The Finances

Protecting the Home

noreply@blogger.com (Anonymous) — Tue, 25 Mar 2014 05:08:00 +0000

Property ownership for each individual moment is between ideal conditions after having a career and some other assets including cars.

Such mentality also belonged to the younger generation of new work not only on factors desire to own a property itself, but because ownership wanted in advance of rising prices soaring.
Of course they also want to own a home with the best investment.

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However , do not forget the importance of insurance coverage because it is an important element as well as the ability to commit to a monthly loan including the policy premium . According to the CEO of Takaful Ikhlas Sdn Bhd (Takaful Ikhlas ) Ab Latiff Abu Bakar , each year the department received premiums of about RM100 million of public employees and it includes housing policies Clustered Housing Protection Scheme .

He said it is the best policy than individual schemes which charge a premium, six to seven per cent higher than in clusters. He says it is the buyer's responsibility to know the type of house policies available in the market to get the best protection , especially for the long term ."The purpose of a policy on a home is to ensure that the property purchased is theirs if any untoward incident happens to the individuals concerned and also to prevent the load on the receiving bail , " he said.

Ab Latiff said the buyer actually has the right to choose their policies manufacturer and is not bound by the decision of the bank financiers because that way they will have home protection with high satisfaction rate when subscribed to understand the product .
Takaful products appears to have advantages over conventional submitting premium rebates in several situations , including when an individual has a good payment record until the end of the period of coverage and payment completed ahead of the deadline." Conventional policy does not provide for payment of the premium return early and do not have a rebate returns on record ," he said .
Looking at this situation what is important is not only the right buyer and the type of coverage , but persistency own the asset protection against fire and natural disasters such as floods .
" Many policyholders who did not renew funding expires protection policies by buying premium and after the occurrence of untoward incidents them back to the insurance company , " he said.

Property insurance safety measures

noreply@blogger.com (Anonymous) — Tue, 25 Mar 2014 05:06:00 +0000


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Step insuring property has been encouraged by the industry players based on some rationale is needed.

Apparently, the bank also has a similar stance to encourage customers to apply for financing products to also take protection products whether takaful and conventional insurance as it is very important to protect the borrower, heirs and seen not onerous.

President of the Association of Islamic Banking Institutions Malaysia (AIBIM) Datuk Mohd Redza Shah said, most banks in the country to offer mortgage financing is encouraging borrowers to take financial protection products and it is not a mandatory step for approval.

He said these efforts benefit the borrowers of housing and also the bank in the event of any matter that may affect the commitment of installment payments.

"Encourage to take financing protection products is not only focused on housing finance, but if we look at all products that involve loans will be accompanied by protection products as a measure of long-term security to the borrower in the options.

"I do not see taking protection products for financing as a liability to the borrower because most banks can include the cost of financial protection products in the amount of funding that is made with their consent,"

MH370 loss was not a factor influencing the stock price drops on Bursa Malaysia

noreply@blogger.com (Anonymous) — Tue, 25 Mar 2014 05:00:00 +0000

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External factors , and not the loss of Malaysia Airlines ( MAS ) MH370 , which have influenced the decline in share prices on Bursa Malaysia .

External factors , including the uncertainties of China's economic growth and the ongoing political problems in Ukraine .

Head of Investment Strategy and Chief Economist AMP Capital Investors Dr Shane Oliver said most global stock markets declined last week due to the issue and do not be surprised to see the Malaysian stock market also experienced it.

" While the news is focused on the missing aircraft , the Kuala Lumpur Composite Index ( KLCI ) declined only 1.5 percent, while other Asian markets actually registered a significant decline , " he said.At the close on Friday, shares of Malaysia Airlines gained half a sen to 24 sen .

Oliver was responding to a question whether the loss of the aircraft has affected the Malaysian stock market last week.

"Overall , Malaysia is in a good position in the face of a not so good week for global stocks ." We may see choppy trading next week on KLCI . But this again may be due to the pressure of global powers , including weakness in the shares in the United States and Europe , caused by concerns about Ukraine , " he said.

MH370 aircraft carrying 227 passengers and 12 crew to Beijing lost about an hour after taking off from Kuala Lumpur International Airport at 12:41 am on Saturday.

The plane was supposed to land in Beijing at 6:30 am the same day.

Commercial debt recovery

noreply@blogger.com (Anonymous) — Fri, 21 Mar 2014 07:43:00 +0000

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The biggest challenges that the British businesses facing is the late payment. Such efforts have been done to reduce it, but it is still remaining. Some, the government have to interfere and it is still lacking of solution.

Unsurprisingly there has been a considerable amount of publicity surrounding this ongoing burden, and in particular its effect on Britain's small and medium enterprises, often thought of as the backbone of the economy. With pressure mounting, and the repercussions of late payment taking a long time to shift, it is vital that smaller firms are doing all they can to safeguard themselves against it by using a range of credit management techniques.

There are a number of ways that SMEs can attempt to prevent the negative cash flow effects that late payment incurs. A rather obvious example is that they can initially create a clear credit control procedure, frequently overlooked, yet essential for setting up a co-ordinated and professional strategy for any accounts receivables team. Another is making sure that they thoroughly know their customer before committing to offering credit terms. By obtaining all the relevant information it can be extremely useful to get a credit expert to check any credit risk posed to the business.

There are many more credit tips available for small businesses to take advantage of, however should late payment occur it can be practical to outsource the debt recovery.

There are a range of benefits to outsourcing bad debt and the first of these is that a business can save valuable time and resources. As invoices grow older it becomes more difficult for businesses to recover what they're owed and the common result is for business owners to spend valuable time and resources chasing late paying customers. By outsourcing the debt's recovery, the debt collection agency acts quickly to minimise the impact of late payment while the business maintains focus on its growth opportunities.

What many businesses may not know is that commercial debt recovery can be entirely flexible and tailored to its specific requirements. A one-off debt recovery can help for an invoice that's particularly old or highly-valued or an ongoing debt recovery service can allow a business to focus on new debts in the confidence that aged balances are in safe hands. There are a number of other factors that outsourcing bad debt can help with, from legal recoveries to debtor tracing services. With late payment persisting, SMEs don't have to battle debt recovery on their own.

Secrets for debt free

noreply@blogger.com (Anonymous) — Fri, 21 Mar 2014 07:36:00 +0000

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A budget is really important. In fact some of the gurus did mentioned a good budget can solve debt. A good budget is spend wisely and don't spend for things that you don't want. The most important in good budget is your principle and attitude in spending.

Too Much Debt- Reject Passivity
Passivity is the mind-set that things will somehow take care of themselves. It's the thinking that somehow if you keep on doing what you are doing, you will get different results. How's that working out for you so far? Things don't magically change for the better. A lottery ticket purchase does not translate to actively fixing your debt problem. You must actively reject passivity. Reject the notion that you are so far in debt that you need to live as long as Moses to get out of debt. That is a weak mind-set which focuses on the past and not on the future. So reject passivity and get your "you-know-what" off the couch.

Accept Responsibility
Take a quick look at your debt. Don't look at the reason(s), just look at the amount. Now accept the responsibility that you either were fully responsible, partly responsible or not responsible at all. But NOW YOU ARE RESPONSIBLE for paying it off. So stop complaining and pointing fingers. Take responsibility and create a plan to get out of debt.

Lead Courageously
This is taking the bull by the horns with a plan in hand with two purposes:
Don't get into any more debt.
Get rid of the debt you have.
Leading means involving others. By that I mean let other close friends know of your plan and keep them routinely apprised of your status. Ask for help if you need it.

Too Much Debt- Invest "Timelessly"
We don't own it all. Another concept that gets tossed under the rug is the notion that we don't own anything really. A reporter asked the wife of the late Mr. E. "How much money did Mr. E Leave?" She responded: "All of it!"

We cannot take it with us. The best we can do is bequeath it to our family, friends or some well-meaning organization. But the question you must wrestle with is: who owns it if I don't. And if I don't own it, how should I be handling all this debt I have accumulated?

Consider taking the posture that you are only the manager of what you have and not the owner. If you are a manager and have to give account for what you have done, then you will treat what you have with more respect.

Below are the summary:
Reject Passivity- Get off the couch
Accept Responsibility- Don't point fingers
Lead Courageously- Make it happen
Invest "Timelessly"- You can't take your money with you when you die.

Long term debt affects US rates-The Crisis

noreply@blogger.com (Anonymous) — Thu, 20 Mar 2014 11:24:00 +0000

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Will it be all torment and no increase for moguls who have heaped into long haul corporate obligation as of late?

Notwithstanding climbing desires of higher US security yields not long from now, and the falling security costs that are the other side of that coin, there has been no deficiency of purchasers for the 30-year dollar securities sold as of late by organizations, for example, Bank of America, General Electric, Pemex, Novartis, and JP Morgan Chase, around others.

Such securities could endure huge value falls if investment rates climb in the nearing months. The peril was adequately and breathtakingly represented a year ago when Apple's 30-year security rapidly lost about a fifth of its esteem as Treasury yields climbed forcefully throughout the Spring.

Since a long time ago dated securities are noted for being more delicate to changes in underlying investment rates than shorter-term obligation securities.

For the time being, doubt about the strength of the US economy, low swelling and the desire that the Federal Reserve is in no dash to tighten financial arrangement, as it gradually decreases its month to month security buys, have set a roof on long haul investment rates.

As opposed to address if this can keep going, moguls have been eager purchasers of long haul bonds, or those with a development of more excellent than 10 years.

"The lesson here is that it has gotten to be to a great degree challenging to time the security markets," says Robert Tipp, boss financing strategist at Prudential Fixed Income.

"Indeed with a favorable investment situation and evidences the Fed might begin to decrease, rates finished not go down strongly, and presumably won't within a brief period of time. Subsequently, long haul altered pay will beat money."

Worry about length of time presentation in bond portfolios is continuously downplayed for the minute. Long haul corporate obligation has created an aggregate return of almost 5 for every penny so far in the not so distant future, while garbage securities have given back 2.4 for every penny, as stated by Barclays.

That is uplifting news for institutional gurus, for example, annuity trusts and back up plans, which have been the most amazing purchasers of long haul corporate obligation lately. They utilize high-review, longer-dated securities to match their underlying liabilities, however a turn higher in rates stands to damage those moguls pursuing the higher yields on more dated obligation.

Jay Mueller, portfolio director at Wells Capital Management, says the longing for span presentation is information subordinate. Annuity plans, which have been exchanging out of values after their solid execution in 2013, are presently moving into the more drawn out span exchange as questionable matter over the quality of the economy and low swelling overwhelm estimation.

"The favored system for annuity arrangements inoculating their portfolios is purchasing as far back as anyone can remember dated credit," he says. "We appear to be in a periods where there is suspicion about the quality of the US economy, but the Fed is winding down its substantial stake buy program."

With the Fed's decrease on course to end by September, and the economy anticipated that will bounce back from its winter soul, the clock is ticking for long haul investment rates.

A powerful pick-up in monetary movement that vindicates the late record US value business sector run is seen pushing long haul investment rates much higher.

The yield on 10-year US Treasury securities remains at 2.67 for every penny, however numerous economists estimate an increment to 3.5 for every penny by the end of the year. As a dependable guideline, a security with a length of time of 10 years might encounter a value decay of 10 for every penny in case benchmark investment rates climbed 1 rate point.

"At this stage, I'm not certain I might go an excessive amount of past the 10-year point with regards to length of time," says Jim Sarni, an overseeing foremost at Payden & Rygel.

"There's a yield pick-up the further along you go out with the [maturity of] securities, however I don't think its worth the trouble, given the potential for value decays were benchmark rates to go down rapidly," he includes.

For the time being, organizations have been exploiting changing speculator assessment and the solid interest from institutional speculators, with issuance of as far back as anyone can remember dated corporate obligation at a strong level of $126bn so far in the not so distant future, as stated by Dealogic. That figure is running marginally underneath a year ago record pace of $145bn, for the same period.

"Request from benefits reserves and institutional speculators has been really compelling," says Mr Sarni. "However it makes you consider to what extent will it keep going, and what sort of effect it may have if for reasons unknown they get less steady."

Wicks, a Guide on How to Cut Loss and Take Profit

noreply@blogger.com (Anonymous) — Tue, 18 Mar 2014 14:32:00 +0000

Wicks are an intriguing sensation in value candles arrangements and are a piece of each light. Wicks could be shaped on the top, base or both sides of a flame, and they speak to the highs and lows of that candle throughout that time of time.

What is important to remember after reading this article is that the wicks are basically 'rejection' areas where the market simply rejected the prices of the wick. It is important to note that we are talking about the "Close" of the candle and the wicks it forms after candle closes. it is the final and permanent shape of the candle.

When you see a long wick, it clearly confirms that market participants rejected the price move in that direction during that period of time, therefore, prices weren't accepted. Whereas, if prices were accepted, then the price would remain there for a decent amount of time and most probably close somewhere around there. And since the relationship between "when" and "what" is considered a crucial one in business, however, its importance rises in this context, which is the market's rejection to the price value during that specific period of time.

If we are talking about 5min charts here, then the wick formed is for only relevant to 5 minutes charts, which are non-essential or of real impact. However, when you start to look at 4 hour or daily charts, then they are of great significance.

If you think about it, day traders are only witnessing two or three 4 hour candles during a day. So in order to have a long wick on a 4 hour chart, then forces behind the price move must be very strong and important which dominants a trading session. And since day traders will rarely take notice of this move because it take a long period of time to form - hence they will usually end up trading against the price action trend, which basically supports the conflict of interest theory between the retail investors and commercial brokers and somehow explains it.

It is always preferable to use the 4 hour chart when working with strategy, or when a long wick forms on the daily chart.

Take a look at any chart, notice how every time the index reversed, it did so with a very long wick that tops or bottoms at the same price level. This usually gives an idea that market participants simply did not accept prices at these levels, simply because the supply didn't coincide with the demand at that specific time frame (No participants), Therefore, sellers aggressively entered the market quickly causing the pair to drop fast which was the confirmation of the drop.

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If a long wick is formed on a daily chart, day traders across all time zones should take note of it and really be confident about their trade going against the wick, especially given enough conviction via technical or fundamental analysis. The main reason is that market participant has rejected that price level that entire day. With that being said, hedge managers always incorporate this approach to target range trading or breakouts, in both cases, these guidelines serve as "Risk Management" principles if applied properly.

Since the wick represent the high and low price of a candle, and is an area of "rejection", then the probability of trading inside the wick in the very near future is pretty low, which means that trading within daily candles' region is going to be less likely, and so your Stop Loss order.

It ought to be noted when breaking down value activity that the business sector will normally make a second endeavor on the past dismissal level (wick's tail). In the event that you investigate any coin outline, you will perceive how these levels serve as help levels. Consequently, when basing choice utilizing the Wicks Strategy, a broker ought to record for an alternate test to the past wick's tail; hence, utilizing the tail will offer a finer risk/reward chance.

Holiday Debt

noreply@blogger.com (Anonymous) — Tue, 18 Mar 2014 14:27:00 +0000

While the end of the year methods occasions loaded with festival and family, it additionally means keeping tabs on year end plans and hit targets. Occasion obligation is made by overindulgence, which might be more troublesome when the borrower owes a generous measure of cash. Customarily in the soul of the occasions, obligations are pushed aside by either the debt holder, the lender, or the judgment holder. The point when individuals owe monies, for example, obligations, judgments, or even youngster backing and spousal help, it might be normal practice to put things on a low priority status for the sake of the occasions. While I comprehend this occasion marvel, we likewise see how testing this might be for a business or a person that is owed cash and attempting to gather.

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Throughout the years, the holidays are notorious for being troublesome months for collecting debts. People will simply not pay what they owe because they will buy presents and celebrate by creating holiday debt, regardless of how much they owe to whom. It is possible to be in the holiday spirit and be empathetic to a debtor's situation while also being firm in debt collections efforts. Sometimes people get caught up paying for things they need in the immediate moment and are so focused on the many lists of things that need to be done for the holiday season and simply forget they are in debt to anyone.

The January Struggle:

The goal of any business owner or individual is to not end up with an increasing number of receivables in January after the buying season has slowed down. People are starting to pay off their holiday debts come January and leave their existing debts for a later date. It is important as a business owner or a debt collections agency to still be active in the collections process while being understanding of the time of year we are currently in.

What You Can Do:

The most significant method you can utilize is to stay sorted out and continue top of your receivables. Your indebted individuals are prone to be sloppy this time of year so it is essential that you look after the association required to gather your cash capably. Despite the fact that this could be a baffling time for a leaser, it is vital to utilize moral accumulations polishes. It's not generally that the borrower would like to pay, they very well might need help in prioritizing.

How to Calculate your Property Lawyers Fee?

noreply@blogger.com (Anonymous) — Sun, 16 Mar 2014 12:53:00 +0000

One major fee that you need to bare other than the 10% downpayment, is the legal fee. It involve some amount depending on the price of the property that you are buying.

Here is the calculation below:

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As an example, if you are buying a RM500,000 property, how much lawyer’s fee would you have to pay? Look at the calculation below:

First RM150,000 x 1% = RM1,500

Remaining RM350,000 x 0.7% = RM2,450

Total: RM3,950

Then, you plus all the other fees as stated.

Now, are all lawyer firms the same? Let me tell you seriously, answer is NO. The lawyer will not make you fail in buying the house but they may not follow up closely enough and you ended up waiting one extra month if not more. Thus, it will be wise to ask your close agent friends on which lawyers are good. Alternatively, ask your banker friends. Once you found a good lawyer, stick to them.

Remember this is a NO discount fee...

MAS Stocks Falls not because MH370

noreply@blogger.com (Anonymous) — Sun, 16 Mar 2014 12:20:00 +0000

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External factors , and not the loss of Malaysia Airlines ( MAS ) MH370 , which have influenced the decline in share prices on Bursa Malaysia .

External factors , including the uncertainties of China's economic growth and the ongoing political problems in Ukraine .

Head of Investment Strategy and Chief Economist AMP Capital Investors Dr Shane Oliver said most global stock markets declined last week due to the issue and do not be surprised to see the Malaysian stock market also experienced it.

" While the news is focused on the missing aircraft , the Kuala Lumpur Composite Index ( KLCI ) declined only 1.5 percent, while other Asian markets actually registered a significant decline , " he said.At the close on Friday, shares of Malaysia Airlines gained half a sen to 24 sen .

Oliver was responding to a question whether the loss of the aircraft has affected the Malaysian stock market last week.

"Overall , Malaysia is in a good position in the face of a not so good week for global stocks .

" We may see choppy trading next week on KLCI . But this again may be due to the pressure of global powers , including weakness in the shares in the United States and Europe , caused by concerns about Ukraine , " he said.

MH370 aircraft carrying 227 passengers and 12 crew to Beijing lost about an hour after taking off from Kuala Lumpur International Airport at 12:41 pm Saturday .

The plane was supposed to land in Beijing at 6:30 am the same day.

How can we stop debt?

noreply@blogger.com (Anonymous) — Wed, 12 Mar 2014 09:10:00 +0000

Nowadays life and debt is much in common. We are like comfortable living with massive of debts and in fact we are taking it even more. The worst thing about it our debt levels have consistently increase and studies shows that we always achieve high number of debts every quarter.

Why do we keep adding to our debt loads — and where will it stop?

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When you can have a brand new car, most people will get it, thinking why not? If I can, I might as well have a nicer home. If I can, I might was well have nicer clothes and the list goes on,” says Tim Hydzik, a 28-year-old Edmonton entrepreneur.

A few years ago, he leased a new SUV and then racked up $16,000 in credit card debt. “With my vehicle, it was me knowing I was capable of having it, so I chose to have it. When things are good, you assume that things are going to stay good. You’re never forecasting the future.”

Almost half of Canadians who have credit card debt say they always or often carry an outstanding balance, according to a survey by Harris/Decima for Hoyes, Michalos & Associates. One in four say it will take more than a year to pay off their outstanding balance; 1 in 20 report that they will never be able to fully pay off the debt.

When do we hit the panic button?

Stephen Harper, Prime Minister of Canada, spoke to journalists in January about our rising levels of household debt.

“There are a percentage of Canadian households who have probably borrowed too much,” Mr. Harper told the press conference in Vancouver.

Mr. Harper said he and his wife borrowed money in recent years because of the low rates; however, he said if rates rise significantly, they could still afford to carry that debt.

“So look, it’s not a reason to panic; in fact, we’ve actually seen Canadian debt beginning to level off. But we would obviously encourage people to look at their debt levels carefully. Eventually, it may not be for two, three years, but eventually interest rates will start to rise. And Canadians should ask themselves serious questions about if interest rates came up significantly, would I still be able to afford my debt payments?”

One useful stress test is to consider what would happen if interest rates rose two percentage points. Think about how you would cope with a job loss. Also, calculate how much you spend to service your debts. For example, are you spending more than 15% of your net income toward servicing your credit card debt? Banks suggest that you take your monthly debt obligations (credit card payments and mortgage payments) and divide it by your after-tax income; it should be between 30% to 45%.

In 2011, Mr. Hydzik moved to Kelowna to start a new business; his financial circumstances had changed but his lifestyle and spending habits did not. Soon, he fell behind on his credit card bills and creditors started calling. It took him three years to clear his debts; he made his last payment a few months ago.
“It’s a feeling of relief, it’s a feeling of accomplishment,” he says. “Face your debt rather than run away from it.”

Canadians’ collective debt is worth a record $1.422-trillion, according to credit agency Equifax Canada, and we don’t seem to be slowing down. Consumer debt, excluding mortgages have risen from $334.6 billion in the first quarter of 2007 to $518.3 billion through the end of November 2013.

TransUnion predicts the average consumer’s total non-mortgage debt will hit an all-time high of $28,853 by the end of 2014.

Although debt levels are climbing, Equifax Canada reports that delinquencies are at all-time low with only 1.12% of Canadians in arrears for more than three months. “Debt is going up but are they able to make monthly payments? The answer so far is ‘yes,’” says Regina Malina, director of modeling and analytics for Equifax.

It seems like good news: we are better at handling our debts.

But paying off only the minimum balance and calling yourself up-to-date on your bills is like treading water. Sooner or later, you’ll drown. A bank can demand you repay your loan, your credit cards may reach their limits and your credit rating may suffer so that you can’t qualify for more financing.

And interest rates might rise so that it all costs you even more.

“With the lower interest rates, it allowed people to get into a view that interest rates are going to be low forever,” says Brian Pritchard, a trustee in bankruptcy and senior vice-president of BDO Canada. He adds that he acutely remembers that in the early ’80s, interest rates soared above 20%; last year, five-year fixed rate closed mortgages dropped as low as 2.99% at some major banks.

Canadians carry an average of two credit cards per household, says the Canadian Bankers Association, but it’s not uncommon for people to have more than two.

“You see now a lot of the retailers have now gotten into the finance business. I remember walking through the store and someone offered me a free hammer if I applied for a credit card through Canadian Tire,” Mr. Pritchard says.

“You’re going to go into the Bay or Walmart or Sears and each of those have their own credit card. They’ll give you a discount if you apply. Now you’ve got access to a limit of say $5,000 that some people view as free money.”

BDO suggests that you use your tax refund to pay down credit card debt. (The government reported that the average individual tax refund for the 2012 tax year was about $1,620.)

Something to ponder - for some of us the cost of living in this supposedly advanced, abundant age of technology is simply too high, with very little evidence to suggest that we will see a turn-around in the cost of a modest living in the 21st century.

For the other half we have a bunch of superficial, materialistic narcissists who love spending money they don't have on things they don't need to impress people they don't really like. These people live empty vacuous lives where the only thing distracting them from how empty they are is to consume.

Third Party Security Finance

noreply@blogger.com (Anonymous) — Tue, 11 Mar 2014 13:43:00 +0000

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A third party security is security given by an individual or entity which secures the liability of a third party. If the third party security does not contain any personal obligation to pay on the part of the mortgagor or chargor, it can be treated like a limited recourse guarantee so that the liability of the mortgagor or chargor is limited to the amount which can be realised upon disposal of the third party security.

In this guide, we look at how this type of security is different to direct security and the key considerations for lenders to be aware of and take into account when they are being granted third party security.

Why does third party security differ from direct security?

Third party security differs from direct security (where the individual or entity is securing his/its own liabilities), because the rights and duties applying in relation to guarantees and indemnities also apply to a third party charge. Generally speaking the duties are embodied in the overriding principle that a creditor must not prejudice the rights (of subrogation) of the surety against the principal debtor or the rights (of contribution) of the surety against his co-sureties. Broadly speaking, the right of subrogation is the right of the surety to "stand in the shoes of" the creditor once it has been repaid by the surety and the right of contribution is the right of the surety to recover from his co-sureties money to the extent that the surety has borne more than his fair proportion of the liability to the creditor.

How can you achieve the same effect as a third party security?
The same effect can be achieved by taking a guarantee and a direct security and indeed this is probably a better method. Many banks will not have a third party security template for this reason.

What features do you find in a third party charge which you do not find in a direct charge?

Apart from the obvious that the third party mortgage or charge secures a third party's obligations to the creditor and not the mortgagor/chargor's direct obligations, a third party mortgage or charge will need to contain guarantee type provisions to avoid the possibility that the surety may be inadvertently discharged by the acts or omissions of the creditor e.g. by the creditor granting time or indulgence to the principal debtor or varying the terms of the guaranteed liabilities.

What are the key issues you need to consider when taking third party security?

In a nutshell, these issues are exactly the same as if you were taking a guarantee, namely:

Corporate benefit - can it be demonstrated that the directors are acting in the best interests of the company? This is not difficult where the liabilities to be secured are those of a subsidiary, but more challenging where the liabilities to be secured are those of a parent or co-subsidiary. If there is any doubt, a prudent creditor will require the shareholders to bless the giving of the third party security so as to avoid the directors being in breach of their fiduciary duties to the company and the possible set aside of such third party security on application to the court by the company or its liquidator or administrator.
Undue influence - a guarantee/third party security from an individual can be set aside if , for example, the consent of a wife to stand as security for her husband's obligations is obtained as a result of undue influence , misrepresentation or other legal wrong of the husband and the creditor cannot demonstrate that it has taken certain reasonable steps to ensure that the wife received independent legal advice not only on the third party security, but also about the nature and effect of the underlying transaction.
Transactions at an undervalue - if a company gives a guarantee or third party security and the benefit it received from giving the guarantee/third party security is significantly less than the benefit it conferred on the creditor, the guarantee/third party security can be set aside if:
- the company was balance sheet or cash flow insolvent when it gave the guarantee/third party security or became so as consequence of giving it; and
- the company enters into administration or liquidation within two years from the date of giving it (three years if the parties are connected),unless it can be shown that the guarantee/third party security was entered into by the company in good faith and for the purpose of carrying on its business, and that at the time it did so there were reasonable grounds for believing that the transaction would benefit the company.

A similar regime applies to individuals, but the relevant period for an individual entering into bankruptcy is five years.

Preference - A guarantee/third party security can be set aside within six months (or two years if the parties are connected) of it being given if it was given to benefit one creditor over the others and the company is insolvent when it was given or becomes insolvent as a consequence of giving thesecurity.

A similar regime also applies to individuals, with the relevant period
- five years prior to the bankruptcy of the individual concerned if the preference is given or entered into is also a transaction at an undervalue;
- two years prior to the bankruptcy of the individual concerned in the case of a preference which is not a transaction at an undervalue and is given to a person who is an associate of that individual; or
- six months prior to the bankruptcy of the individual concerned in any other case of preference which is not a transaction at an undervalue.

Conclusion

So, if you are deciding to take third party security, make sure all the issues such as guarantees of the document creating the third party security incorporated to protect the creditor.

All time Myths about Life Insurance

noreply@blogger.com (Anonymous) — Tue, 11 Mar 2014 08:38:00 +0000

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Life insurance now is a need not an option. A good life insurance policy helps us to prepare changes in our life and protects our love ones. Here are some Myths that you should know about life insurance.

Myth 1: Life insurance is too expensive.
There are a wide variety of plans available. Depending on the person’s age and the coverage that they select, the costs will vary. Some people can find very affordable plans to meet their needs that fit within their budget. Discussing their needs and goals with a professional can help people to find the right plan for them. Prices have changed over the years so it is worth looking into the current options.

Myth 2: All policies are the same.
This is certainly untrue. Not only do plans vary by provider, people can tailor them to meet their specific needs. They can choose different levels of protection and benefits. It is important to look at more than just the price. Read the details about what is covered and how the plan works. A person may pay a little bit more but get a policy with more comprehensive services and save in the long run.

Take the time to compare what different policies provide. Also assess personal needs. In addition to paying for medical and funeral bills, having coverage that will satisfy other debts and living expenses for the family is valuable. Professionals can help people to assess their cash flow and debt, and determine how much coverage is most beneficial.

Myth 3: Single people do not need coverage.
Although single people may not have any dependents relying on them, this does not mean that they do not need coverage. If something should happen to them, their family is left to cover the costs of their care, funeral, and any outstanding debts. Insurance coverage can also help to support loved ones in the future and provide them with more financial security.

Myth 4: It is okay to wait to purchase a policy.
When a person purchases a life insurance policy is a matter of personal preference, but it is never too soon to invest. Even though the person is young and healthy now, they have no way of knowing what the future will bring. Should they become ill later on, they have the comfort of knowing that they already have a policy in place. This can reduce the stress and burden they feel.

Myth 5: People with health problems cannot purchase life insurance.
Insurance companies work with people who have a wide range of needs. While it is sometimes less expensive for someone in better health to get a policy, that does not mean that others are excluded. Some providers offer special plans for those who have existing medical problems to address their needs. This is another reason why early planning is key.

Myth 6: Employer coverage is enough.
“It is a nice benefit when employers provide life insurance coverage,” says Trevor Garbers, “but there are limitations.” For example, the amount of coverage may cover one to two times their salary but still fall short when it comes to meeting their family’s needs as well as other expenses. Also, if the person should leave the company, their coverage ends. It is not generally something that they can take with them. If they want to continue having coverage, a separate policy is required.

A separate policy can also supplement what their employer provides. It can help to better meet the individual’s and family’s needs and expenses. Should they leave, they can adjust their personal plan to make sure that it is still beneficial and provides adequate coverage.

Myth 7: Stay-at-home spouses do not need coverage.
Although a stay-at-home spouse may not bring in a salary per se, they provide valuable services. Should that person pass away, will the remaining spouse have enough to cover child care or cleaning costs? Will they still have the means to maintain the same type of lifestyle they are accustomed to? A non-employed spouse may not bring money in, but they help to save on the amount of money going out.

Myth 8: Buying a life insurance policy is a once-and-done event.
Just because someone’s life insurance policy was appropriate at the time and provided them with the coverage they needed does not mean that they can forget about it. As their life changes and they get married, buy a house, have children, get divorced, or retire, it can affect the type of coverage they need. Reviewing their coverage periodically can help to ensure that it still fits their needs even as their life has changed.

This gives them the opportunity to make adjustments. They may find that what they once needed is not enough, or is more than enough. These changes could also affect the cost of their policy. It is important to make sure that they stay up-to-date so should anything happen, they are prepared.

Financial Stress or Debt Free Retirement?

noreply@blogger.com (Anonymous) — Tue, 11 Mar 2014 02:33:00 +0000

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Based on a report, Americans will face huge debt burden during the final phase of their working years. Those who are planning to enjoy their post retirement life need to lower the debt burden. Almost 28% Americans retirees went to the Association of Independent Consumer Counseling Agencies for financial guidance. There a studies that shows a large percentage of senior citizens have a massive amount of credit card debt, mortgage obligations as well as pending student loan payments.

Well, you'll be surprised to find that there is a common myth surrounding retirement. Most of the people assume that retirement means being debt free. If you've overwhelming debt, then it's a clear indication of delaying retirement for an indefinite period. Who doesn't want to enjoy his post retirement life? Retirement is actually a period of ease, so entering this stage with debts can be intimidating. Paying off debt is one of the essential steps while planning for retirement.

4 Steps to achieve a debt free retirement life to avoid financial stress:

Pay more on the mortgage: Use an amortization calculator to pay off the mortgage before your retirement. Supposedly, if you plan to retire in 15 years with 30-year mortgage, start making an additional principal payment per month. This can help you pay off the debt before you retire. If you keep your mortgage at a 30-year fixed loan, you're not required to make extra payment.

Move to a small apartment: You may often find retired people moving to a smaller apartment. In this slow real estate market, most of the people failed to get the right price; hence, they didn't sell their home. During the housing crisis, the lender tightened the lending standard, so the qualified buyers were unable to obtain the loan. As these people couldn't sell their homes, so it wasn't possible for them to buy a new one. Once the market recovers, make sure you sell the home. Selling the home can be beneficial, especially if you're unable to pay off the loan.

Increase your income: Even after cutting your expenses, if you still find it difficult to pay off your debt, find ways to make some more money. Start working little hard if you plan for a post retirement debt free life. Use your second job income to lower your financial obligation. Plan for a home based business or work as a freelancer to make some more money during your spare time.

Avoid borrowing from 401k plan: If you're planning to dig your money from retirement account, then it's not a good option. You may have adequate retirement savings, but it may not be enough to manage your expenses post retirement. Exhausting your retirement savings can be a major reason for messing your financial situation. Try to pay off your debts before retirement.

Therefore, if you're planning a debt free retirement, above points are critically should be followed.

source

Facts of the Missing MH370

noreply@blogger.com (Anonymous) — Mon, 10 Mar 2014 13:53:00 +0000

Since the aircraft was missing, too much speculation have been raised by the social media. Here are some facts about the missing aircraft MH370.

1. The Boeing 777-2H6ER, registration 9M-MRO MSN 28420, first flew on 14 May 2002, and was delivered new to Malaysia Airlines on 31 May 2002.

2. The aircraft was powered by two Rolls-Royce Trent 892 engines.

3. It had accumulated 20 243 hours and 3,023 cycles in service.

4. The aircraft was involved in a prior accident at Shanghai Pudong airport in August 2012, where its wingtip collided with another aircraft and broke off.

5. The plane B777-300 ER Registration # 9M-MRO was last inspected 10 days ago and was “in proper condition,” Ignatius Ong, CEO of Malaysia Airlines subsidiary Firefly airlines, said at a news conference.

6. However, there is a news report that just a day before the crash the aircraft had been on A-Check on KLIA hangar.

7. B777-200ER Registration # 9M-MRO of Malaysian airlines flew as flight MH370 on Saturday 8th March 2014.

8. Aircraft took off at 00:41 (16:21 GM) from Kuala Lumpur and was due to land at Beijing at 06:30 (22:50 GMT)

9. It had 239 people on board including all passengers and flight crew.

10. The 53-year-old pilot of Flight MH370, Zaharie Ahmad Shah, has more than 18 000 flying hours and has been flying for the airline since 1981. The first officer, 27-year-old Fariq Hamid, has about 2 800 hours of experience and has flown for the airline since 2007.

11. B777 flight MH370 from Kuala Lumpur to Beijing went missing in South China Sea

12. Last known location was off the country's Ca Mau peninsula 6°55′15″N 103°34′43″E (approximately 130 km/80 mi NNE of Kuala Terengganu, Malaysia). 120 nautical miles (220 km) east of Kota Bharu at the South China Sea.

13. The plane had been flying at an altitude of 35 000ft (10,700m)

14. The pilots had not reported any problems with the aircraft, no mayday or warning signals sent.

15. Aircraft lost contact at about 01:22.

16. The plane “lost all contact and radar signal one minute before it entered Vietnam’s air traffic control (Ho Chi Minh Area Control Center),” Lt Gen Vo Van Tuan, deputy chief of staff of the Vietnamese army, said in a statement.

17. No ELT signal to locate the wreckage.

18. No Mayday signal sent.

19. Aircraft’s black box is equipped with “pinger” that emits ultrasonic signals that can be detected underwater. Under good conditions, the signals can be detected from several hundred miles away If the box is trapped inside the wreckage, the sound may not travel as far. If the box is at the bottom of an underwater trench, that also hinders how far the sound can travel. The signals also weaken over time.

20. Search and rescue operation started.

21. The oil slicks sighted off the southern tip of Vietnam by Vietnamese Navy were each between 10 kilometers and 15 kilometers long.

22. The oil was spotted, the air search was suspended for the night and was to resume Sunday morning.

23. No floating debris except oil slick found at the suspected area of crash.

24. Two passengers were on board with stolen passports. The passports belonged to an Austrian National and an Italian national. Both the passports were stolen in Thailand. One was stolen 18 months ago and another one 2 years ago.

25. Questions are being raised for possible act of terrorism in this regard. But there is also a possibility that the passports have been used multiple times after theft by drug smugglers on the same route.

We hope that people will stop spreading false speculation and have some respect to the families of the passenger and the cabin crew MH370.

#pray4MH370

Financial tips for buying a house in Malaysia

noreply@blogger.com (Anonymous) — Mon, 10 Mar 2014 13:40:00 +0000

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Having your own house or home is like a dream of all people. But with the increasing of real estate prices and the burden of lengthy loan repayment periods, buying and financing a home is not just a matter of saying “I like it” and signing on the dotted line. It is something that should be done with a great deal of sense and prudence.

For all Malaysians who are actively considering to buy a home by taking a loan, here are some tips to determine if you’re financially ready to buy one:

1) Do you have enough for the upfront costs?

In Malaysia, most banks offer up to 90% of the property’s price (margin of financing) for your first two residential properties. If you receive that 90%, you need 10% cash to pay for the rest of the property’s price.

Say you’re targeting to buy a condo in Cheras for approximately RM400,000, you must have a minimum RM40,000 to pay upfront, be it from your savings or money from your parents, siblings or partner.

2) Do you have extra cash for miscellaneous fees and charges?

First-time home buyers may not know it; but buying and financing a home takes more than just the deposit and the loan, it also involves miscellaneous fees and charges that include, among others:

1. Stamp duty for transfer of ownership title (also known as memorandum of transfer or MOT) = 1% for the first RM100,000; 2% on the next RM400,000, and 3% on the subsequent amount.

2. Sale & Purchase Agreement (“SPA”) legal fees = 1% for first RM150,000 and 0.7% of remaining value of property within RM1 million

3. Stamping for SPA = Less than a hundred Ringgit

4. SPA legal disbursement fee = A few hundred Ringgit

5. Loan facility agreement legal fees = 1% for first RM150,000 and 0.7% of remaining value of loan within RM1 million

6. Stamp duty for loan = 0.5% of loan amount

7. Loan Facility Agreement legal disbursement fee = A few hundred Ringgit

8. Fee for transfer of ownership title = A few hundred Ringgit

9. Mortgage Reducing Term Insurancehttp://the-financeinfo.blogspot.com/2014/03/financial-tips-for-buying-house-in.html (ie. think of it as a life insurance for your home loan) = RM1,000 or more (some banks waive this amount)

10. Government Tax on Agreements = 6% of total lawyer fees

11. Bank processing fee for loan = RM200

*Note: The percentages are based on recommended numbers and industry averages. Actual figures may differ.

To put things into perspective, a home valued at RM400,000 with 90% margin of financing comes close to about RM20,000 in fees and charges – which will have to be borne by you, the buyer. Now consider this: do you have the money to make it happen?

3) Can You Afford to Pay the Monthly Installment?

Unless you have the financial muscle to buy a property with cash upfront (in which case, this article probably wouldn’t apply to you), you’ll need to secure a loan from a bank or a financial institution to help pay for your home.

Based on the current market rate of 4.2% to 4.4% p.a. interest for a standard home loan, you will need to pay a minimum of RM1,760 per month over the next 30 years for a 90% loan to finance a RM400,000 home. To quickly calculate the monthly installments charged by banks of Malaysia for a home loan of any value, you can use online calculators.

As most financial experts recommend that you allocate no more than one-third of your total income to pay off your home loan, this means you or your household should have an income of at least RM5,280 per month to afford the RM400,000 home.

Take note that Malaysian banks generally allow you to hold loans (including commitment for car loan, personal loan etc) of up to 80% of your income if you have a relatively good credit score, so you can always choose to increase your monthly installment and shorten your loan term. But make sure you’ve done the math and understood the financial implications before you commit!

What If I Don’t Qualify?

For those of you who can afford the monthly installment but do not have the necessary savings for down payment and legal fees & charges, hope is not lost.

For a start, you may consider looking around for properties with free SPA and loan facility agreements to save thousands of Ringgit in legal fees. This should be relatively simple as most new property projects commonly absorb the costs of legal agreements for home buyers.

To cut down on the initial payment needed to buy a home, do actively shop around for properties with low initial down payments. Many developers now offer competitive early bird or “easy entry” sales packages which include rebates of between 2% to even 10% of the property price.

Ultimately, buying a home is a serious life decision that shouldn’t be taken lightly. Though owning a home in a posh area is always nice, one should always consider one’s financial position when it comes to buying property, so you don’t end up being overly burdened for the next few decades.-source

How does the missing MH370 affects Boeing Shares?

noreply@blogger.com (Anonymous) — Mon, 10 Mar 2014 13:22:00 +0000

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Last three days the world was shocked by the news of missing aircraft Boeing B777-200 (MH370). The Boeing B777-200 aircraft was carrying 227 passengers, including two children, and 12 crew members. The incident not only affected MAS shares lately but also will affect Boeing that are currently facing down of share prices.

Boeing is inspecting the wings of 43 undelivered jets of its 787 Dreamliner model after their supplier warned that a change in the manufacturing process may have led to the formation of hairline cracks, causing Boeing to further delay deliveries.

The plane manufacturer experienced major difficulties with its marquee jet, whose debut in 2011 came with a three-year delay, and the company has been struggling to maintain production this year at 10 jets per month. Boeing however announced that it still plans to produce about 110 Dreamliners in 2014 and its revenue forecast remains unchanged, although only 8 were delivered through February.

The wings’ producer, Mitsubishi Heavy Industries Ltd., said that a change in its manufacturing process may have caused the cracks and following inspections confirmed the defect was present on some of the airplanes.
However, Marc Birtel, a Boeing spokesman, said, cited by Bloomerg, that all the affected planes were still in production and the company is working towards correcting them. None of the already delivered 123 Dreamliners have been exposed to the manufacturing flaw, the company said, since Mitsubishi found out the issue in mid-February during routine quality checks. Boeing expects each aircraft will require one to two weeks to inspect and correct, depending on their stage of completion.

According to external sources tracking the program, cited by the Wall Street Journal, seventeen out of the 43 jets being inspected were fully completed, while seven were being tested prior to their delivery. The remaining Dreamliners were still being assembled, and some of their wings have not yet been shipped by Mitsubishi.

In 2013, Boeing delayed deliveries of the Dreamliner as the lithium-ion batteries on two of the aircrafts melted down, due to which global regulators grounded the whole fleet for three months until the issue was resolved. The plane maker accelerated production to 10 Dreamliners per month from seven at the end of 2013 in order to meet the high demand for its fuel-efficiency, which is expected to bring seventeen new customers in 2014, among which Air Canada and American Airlines Group.

Boeing assembles its Dreamliners in two factories – its main wide-body plant in Everett, Washington, and at a newer facility in Charleston, South Carolina. Dreamliners are the first commercial airplanes made mainly of spun composite fibers instead of aluminium.

Mitsubishi builds carbon fiber composite 787 wings at its factory in Nagoya, Japan, and delivers them to Boeing’s final assembly lines in its two factories. Japanese suppliers account for around 35% of the Dreamliner’s construction. The wing is well known for its 58-meter span and its 20% smaller weight compared to the traditional ones, due to the new materials used in it.

Peter Arment, a New York-based aerospace analyst with Sterne, Agee & Leach Inc., said, cited by Bloomberg: “This looks to be a one-off, but obviously it gets a lot of attention given the history of this program.” He said Boeing’s shares didn’t mark any significant decline after the disclosure of the issue, because the company kept its production and revenue targets unchanged.

According to Boeing’s website, the company has delivered 122 of the 787s through February and still expects to deliver another 110 in 2014. Its revenue target remained unchanged at between $87.5 billion and $90.5 billion.

Boeing Co fell by 0.25% on Friday in New York to settle the session at $128.54, marking a one-year change of +58.24% and a market capitalization of $95.56 billion. According to the Financial Times, the 21 analysts offering 12 month price targets for The Boeing Company have a median target of $155.00, with a high estimate of $175.00 and a low estimate of $132.00. The median estimate represents a 20.59% increase from the previous close.

Is it important to have a budget plan?

noreply@blogger.com (Anonymous) — Mon, 10 Mar 2014 12:50:00 +0000

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A budget is a spending plan that helps to allocate income. We will need to pool together all household income and prioritize each expense according to personal needs and situations. Expenses involves categories to control cash flow and limit error. A well-managed budget creates a plan focused on financial goals and objectives. The most important thing that we must think is what do you want your budget to do for you?

Will a budget limit debt?

Only people and circumstances can actually limit debt. A budget is going to manage it to minimize any liabilities. Long-term debt troubles alter monthly budget goals. High credit card debt demands minimum payments and a budget must accommodate these at the expense of something else. Most often, short and long-term saving goals are the first ones pushed to the back burner while a budget tackles added expenses.
A budget will be able to minimize debt if left alone to do so. When a household's focus is to minimize debt, it is imperative not to create new debt in a different category. It is also important to create a plan for the money saved once the debt is paid off. A budget will be able to highlight areas of concern when monitoring cash flow. There are many helpful tools to maximize budget management and results.

Is it important to have a budget plan?

A budget plan is necessary to make sure there is enough money left at the end of the month to cover essential needs. Your bills may all be due by mid-month but the family will still need to eat during the last week of the month. Running out of money creates debt problems. People who use credit cards or payday loans online in order to purchase household needs are in desperate need of a good budget plan. Set a goal on how much to spend each week in order limit barreling out before the end of the month.

Prepare a list of fixed expenses and make a best estimate for those that vary. Know when you get paid and assign certain costs to paychecks that arrive before the due date. The main goal of a good budget is to split the income up throughout the month, have enough to cover needed expenses and make all payments on-time. People who live paycheck to paycheck will have their hands full working on just this aspect. Once the budget is set-up, there will be a clear picture on if there are any cut-backs needed or what debt creates the most problems. Hard decisions may be the solution in order to decrease the stress placed on a basic budget plan.

Why do you need a budget?

-Would a spending plan help your finances?
-Do you want your expenses reduced?
-Do you want to be prepared for money emergencies?
-Do you want more control of your income?

If you answer yes to any one or more of these questions, you need a budget to plan, organize and manage household income efficiently.

Once you have a well managed budget and all goals and objectives is sets, creditors, payday online lenders and banks don't have an opportunity to take it through interest rates and mismanagement penalties. All you have to do is just stick to the plan.Good Luck!!!

source

MAS Shares falls since MH370 Vanishes

noreply@blogger.com (Anonymous) — Mon, 10 Mar 2014 07:11:00 +0000

www.bloomberg.com

Since the missing air flight MH370 three days ago, Malaysian Airline System Bhd. (MAS) shares headed for the biggest decline in nine months.

The stock sank 10 percent to 22.5 sen at 10:03 a.m. local time, poised for the lowest close on record, after falling as much as 18 percent. It was the most active on Kuala Lumpur’s exchange with 212 million shares traded. The benchmark FTSEBursa Malaysia KLCI Index slid 0.6 percent, while the ringgit weakened 0.6 percent against the dollar.

Malaysia stepped up efforts to locate the jet that may have crashed in the Gulf of Thailand with 239 people on board, focusing on oil slicks. The prospect of terrorism arose after Austria and Italy said passports used by two male passengers were stolen from their citizens.

The oil slicks discovered by Vietnamese military aircraft were about 140 kilometers south of Tho Chu Island in the Gulf of Thailand, off the South China Sea. Searchers looking for the missing Boeing Co. (BA) 777-200 said they found a suspected window or door fragment.

China Southern

Le Van Minh, a Vietnamese coast guard commander, said in a telephone interview today that the fragment is suspected to be part of a plane’s emergency door or window, and that rough seas and darkness were preventing crews from retrieving it. Ships are still searching the area for the piece, which was spotted by helicopter 90 kilometers (56 miles) south of Vietnam’s Tho Chu Island, Minh said.

Flight 370 departed the Malaysian capital at about 12:41 a.m. local time March 8 and was scheduled to land in Beijing at 6:30 a.m. Security screening was performed as usual at Kuala Lumpur, Malaysia Airports Holdings Bhd. (MAHB) said.

The twin-engine, wide-body plane carried 227 passengers and 12 crew members, with Chinese travelers accounting for the largest group by nationality at 153, including an infant, the airline said. Also aboard were three U.S. citizens, according to the U.S. State Department.

Interpol said in a statement that at least two passports recorded in its database, one Austrian and one Italian, were used by passengers on the flight after being reported stolen in Thailand. Two people using stolen Italian and Austrian passports had consecutive ticket numbers, suggesting the tickets were issued together, Cable News Network reported, citing the Chinese e-ticket verification system Travelsky.

The missing plane was a code-share service with China Southern Airlines Co. (1055), which said it sold seven tickets on the flight, including to people of Austrian and Italian nationality, according to the company’s microblog.

While the Malaysia Airports Holdings shares fell 3.8 percent, China Southern Airlines which is also affected and results of dropped 3.1 percent in Hong Kong trading, heading for the lowest close since Feb. 6. The Bloomberg World Airlines Index slipped 0.3 percent.

source

Mobile Banking tips for Consumers

noreply@blogger.com (Anonymous) — Mon, 10 Mar 2014 06:03:00 +0000

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There are numerous advantages to mobile banking on your smart phone, tablet or laptop computer. Besides the convenience factor, there's the quick access to your accounts that mobile banking affords, which can be helpful when you're traveling or doing business at odd hours. Plus, in many instances, mobile banking means that you're helping the environment, since banking on your computer devices involves less paper and ink used for bank statements, checks and so forth.

With proper precautions (and a reliable, experienced banking partner), mobile banking is a safe option for conducting personal or commercial banking business. However, whether you're just dipping your toe into the mobile banking pond, or you're a savvy early adopter, there are a few precautions all consumers must take in order to safeguard their account and protect themselves from identity theft. Here are a few tips to consider:

Tip One: Know before you download.
Many computer criminals will attempt to gain access to your accounts via illegitimate applications (apps) masquerading as authentic apps from your bank or other provider. If the app logo looks a bit "off", is suggested to you via an unknown source, or requires personal information to be entered in order to download, stay away.

Tip Two: Don't use your mobile banking apps in unsecured environments.
The free wi-fi hotspot at the coffee shop may be convenient, but it also may not be very secure. Whenever possible, use your mobile apps at home, at work, or in other secure environments that are not open to the public.

Tip Three: Don't click on links.
Your bank should never ask for you to submit any personal information via email or text. If you get a message saying something like "action needed" or "your account's been compromised", call your bank's 800 number and ask for verification before proceeding. Chances are the message is a criminal's attempt, known as "phishing" or "spoofing", to fool you into believing you're receiving an official communication from your bank.

Tip Four: Don't keep personal details unsecured on your phone or laptop.
If you use your laptop or phone to access your account, make sure you clear your cookies and cache on a regular basis, so that your accounts can't be accessed should your computer or phone get stolen. ("How to" information on clearing cache can be readily found via an Internet search or by placing a call to your phone or computer provider.) Also, set up your phone and computer so that they require a password to be entered in order to gain access to the device.

Tip Five: Ask your bank for help.
Your bank likely has a wealth of information on its website about security and privacy best practices. Take some time to read through it, and follow-up with your banker with questions. Ask if the bank has a security brochure or handbook you can keep in your desk or car in case of a security emergency.

Bonus Tip: Your kids' names or high school mascot may be easy-to-remember passwords, but they aren't very secure. Change your passwords every 90 days, being sure to use words and phrases that aren't easy to guess. For extra protection, incorporate capital and lowercase letters, and use symbols and numerals.

Source

Finance, Credit and Investment an Economical View

noreply@blogger.com (Anonymous) — Mon, 10 Mar 2014 05:45:00 +0000

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Theories of finances and credit, can be characterized to be many-sided and many-leveled based on the economical views.

The definition of totality of the economical relations formed in the process of formation, distribution and usage of finances, as money sources is widely spread. For example, in "the general theory of finances" there are two definitions of finances:

1) "...Finances reflect economical relations, formation of the funds of money sources, in the process of distribution and redistribution of national receipts according to the distribution and usage". This definition is given relatively to the conditions of Capitalism, when cash-commodity relations gain universal character;

2) "Finances represent the formation of centralized ad decentralized money sources, economical relations relatively with the distribution and usage, which serve for fulfillment of the state functions and obligations and also provision of the conditions of the widened further production". This definition is brought without showing the environment of its action. We share partly such explanation of finances and think expedient to make some specification.

First, finances overcome the bounds of distribution and redistribution service of the national income, though it is a basic foundation of finances. Also, formation and usage of the depreciation fund which is the part of financial domain, belongs not to the distribution and redistribution of the national income (of newly formed value during a year), but to the distribution of already developed value.

This latest first appears to be a part of value of main industrial funds, later it is moved to the cost price of a ready product (that is to the value too) and after its realization, and it is set the depression fund. Its source is taken into account before hand as a depression kind in the consistence of the ready products cost price.

Second, main goal of finances is much wider then "fulfillment of the state functions and obligations and provision of conditions for the widened further production". Finances exist on the state level and also on the manufactures and branches' level too, and in such conditions, when the most part of the manufactures are not state.

V. M. Rodionova has a different position about this subject: "real formation of the financial resources begins on the stage of distribution, when the value is realized and concrete economical forms of the realized value are separated from the consistence of the profit". V. M. Rodionova makes an accent of finances, as distributing relations, when D. S. Moliakov underlines industrial foundation of finances. Though both of them give quite substantiate discussion of finances, as a system of formation, distribution and usage of the funds of money sources, that comes out of the following definition of the finances: "financial cash relations, which forms in the process of distribution and redistribution of the partial value of the national wealth and total social product, is related with the subjects of the economy and formation and usage of the state cash incomes and savings in the widened further production, in the material stimulation of the workers for satisfaction of the society social and other requests".

In the manuals of the political economy we meet with the following definitions of finances:
"Finances of the socialistic state represent economical (cash) relations, with the help of which, in the way of planned distribution of the incomes and savings the funds of money sources of the state and socialistic manufactures are formed for guaranteeing the growth of the production, rising the material and cultural level of the people and for satisfying other general society requests".

"The system of creation and usage of necessary funds of cash resources for guarantying socialistic widened further production represent exactly the finances of the socialistic society. And the totality of economical relations arisen between state, manufactures and organizations, branches, regions and separate citizen according to the movement of cash funds make financial relations".

As we've seen, definitions of finances made by financiers and political economists do not differ greatly.
In every discussed position there are:

1) expression of essence and phenomenon in the definition of finances;
2) the definition of finances, as the system of the creation and usage of funds of cash sources on the level of phenomenon.
3) Distribution of finances as social product and the value of national income, definition of the distributions planned character, main goals of the economy and economical relations, for servicing of which it is used.
If refuse the preposition "socialistic" in the definition of finances, we may say, that it still keeps actuality. We meet with such traditional definitions of finances, without an adjective "socialistic", in the modern economical literature. We may give such an elucidation: "finances represent cash resources of production and usage, also cash relations appeared in the process of distributing values of formed economical product and national wealth for formation and further production of the cash incomes and savings of the economical subjects and state, rewarding of the workers and satisfaction of the social requests". in this elucidation of finances like D. S. Moliakov and V. M. Rodionov's definitions, following the traditional inheritance, we meet with the widening of the financial foundation. They concern "distribution and redistribution of the value of created economical product, also the partial distribution of the value of national wealth". This latest is very actual, relatively to the process of privatization and the transition to privacy and is periodically used in practice in different countries, for example, Great Britain and France.

"Finances - are cash sources, financial resources, their creation and movement, distribution and redistribution, usage, also economical relations, which are conditioned by intercalculations between the economical subjects, movement of cash sources, money circulation and usage".
"Finances are the system of economical relations, which are connected with firm creation, distribution and usage of financial resources".

We meet with absolutely innovational definitions of finances in Z. Body and R. Merton's basis manuals. "Finance - it is the science about how the people lead spending `the deficit cash resources and incomes in the definite period of time. The financial decisions are characterized by the expenses and incomes which are 1) separated in time, and 2) as a rule, it is impossible to take them into account beforehand neither by those who get decisions nor any other person" . "Financial theory consists of numbers of the conceptions... which learns systematically the subjects of distribution of the cash resources relatively to the time factor; it also considers quantitative models, with the help of which the estimation, putting into practice and realization of the alternative variants of every financial decisions take place" .

These basic conceptions and quantitative models are used at every level of getting financial decisions, but in the latest definition of finances, we meet with the following doctrine of the financial foundation: main function of the finances is in the satisfaction of the people's requests; the subjects of economical activities of any kind (firms, also state organs of every level) are directed towards fulfilling this basic function.

For the goals of our monograph, it is important to compare well-known definitions about finances, credit and investment, to decide how and how much it is possible to integrate the finances, investments and credit into the one total part.

Some researcher thing that credit is the consisting part of finances, if it is discussed from the position of essence and category. The other, more numerous group proves, that an economical category of credit exists parallel to the economical category of finances, by which it underlines impossibility of the credit's existence in the consistence of finances.

N. K. Kuchukova underlined the independence of the category of credit and notes that it is only its "characteristic feature the turned movement of the value, which is not related with transmission of the loan opportunities together with the owners' rights".

N. D. Barkovski replies that functioning of money created an economical basis for apportioning finances and credit as an independent category and gave rise to the credit and financial relations. He noticed the Gnoseological roots of science in money and credit, as the science about finances has business with the research of such economical relations, which lean upon cash flow and credit.

Let's discuss the most spread definitions of credit. in the modern publications credit appeared to be "luckier", then finances. For example, we meet with the following definition of credit in the finance-economical dictionary: "credit is the loan in the form of cash and commodity with the conditions of returning, usually, by paying percent. Credit represents a form of movement of the loan capital and expresses economical relations between the creditor and borrower".

This is the traditional definition of credit. In the earlier dictionary of the economy we read: "credit is the system of economical relations, which is formed while the transmission of cash and material means into the temporal usage, as a rule under the conditions of returning and paying percent".

In the manual of the political economy published under reduction of V. A. Medvedev the following definition is given: "credit, as an economical category, expresses the created relations between the society, labour collective and workers during formation and usage of the loan funds, under the terms of paying present and returning, during transmission of sources for the temporal usage and accumulation".

Credit is discussed in the following way in the earlier education-methodological manuals of political economy: "credit is the system of money relations, which is created in the process of using and mobilization of temporarily free cash means of the state budget, unions, manufactures, organizations and population. Credit has an objective character. It is used for providing widened further production of the state and other needs. Credit differs from finances by the returning character, while financing of manufactures and organizations by the state is fulfilled without this condition".

We meet with the following definition if "the course of economy": "credit is an economical category, which represents relations, while the separate industrial organizations or persons transmit money means to each-other for temporal usage under the conditions of returning. Creation of credit is conditioned by a historical process of fulfilling the economical and money relations, the form of which is the money relation".
Following scientists give slightly different definitions of credit:

"Credit - is a loan in the form of money or commodity, which is given to the borrower by a creditor under the conditions of returning and paying the percentage rate by the borrower".

Credit is giving the temporally free money sources or commodity as a debt for the defined terms by the price of fixed percentage. Thus, a credit is the loan in the form of money or commodity. In the process of this loan's movement, a definite relations are formed between a creditor (the loan is given by a juridical of physical person, who gives certain cash as a debt) and the debtor.

Combining every definition named above, we come to an idea, that credit is giving money capital of commodity as a debt, for certain terms and material provision under the price of firm percentage rate. It expresses definite economical relations between the participants of the process of capital formation. Necessity of the credit relations is conditioned, from one side, by gathering solid quantity of temporarily free money sources, and from the second side, existence of requests of them.
Though, at the same time we must distinguish two resembling concepts: loan and credit. Loan is characterized by:

o Here, the discussion may touch upon transmission of money and also things form one side (loaner) to another (borrower): a)under the owning of the borrower and, at the same time, b) under the conditions of returning same amount or same quantity and quality of the things;
o The loaning of money may bear no interest;
o Any person may take part in it.
With the difference with loan, credit, which is somehow a private occasion of the loan, represents:
o One side (loaner) gives to the second one (borrower) only money, and _ for temporal usage;
o It may not bear no interest (if the assignment doesn't foresee something);
o In it creditor is not any person, but a credit organization (at the first place, banks).
So, a credit is the bank credit. To our mind, it is not correct to use "credit" and "loan" as the synonyms.
Banking crediting is the union of relations between bank (as a creditor) and its borrower. These relations touch upon:

a) Giving a certain amount of money to the borrower for definite purpose (though, we meet with the so-called free credits, aims and objects of crediting are not appointed in the assignment);
b) Its opportune returning;
c) Getting percentage rate from the borrower for using the sources under his/her disposal.

The essential foundation of the credit essence and its important element is existence of trust between the two sides (in Latin "credo", from which comes the word "credit", means "trust").

From the position of circulation of money forms (in the abstraction, historical process of formation economical relations and social budget and banking systems expressed by them) comparing different definitions of finances and credit, the paradox conclusion appears: credit is the private occasion of finances. And truly, from the position of movement of the money forms, finances represent the process of formation and usage of the funds of cash means. Very often such movements are fulfilled without returning, but sometimes, it is possible to give loans from the budget for the investment projects of other needs. Also, when a manufacture or corporations use their cash funds and we mean the finances of industrial subject, such usage may be realized as inside the manufacture or corporation (there is no subject about returning or not returning of the usage), so gratis under conditions of returning. This latest is called commercial form because of transmitting the sources to others, but even in this occasion, it is the element of financial system of the manufacture and corporation.

From the point of cash means movement, main character of credit is the process of formation and usage of the funds of cash means under the conditions of returning and, as a rule, taking the value-percentage. If gating the credit value doesn't take place (even in the exceptional occasions), according to the movement form, credit becomes a private occasion of finances, as from the net financial funds (consequently from the state budget) the loans which bear no interests may be used. If gating credit value takes place, by the appearance form, credit is discussed to be financial modification.

From the historical point of view, finances (especially in the sort of the state budget) and credit (beginning with usury, later commercial and banking) were developing differently for considering credit to be the part of finances. Though, from the genetic-historical point of view, previous loaners, before giving loan, needed gathering the permanent capital not returning, that is the net financial foundation. The banks analogously needed concentration of the important own capital for influxing the consumers' means and for getting higher percentage rate under the conditions of returning. Herewith, exactly on the financial basis, in the sort of financial fund (which later partially becomes loan fund) part of the bank capital appears to be the reservation (insurance) part of the fund, which by nature is financial and not loan. So notwithstanding the essential distinctions between finances and credit form the genetic-historical point of view, credit appears to be formed from finances and represent their modification.

From the essential position of expressing economical relations of finances and credit, we meet with cardinal distinctions between these two categories. Which mostly expressed by the distinction of the movement forms notwithstanding they are returnable or not. Finances express relations in the aspects of distribution and redistribution of social product and part of the national wealth. Credit expresses distribution of the appropriate value only in the section of percentage given for loan, while according to the loan itself, a only a temporal distribution of money sources takes place.

Herewith, there is a lot of common between the finances and credit as from the essential point of view, so according to the form of movement. At the same time, there is a significant distinction between finances and credit as in the essence, so in the form too. According to this, there must be a kind of generally economical category, which will consider finances and credit as a total unity, and in the bounds of this category itself, the separation of the specific essence of the finances and credit would take place.

Funding of the cash means is common to the researched economical categories. It takes place in any separate system of finances and credit, which have been touched upon during the analyses of defining finances and credit. Word combination "funding of the cash sources (fund formation)" reflects and defines exactly essence and form of economical category of more general character, those of finances and credit categories. Though in the in economical texts and practice, it is very uncomfortable to use a termini, which consists of three words. Also, "unloading" with an information hardens greatly its influxing into the circulation even in the conditions of its strict substantiation and thoroughness.

In the discussing context we consider:

1) wide and narrow understanding of economical category of the finances;
2) discussing finances in narrow understanding under general traditional meaning;
3) discussing finances, as funding of the cash means, in wide understanding, which concerns finances - in narrow meaning and credit - in complete meaning.

Termini "funding" and its equivalent "fund formation" are used by us as the purposeful structuring of cash means, which is based on two poles - accumulation of money sources (gathering) and its usage for definite purpose in the way of financing and crediting.

We have established a new termini - "finance-investment sphere" (FIS). Analyses about interrelation of finances and credit made by us give us an opportunity of proving, that in the given termini, the word "financial" is used with the meaning of funding cash sources, its purposeful structuring. In this process we consider at the same time financial, credit and investments' economical categories.

Let's sum up middle results of discussing new concept - "finance-investment sphere" and discuss its investment consisting parts.

The concept "investments" was brought into the native economical science from the West. In the Soviet economical science they for a long time used in the place "investments" the termini "capital placement", which expressed the usage of the industrial factors in the sphere of real industrial activities during realization of capital projects. From one glance, this termini in its concept is identical to the "investments", consequently it is possible to use them as synonyms. Though the termini "investments" and "investing" have the advantage towards the termini "capital placement" from linguistic and philological points of view, because they are expressed with one word. This is not only economical and comfortable in the process of working with the termini "investment" itself, but also it gives an opportunity of termini formation. More concretely: "investment process", "investment domain", "finance-investment sphere" - all these termini are much more acceptable.
Changing native economical termini with foreign ones is purposeful, if it really matters (by keeping parallel usage of the native termini for the inheritance). Though we must not change native economical termini into foreign ones all together, when by ordinal traditional language easy to explain private and narrow concrete processes and elements get their own termini. The "movement" of these termini is approved in the narrow professional bounds, but their "spitting out" into the economical science may turn economical language into the tangled slang.

Let's discuss termini - "investment" and "capital placement's" usage in the economical literature.
Investments are placement of funds into the main and circulation capital for the purpose of getting profit. "Investments in material assets - are the placements of funds into the mobile and real estate (land, buildings, furniture and so on). Investments in financial assets are the placements of funds into the securities bank accounts and other financial instruments".

We don't meet with the termini "investments" in the earlier economical dictionary, but we meet the combined termini "investment policy" - the union of the industrial decisions, which guarantee main directions of the capital investments, the activities of their concentration in the determinant suburbs, on which the reaching of planned rates of development of the society production is depended, balancing and effectiveness, getting more and more production and profit of the national income for every lost Ruble". For today, in the most actual definitions, the capital investments are bounded only by financial means, when not only financial, but also the investment of natural, material-technical and informational resources takes place. Labour resources take an actual place in the investment process. They themselves fulfill this or that investment process.

A positive side of the discussed definitions is that they connect investment policy and capital placements (investments):
- economical development according to the key directions to the concentration;
- providing high rates of economical growth;
- raising an economical effectiveness, which is expressed:

a) by growing the throw off of the production and national income for every lost Ruble;
b) by fulfilling the branch structure of the investments;
c) by improving their technological structure;
d) by optimization of their further production structure.

Compared with such definition of the investments (capital placement) the definition of investments in the dictionary attaching the "Economics" seems to be unimproved: "investments - the expenses of gathering production and industrial means and increasing material reserve". In this definition current expenses (production expenses) are mixed with the investment (capital) expense. Also, not the investment expenses but (though the investments are followed by the appropriate expenses) exactly advancing. It differs from the expenses by that the means (means) are put by returning the advanced values, also, under the conditions of growth, to which the concept-advanced capital is corresponding. the advancing may be realized in the money, natural-material and informational forms.

Except the termini "investments", there are two more termini related with the investment. They are shown below.

"Human capital investment" - any activity provided for rising the workers labour productivity (in the way of growing their qualification and developing their abilities); at the expenses of improving the workers' education, health and raising the mobility of the working forces". It is very useful to use the mentioned termini, though it needs one correction: the human capital investments do not concern only workers, but also the servants, representatives of every kind of labour.

"Investment commodity, capital goods - a capital."

In the official manuals of political economy of the reformation time the capital investments are discussed as "expenses for creating new main funds and widening, reconstruction and renewing the active ones". In this definition the investments (capital placements) during separation of the forms (types) of further production of the main funds are bounded only by main funds (without increases of the circulation funds and insurance reserves):

a) creating new ones;
b) widening;
c) reconstruction;
d) renewing.

Also, the concept of the industrial gathering appears, at the expenses of widening of basic, circulation funds and also insurance reserves takes place".

You'll meet below the definitions of investments from "the course of economy": the investments are called "placements of fund into the basic capital (basic means of production), reserves, also other economical objects and processes, which request long-termed influxing of material and cash means. "According to the division of capital into physical and money forms, the investments too must be divided into material and cash investments".

They apportion investment commodity, to which belong industrial and nonindustrial building objects, vehicles purposed for changing or widened technical park and the furniture, increasing reserves and others.

"They call the total investments of production an investment product, which is directed towards keeping and increasing the basic capital (basic means) and reserve. Total investments consist of two parts. One of them is called the depreciation; it represents important investment resources for compensation of renewal till the level of before industrial usage, wearing out and repairing of the basic means. Second consisting part of the total investments is represented by net investments - capital investments for the purpose of increasing basic means". Depreciation is not a compensation resource of wearing the basic funds out, but it is the purposeful financial source of such resources.

Human capital investment is "a specific kind of investments, mostly in education and health protection".
"Real investments are the investments in the economical branches and also, they are kinds of economical activities, which provide influxing the increases of real capital, that is increasing material values of the industrial means". We can agree with such definition with one specification that material and nonmaterial values too belong to the real capital (wealth), consequently science-researching experimental-construction results, various information, education of he workers and others. Such service as organization of the excitable games, also the service of redistribution social wealth from one private person to another (except charity).
"Financial investments represent placement of funds into the shares, obligations, promissory notes, other securities and instruments. Such investments, of course, do not give increases of the real material capital, but they help getting profit, consequently at the expenses of changing the course of the securities in the time of speculation, or distinguishing the course in different places of sell and purchasing". We share wholly such definition, hence it follows that financial investments (if it is not followed by real investments as a result) do not increase real material wealth and real nonmaterial wealth. According to this context, the expression below is very important: "we must distinguish financial investments, which represent placement of the funds in the ways of selling and purchasing the securities for the purpose of getting profit and financial investments, which become cash and real, moved to real physical capital."

In the "economical course" quoted before long and short-termed investments are separated. Recognizing the existence of the bounds between them, the authors ascribe short-termed investments to "one month or more" investments. If we get such conditioned criteria, that we can call the investments which overcome the terms of some months, long-termed ones, which is very doubtful and we don't agree with it. A long-termed character of the fund placement is a significant feature of the investments (short-term doesn't combine with the concept of investments). Principally, it would be better to point out quick compensative, middle termed compensative and long-termed compensative investments:

- less then 6 months - quick compensative;
- from 6 months up to the year and a half - middle termed compensative;
- more then the year and a half - long termed compensative.

We stopped at the definition of the investments in the capital work "economical course" for the special purpose, as, in it the author tried to discuss the concept of investments systemically and quite completely, herewith the book is published just now.

We'll return to the discussion the definition economical category of "investments" in different publications in the following chapter. The definitions given here are quite enough for having a notion of the level of lighting up the given category in the economical literature.

What conclusions may be made according the definition of the mentioned economical category in the published works, except the made notions and specifications?

There is quite deeply, concretely and thoroughly defined the concept of "investments", different definitions in the economical literature; but mostly in every works about the investments discussed by us until now, there is not opened the essence of investments as an economical category. In every monograph , even if it has a title investment, as an economical category , there is given only the definition, concept of investments. But, as the Academician Vasil Chantladze explains, "a concept is a discussion, which proves something about the distinguishing feature of the researched object. A concept out of much essential characteristic features represents only one, and essential in it is only - definition".

But the categories are much wider; it is "a key, the most fundamental concept of every science". Economical categories theoretically represent real, objectively existed productive relations. A category is the defining of occasions of existed characters, connections, relations of the objective world. Generally, any educational process is fulfilled by the categories, which give opportunities for dividing the processes and occasions semantically, for expressing the definitions of a subject and realize their specific peculiarities and economical relations of a material world.

Our goal is exactly to substantiate investments - as an economical category and also, as a financial category in the narrow understanding.

Here we apply for another manual thesis made by the academician Vasil Chantladze: "every financial relation is an economical one and every financial category is and economical one, but not every economical relation and economical category is financial relation and financial category".

In the process of defining the investments, it is important to take in mind the sides of resources, expenses and incomes, because investment, from one side, is the result of the manufacture's activity, and, from another one, - a part of income, which, in this case, is not used for usage.

Another occasion: it is advisable to discuss investments in two aspects: as a category of reserve and flow, which will reflect exactly the connection between "placement of funds" and "investments".

As we've mentioned above, not long ago, in the well-known Soviet literature the concepts of "the placement of funds" and "investments" were accepted to be the synonyms and concerned to be investment of sources for further production of the main funds and formation of the turnover funds. We meet with such understanding of the concept of "investment" (here, they separate three types of the investment expenses: investments in the basic capital of investments, investments in the house building and investments in the reserves) in the modern economical publications and it is mostly used on the macro level during a statistical analyze of economical processes. In this concrete occasion investment is the category of reserve.