling that we had not experienced before with in the MLM world – we were very impressed.
We quickly learned that Fortune Hi-Tech Marketing (FHTM) is a team of highly motivated and dedicated individuals working together toward a common goal; achieving success with integrity. FHTM has allowed thousands of individuals, regardless of education, race, experience or current financial situation, to reach their financial goals by becoming FHTM business owners. Success is easily achieved through the support, encouragement and guidance of the Independent Representatives and National managers all working together as a team to become the best possible advocates of FHTM’s quality and name brand products and services that consist of more than just travel alone.
FHTM can set your life on the “Fast Track” to success! We strongly encourage you to please take a moment to review this site and watch the 20 minute FHTM video , it will change your life!
We can show you how to start a full or part-time business that will help you to generate the money you need and deserve while working from the privacy of your own home. We look forward to hearing from you and helping you achieve financial freedom and helping you achieve all your dreams! Don’t hesitate contacting us – successful people make decisions and act on them.
Folks, we can’t express enough what this opportunity is for you to jump on board this “ship” before everyone else knows about it! We look forward to working with you in the future.
We are former YTB Power Team Leaders that moved our team to FHTM. We quit YTB for a number of reasons and they are the inability to promote our business on the internet, pending lawsuits, and the lack of communication and direction from YTB leaders.
Fortune Hi-Tech Marketing is currently available in the US, Canada, Pureto Rico and the United Kingdom (UK).
If you are frustrated with your current financial situation, and living pay check to pay check, you owe it to yourself to explore your options and spend 20 minutes to see how FHTM can change your life, just working part-time a few hours a week from home and check out or join FHTM and change your financial situation today.
Sherri Russell and Brent Vanderstelt
Provab Is A Global It Services Provide Web Design & Development,Portal Development & Seo Services
Posted on 12. Mar, 2010 by admin in general
PROVAB is a promising offshore IT service provider based in Bangalore, India. Our strategies help in pursuing emerging opportunities in providing end-to-end IT solutions and services through onsite, offshore and outsourcing methods. PROVAB proficiency guarantees quality, competent and rapid execution of any projects – from small websites to complex ecommerce software and custom solution programming. PROVAB experts deliver unsurpassed business value to customers through a combination of process excellence, quality frameworks and service delivery innovation with latest version of technologies. Our professional designers, developers and managers are committed to services, and best quality work. Our SERVICES include Web Application Development, Website Designing, E-commerce Solutions, Portal Development, Search Engine Optimization, etcWe provide the following services to London, Paris, Boston, Chicago, Dallas, Denver, Houston, Las Vegas, Los Angeles, Minneapolis, New York, Philadelphia, Phoenix, Portland, San Diego, Seattle, Washington, Argentina, Austria, Canada, Egypt, France, Great Britain, Greece, Mexico, New Zealand, Norway, Spain, Sweden, Switzerland, UAE, UK, USA. Web Services and Solutions PROVAB provide a full range of web services to our clients abroad including strategic direction, business analysis, management, web application development and systems integration. Our services cover the complete lifecycle of your web initiative that includes: Web designing and development, Web hosting, Web maintenance and support, E-commerce, Search Engine Optimization. Portal Development PROVAB deliver portal development services for pioneering knowledge & use them effectively to enhance user features. We design and develop multi dimensional web portals including web portals, B2B portals, B2C portals, travel portals, real estate portal development and social networking portals and our services include offshore portal development, portal maintenance and designing. Application Development Our organization provides Web application development focusing on quality, application design, development and programming with implementation of latest technology in different industry verticals. PROVAB offer widest range of web application development services like custom application development, product development, E-learning solutions, Intranet development and application maintenance. Website Design and CMS PROVAB is one such organization which offers a comprehensive list of services to meet all the designing factors including custom website designing, bespoke corporate designs, dynamic web designing, content management system, website template design, flash and multimedia designs. We consign to work with clients and determine the most effective means of achieving maximum benefit through the appropriate combination of the technologies. Our expert technical support staff has in-depth knowledge and experience in software products and tools to maximize system efficiency. You can view our Portfolio as we delivers quality web designs to customers across the globe.
Ethics in the Business Brokerage Industry
Posted on 11. Mar, 2010 by admin in general
If you are in the market to buy or sell a business and have made the decision to work with a professional in the business brokerage industry, please use caution who you deal with.
Unfortunately, not all “professionals” in the industry follow a strict code of ethics or have the highest professional integrity, as they are supposed to. This article will examine some of the more common things to consider and look out for when working with a business brokerage firm or professional.
What is their reputation like in the industry?Does the firm you are considering working with have a good reputation in the industry? Are they considered honest and ethical by their peers? Be wary of dealing with firms that espouse themselves to be ethical professionals in the business brokerage industry when, in fact, a quick survey of industry peers would suggest otherwise.
As with most things, it is quite easy to present oneself as being a leading, ethical organization. As a potential client, please ensure that this is in fact true and if it is also recognized by the broader profession.
Have they crossed any ethical boundaries?Before you commit to dealing with a firm, ask around. Have they crossed any ethical lines that they should not have? Have they truly put their clients first? Do they strictly adhere to the Real Estate & Business Brokers Act Code of Ethics?
Before you sign on the dotted line to work with a business brokerage firm or professional, please ensure that they put business ethics first & foremost.
A growing industry may attract unsavory “professionals”The industry is growing in Canada and this can attract unsavory business brokerage “professionals” to the industry. The field of business brokerage is considered a “growth” field. The number of ‘baby boomers’ retiring over the next 10 years will cause a spike in demand for business brokerage services. Boomers who own businesses in southern Ontario may want to retire and sell a business and boomers who are in the corporate world may decide it’s time for a new challenge and want to buy a small business. The point is that there may be players attracted to this industry who only see the dollar signs associated with such growth and are willing to set ethical behavior towards their clients and industry colleagues aside as a result.
As a consumer, please be vigilant about protecting your interests and please, only work with a business brokerage professional who has a good reputation and if it “feels right.” Usually, if a business relationship doesn’t feel right or if something about the “professional” or firm seems amiss, your hunch is probably correct so find yourself another business broker to work with.
Buying or selling a business can be a convoluted process. The decision to work with a business brokerage professional is a wise one. The vast, vast majority of professionals in this field are ethical and do not cross moral boundaries. The main point to keep in mind is to be careful because, like in all industries, there can be a few ‘bad apples’ that spoil it for everyone.
Easy Home Based Business
Posted on 11. Mar, 2010 by admin in general
EBay began its operations in San Jose, California, in September 1995 with the pioneering work of Pierre Omidyar. Ebay is the largest person-to-person and business to person marketplace. It uses the novel concept of online auction sales to enable and empower individuals (and businesses) around the world to sell almost all types of products and services.
Thousands of people from all over the world are making a lot of money on eBay. At any moment, millions of items and services are on sale. Billions of dollars worth of property successfully passes through eBay, not merely every year, but every month and day.
Besides the relatively low value individual sales of collectibles and “garage sale” items, many established merchants sell cars and real estate, computers and antiques, and electronics and jewelry. In addition, not just in the United States or Canada, either. EBay operates and provides an opportunity around the world, in Western Europe and (through an investment, MercadoLibre.com) in Latin America, Hong Kong, Malaysia, Australia, and India. It is a vast, international marketplace, in which millions of individuals and merchants sell millions of products and services.
EBay is a beautiful thing! To make unlimited money through eBay, you must learn, understand and apply what you learn. If you have any products or services to sell, eBay helps you find someone to buy them. It is all automated and streamlined; just fill out the online forms and eBay launches and runs the entire auction process for your benefit. When the auction is over, the highest bidder wins; after receiving payment from the bidder, the seller then ships the item, and with this, another auction is successfully completed.
After you start buying and selling on eBay, you will observe that there are plenty of options and choices. The following are the most important benefits:
EBay is not only a great place to carry out your easy home based business it’s also a great site to make and meet like-minded friends and join a worldwide community.
A positive advantage of an easy home based eBay business is that you can start the operation and later abandon it without using a lot of money. Just imagine that you own a business like a bakery or a hair salon or a barbershop or some kind of restaurant. How many businesses are you able to start and stop within a short time without spending too much money? An easy home based eBay business can be turned on and off just like a light switch and still you may not be adversely affected. When you are ready to go back to your easy home based business, just start selling once again. That is a lot of flexibility to have in an easy home based business.
Online auction sites attract a large amount of traffic thus making them an ideal place to make use of readily available and widespread exposure for your products and/or company. Because of the immense opportunity for buying highly valued and premium items at a relatively low price, the broad range of products and services available on the site, the ease of access to them and the social/economical benefits of the auction process, one can find a large number of bidders on eBay.
Financial Myths Vs. Financial Facts
Posted on 11. Mar, 2010 by admin in general
FINANCIAL MYTHS vs. FINANCIAL FACTS
Evaluating Funding Options for your B2B Business
The world of commercial finance is complicated. It is suggested that all businesses consult with their trusted advisors (CPA, Attorney, or Partner) before entering into any financing transaction that will have long term effects on their business. The following statements are the opinions based on the dictionary definitions herein below.
Merriam-Webster Online Dictionary Abridged Definitions:
MYTH:
Pronunciation: ‘mith
Function: noun
Etymology: Greek mythos
1 a: a usually traditional story of ostensibly historical events that serves to unfold part of the world view of a people or explain a practice, belief, or natural phenomenon.
2 a: a popular belief or tradition that has grown up around something or someone; especially: one embodying the ideals and institutions of a society or segment of society
2 b: an unfounded or false notion
FACT:
Pronunciation: ‘fakt
Function: noun
Etymology: Latin factum, from neuter of factus, past participle of facere
1: a thing done
2: the quality of being actual
3 a: something that has actual existence
3 b: an actual occurrence
4: a piece of information presented as having objective reality- in fact: in truth
“A fool and his money are easily parted”
FINANCIAL MYTH: No. 1
Finance companies that promise funding in 24-48 hours are the best choice.
FINANCIAL FACT:
Unless you are desperate for funding, you should take time to compare alternatives, read the proposed contracts, and consult with your advisors.
It is recommended that you read the proposed contract before you agree to terms, and carefully consider the risks regarding following matters:
1. Percentage to be advanced: This may range from 60% to 90% of the face value of an invoice. Will the percentage to be advanced be sufficient to help you grow profitably?
2. Your obligation to work with the finance company: Are you required to sell 100% of your accounts receivable every month, or are you permitted to sell at your discretion? Are there monthly minimum charges and if so, would you be likely to use the services of the commercial finance company to this degree every month?
3. Will you be more profitable if you use the finance companies services? In other words, can you afford to pay the commercial financing fees in order to grow your business?
4. Which source is better for you: a small commercial finance company, a large commercial finance company, or the asset based lending department of a bank? With the small companies, you are more likely to work with the decision makers and their usually is more flexibility and discretion. With the large companies, you can accomplish larger transactions and this may be of great significance especially if your business is international. Banks may be an excellent choice if your accounting is perfect and you are good at dealing with strict requirements. Banks are regulated institutions with safety and soundness requirements which generally make banks more conservative than private lenders. GFS works with all three types of lenders.
5. Choice of law: If you are in California, and any dispute must be litigated in New York can you afford the risk that you might have to travel to protect your interests? Where are disagreements or disputes to be decided? Is there binding arbitration?
6. Penalties for early termination: Some yearly contracts provide that if you want to leave the commercial finance company, you are liable for “the greater of Two percent (2.00%) of the Maximum Credit Line, or the number of months remaining in the agreement multiplied by the Monthly Minimum Fee”. Is the termination fee risk affordable?
7. Penalty interest if you client fails to pay on time: Some lenders provide that if a client defaults, you can substitute another invoice and not be charged a penalty. Other lenders may require that if a client fails to pay an invoice within 90 days, you are charged 20% of the invoice face amount plus 7.5% per month until payment is made. What does the commercial financing agreement require when your client does not pay on time?
“Economical with the truth”
If someone is economical with the truth, they leave out information in order to create a false picture of a situation, without actually lying.
FINANCIAL MYTH: No. 2
Finance companies that promise lower rates are the better choice. For instance, Co. “A” offers 3% per month; Co. “B” offers 3.25% per month. Co. “A” is the best choice.
FINANCIAL FACT:
Contract terms and conditions determine your actual costs based on when your clients pay. This requires analysis.
It is recommended that you carefully consider the contract terms regarding how interest is charged and your experience regarding how your customers typically pay to project the true costs of financing. Here are several examples:
1. You sell an invoice with a face value of $100.00. Assume the contract charges are 3% for 30 days, with an 80% advance to you and your customer pays the commercial finance company the full amount due on the 30th day. You take an $80.00 advance on day 1 and your customer pays the commercial finance company $100.00 on the 30th day:
v Suppose Lender “A” charges 1% for every 10 days period. Assume “Payment date” is defined in the commercial finance contract as the date the finance company receives payment from your customer pays plus ten (10) banking days. Ten banking days are two calendar weeks. You will be charged for 44 days. One percent for the first 10 days, plus 4 percent for the next 34 days equals a charge of 5%. Your cost = $5.00.
v Suppose Lender “B” charges 1.5% every 15 day period. Assume “Payment date” is defined in the commercial finance contract as the date the finance company receives payment from your customer plus three business days for check clearance. You will be charged for 33 days. You will be charged 4.5%. Your cost = $4.50.
v Suppose Lender “C” defines “Payment date” as the day they receive the check or wire funds transfer. This commercial finance company stops the interest clock on the day they receive payment from your customer. You will be charged 3%. Your cost = $3.00.
v Suppose Lender “D” defines “Payment date” as the day they receive funds and charges daily interest only on the actual funds advanced, also know as per diem interest. Since you are being charged 3% on $80.00 your cost = $2.40.
2. In every contract the definition of “Payment date” and method of interest calculation are critical to anticipate your actual costs of financing. All of the above methods of calculation, except Lender “A”, may be reasonable on account of the risks inherent in the transaction. Gregg Financial Services works to obtain the most competitive rates and terms for our client’s initial funding; and GFS works to reduce commercial finance costs as you grow.
3. If you customers typically pay in 60-90 days, a contract that requires a minimum interest charge for 60 days is not unreasonable. This condition may be a required for medical accounts receivable financing.
4. Consider whether the commercial finance company’s contract requires you to sell every invoice (100% of all invoices) on the day you issue them, or may you sell individual invoices up to 59 days past due, according to your needs? There are tradeoffs: lower price vs. flexibility. It is very much a question of assessing your commercial financing requirements and your gross margins to pay for financing costs.
“Easier said than done”
If something is easier said than done, it is much more difficult than is sounds. It is often used when someone advises you to do something difficult and tries to make it sound easy.
FINANCIAL MYTH No. 3
You can determine the best finance company to work with by simply by comparing several different websites.
FINANCIAL FACT:
Websites are advertising. Knowledge of the lender, their reputation and business practices are essential to choose wisely.
KEY POINTS TO CONSIDER:
When assessing the most appropriate commercial financing company to use, make sure:
• the provider is a reputable company
• your contract corresponds with any verbal or written quotations
• you are aware of any financial penalties if you wish to end the agreement early
• the financing credit limits are sufficient for your initial needs
• you have read the contract carefully before signing it, checking the amount of financing and notice periods
• you understand all terms and conditions, and the costs you will have to pay
Commercial Finance Brokers work with many dedicated commercial finance companies and banks across several businesses of all sizes. There are many areas of specialization, such as purchase order financing, accounts receivable financing, inventory financing and SBA financing. Most commercial finance companies limit their services to one or two of these categories. A commercial finance broker will assess different companies and match you with one that best fits for your business needs. They also keep a close watch on commercial finance companies that may charge non-competitive fees and will not match you with them. In addition to comparing rates, there are many points to consider when choosing services.
To anticipate problems with customers that inevitably arise, find out what level of customer service they offer to help resolve problems. Do they provide telephone support and in-person meetings, e-mail help and live chat, or a combination of services? Choose the commercial finance company that offers multiple ways to reliably address concerns or answers questions. Consider differences in where you are located and the time zone where the commercial finance company is located. How will this affect cut off times for funding? How will this affect your ability to reach your key finance representatives?
You may want to ask for a list of references before you do business with them. Make sure to ask such questions as:
• Were they able to quickly process your funding requests?
• Was the approval process simple? How long did it take?
• Was the company easily accessible through phone and email?
• How long did it take before you received funds?
• If you had a problem with your account, what did they do to resolve it?
• How did your clients react to working with the commercial finance company? Did they handle them appropriately?
• Would you recommend this company?
“Face Value”
If you take something at face value, you accept the appearance rather than looking deeper into the matter.
FINANCIAL MYTH: No. 4
A non-recourse contract means you do not have to pay the finance you to pay unless your company if there is a default.
FINANCIAL FACT:
Most contracts require you to pay unless your client files bankruptcy or goes out of business.
There are two general types of factoring: recourse and non-recourse. Recourse factoring is the most common. With recourse factoring, the commercial finance company generally will fund every invoice you submit, but will require a refund plus their fees for invoices that are not paid within a specific period of time, usually 90 days.
Non-recourse factoring may free your company of any responsibility for non-paying accounts, if, and only if, it is truly “non-recourse” without conditions.
The commercial finance company with a non-recourse contract will have more stringent policies for the invoices they will accept. In a non-recourse contract the commercial finance company agrees to purchase the invoice from you and takes some or full responsibility for its payment. It depends on the contract terms. Credit insurance may be required. This is an additional expense.
Non-recourse factoring generally is defined in commercial finance contracts to mean: if the customer does not pay in limited situations, it’s not your problem. For example, should the customer declare bankruptcy or go out of business you are not responsible to pay back the commercial finance company for the advance on certain invoices. But, if there is a warranty issue, if anything at all is wrong with your product or service, you may be held responsible for the advance you received. And the commercial finance company can assert a breach of the many warranties and representations in your contract as a defense to accepting responsibility for a loss due to non-payment in a non-recourse agreement.
There are also commercial finance companies that will provide a mix of the two. These companies will promise to assume the risk of your invoices but require you to swap in a replacement of equal or greater value for slow-paying or defaulted accounts. This is not a true “non-recourse” contract in the literal sense of the idea because you are required to substitute non-performing invoices with new invoices that are likely to perform.
On the surface, non-recourse sounds better than recourse. But if the fees for the non-recourse factoring are significantly higher than full recourse, is the added cost to transfer the risk of payment default worth the expense? How many of your customers will file bankruptcy or go out of business? Over a period of time it may cost you more of your potential profits to transfer some payment risk to the commercial finance company.
Most commercial finance companies offering full non-recourse factoring conduct extensive credit checks on the customer before they will pay an advance on an invoice. This is a benefit to all concerned. When it is predictable that an invoice will get paid by a creditworthy customer, the invoice will be purchased. This credit quality check is of benefit to you because you do not want to knowingly sell your products or services to businesses that are not likely to pay. On the other hand, there may be companies you would prefer to do businesses with that do not meet the creditworthiness standards for non-recourse factoring. There may be compelling business reasons to choose recourse vs. non-recourse factoring.
“Look after the pennies and the pounds will look after themselves.”
If you look after the pennies, the pounds will look after themselves, meaning that if someone takes care not to waste small amounts of money, they will accumulate capital.
“Hook, line and sinker”
If somebody accepts or believes something hook, line and sinker, they accept it completely.
FINANCIAL MYTH: No. 5
Startup companies with a new hot product need venture capital to grow rapidly.
FINANCIAL FACT:
You can grow exponentially with purchase order financing, factoring, and inventory financing from a commercial finance company.
In general, more products you sell, the higher your revenues and profits. The more orders you have, the more you can sell, provided you can pay your suppliers upon delivery. Purchase order financing is like inventory financing for goods in transit to your customer.
Commercial finance companies provide purchase order financing to pay your suppliers, enabling you to close the sale and deliver your orders to your customers. This often involves a letter of credit using the commercial finance company’s credit to guarantee payments to the factory producing the product, especially if the manufacturing facility is not located in the US.
When the goods are accepted by your customer, an account receivable is created. An invoice factor, or commercial finance company that purchases accounts receivable, pays for the purchase order financing. You are paid the profit when your customer pays.
The commercial financing structure may follow these steps:
Letter of credit (to guarantee manufacturer payment for goods) ? Purchase Order Financing (pays manufacturer/supplier) ? Accounts Receivable Financing (pays Purchase Order Financing) ? Inventory Financing ? Customer pays ? Factor is paid
? You are paid profits from your sales after financing costs are paid
Commercial Finance Brokers help you determine what financing is available according to your circumstances, at competitive rates.
“Play hardball”
If someone plays hardball, they are very aggressive in trying to achieve their aim.
Venture Capital Funding
The Venture Capital Industry:
Venture capital is money provided by professionals who invest alongside management in young, rapidly growing companies that have the potential to develop into significant economic contributors. Venture capital is an important source of equity for start-up companies.
Professionally managed venture capital firms generally are private partnerships or closely-held corporations funded by private and public pension funds, endowment funds, foundations, corporations, wealthy individuals, foreign investors, and the venture capitalists themselves.
Venture capitalists generally:
• Finance new and rapidly growing companies;
• Purchase equity securities;
• Assist in the development of new products or services;
• Add value to the company through active participation;
• Take higher risks with the expectation of higher rewards;
• Have a long-term orientation
When considering an investment, venture capitalists carefully screen the technical and business merits of the proposed company. Venture capitalists only invest in a small percentage of the businesses they review and have a long-term perspective. Going forward, they actively work with the company’s management by contributing their experience and business savvy gained from helping other companies with similar growth challenges.
The advantage of venture capital investment is that you get money that enables you to expand your business and obtain market share before someone beats you to it. Venture capital is not a loan that needs to be repaid; rather, venture capitalists (VCs) invest their money in exchange for equity (an ownership share) in your company. VCs get their cash out only when your business is acquired by another company or “goes public,” that is, when its shares can be publicly traded on a stock exchange. The disadvantage is that you are no longer the sole owner of your company and may lose control. Moreover, a VC may move your company towards an Initial Public Offering (IPO) of publicly traded shares faster than might be best for the long-term health of the business.
In general, the earlier the stage where you receive funding, the more you have to give up. A few VC companies or “angel investors” might invest in what is not yet a real operating business but just a concept. For $500,000, they might take a 60% ownership in the company, and put in their own management team. If they decide that this can become a viable business (”proof of concept”), they might fund the company for another $5 million, taking yet more equity. By the second round of financing, the original business owner might retain only a 5% to 10% ownership.
What are the Pros and Cons in having Venture Capital Funding as a partner?
Pros:
– Financial strength for global competition
– Share buy-back opportunity
– Easier to get listed on a stock exchange
– No conflict of interest
– VC network can enhance the company’s business
VC’s provide experience, advice, and mentoring. They are objective, helpful with networking and hiring the right people. They add credibility and prestige to your business, share the risks, and help eventually to sell the business.
Cons:
– Lose part of the ownership
– Cannot manage the company as a family-run business
The risk of working with a VC may be their concern is more for a profitable and mandatory exit, compared to your concern for your employees and customers. You loose independence to manage your business and the VC’s may have the right to fire you and your management team. It can be a full-time job to manage the venture capitalists that are funding your business. Venture capitalists usually ask for:
•Anti-dilution protection. If the company’s stock price goes down any time in the future, they get additional stock for free.
•Dividends. In addition to stock, they get a guaranteed rate of return.
•Liquidation preferences. VCs get their principal and dividends back before anyone else gets a penny.
•Participating preferred. They get to double dip—they first get their investment plus dividends, then the value of their stock.
•Mandatory redemption. This requires the company to buy their stock back by a certain date, establishing a deadline for an exit event.
•Demand registration rights. The VCs can force the company to file a registration statement with the Securities and Exchange Commission to initiate an initial public offering—another way of forcing an exit event.
•Approval rights. The VCs must approve any new financings and have the right to participate.
•Reps and warranties. You’ll also have to accept personal liability for representations you’ve made about key aspects of the company. They will have the right to sue you for all you own if you forgot to give them any bad news.
CONCLUSION: There are no easy choices. If you have orders for your product with a sufficient gross margin, commercial finance companies may be your best choice. If you need to develop your product and lack the capital to fund your business to develop the product, market your brand and receive orders, venture capitalists can be the best thing that ever happened to your company. If you commit to a commercial finance company, you can terminate the contractual relationship. If you commit to a venture capitalist, the exit strategy is in their domain.
“Make a mint”
If someone is making a mint, they are making a lot of money.
“Feel the pinch”
If someone is short of money or feeling restricted in some other way,
they are feeling the pinch.
FINANCIAL MYTH: No. 6
All finance companies charge interest on 100% of the face value of the invoices you sell to them.
FINANCIAL FACT:
Some finance companies base their charges only on actual amount of money you receive.
There is a large range of pricing in the commercial finance business. Although competition tends to hold prices down, different industries may be charged more because of historical risk. For instance, medical and construction accounts receivable financing will be more costly than commercial financing for a staffing agency.
At one extreme, some commercial finance companies require that 100% of invoices be sold and interest is charged on 100% of the invoices. This may be reasonable because the business is high risk and if your company goes bankrupt, the commercial finance company cannot collect any of the funds that have been advanced.
The best pricing available is computed with regard to the actual funds advanced with interest payable on a daily basis for the period the funds are utilized. This is called per diem interest. Most banks and some commercial finance companies offer this option which may be described as a “line of credit” or “asset based financing” for larger transactions.
Assume a commercial finance company charges a 3% monthly fee and you sell an invoice for $100.00. Assume further that you customer pays in 5 days. Here is a range of costs you would pay, based on various minimum contract time and payment terms:
Based on 100% of the invoice:
59 day minimum term = $6.00 cost
30 day minimum term = $3.00 cost
15 day minimum term = $1.50 cost
10 day minimum term = $1.00 cost
Per Diem interest 5 days = $ .41 cost
Based on an 80% advance Per Diem for 5 days = $ .33
“Leave no stone unturned”
If you look everywhere to find something, or try everything to achieve something, you leave no stone unturned.
“Game Plan”
A game plan is a good strategy
FINANCIAL MYTH: No. 7
A finance company contract with no term is better than a contract with a one year term.
FINANCIAL FACT:
If you will need financing for one year and rates and terms are lower, the one year contract may be a better choice.
“Keeping your options open”
If someone is keeping their options open, they are not going to restrict themselves or rule out any possible course of action.
FINANCIAL MYTH: No. 8
SBA business loans are similar at every bank.
FINANCIAL FACT:
Some banks originate SBA business loans with delegated authority. This allows additional financing for purchase order, accounts receivable and inventory from third party lenders creating more capital for growth.
“Put all your eggs in one basket”
If you put all your eggs in one basket, you risk everything on a single opportunity, which, like eggs breaking, could go wrong.
FINANCIAL MYTH: No. 9
All finance company contracts, terms, and conditions are similar.
FINANCIAL FACT:
Terms range from fair to onerous. When you factor invoices you entrust all your cash flow to a commercial finance company.
“Comfort Zone”
It is the temperature range in which the body does not shiver or sweat, but has an idiomatic sense of a place where people feel comfortable, where they can avoid the worries of the world. It can be physical or mental.
FINANCIAL MYTH: No. 10
All finance companies require that your customers be notified that you are working with them. This is called notification and verification.
Financial Fact:
Some finance companies allow non-notification factoring. This makes the financing transparent to your customer.
“Take the plunge”
If you take the plunge, you decide to do something or commit yourself even though you know there is an element of risk involved.
Submitted by:
Gregg Elberg, President
GREGG FINANCIAL SERVICES
930 Irwin Street, Suite 209
San Rafael, CA 94901
415-482-9221
415-482-9228 Fax
415-847-8434 Cell
gregg@greggfinancialservices.com
Gregg Financial Services is a full service brokerage for commercial finance companies and banks that fund manufacturers, distributors, assemblers, jobbers, importers, staffing, service, agribusiness, construction and health care companies. We shop for the lowest rates and terms. We arrange various types of financing including purchase order financing; factoring; factoring with an inventory component; and asset based loans on receivables, inventory, equipment and machinery. GFS also provides cash flow financing and SBA loans on real estate and equipment. We work with all industries and can arrange financing transactions throughout the US and Canada, Mexico, Australia and several areas of Europe including the UK, Ireland, France, and Poland. GFS arranges funding from $25,000 to $50 million at competitive pricing, and we work to reduce your financing costs as your company grows. For more information about GFS, please visit our website: www.greggfinancialservices.com
Copyright 2006 Gregg Financial Services.