A certain amount of money, decided upon by the board of directors, is paid out of either the company’s earnings or its reserves. Dividends can be quoted in terms of dollar amount paid per share, known as dividends per share (DPS). Another way to describe them is as a percentage of the current market price of the shares, known as dividend yield.

Find the right companies to invest in
The key to making money from dividends is finding the right companies to invest in. There are two important factors to look at. First, a company should offer a high dividend yield on its stocks at the time you invest. To calculate the dividend yield in terms of a percentage, divide the dividend dollar amount by the share price.

This way you can easily compare the yield with other potential investments. Second, the company should have a proven past history of increasing dividends every year. This is one sign of a successful company experiencing a good rate of growth.

Beware of companies offering overly high dividends
It may seem counter intuitive, but there is such a thing as dividends that are too high. Be cautious about investing in a company that promises overly large dividends. Compare its dividends with what is offered on the market as a whole. Several possibilities come to mind. The company may be in financial or legal trouble.

It may be proffering the exceptional dividend as a one-time special offer. The dividend may not be sustainable and will eventually be reduced.

Look at the big picture
When you are considering a stock purchase, the dividend yield is definitely an essential factor. However, you should also take into account the overall health of the company, as evidenced by its balance sheet, as well as its past performance and rate of growth. A good example of this is the coca cola stock 2017 analysis. This will give you a better picture of how profitable your investment is likely to be over the long term.

Another not-to-be overlooked consideration is the dividend tax laws currently in effect. Any stock dividends you may earn will be counted as taxable income in the US. Calculate the after tax income to determine how much money you will make from a particular company’s dividend payouts.

How to Improve Your DTI
There are several different ways that you can improve your DTI, but the best way is to increase your income. While that seems simple, it can be challenging to just wake up and decide to make more money.

You can also decrease your debt, or do both at the same time – which of course is the optimal example.

• Increase your salary by looking for new positions and opportunities both at your work and at other organizations
• Work at home by being an independent consultant – but be sure you’re not interfering with your day job.
• If you live near popular destinations, rent out your parking spot! Walking just a little farther can net you additional income.
• Freelance writing is a growing field. With the rise of content marketing there is more need for words than ever before.
• Tutoring is another great way to make money and help out children (or adults!) in your community at the same time.
• Ever thought of house sitting or pet sitting? These are both great ways to get a little extra income on the weekend and throughout the week without a lot of extra work.
• Lift and Uber are changing the way people think of moving from destination to destination. These non-taxi taxi drivers can make a significant amount of extra income in large cities.
• Business people today are incredibly busy. Find personal assisting jobs online; certification can be available to get more pay.
• Translation is a huge need these days as well, and if you have language skills you can receive a premium amount of money for your knowledge.
• Start a social media consulting business – you can earn extra money and these jobs are generally quite fun to do.

Reducing your debt is also an important part of improving your DTI ratio, and one that you should focus on going forward. There are many different ways to achieve this. One way is to apply for a personal consolidation loan, you can always examine  a couple of different sites online. After you have reduced your debts, get ready for that great mortgage rate coming your way!

Don’t give potential identity thieves an opening
Identity thieves work much like house burglars do – they look for an opening. The only difference is that individuals planning identity theft are not searching for an unlocked door or window to your house, but rather for some carelessness or gap in your personal security. You can help thwart their plans by keeping your wits about you and depriving them of obvious opportunities.

It is said that the best defense is a good offence, but in the case of potential theft of a person’s identity, the best defense is improved security.

Safeguard physical security
A common starting point for an identity thief is stealing your wallet or purse, mainly for the sake of the credit cards and other identification usually found inside. For this reason, you should scan all credit cards and identification documents and store them on a disk on key or external hard drive (don’t email them to yourself and risk having your email account hacked), to make reporting their theft faster and easier if necessary.

It’s also advisable to carry a minimal amount of ID with you – you do not need your passport on your person unless you are traveling internationally, for example. Never, ever keep any account passwords in your wallet.

Another criminal’s trick is to go through your mailbox or garbage, in search of financial statements and other “loot.” Make sure your mailbox is securely locked, or have mail sent to a post office box, and shred all important documents before discarding them.

Be equally careful of online security
Safeguard your personal computer with a good anti-virus program, which is regularly updated. Use firewalls and secure browsers for further protection. Choose a unique, hard-to-guess password for each account, and change passwords occasionally. Be wary of accessing sensitive password-protected sites, such as your bank account, from any public computer.

Be equally cautious about revealing personal information via social media sites — even something as seemingly innocent as posting the fun photos taken at your 30th birthday party (which will alert thieves to your date of birth).

What Does APR Mean?
APR, or Annual Percentage Rate, is the total annual rate that you will be charged for borrowing. It is based on the current US Prime Rate plus the bank’s margin. The APR clarifies the yearly rate of interest. For example if you take out a loan at 2 percent interest per month, the APR will be 2 percent x 12 months, or a rate of 24 percent per year. In some cases, the APR is structured to include charges such as transaction initiation fees or late penalties. In US law, the Truth in Lending Act regulates the way in which a lender must calculate and disclose the Annual Percentage Rate on a particular loan.

What Are the Requirements for APR Disclosure?
Lending institutions such as banks and credit card companies are required to disclose the annual rate of interest on loans and credit card debt before you sign an agreement with them. This applies to both open-end credit (for instance credit card debt, home equity loan) and closed-end credit (mortgage, automobile purchase loan, etc.).

In the case of a home mortgage, the lender is required to disclose the APR to you within three working days from the time that you make your application. You are further protected by the Mortgage Disclosure Improvement Act (MDIA), which came into effect in 2009; if the final APR varies by more than 1/8 of a percent from the original Good Faith Estimate, the lender must disclose the revised amount and allow you another three days before the transaction is completed.

How Does Understanding the APR Help You?
When you take out a loan, it is essential to know exactly how much you will end up repaying. This will allow you to budget for loan payment, interest, and any additional charges as part of your household expenses. Equally vital, understanding the APR will permit you, as an informed consumer, to comparison shop for your loan.

You will have a clear numerical basis for comparison, so that you will know which lender offers you the best deal.

Common stock – Most of the stock which is held by the public is common stock. Although holders of common stock are considered part owners of the company and have voting rights proportionate to the number of shares that they own, due to limited liability they are not personally responsible for the business’s debts. Common stock holders have the right to share in any dividends the company may pay out. These shares are highly liquid and can be bought or sold readily.

Preferred stock – Publicly owned companies may also issue preferred stock as well as common stock. Preferred stock holders do not have the right to vote. However, there is a financial advantage in that dividends are generally paid out consistently on preferred stocks and preferred stock holders receive dividends before holders of common stock do.

Authorized shares – Authorized shares are the total number of shares that a company was authorized to issue when it was first established as a publicly held body. This number may be increased only by a majority vote of the stock holders.

Unissued shares – A certain number of the authorized shares may be retained by the issuing company as part of its treasury. These are not issued to the public at large. Doing so will help the company to avoid a hostile takeover by another company which has bought up a large amount of stock. The shares may also be used in the future to fund major purchases.

Restricted shares – A certain amount of stock may be given to company employees (“insiders”) as compensation and incentives. It is termed restricted because in order to sell, holders of these shares must receive permission from the Securities Exchange Commission. Beginning stock market traders would be well advised to observe what owners of restricted shares do; if they start selling large amounts, it could signal trouble.

Float shares – The stock which is freely available for trading on the open market is called float shares. These may be bought by any individual or company.

Outstanding shares – All the shares which are issued by a company – that is, the total of float shares and restricted shares – are termed outstanding shares.

Classification according to the GICS
Every stock classified according to the GICS, whether it is domestic or international, is coded at each of 4 different levels. These levels include 10 sectors (oil and gas, basic materials, industrials, consumer goods, healthcare, consumer services, telecommunications, utilities, financials and technology), further divided into 24 industry groups, 67 industries and 147 sub-industries.

Within this framework, companies are classified according to their principal business activity, as determined by what brings in the bulk of their revenue. To date, over 95 percent of all publicly listed stocks in 90 markets all around the world, totaling more than 26,000, have been classified by the Global Industry Classification Standard system.

The production-oriented approach vs. the market-oriented approach
There are two possible ways to classify industries for the purpose of identifying stock sectors. The first is the production-oriented approach, which classifies companies by what they produce, in terms of goods or services. This method may become unduly complicated because many companies produce both goods and services, often with a substantial degree of overlap.

The second is the market-oriented approach. This classifies companies by the role their products, both goods and services, play in the marketplace. An example would be the classification of consumer staples (goods such as food and housing which are necessities of life), as opposed to consumer discretionary (for instance hotels and automobiles).

The latter category is more likely to be affected by a slowdown in the economy.

Why stock sectors are important
Grouping stocks into sectors helps to provide a better understanding of trends within the stock market. If a particular industry is thriving – or, the opposite, floundering – stock prices throughout that sector will tend to reflect that movement. For this reason, a portfolio whose investments are diversified throughout a range of sectors is apt to involve less risk than if all the investment is concentrated in one limited area.

Positive economic analysis
Positive economics is based on statements of fact which describe the condition of the economy as it is. Examples of such statements might be: “The US Gross Domestic Product for 2013 was 16,800 trillion dollars” or “The current rate of employment is X percent.” These economic statements may not be necessarily true, but the facts they contain can be definitively proven or disproven using available data.

Positive economic analysis refers to the arrival at objective, verifiable conclusions by applying scientific principles to the facts, while avoiding value judgments and proscriptions. If you wish to dispute a positive economic analysis, you may do so quite readily by questioning the data it uses or the calculations it performs.

Normative economic analysis
On the other hand, normative economic statements are, by definition, based on opinion rather than objective facts. Examples might be: “The United States should use more of its GDP to establish social programs” or “Unemployment is a bad thing.” Statements such as these are founded on the values of the speaker, rather than objective fact.

They cannot be quantified as true or false, nor may they be tested and proven right or wrong. A normative economic analysis is open to being disputed in two ways. You may question the positive information behind the analysis by bringing in contradictory facts. On the other hand, you might choose instead to dispute the validity of the objective conclusion.

This latter approach is problematic, since there is no way of proving that a value judgment is right or wrong.

Positive vs. normative economic analysis in policy making
It is important to be clear about the distinction between positive and normative economic analysis, particularly when it comes to formulating policy. Bear in mind that economists are not only academics in ivory towers. Frequently an economist may wear a second hat as a business consultant or government policy advisor.

Business owners and politicians alike should make an effort to distinguish when economists are simply presenting the facts of the matter and when they are making judgments rooted in their own individual values.

Causes of inflation
There are a number of theories as to the cause of inflation. The first posits that inflation is caused in large measure by demand vs. supply. When demand (the number of consumers wishing to purchase) exceeds supply (the amount of goods available for sale), prices are pulled up, as sellers take advantage of the situation.

A second theory claims that prices are increased in response to increased costs of doing business. Yet another theory hypothesizes that inflation occurs when the government permits an overabundance of money to be created, resulting in a fall in its value in relation to the amount of goods and services that it will buy.

Effect of inflation on loans
When the rate of inflation increases, interest rates are raised accordingly. This makes existing variable mortgage loans more difficult to pay off, while fixed rate mortgages are unaffected. New home ownership loans will be more expensive, causing many would be home buyers to purchase less expensive homes than they had intended or perhaps to delay pursuing their purchase altogether.

Personal loans and other forms of credit will also cost more in terms of interest, encouraging consumers to curtail their spending. Once again, major purchase, such as automobiles or home appliances, will be reduced in scale or postponed.

Effect of inflation on savings
Inflation might seem to have a positive effect on your savings if they are stowed in an interest bearing account, and not under your mattress. However, bank interest on savings historically has not kept up with the rate of inflation. What’s more, recently bank interest rates have been at an all-time low.

What this means in simple terms is that, even though you may find that your savings have increased 10 years from now due to interest, price hikes due to inflation will still reduce your future purchasing power. Add to that the fact that the interest on your savings is considered taxable income and it’s no wonder that some individuals choose to invest in commodities such as gold, real estate or stocks and bonds rather than a savings account.

An economic model is an incomplete system
An economic model that is considered “true” is one that can be validated, in other words, shown to be true. Economics is different from a science such as chemistry. In economics, it is difficult to perform controlled experiment due to outside factors. An economic model of necessity is an incomplete system and economic truth only a partial glimpse of reality, with the economic model as a window on this glimpse.

There are two sides of economics – the positive (what really exists) and the normative (what should be). Therefore even if an economic model cannot be validated, economists may value it for its normative aspect.

A good economic model is credible
In this context, a model can be described as a way to explain certain conclusions based on inferences, or causal chains, connecting a small set of variables. The economic model is to be considered good (that is, a credible window on economic reality) if the following three conditions apply: the model is based on plausible assumptions, the results themselves (that is, the explanation the model leads to) are plausible and the model’s conclusions are not overly sensitive to its assumptions.

A good economic model follows the 3Rs of economic research
The 3Rs of economic research require that a model be Realistic, Relevant and Robust. It should, in addition, be verifiable. A realistic model is based on plausible assumptions, which are the foundation of good research. Its assumptions must fairly accurately represent economic reality. A model is relevant when its assumptions provide a plausible explanation for the conclusions and it produces results that are strong and of the first order.

To be relevant, the model should conform to the 3 Ss: it is backed by a Story, or clear intuition; it is Simple; and the model implies plausible Sizes. A robust economic model means that its conclusions are not overly sensitive to small changes in its assumptions. Finally, the model should be verifiable, possessing the basic ABCs – Alternative, Byproducts and Calibration. Its conclusions may be verified by either statistical or anecdotal evidence.

When you apply for the loan
At the time you apply for a loan, the pay day loan store will most likely require you to secure the application by giving them a postdated check or your bank account number. You will also need to sign a contract which lists in detail the terms for repayment of the loan. Read the contract carefully. It may state that you authorize the lender to make withdrawals from your account in specific circumstances.

For example, these circumstances may include coverage of late fees if your repayment is not received on time. Make sure you understand and agree to any and all authorizations listed before you sign the contract. If you are not sure, ask the lender to clarify for you. It’s important to note that only transactions which are explicitly stated in the contract are allowed.

Unauthorized transactions
Any withdrawals the pay day lender makes from your bank account which are not specifically spelled out in your original loan contract are, quite simply, illegal. Even if you end up late in repaying, the lender is not permitted to withdraw unauthorized funds from your bank account to cover the repayment or any late penalty.

Instead, the lender must take the matter to court. Only if the presiding judge decides in the lender’s favor will the lending institute be given authority to withdraw the sum in question from your account.

Illegal withdrawals
If the lender ignores the above and proceeds to withdraw an unauthorized amount from your bank account, you have recourse, according to the law. The procedure starts with your notifying the pay day loan store or other institution that they withdrew funds without your authorization and requesting repayment. Then let your bank know about the withdrawal, followed by contacting the consumer affairs office or attorney general for your state.

It’s recommended to document all these notifications in writing, keeping copies of your letters for yourself as backup. You may be able to get the bank to cancel an unauthorized withdrawal. If this is not possible, you are entitled to sue the lending institution for civil damages. For more information regarding payday loans click here (external link).