Archive for May, 2009
Venture Capital Financing: Structure and Pricing
Posted by Anthony in Entrepreneurship on May 31st, 2009
duction
A venture financing can be structured using one or more of several types of securities ranging from straight debt-to-debt with equity features (e.g., convertible debt or debt with warrants) to common stock. Each type of security offers certain advantages and disadvantages to both the entrepreneur and the investor. The characteristcs of your situation and current market forces will impact the type and mix of security package that is right for you.
Types of Securities Senior debt: Which is usually for long-term financing for high-risk companies or special situations such as bridge financing. Bridge financing is designed as temporary financing in cases where the company has obtained a commitment for financing at a future date, which funds will be used to retire the debt. It is used in construction, acquisitions, anticipation of a public sale of securities, etc. Subordinated debt: Which is subordinated to financing from other financial institutions, and is usually convertible to common stock or accompanied by warrants to purchase common stock. Senior lenders consider subordinated debt as equity. This increases the amount of funds that can be borrowed, thus allowing greater leverage. Preferred stock: Which is usually convertible to common stock. The venture’s cash flow is helped because no fixed loan or interest payments need to be made unless the preferred stock is redeemable or dividends are mandatory. Preferred stock improves the company’s debt to equity ratio. The disadvantage is that dividends are not tax deductible. Common stock: Which is usually the most expensive in terms of the percent of ownership given to the venture capitalist. However, sale of common stock may be the only feasible alternative if cash flow and collateral limits the amount of debt the company can carry.
While each of these securities has unique characteristics, they can be grouped into two categories: debt or equity. In structuring a venture financing, the primary question is whether the financing should be in the form of debt or equity.
Disadvantages of Debt to a Company
From a company’s viewpoint, there are two potential disadvantages to debt.
An excessive amount of debt can strain a company’s credit standing, thereby reducing its flexibility in meeting future long-term financing requirements on a favorable basis. It can also negatively affect a company’s ability to obtain short-term credit. Of course, the form of debt the venture financing takes makes a difference. For example, subordinated debt will have less impact on borrowing capacity than senior debt. The venture capitalist has the option of calling his loan if the company is in default of the loan agreement. This remedy, which is not available to him under other financing agreements, puts him in a better position to influence the company’s affairs when it is in default. Advantages of Debt to a Venture Capitalist
From the venture capitalist’s viewpoint, there are three principal advantages to debt.
There is a greater likelihood that the venture capitalist will get his principal back and, at least, a small return. Many of the companies in the average venture capitalist’s portfolio are referred to as "the living dead." Needless to say, their performance has turned out to be disappointing. In some cases, these companies are able to repay principal with interest but have limited appeal to potential acquirers or the public. As a result, a venture capitalist with an investment in such a company’s common stock may be unable to recover his investment within a reasonable period, if at all. As previously discussed, under certain circumstances the venture capitalist is in a better position to influence the company’s affairs. The venture capitalist has a senior claim. However, it should be emphasized that the meaningfulness of a senior claim depends on the marketability of a company’s assets and the amount of equity it has to cushion its creditors’ position. For example, in the case of a start-Lip situation with little or no equity, a senior claim means little or nothing. Percentage Ownership Needed
While the difference may not be great, depending on the particular circumstances of the company, a debt position involves less risk than an equity position for the venture capitalist. Accordingly, a company should not have to relinquish as much ownership when a financing is in the form of debt. However, this advantage must be weighed against the disadvantages of debt.
No matter how the venture financing is structured, it must be priced so that it is attractive to the venture capitalist. There is no clear-cut answer as to how much ownership a company will have to relinquish to make a financing attractive. Broadly speaking, the greater the potential return perceived by the venture capitalist, the less ownership he will demand. In other words, if a company has a patented product which a venture capitalist thinks is revolutionary and highly marketable, he will undoubtedly settle for less ownership than he would in the case of 4 company with a relatively less attractive product. Thus, his ultimate position will be a business judgment based on his potential return.
Before you enter negotiations with the venture capitalist, you should determine what your company is worth and how much of your company you want to sell. The following procedure can be used to get a rough idea of how much ownership you will have to give up to make the financing attractive.
Estimate the risk associated with the venture financing. If the investment is very risky, the venture capitalist may be looking for a return as high as 15 times his investment over five years. Conversely, if a relatively low degree of risk is involved, the venture capitalist may be satisfied with doubling or tripling his investment over five years. Make a reasonable estimate of the price/earnings ratio applicable to comparable publicly held companies. The market value of the company can then be projected by multiplying forecasted annual earnings by the estimated price/earnings ratio for comparable companies. Divide the estimate of the total dollar return the venture capitalist wants by the projected market value of the company. This yields the percentage ownership the venture capitalist will need, as oil the future date, to realize his desired return. It is important to note that any equity financing required during the interim period must be considered in making these calculations.
Case Study
Suppose XYZ Company, Inc., a start-up, needs $500,000. The company’s product appears to have excellent potential. However, because the product is new and unproven, an investment in the company would be extremely risky. Accordingly, it is reasonable to estimate that a venture capitalist would want a potential return of at least ten times his total investment in five years. Management estimates that the company should be able to "go public" at 20 times earnings in five years. Projected after-tax earnings for the fifth year is $1,250,000. Additional long-term financing of $500,000 will be needed at the beginning of the third year.
Scenario I
In the calculations below it is assumed that the venture capitalist who provides the initial financing ($500,000) also provides the subsequent financing ($500,000), and that he wants a return equal to ten times both. However, it should be noted that if the company made satisfactory progress during the first two years, it would be reasonable to assume that the venture capitalist would be satisfied with a lower return on the subsequent financing since it would involve less risk.
Estimate of Total Dollar Return Required Total Investment $ 1,000,000 Estimate of Return Required X 10
$10,000,000
V. Projected Market Value in Fifth Year VI. VII. Projected Earnings $1,250,000 VIII. Estimate of P/E Ratio x 20
$25,000,000
Percentage Ownership Needed in Fifth Year Estimate of Total Dollar Return quired $10,000,000 Projected Market Value of Company in Fifth Year 25,000,000
40% Scenario II
In this set of calculations it is assumed that a second investor provides the subsequent financing ($500,000). The calculations show that the venture capitalist who provides the initial financing ($500,000) would need 20% ownership as of the fifth Year to realize the return he wants. However, since the ownership to be given up for the subsequent financing will reduce his ownership position, he will want more than 20% ownership initially. For example, if it is assumed that 15% ownership will have to be given up for the subsequent financing, the venture capitalist who provides the initial financing would need 23% ownership initially to end up with 20% ownership in the fifth year.
Assume the same facts as Case I, except a second investor provides the subsequent financing for 15% ownership.
Estimate of Total Dollar Return Required Total Investment $ 500,000 Estimate of Return Required X 10
$5,000,000
Projected Market Value in Fifth Year Projected Earnings $1,250,000 Estimate of P/E Ratio x 20
$25,000,000
Percentage Ownership Needed in Fifth Year Estimate of Total Dollar Return required $5,000,000 Projected Market Value of Company in Fifth Year 25,000,000
20%
Thus, it appears that the investment ($500,000) may be attractive to an interested venture capitalist if the principals of XYZ Company, Inc. are willing to give up approximately 23% ownership.
Conclusion
It must be emphasized that the above procedure is highly subjective. And, you should remember that what really matters is how the venture capitalist views the relative attractiveness of a company. Typically, venture capitalists are satisfied with a minority interest. Although a venture capitalist may demand a majority interest, generally they are not interested in operating control. Some of them like to tie the amount of ownership they ultimately get to the performance of the company. For example, a venture capitalist who wants a majority interest initially may give the principals the opportunity to earn part of it back. Such an arrangement can be used to compromise on pricing when there is a significant disagreement between the principals and the venture capitalist.
To entrepreneurs unfamiliar with venture capital, it may appear that the venture capitalist is seeking an extraordinary high return on his investment. However, it is important to understand that, even under the best of circumstances, only a minority of the companies in which the venture capitalists invests will be successful. He is well aware of this, and must make a sufficient return of his successful investments to come out with an acceptable return overall.
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Money Advice For College Students
Amidst the current economic peril America is facing, many families that plan to send their teenagers to a good college are probably worried about where and how they will find the financial means to do so. With the current costs of tuition and room and board over the roof, and rising (for example, UC’s have raised their tuition by ten percent this year), finding the money to finance a college education is becoming more and more challenging. However, if you are in the know about where to find money to pay for college, then you should have nothing to worry about. If a student is in good standing, they can easily obtain sufficient financial aid for college by pursuing scholarships, federal aid, student loans, and other creative ways to save money for college. This article will cover how students should go about obtaining financial aid to help pay for college.
The first step one should take in finding money to pay for college is to fill out the FAFSA form; this is probably the most essential thing out there to receiving good financial aid. Many schools base what they will offer you on what you put on this form, so if you don’t even submit a FAFSA, you have no chance at all of receiving any financial aid! Some people have the attitude “I make too much money, they would never offer me anything anyways”, but they could not be any further from dead wrong. While you might not have much of a chance of getting financial aid if you are earning six figures, families making even just a bit less than this are often known to receive a decent financial aid offer. Even if you are just offered a loan, some of those can be great deals compared to the loans you might be offered through a bank.
Once you have completed and submitted the FAFSA, you will hear back on what your school/government will offer you in financial aid, and how much you are expected to contribute on your own. At this point you should have an idea of whether you should be good applying for a few scholarships, or if you will have to go as far as applying for loans.
After receiving the FAFSA offer, now it is time to figure out how you are going to find money to cover the rest of the costs of college that your school and the government aren’t covering. Your first step in finding sufficient money for college will be to pursue scholarships, as free money is the best! The best scholarships to pursue are local ones and ones related to your major; in other words, pursue scholarships that will be less competitive due to the fact that less people can apply to them. Apply to scholarships that are only offered in your city (by local groups, businesses, etc.), scholarships that your school (or a private organization) offer specifically to your major, or, if you are a minority, scholarships that only that specific minority are eligible to apply for. Avoid applying to scholarships, such as national scholarships, as countless students apply to these making them extremely competitive. By applying to less competitive scholarships, you will greatly increase your chances of receiving one or more. Make sure that you also apply to as many scholarships as possible, in order to increase your chances of winning at least one.
After finding out how many scholarships you have received, now you need to figure out how you are going to cover the rest of your unmet financial need. The next common step is to apply for student loans. You should first apply for any federal student loans that you are eligible for, as these usually have the best rates, compared to private loans.
Once you have used up your scholarship, federal, and personal resources in financing your college education, you have a few other options remaining for covering the rest of your financial aid. For example, you can get a part time job during the school year and find well-paying internships during the summer, which can easily result in an extra $5,000 to $10,000 per year to help cover college costs. If you decide to become an RA in your dorm, your school will often cover the entire cost of your housing!
By following the information above, any student in good standing should easily be able to find enough financial resources to cover the costs of their college education. It will not be easy, but if you put in the effort, you should be able to find sufficient money for college.
For more advice on how to save thousands of dollars in financial aid for college, visit money for college students!
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Are You Considering Re-Financing?
Homeowners who are considering re-financing their home may have a wealth of options available to them. However, these same homeowners may find themselves feeling overwhelmed by this wealth of options. This process doesnt have to be so difficult though. Homeowners can greatly assist themselves in the process by taking a few simple steps. First the homeowner should determine his refinancing goals. Next the homeowner should consult with a re-financing expert and finally the homeowner should be aware that re-financing is not always the best solution.
Determine Your Goals for Re-Financing
The first step in any re-financing process should be for the homeowner to determine his goals and why he is considering re-financing. There are many different answers to this question and none of the answers are necessarily right or wrong. The most important thing is that the homeowner is making a decision which helps him achieve his financial goals. While there are no right or wrong answer to why re-financing should be considered there are, however, certain reasons for re-financing which are very common. These reasons include:
* Reducing monthly mortgage payments
* Consolidating existing debts
* Reducing the amount of interest paid over the course of the loan
* Repaying the loan quicker
* Gaining equity quicker
Although the reasons listed above are not the only reason homeowners might consider re-financing, they are some of the most popular reasons. They are included in this article for the purpose of getting the reader thinking. The reader may find their mortgage re-financing strategy fits into one of the above goals or they may have a completely different reason for wanting to re-finance. The reason for wanting to re-finance is not as important as determining this reason. This is because a homeowner, or even a financial advisor, will have a difficult time determining the best re-financing option for a homeowner if he does not know the goals of the homeowner.
Consult with a Re-Financing Expert
Once a homeowner has figured out why they want to re-finance, the homeowner should consider meeting with a re-financing expert to determine the best refinancing strategy. This will likely be a strategy which is financially sound but is also still geared to meeting the needs of the homeowner.
Homeowners who feel as though they are particularly well versed in the subject of re-financing might consider skipping the option of consulting with a re-financing expert. However, this is not recommended because even the most educated homeowner may not be aware of the newest re-financing options being offered by lenders.
While not understanding all the options may not seem like a big deal, it can have a significant impact. Homeowners may not even be aware of mistakes they are making but they may here of friends who re-financed under similar conditions and receive more favorable terms. Hearing these scenarios can be quite disheartening for some homeowners especially if they could have saved considerably more while re-financing.
Consider Not Re-Financing as a Viable Option
Homeowners who are considering re-financing may realize the importance of evaluating a number of different re-financing options to determine which option is best but these same homeowners may not realize they should also carefully consider not re-financing as an option. This is often referred to as the do nothing option because it refers to the conditions which will exist if the homeowner does not make a change in their mortgage situation.
For each re-financing option considered, the homeowner should determine the estimated monthly payment, amount of interest paid during the course of the loan, year in which the loan will be fully repaid and the amount of time the homeowner will have to remain in the home to recoup closing costs associated with re-financing. Homeowners should also determine these values for the current mortgage. This can be very helpful for comparison purposes. Homeowners can compare these results and often the best option is quite clear from these numeric calculations. However, if the analysis does not yield a clear cut answer, the homeowner may have to evaluate secondary characteristics to make the best possible decision.
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Personal Finance tips for Managing the Income Portfolio. Useful Info to Consider
The reason people assume the risks of investing in the first place is the prospect of achieving a higher rate of return than is attainable in a risk free environment…i.e., an FDIC insured bank account. Risk comes in various forms, but the average investor’s primary concerns are “credit” and “market” risk… particularly when it comes to investing for income. Read about tips of how to make money online. Credit risk involves the ability of corporations, government entities, and even individuals, to make good on their financial commitments; market risk refers to the certainty that there will be changes in the Market Value of the selected securities. We can minimize the former by selecting only high quality (investment grade) securities and the latter by diversifying properly, understanding that Market Value changes are normal, and by having a plan of action for dealing with such fluctuations. (What does the bank do to get the amount of interest it guarantees to depositors? What does it do in response to higher or lower market interest rate expectations?)
You don’t have to be a professional Investment Manager to professionally manage your investment portfolio, but you do need to have a long term plan and know something about Asset Allocation… a portfolio organization tool that is often misunderstood and almost always improperly used within the financial community. It’s important to recognize, as well, that you do not need a fancy computer program or a glossy presentation with economic scenarios, inflation estimators, and stock market projections to get yourself lined up properly with your target. You need common sense, reasonable expectations, patience, discipline, soft hands, and an oversized driver. The K. I. S. S. Principle needs to be at the foundation of your Investment Plan; an emphasis on Working Capital will help you Organize, and Control your investment portfolio. work from home is thing people are looking more and more these days.
Planning for Retirement should focus on the additional income needed from the investment portfolio, and the Asset Allocation formula [relax, 8th grade math is plenty] needed for goal achievement will depend on just three variables: (1) the amount of liquid investment assets you are starting with, (2) the amount of time until retirement, and (3) the range of interest rates currently available from Investment Grade Securities. If you don’t allow the “engineer” gene to take control, this can be a fairly simple process. Even if you are young, you need to stop smoking heavily and to develop a growing stream of income… if you keep the income growing, the Market Value growth (that you are expected to worship) will take care of itself. Remember, higher Market Value may increase hat size, but it doesn’t pay the bills.
First deduct any guaranteed pension income from your retirement income goal to estimate the amount needed just from the investment portfolio. Don’t worry about inflation at this stage. Next, determine the total Market Value of your investment portfolios, including company plans, IRAs, H-Bonds… everything, except the house, boat, jewelry, etc. Liquid personal and retirement plan assets only. This total is then multiplied by a range of reasonable interest rates (6%, to 8% right now) and, hopefully, one of the resulting numbers will be close to the target amount you came up with a moment ago. If you are within a few years of retirement age, they better be! For certain, this process will give you a clear idea of where you stand, and that, in and of itself, is worth the effort.
Organizing the Portfolio involves deciding upon an appropriate Asset Allocation… and that requires some discussion. Asset Allocation is the most important and most frequently misunderstood concept in the investment lexicon. The most basic of the confusions is the idea that diversification and Asset Allocation are one and the same. Asset Allocation divides the investment portfolio into the two basic classes of investment securities: Stocks/Equities and Bonds/Income Securities. Most Investment Grade securities fit comfortably into one of these two classes. Diversification is a risk reduction technique that strictly controls the size of individual holdings as a percent of total assets. A second misconception describes Asset Allocation as a sophisticated technique used to soften the bottom line impact of movements in stock and bond prices, and/or a process that automatically (and foolishly) moves investment dollars from a weakening asset classification to a stronger one… a subtle “market timing” device.
Finally, the Asset Allocation Formula is often misused in an effort to superimpose a valid investment planning tool on speculative strategies that have no real merits of their own, for example: annual portfolio repositioning, market timing adjustments, and Mutual Fund shifting. The Asset Allocation formula itself is sacred, and if constructed properly, should never be altered due to conditions in either Equity or Fixed Income markets. Changes in the personal situation, goals, and objectives of the investor are the only issues that can be allowed into the Asset Allocation decision-making process.
Here are a few basic Asset Allocation Guidelines: (1) All Asset Allocation decisions are based on the Cost Basis of the securities involved. The current Market Value may be more or less and it just doesn’t matter. (2) Any investment portfolio with a Cost Basis of $100,000 or more should have a minimum of 30% invested in Income Securities, either taxable or tax free, depending on the nature of the portfolio. Tax deferred entities (all varieties of retirement programs) should house the bulk of the Equity Investments. This rule applies from age 0 to Retirement Age – 5 years. Under age 30, it is a mistake to have too much of your portfolio in Income Securities. (3) There are only two Asset Allocation Categories, and neither is ever described with a decimal point. All cash in the portfolio is destined for one category or the other. (4) From Retirement Age – 5 on, the Income Allocation needs to be adjusted upward until the “reasonable interest rate test” says that you are on target or at least in range. (5) At ret
Controlling, or Implementing, the Investment Plan will be accomplished best by those who are least emotional, most decisive, naturally calm, patient, generally conservative (not politically), and self actualized. Investing is a long-term, personal, goal orientated, non- competitive, hands on, decision-making process that does not require advanced degrees or a rocket scientist IQ. In fact, being too smart can be a problem if you have a tendency to over analyze things. It is helpful to establish guidelines for selecting securities, and for disposing of them. For example, limit Equity involvement to Investment Grade, NYSE, dividend paying, profitable, and widely held companies. Don’t buy any stock unless it is down at least 20% from its 52 week high, and limit individual equity holdings to less than 5% of the total portfolio. Take a reasonable profit (using 10% as a target) as frequently as possible. With a 40% Income Allocation, 40% of profits and dividends would be allocated to Income Securities.
For Fixed Income, focus on Investment Grade securities, with above average but not “highest in class” yields. With Variable Income securities, avoid purchase near 52-week highs, and keep individual holdings well below 5%. Keep individual Preferred Stocks and Bonds well below 5% as well. Closed End Fund positions may be slightly higher than 5%, depending on type. Take a reasonable profit (more than one years’ income for starters) as soon as possible. With a 60% Equity Allocation, 60% of profits and interest would be allocated to stocks.
Monitoring Investment Performance the Wall Street way is inappropriate and problematic for goal-orientated investors. It purposely focuses on short-term dislocations and uncontrollable cyclical changes, producing constant disappointment and encouraging inappropriate transactional responses to natural and harmless events. Coupled with a Media that thrives on sensationalizing anything outrageously positive or negative (Google and Enron, Peter Lynch and Martha Stewart, for example), it becomes difficult to stay the course with any plan, as environmental conditions change. First greed, then fear, new products replacing old, and always the promise of something better when, in fact, the boring and old fashioned basic investment principles still get the job done. Remember, your unhappiness is Wall Street’s most coveted asset. Don’t humor them, and protect yourself. Base your performance evaluation efforts on goal achievement… yours, not theirs. Here’s how, based on the three basic objectives we’ve been talking about
Base Income includes the dividends and interest produced by your portfolio, without the realized capital gains that should actually be the larger number much of the time. No matter how you slice it, your long-range comfort demands regularly increasing income, and by using your total portfolio cost basis as the benchmark, it’s easy to determine where to invest your accumulating cash. Since a portion of every dollar added to the portfolio is reallocated to income production, you are assured of increasing the total annually. If Market Value is used for this analysis, you could be pouring too much money into a falling stock market to the detriment of your long-range income objectives.
Profit Production is the happy face of the market value volatility that is a natural attribute of all securities. To realize a profit, you must be able to sell the securities that most investment strategists (and accountants) want you to marry up with! Successful investors learn to sell the ones they love, and the more frequently (yes, short term), the better. This is called trading, and it is not a four-letter word. When you can get yourself to the point where you think of the securities you own as high quality inventory on the shelves of your personal portfolio boutique, you have arrived. You won’t see WalMart holding out for higher prices than their standard markup, and neither should you. Reduce the markup on slower movers, and sell damaged goods you’ve held too long at a loss if you have to, and, in the thick of it all, try to anticipate what your standard, Wall Street Account Statement is going to show you… a portfolio of equity securities that have not yet achieved their profit goals and are probably
Working Capital Growth (total portfolio cost basis) just happens, and at a rate that will be somewhere between the average return on the Income Securities in the portfolio and the total realized gain on the Equity portion of the portfolio. It will actually be higher with larger Equity allocations because frequent trading produces a higher rate of return than the more secure positions in the Income allocation. But, and this is too big a but to ignore as you approach retirement, trading profits are not guaranteed and the risk of loss (although minimized with a sensible selection process) is greater than it is with Income Securities. This is why the Asset Allocation moves from a greater to a lesser Equity percentage as you approach retirement.
So is there really such a thing as an Income Portfolio that needs to be managed? Or are we really just dealing with an investment portfolio that needs its Asset Allocation tweaked occasionally as we approach the time in life when it has to provide the yacht… and the gas money to run it? By using Cost Basis (Working Capital) as the number that needs growing, by accepting trading as an acceptable, even conservative, approach to portfolio management, and by focusing on growing income instead of ego, this whole retirement investing thing becomes significantly less scary. So now you can focus on changing the tax code, reducing health care costs, saving Social Security, and spoiling the grandchildren.
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Precious Metals Investments - Issues and Their Details
Before investing in gold there is a need to follow several vital steps. You need to acquire good basic knowledge and understanding. In addition, it is highly recommended to get a very good investing education on gold before you begin. As a matter of fact there are a lot of financial institutions that offer a good education in this regard. In the case you think that there is no enough time to attend the classes then Internet education is the best available choice for you to make. It goes without saying that it would be much simpler and very apt to consult a specialized gold investment consultant or a financial advisor as these guys can really help you, especially in the case you are a beginner in the sphere of gold investment. You will get all necessary information including how to make the right moves based on your priorities and personal financial goals that you want to achieve. It should be also pointed out that gold investment can help in hedging your portfolio. If there is such a possibility you should ask financial advisor to help you and keep in mind that in the case that he/she does not have any experience in dealing with this issue it is better for you to find some one else who is more professional.
The point is that there is a lot of demand for gold in some countries around the world, for example, India, Pakistan, Bangladesh and the Middle East. Actually, you are available to use this opportunity to your benefit by making a gold investment. Simply speaking you can purchase them and preserve them till the prices rise and you can make a sell off. You should also be aware of that gold can exist in many forms like Gold certificate, gold exchange traded funds.
If you really want to make a profit from the price variations of gold then purchasing the bullion coins is a perfect option. The Canadian Maple Leaf, the Australian Nugget, the Britannia, and American Eagle are some of the best choices that are available. In addition, you could also have the strategy of purchasing gold coins from dealers, both offline and online. Keep in mind that you must always shop around to get the best possible deals and prices before purchasing gold coins. You should be certain concerning the fact that the dealer you are making a purchase from is experienced enough. It also highly recommended for you to preserve the gold coins you have purchased in a mint packaging in order the coins will be safe from scratches. In fact, you don’t lose money in your gold investment while you sell off.
The other important fact for you to remember is that the trends in gold investment are rather different from the global stock market trends. You must understand that the gold prices are independent of the market sentiments and volatilities. To put it different, the prices may boost when the share market falls and may decrease when global markets are on a rise.
To conclude it all there is a need to add that gold investment can make real wonders for you in the case you bear in mind the above mentioned facts. As a matter of fact, gold investment is the safest bet of investment possible according to that the prices always tend to grow higher.
Think about investing into silver bullion.
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Lucky Few are Buying $1 Million Homes for Just 2%. Useful Information to Keep in Mind
The President just said he’s going to stimulate the housing market…
JUMP ON THIS NOW, while the market is at the bottom!
Anyone can buy homes as high as $1 million
- but for as low as JUST $1,995!
No, that is not a joke!
You can literally get entire houses for just 5-10 cents on the $ that would otherwise costs you $1OO,OOO’s.
Concetta and I are NOT joking - we’ll show you PROOF in a moment!
But what you need to know most is this:
1) You can get $1,OOO,OOO homes as low as $1,995!
2) You can get them in any county in the United States!
3) You can get them all with just 1-3 clicks using just your mouse!
4) You can resell them to banks, lenders or any buyers!
5) You can resell them for as much as 20 times what you paid!
6) You can REPEAT this as often or as little as you want!
7) You can get them in the Hottest Vacation spots…Florida, Arizona, Colorado, Etc.
Now is the BEST TIME IN HISTORY for Tax Lien Investing!
9) You Can see 80%+ Redemption rates all over the country!
And again, it takes just 45 minutes to learn how to do this!
There’s a new “secret” that a lucky few have already found that’s enabling them to literally buy houses that ordinarily sell for around $1 Million or more - but now for just $1,997 or LESS!
There are 3,141 counties in the United States, and each one possesses this exciting new opportunity whereby anyone with as little as $100 to seldom more than $5,000 can buy homes ordinarily valued from $30,000 to in quite a number of cases above $5 million! - and for just 1% to rarely above 5% their selling costs!
And the BEST part about this is that you can be located anywhere and still buy any home you want - even if you’re 3,000 miles away or more!
But, you don’t have to visit the county you buy the homes in - instead, you can do it all from the comfort and privacy of your home using just your tiny ‘ole mouse!
This is what makes this such a wonderful opportunity, in that you can go online to some select websites, then pick and choose the properties you want, and then get them for between 1%-5% at most.
No matter what happens you make money!
You basically buy a homeowner’s tax lien certificate because he or she wasn’t able to pay their property taxes.
They by law must pay you anywhere from 16% to as much as 50% in interest - and in many cases they must pay you back within as little as 6 months.
But, if they can’t pay you back, YOU own their home free and clear (and for what usually amounts to just 1% of the house’s actually selling value!)
Now, at this point you can either keep the house for yourself, or you can swiftly turn around and resell it (in any economy, good or bad!) to banks, lenders or individual buyers answering your little classified ad! - and where you make a killing!
The site that has all the facts as to how you can do this from your laptop or PC is here:
Make money in real estate with no money
But I wish to strongly encourage you to take action and go there as it’s rumored that they are going to withdraw this exciting opportunity as soon as they reach the maximum number of “members” they can handle.
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Finance - General Overview
Finance is a generally applied term for more than a couple of things. The term finance applies to the commercial activity of providing funds and capital; also it is that branch of economics that studies the management of money and other assets. If one were to round up the different definitions into one, finance can be defined as the management of funds and capitals required by a business activity.
Management of Finance Management of finance has developed into a specialized branch within management since long ago. Managing finance involves dealing with optimizing allocation of funds to various activities either by borrowing or by mobilizing from internal resources. The word optimizing in finance may strike an odd note but it means taking intelligently structured steps at minimizing the cost of financing while simultaneously attempting to maximize the profits out of the employed finance.
Finance Governs Most of the Activities A poor finance management will immediately show as deteriorating conditions in the procurement, production and sales as it touches all spheres of business activities. For this reason, a finance manager is expected to be very judicious in either mobilizing funds or allocating for expenses. Lee Iacocca, the most revered management guru, calls finance managers as ‘bean counters’ who look at the expense part with rather pessimistic view. Unlike the sales managers, who would like to invest in future by product development, finance managers are rather skeptic of financing a project whose benefits lie in the future. Finance management governs the future outcome too.
Finance in Small Business For most small business owners there is not a clear distinction between personal finance and business finance often leading to cross utility of funds. Lenders, either future or present, don’t look at this with a soft corner. But resisting the tendency for such utilities may dampen ones zeal temporarily but sure brings the much needed discipline which is the foundation of all future progresses.
Financing a business can often be perilous if not approached with caution. Although bad management is commonly given as the reason businesses fail, inadequate or ill-timed financing comes a very close second. Whether you’re starting a business or expanding one, sufficient ready capital is essential. But it is not enough to simply have sufficient financing; knowledge and planning are required to manage it well. These qualities ensure that you will avoid common mistakes like securing the wrong type of financing, miscalculating the amount required, or underestimating the cost of borrowing money.
Financing Small businesses can finance their needs from either internal resources, friends or from banks and private lenders. The less you finance from outside lenders the more it ignites the profitability. This is why, perhaps, Bob Hope famously said, “A bank is a place that will lend you money if you can prove that you don’t need it.”
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Valuable Info for You to Consider About Life Insurance
When you shop for 10 pay life insurance, you may only be concerned with the price. If this describes you, you’re looking for term life. You want the right about of insurance at a fair price with a company you can trust. Sometimes, getting started is the hardest part. That’s where the following Life Insurance Checklist can help.
1. What will your policy do for you?
Ask yourself what it is you want your life insurance to do. For example, do you want to have insurance coverage that will:
Pay for your burial costs?
Pay off any outstanding medical bills and other debts?
Cover your income when you’re gone?
Provide some money to your children for education?
A combination of all or part of the above?
Knowing what you want with your life insurance policy and approximately how much you need to achieve these goals will help you determine how much life insurance you should consider purchasing. Online calcs can help you figure up how much insurance you need.
2. Who would you like to protect?
Most insurance companies have many different products to suit your lifestyle and family needs. You can purchase insurance on yourself or you and your spouse (called a joint life insurance policy). The most common joint life policy provides coverage when the first partner dies, leaving the life insurance benefit to the surviving spouse.
3. How long do you need the policy?
Consulting a psychic isn’t necessary, although it does require that you estimate the timing of your life insurance needs. For example:
When will your mortgage be paid off? The amortization period of your mortgage will often determine how long your term life insurance policy should be.
When will your children be finished school? One day they’ll finish their education and having enough life insurance coverage to pay their educational expenses won’t be necessary. When are you planning to retire? After you retire, your kids are gone and you probably have paid off your debt.
Knowing how long you need coverage helps you pick the right policy. Online tools are available to help you figure out which term for your life insurance policy is most recommended for people with similar lifestyles.
When you figure out what you need, who and how long questions answered, you’re ready to shop.
1. Compare life insurance quotes from multiple companies:
Get several quotes because life insurance rates can deviate substantially depending on the product you choose, your age, and the amount of coverage you request. It’s not really that difficult, because with the Internet you can compare life insurance quotes easily, online, anytime.
2. Which policy has been quoted standard or preferred?
There are two basic groups you should know about when shopping for life insurance coverage: standard rates and preferred. Standard life insurance rates are the rates the majority of Americans qualify for.
Preferred life insurance rates are typically offered to very healthy people and means you may pay a smaller premium than most. Usually preferred rates are offered only once the results of the medical information and tests are known. It will depend on your blood pressure, cholesterol levels, height, weight, and family health history. But preferred rates are worth it. They could save you up to 30-35% off your quoted premium.
Make sure you are making fair comparisons, don’t compare standard rates from one company to preferred rates of another. If you’re not sure, ask the broker. You could end up cheating yourself later on.
3. Review the life insurance broker’s availability:
Is the broker easy to contact? Will they have time for you if problems arise? Whether it is through their website or telephone, the life insurance broker should be easily accessible to you should you ever have questions or need to speak to them about a change in your life insurance needs. Look for 800 type numbers.
4. Review the medical information required to obtain a life insurance plan:
The more the insurance company knows about you, the better the price. If the company isn’t asking you a lot of questions, you can bet the premium is higher for the same coverage then a plan asking for more information. Depending on the company, your age, and the amount of coverage you want, you could be asked to provide blood and urine samples. To obtain the samples, a nurse will visit at not cost to you.
5. Consider a life insurer’s financial stability and strength:
You want to consider a company’s comdex score. There are organizations out there, like A.M. Best, that evaluate insurers and provide a rating on their stability and strength.
6. Ask about renewal options and requirements:
Once the initial premium is set, it is usually guaranteed for the length of the policy (often 10 or 20 years). But what happens when the policy expires? Most insurance policies can be renewed up to age 75 so don’t forget to ask your broker if you will have to take a medical to renew your policy. At this point your premiums will increase, find out if they will also be guaranteed to remain level for the second term of the policy.
7. Confirm the policy can be canceled without penalty:
Make sure you can cancel without a penalty if you need to. Make sure to check with your broker to see if the life insurance company has any unusual cancellation policies.
Final tip choose a life insurance broker you trust:
This has nothing to do with the quality of the company or the product, but a rapport with your broker is critical in feeling comfortable with the life insurance policy you buy and the information you’ve received.
Take care about your future! Make it stable! Learn how to earn and how to save paper money from inflation with silver bullion!