I’m sure you already heard that from a friend or from a family member: “the bank declined my loan, they don’t know what their doing!”. Banks and other financial institutions are often seen as the bad guy who doesn’t understand. This situation often occurs because most people don’t know how loans workout. I have a Norwegian friend who works in a bank and told me how it works. Here are they look at Norwegian consumer loan application:
The first question is related to the person who applies for a loan. The banker wants to know where you work, for how long, if you are married, have children, etc. This helps him drafting a portrait of the kind of person you are. The point is to know if you are in a situation that you will need more credit later on or if you are relatively stable. Loan officers love when someone is stable, it makes credit behaviours predictable.
Then, the banker will look at your balance sheet. If you have been working for the past 20 years, he will expect to see some assets. If you ask for more credit and you show a negative balance sheet (more liabilities than assets), your chances of getting the loan are not very good. Usually, cars, furnitures and jewels are not accepted as asset in the eye of a financial institution. They will most likely look at your bank account, investments and real estate properties.
The financial institution will also pull out a credit bureau to see which kind of payer you are. A bad credit is a direct breach of confidence in your relation with the bank.
Finally, the banker wants to know who you will pay off your debt. This is often a misconception from the population who has assets, but little revenue. If your house is free of debt but you don’t work anymore, it will be harder to convince the lending firm to give you a new mortgage. In the end, the banker doesn’t want to take back your house. He is not in the housing business, he is in the lending business. He wants to make sure you have an income stream that is sufficient to pay for your living and reimburse your debts.
My friend finished his explanation with a great tip to put all your chances on your side to get approved for you loan: tell the truth! A good explanation of the worst situation is better than a good lie. Most bankers will read you and find out about your lie instantly. Then again, lying to a financial institution will definitely not get your loan approved!Comments: 0 Read More
How You, Too, Can Capitalize Off Of Brexit
Despite the fact that some time before the British referendum to leave the European Union, four out of five European hedge funds had bravely put their money on the UK remaining in the EU, a certain number of firms saw some pretty impressive returns after their betting against the grain of popular opinion of economic policy and the cash debate. According to Craig Weynand, the NuWave Matrix fund rose in profits by 12% on the day of the vote. Other hedge fund managers, like CIO Ryan Tolkin of Schonfeld Strategic Advisors among others, as well as legendary investors George Soros and Stanley Druckenmiller also made fantastic gains from the sudden market volatility. How did these people achieve such successful gains even if, in the case of the hedge fund managers, they did not place bets on the outcome? The answer is simpler than you might think…
Understand The Risk
China is being crushed by their debt and poor economic policy, as is most of Asia. The Brexit decision is a testimony to the success (read: absolute failure) of the EU’s experiment in artificial currency, the Euro, which has been a central point in the cash debate. The whole world will feel the consequences of Brexit, consequences that will change depend on how prepared economically those countries are.
As an individual, you might be wondering what you can do to prepare for a volatile and risky market. A great place to start is to look to the greats; for instance, the aforementioned Soros and Druckenmiller. What did these incredibly wealthy and influential men do long before the Brexit decision was even brought to referendum?
Well, Druckenmiller just told the attendees of the Sohn Investment Conference in May to get out of stocks and get into buying gold. George Soros dialed back his US holdings and invested in the SPDR Trust. Really, investing in gold may be the best move in the wake of the British referendum. Every group or individual who made returns of any major kind after what Remain-ers claimed would be the fallout after the vote on the 24th of May has one thing in common: they all invested in, or already owned, precious metals.
A Safe Bet
Peter Donisanu compared the economic results of the referendum to Black Wednesday. Part of his comparison is correct: People have flocked to “safe haven” assets, such as government bonds, but even the prices of the precious metal have been predicted to begin to fall starting in August. A different safe option would be the cryptocurrency Bitcoin, which has many of the trademark qualities of a safe-haven investment.
Diversify, Diversify, Diversify
As in any great shift in economy, the safest move after the UK’s departure of the European Union is, as usual, to diversify your portfolio with a variety of safe investments. There has never been a better time to get a few more eggs in your basket, and your financial health will certainly be better for it.
By Harald Seiz, Multi-Business Entrepreneur & Expert on Gold
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Formal budgeting is often seen as a cumbersome exercise, yielding more tedium than tangible financial gains. Record keeping aside, the process does furnish valuable insight for those committed to tracking expenses and accounting for household cost of living. The key to maximizing the positive impact of formal budgeting is applying discipline and using the data to take control of your financial life.
In its simplest form, a budget is balance sheet, accounting for income and expenses. And while there are many ways to manage household finances, budgets formalize the process, putting your bad spending habits under a spotlight. Identifying where your money goes enables you to divert resources to more important areas, as you realign spending priorities. Especially when financial difficulties cause cash flow problems, budgeting helps ensure your income stretches to cover all of your expenses.
If you’ve had limited success with prior attempts, or are creating your first formal budget, stick to these basic budgeting tactics.
Categorize – Your household financial flow operates like a small economy, addressing spending in several distinct areas. In order to create a realistic record of your spending, break it into smaller pieces, to track as related purchases. Your “Entertainment” category, for instance, includes spending on movies, concerts and music downloads, as well as cable TV subscriptions and nights out with friends. Another classification, called “Food and Dining”, captures spending at the grocery store and money paid for prepared meals. If your gastronomic explorations are more like entertainment than sustenance, you may choose to file restaurant costs in that category. The key is remaining consistent, so categories reflect the same type of spending each month. Additional categories to consider as you track spending:
Track Spending and Income – Effective budgeting balances income with outgoing spending. In order to build a meaningful budget foundation, it is important to closely track spending for an extended period of time. For the best results, note purchases in a ledger each month, for at least three consecutive billing cycles. Once each month is complete, budget columns can be reconciled, so you know exactly how much money was spent in each category. Over time, subsequent months can be used to identify and compare spending trends.
Accounting for income is fairly straightforward when it comes from a single source, but you should also include money made on the side. Investment returns, hobby businesses, and even gambling winnings should all be included in your plus column, before you begin to tally expenses.
Set Spending Limits – Once you’ve accumulated personal financial data, it is up to you to put it to good use. Using your established categories, turn your eye toward budget savings, setting spending limits in each category. Discretionary purchases yield the most potential for trimming, because ‘fixed’ monthly expenses do not change substantially from month to month. Be realistic, but also challenge yourself with budget limits forcing you to spend sensibly.
Make Adjustments – Even with several months’ worth of spending records at your disposal, it can be difficult to craft a manageable budget. Start with core costs, addressing big-ticket obligations like mortgage repayment, car notes and other fixed monthly costs. As you rein-in your discretionary budget, leave room for adjustments. A cancelled subscription, for example, can always be reinstated, should your budget yield resources to cover the cost. Likewise, ineffective budgets can be tightened further, when cost-cutting measures don’t add-up to sufficient savings.
Show Resolve – Budgeting is a directed effort, so commitment and resolve are key ingredients for success. If budgeting is uncomfortable, you are probably doing your job, leaving no spending unexamined. To assist those put-off by the process itself, budgeting apps and software simplify record keeping and furnish intuitive tools for managing cash flow. Use these and other resources to remain steadfast throughout the initial formal budgeting process. Once established, your budget becomes increasingly easy to maintain, as good habits replace poor spending outcomes.
Without an accurate understanding of where your income is spent, it is difficult to take control of your personal finances. Formal budgeting highlights cash flow trends, illustrating where your money goes. Armed with a ledger tracking expenses and a commitment to maximize resources, it is possible to carve out savings and stretch your financial reserves. Use these 5 steps to jump-start your personal budgeting resolve.Comments: 0 Read More
Stockbroking has been around for centuries. The stock market was initiated on wanting to invest on a business and from that make profit off of its performance. This still remains the same today. Stock markets are very important today for they also help economic growth in countries all over the world. Stock markets do emerge because this way they get the public to continue investing or begin to invest their money into stocks.
Stocks aren’t the only thing the public can invest in there is also bonds from the government. Next we will speak on three great moments in the history of stockbroking.
The Birth of Stock Exchange
The first stock exchange to ever happen was in Belgium. Antwerp was where it all happened, back in 1531. The way this stock exchange worked was by dealing with it with promissory notes as well as bonds. In the 1500’s there were no real stocks meaning that there was no real share. Beurzen’ was what early stock markets were called.
This was due to the influence of the Van der Beurze family whom was a resident of Belgium. This stock market resembled a lot of what’s going on today in companies such as CMC Markets and the stockbroking world. The way they were organized and ran was very similar to what we have today. The only major difference was what was being traded. No real company trading shares were being traded.
The East India Company
Belgium might have had the first stock exchange happen, but East India had the first publically traded company. Simply because they were willing to take the risk that everyone else didn’t. No company was willing to take the risk to go across the planet. This company was called Governor and Company of Merchants of London trading with the East Indies.’ So what was different about this company aside from taking the risk?
They came up with a plan that was a lot more intriguing when it came to investing. Investors would no longer have to invest everything on one voyage and take the risk of losing everything. They would now be able to invest and purchase share in more than one company. This meant that if ships were lost the investors would still make a profit instead of it being a complete loss.
The First Major Stock Exchange in the U.S.
The New York Stock & Exchange Board was the first major stock exchange in the U.S. This stock was initiated in 1792 in New York City’s infamous Wall Street. NYSE (New York Stock Exchange) grew quickly, so quickly they had to relocate to a much bigger and spacious building in order to keep the large amount of traders they had.
NYSE is one of the most well-known and largest stock exchanges in the world. CMC Markets keeps traders up to date by following the world’s largest stock exchange. In 2000 NYSE launched an electronic trading platform that introduced a lot more transparency with a more accessible way to the OTC energy markets. It has continually kept growing with inspiration from their customer’s needs. They strive to keep their markets, clearing, risk management, listings, technology, data and customer service up to date to keep customer needs in top priority.
These three great moments in the stockbroking history definitely changed the world of stock exchange. Shaping the stock exchange into the way it is today and still learning from important events like these. Nowadays basically every country has it’s own stock market. Millions and trillions of dollars are being traded on the daily in the stock market all around the world. Of course major stocks have gone through the ups and downs of having a crash at some point. Some of the biggest crashes include one’s like Black Thursday and Terrible Thursday back in 1929.
The electronic trading had it’s own crash in 1987 which nobody saw coming. Stock markets that are on the rise as of today include the Bombay Stock Exchange in Mumbai, India, BM&F Bovespa in Sao Paulo, Brazil. Today there are 18 major stocks exchanges in the planet. A big rise of online trading has made it quite easier to trade stocks all over the world.
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Small business owners have several options when it comes to raising working capital – they can get a traditional small business loan with fixed payments, raise money from investors by selling shares of equity in the company, run up balances on credit cards, or get a revolving line of credit. A revolving line of credit is an important tool for small business finance, but this type of working capital is often misunderstood. There are several reasons why a revolving line of credit should be a key part of your financial management strategy.
A Revolving Line of Credit Offers Flexibility
Revolving lines of credit give business owners a great degree of flexibility. Unlike a traditional business loan with fixed terms and fixed payment amounts, a revolving line of credit can expand and adapt to meet the changing needs of your business over time. A revolving line of credit works like a credit card: you get approved for a certain credit limit (based on your creditworthiness) and then you can borrow as much or as little money, within that limit, as you need.
A revolving line of credit also enables you to have flexibility in regards to repaying the loan. Instead of a fixed term loan where you have to make the same payment every month, a revolving line of credit (like a credit card) gives you the option of making minimum payments that are more tailored to your monthly cash flow – although, of course, you need to be mindful of the added interest costs and fees that can accrue from only making your minimum payments.
A Revolving Line of Credit is More Convenient Than a Traditional Loan
A line of credit offers great convenience because you don’t have to apply and get approved for a new loan every time you want to borrow money. Also, many online lenders offer lines of credit with approval processes that are much faster than a traditional bank’s loan approval process. This makes a line of credit the ideal choice if you need cash quickly or if you have ongoing needs for working capital that need to be addressed with regular infusions of cash.
Once you are approved for a line of credit, you can continue to use that account with all the convenience of a credit card in your pocket (but without carrying the piece of plastic). As an added bonus, business lines of credit also typically offer lower interest rates than credit card accounts.
A Revolving Line of Credit is Ideal for Online Banking
More business owners are getting comfortable with the idea of online loans, and revolving lines of credit are well suited to online banking and mobile banking. Just like people use their smartphones to check their bank account balances or shop online or make payments, more bank customers are starting to be interested in borrowing online as well. For example, the Adobe 2015 Mobile Consumer report found that more than 20 percent of Millennials (and 14 percent of Gen Xers) want to be able to apply for banking products online, and more than 50 percent of U.S. and U.K. mobile consumers say they would like to use mobile-only banking. A revolving line of credit – depending on your choice of lender – can be applied for online and then you can check your line of credit details at any time from a mobile device. This spirit of flexibility, adaptability and convenience that is powered by mobile banking technology is a good fit for the current trends related to how more small business owners are expecting to access financial services.
A Revolving Line of Credit Can Help with Ongoing Expenses and One-time Investments
A revolving line of credit can be used for any type of business expense, but most financial experts recommend that your business line of credit should mainly be used for ongoing operational costs – paying bills, covering cash flow shortfalls, and so on – with a smaller percentage dedicated to one-time contingencies. By striking the right balance in regards to how to use your line of credit, you will be sure to have enough working capital available to pay your bills each month while still having flexibility to invest in growth – and if you realize that you need more money, you can always apply to increase your line of credit to a larger credit limit.
A line of credit is an essential financial management tool that can help your business survive, thrive and grow. Before applying for a line of credit, make sure you do your research: understand the fine print and calculate any fees or costs, and make sure you have a good strategy in mind for how you want to utilize the line of credit. Whether it’s for ongoing expenses or one-time investments, a line of credit can help you have a flexible source of cash to keep your business moving forward.Comments: 0 Read More
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