Finance Roll

"We're now no different from any of those Western European semi-socialist welfare states that we love to deride. Italy? Sure, it's had four governments since last Thursday, but none of them would have allowed this to go on; the Italians know how to rig an economy."

- Bill Saporito, "How We Became the United States of France," Time (September 21, 2008)

October 24 marks the 79th anniversary of the October 1929 stock market crash. Heavy selling started on Thursday, October 24, 1929, and accelerated the following week on Black Monday and Black Tuesday, October 28 and 29. Many feared a repeat of this disaster on Friday, October 24, 2008, after Japan's Nikkei stock average fell nearly 10% during the night, Hong Kong's Hang Seng fell 8%, and Germany's and Britain's fell 5%.

"In a stunning turn of events," reported Yahoo! Finance, "the futures for the major indices were 'lock limit' down before the start of trading Friday, meaning they had hit a 5% threshold that prevented them from trading any lower until the stock market opened Friday." Traders prepared for the worst, but remarkably, disaster was averted. The U.S. market fell only 3.5%, just another "ordinary" bearish day.

Why the more modest drop in the U.S., where the financial debacle originated and should have hit hardest? Suspicious observers saw the covert hand of the Plunge Protection Team (PPT), the group set up under President Reagan to maintain market "stability" by manipulating markets behind the scenes. Bill Murphy commented in LeMetropoleCafe.com:

"Today the Muppets on CNBC were remarking how well our market acted, not falling apart as expected. All day long they spoke of how our market was acting differently today than every other stock market in the world. Well hello, the other countries don't have a PPT, which is WHY our market is so different.

"There are those who might think what the PPT is doing is right. What they don't realize is their making 'Everything is fine' for so long, and not allowing the market to trade freely . . . like allowing the stock market to fall the way it should, has kept the individual in the market . . . when they might have been SCARED out some time ago."

In response to Bill Saporito's comment in Time, it might be countered that Henry Paulson's Plunge Protection Team is quite adept at rigging an economy. The difference between an acknowledged socialist state and the stealth socialism we have in the U.S. today is that in a socialist state, everyone expects the market to be rigged and operates accordingly. In a rigged pseudo-capitalist economy, investors are easily separated from their money because they expect the market to follow "free market principles" based on "supply and demand." They are seduced into "pump and dump" schemes - artificial manipulations that allow insiders to unload stock at a high price or buy it at a low price - because they trust in Adam Smith's "invisible hand," which is supposed to automatically set things right in a market left to its own devices. The market today is indeed controlled by an invisible hand, but it is not necessarily serving the interests of small investors.

PLUNGE PROTECTION FOR SOME, PLUNGE CREATION FOR OTHERS

The most egregious examples of market manipulation have been in gold, silver and oil. The official "spot" (or cash) prices of gold and silver were taken down sharply in the week before October 24, despite the fact that physical demand has been inexorable. Gold is available in the "real" market only at huge markups, and popular types of silver are not available at all.1 We were taught in school that communism does not work because when industry is in the hands of a single owner (the government), competition is eliminated and chronic shortages and black markets develop, since the government does not let prices respond to "supply and demand" but dictates them from the top. Today this is happening with gold and silver, with the true physical price varying radically from the reported paper price.

Gold is known as the "contra-investment," the "go to" investment which historically has gone up when other stocks were failing. Investors see it as something tangible that will hold its value when everything else is falling apart. For that reason, rigging the market to "maintain stability" means suppressing the price of gold.

The current round of gold manipulations started on Thursday, October 16, at 10 am, when the price of gold suddenly suffered a freefall plunge of $45 within minutes. It continued to drop until it was down by nearly $60 in a little over an hour. Nothing happened on Thursday between 10 and 11 am to warrant this vertical drop. If anything, gold should have been shooting up in the same exponential fashion that it was falling. On Wednesday, the stock market had dropped over 700 points, and Dow futures (bets on which way the market would go) were down by 150 points Wednesday night. During the night, the Japanese stock market fell more than 10%, and all European markets were down.2 Thursday morning, among other very bad economic news, U.S. industrial output was reported to have posted its biggest fall in 34 years, and mid-Atlantic factory activity had crashed unexpectedly from September to October. Yet Dow futures were suddenly 130 points higher; and gold was slammed down right at 10 am, although physical gold was available only by paying huge premiums, and gold prices around the world were shooting up. The day continued in the same counterintuitive way, just one more egregious example of an ongoing pattern of manipulation that has become so blatant that either the manipulators have become supremely confident of their invulnerability or they are so terrified of impending doom that all pretense of plausible denial has been abandoned.

"THE MOST MASSIVE INTERVENTION SINCE ROOSEVELT"

Market manipulation is not generally discussed by the commentators on CNBC, but sense can hardly be made of today's wildly unpredictable trading patterns unless the plays of powerful men behind the curtain are factored in. One commentator who does talk about this manipulation is Don Coxe, strategist for the Bank of Montreal. In a weekly conference call on September 5, 2008, he described what has been going on in the markets since July as "the most massive intervention of government into the capital markets or the financial system since Roosevelt closed the banks back in 1933."3

According to the British Globe and Mail, Coxe is "no paranoid conspiracy theorist. As the chairman and chief strategist of Harris Investment Management in Chicago, he is one of the most respected investment authorities in North America."4 The unprecedented intervention he described went back to when the financial establishment was facing a very banker-unfriendly market in July. Gold was about to break through the psychologically important $1,000 mark, oil was above $140 dollars a barrel, the dollar was breaking down, the bank stock index had dropped in six months from 90 to 50, and the Federal Reserve had a balance sheet to match, after making huge loans to banks on shaky collateral. Fannie Mae and Freddie Mac were on the verge of collapse, and hundreds of billions of their securities were held abroad. As if by magic, these trends all suddenly reversed, beginning with a dramatic reversal in the swooning dollar.

How was it done? The cat was let out of the bag by the Nikkei English News, which reported in late August that finance officials from the U.S., Japan and Europe had drawn up plans to strengthen the dollar following the collapse of investment bank Bear Stearns. The intervention called for the central banks to purchase dollars and sell euros and yen if the dollar's value dropped significantly, with Japan providing the yen for the currency swap.5

As the dollar strengthened, gold, silver and oil plunged. The pundits read the drop in gold and silver as a reaction to the rise in the dollar, since precious metals rise historically when the dollar falls. But what they failed to explain was why the dollar was rising. As Bill Murphy observed, "the dollar rallies sharply whenever the US stock market comes under pressure. It is almost simultaneous." He quoted one of his newsletter contributors:

"Since the [stock market] low on 22 SEP we have lost 8.3 trillion bucks worth of asset value within the equities markets and what happens? The US dollar goes up, and up, and up, and up, and up. From what? 72 to 84 now (up 1.14 just today??!!??)? A non-stop rally that is NEVER adversely affected by news or market events. It's almost been a 45-degree ascent. THAT is pure unmitigated intervention of a huge degree."6

How to explain the stunning reversal in the dollar's slide? In Coxe's September 5 conference call, he candidly laid out how the Federal Reserve and the Treasury, in conjunction with the CFTC (Commodity Futures Trading Commission) and the SEC (Securities and Exchange Commission), colluded to manipulate this "necessary" bounce in the dollar, along with a corresponding boost to financial stocks and sudden collapse in the commodities markets. Coxe called it "brilliant," but the play was at a cost of millions of dollars to commodities investors and short sellers who were betting on what a "free" market "should" do. Oil plunged more than 50%, from a high of $145 a barrel in July to a low of about $64 on October 24. The same pattern was seen in silver and gold, with gold falling from a high of over $1,000 an ounce to a low of $700 on October 23. It all added up to a massive "pump and dump" scheme, with insiders pocketing the fortunes lost by unsuspecting investors. It's a messy business, but somebody has to rake in these obscene profits for the "greater good" of market stability.

"THE MOST SORDID SCHEME IN THE HISTORY OF FINANCE"

Theodore Butler, writing on SilverSeek.com on September 2, reported that there was more than just central bank collusion going on behind the scenes. He tracked an unprecedented wall of short selling of gold and silver - massive "borrowing" of stock to sell it into the market, forcing down the price, then "covering" by buying the stock back at the lower price. Butler wrote:

"In gold, no more than 3 U.S. banks sold short in one month more than 10% of world annual mine production. This was the largest short position in gold and silver ever recorded by U.S. banks. After the massive and concentrated silver and gold short position was established by these U.S. banks, the [gold and silver] markets experienced a historic decline in price. It all took place during the first widespread retail silver shortage in history. It is completely at odds [with] how the law of supply and demand works."

Butler called it the most sordid scheme in the history of finance. "It makes a mockery of financial regulation and the rule of law," he wrote. "It allows a large financial entity, or entities, to rip off the investing public and gouge them for obscene profits. It is cronyism, back-room dealing, market fixing and inside information at its worst."7

While gold and silver were being shorted to oblivion, the SEC imposed a ban on the short selling of 19 select financial stocks, including Fannie Mae and Freddie Mac. It was blatant favoritism for the privileged few, but Coxe said it was necessary to make financial stock look attractive to potential buyers (particularly sovereign wealth funds), in order to allow the banks to sell their stock and raise the capital necessary to start lending again.

At the same time, Treasury Secretary Paulson sought and was granted an unlimited credit line to Fannie Mae and Freddie Mac directly from the U.S. Treasury, as well as the authority to buy the mortgage giants' stock. Fannie and Freddie were put into a form of bankruptcy called a conservatorship; but unlike in the ordinary bankruptcy, in which creditors divide up the debtors' available assets without government help, in this case the claims of the lenders were guaranteed by the Treasury. Foreign lenders were bailed out while the shareholders were wiped out - including banks, pension funds, and other institutions holding the savings of millions of Americans. In the long run, the "bailout" created more problems than it solved; but according to Coxe, it was a necessary sacrifice to keep the mortgage market functional for the near term.

How near? The Presidential election is now only weeks away. Markets have an uncanny way of looking good before elections.

Rob Kirby, writing in LeMetropoleCafe on September 9, observed that there are laws and stiff penalties against market collusion. The U.S. antitrust laws impose fines of up to $10 million and jail terms of up to 3 years for unfair practices that inhibit competition or monopolize markets in restraint of trade. "I admire [Coxe's] candor," said Kirby, "but my take on this is that all the perpetrators should face a firing squad, or worse, for treason."8

That probably won't happen, however, because the "perpetrators" can claim governmental immunity. The Plunge Protection Team, officially called the President's Working Group on Financial Markets, was formed by President Reagan in response to a stock market crash in 1987 for the express purpose of "maintaining investor confidence" by manipulating markets with public funds. The PPT includes the President, the Secretary of the Treasury, the Chairman of the Federal Reserve, the Chairman of the Securities and Exchange Commission (SEC), and the Chairman of the Commodity Futures Trading Commission (CFTC).9 Calling the shots is no doubt Secretary Paulson, who now has a $700 billion fund to use for the purpose, after Congress passed his massive bank rescue plan on October 3.

"SOCIALISM FOR THE RICH"

Nouriel Roubini, Professor of Economics at New York University, wrote on his popular blog Global EconoMonitor:

"Socialism is indeed alive and well in America; but this is socialism for the rich, the well connected and Wall Street. A socialism where profits are privatized and losses are socialized with the US tax-payer being charged the bill . . . ."10

Investment guru Jim Rogers told "Squawk Box Europe":

"America is more communist than China is right now. You can see that this is welfare of the rich, it is socialism for the rich. . . it's just bailing out financial institutions. . . .

"This is madness, this is insanity, they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I'm not quite sure why I or anybody else should be paying for this."11

If we are going socialist, we should own up to it and have some transparency in what's going on. We the people need to know how to plan and to invest for an uncertain future. If we're nationalizing the banks, let's nationalize them all the way, with the profits going back to the people along with the losses and risks. Better yet, let's nationalize the Federal Reserve, so it can issue "the full faith and credit of the United States" directly, without having to back this credit with a multi-trillion dollar federal debt that will never get paid back but just continues to grow. It would actually be less inflationary for the government to print dollars directly than for it to print bonds that are swapped for dollars created on a printing press by a privately-owned central bank, because in the latter case both the bonds and the dollars remain in circulation. U.S. bonds not only serve as money around the world, but they count as the "reserves" for banks to create many times their face value in loans. These bonds never get paid off but just get rolled over from year to year, inflating the money supply just as if dollars were printed directly; but the bonds carry the added burden of perpetual debt and interest payments.

The costly bank bailouts and blatant market manipulations going on today are justified as being necessary to save a private banking system that we think we need to get the credit that keeps the economy running. But we don't actually need private banks to get credit. Many authorities have attested that, contrary to popular belief, banks don't lend their own money or their depositors' money. Every dollar lent by a bank is money created out of thin air on a computer screen. It's just "credit." The bank "monetizes" the borrower's own promise to repay. The government could issue its own credit in the same way. There are a number of successful historical precedents for this, including the publicly-owned central banks of Australia and New Zealand, which saved those countries from the devastating effects of the Great Depression in the 1930s; and the publicly-owned bank of the colony of Pennsylvania, which funded the Pennsylvania provincial government without taxes or debt in the first half of the eighteenth century.

Today's bankrupt banks dug their own black hole when they loaded up their books with lucrative but highly risky derivative bets that are now backfiring on them. Instead of trying to clean up the banks' books by throwing taxpayer money at this impossible-to-fill black hole, we would be better off simply letting the banks go bankrupt, as President Reagan did with the savings and loan industry in the 1980s. The banks' bad debts could then be discharged in bankruptcy, and their assets could be absorbed into a public credit system with a new, untarnished set of books, a system that would serve the interests of the people and return the profits to the people.

SO WHAT IS AN INVESTOR TO DO?

That still leaves the question of how to negotiate today's very unpredictable markets. The Friday before the white-knuckle October 24 ride, investors were being encouraged to get back into the market. Commentators cheerily announced the best market week in 5-1/2 years, after the Dow climbed from a low of 7,774 on October 10 to a high of 9,924 on October 14. But the week still ended below 9,000, and the market was coming off the most historic plunge since the Great Depression, down from a high of 10,845 on October 3 to below 8,000 a week later. By October 24, the Dow was again hovering near 8,000.

"Frankly, I'm sick of this," said CNBC market watcher Erin Burnett as she tracked the Dow's wild gyrations on October 23. "Up and down, up and down. It doesn't seem to mean anything or be linked to anything."

Beleaguered investors might well decide it's time to pull their money out of a stock market that is looking more and more like a rigged and risky Las Vegas casino and put it somewhere else. As one talk show commentator quipped recently, "I'm fully diversified. I've got some under the mattress, some under the floor boards, some in the backyard."

Most entrepreneurs start their businesses with no outside financing from investors or banks, which is known as "bootstrapping". Bootstrapping can be a very stressful situation for entrepreneurs as it usually occurs while the future is very uncertain and a lot is riding on the success of the venture. Although bootstrapping is a very creative process and every entrepreneur has their own unique way of tackling problems, there are a few things you can do to try and improve your chances of success.

Evaluate Expenses Very Closely
The first thing most entrepreneurs think about when they decide to bootstrap their venture is where they are going to personally get the funds from. While this is a crucial question to ask, it should not be the sole focus of the financial situation. Keeping expenses as low as possible is just as important as the source of start-up funds. It's probably safe to say that you will not be working with very much capital, so you must preserve that capital as best as possible.

Whenever you purchase something for your business, comparison shopping is necessary but might not be enough to keep costs low. Evaluate if you need to make that purchase right now or at all. Is there a free alternative? Will you use it? Is it necessary? In the very early stages of a venture, you will want to spend majority of your money on operating expenses, or on something that will give you a direct return on your money.

Don't Plan On Outside Investments in the Near Future
When bootstrapping, assume you will not have outside financial assistance for some time. This will force you to plan accordingly and keep the focus on growing cash flow organically and as quickly and efficiently as possible. This way, when outside capital approaches you, it will be a luxury but not a necessity - giving you the advantage. It will also keep your business plan much more attainable, as securing outside investments is much more difficult then it sounds.

Test the Market Gradually
Don't expect to roll out your product or service and hit the ground running with your final product right from the beginning. Great ideas adapt to market conditions, and I guarantee that your first product or service will be vastly different in the future. Write a marketing plan that allows you to gradually introduce your product or service to different segments of your target market, and then bring your product or service to market at a methodical pace according to the plan. This will allow you to perfect your business, sales pitch and logistical details while preventing you and the business from overheating. This will also prevent you from making investments much too risky for a venture in its early stages.

Write a Business Plan
All entrepreneurs think they know their business inside and out, know where the business has come from, what the business will look like in the future and what implementation plan must be fulfilled in order to reach that point. While this might be partially true, writing a business plan allows entrepreneurs to work out the most intricate details of future business plans. By working out those minor details you may or may not have been aware of, you can easily avoid minor roadblocks that can cause major problems in the future, as well as implement your plan much quicker as you know exactly what to expect at every stage. Start-ups have many moving parts, so writing a business plan will allow you to see how everything will work together as far as time and money. Eventually, whether it is to compete in a competition or to pitch your business to investors, you will need to have a business plan. It is much less stressful to update an existing business plan then completely write a new one.

Choose the Best Financing Strategy for Your Situation
Bootstrapping is about creativity and quickly adapting to whatever situation you and your business are confronted with. It would be irresponsible to name a "best" financing method, since every situation is unique and must be adapted for the business. However, it is safe to say that financing will be secured through a number of different sources. Here is a couple of idea on how to finance your start-up without venture capital investors.

Setting up presentations or displays can either be very easy, or very difficult. Many factors can have a huge effect on how the whole process goes. The equipment in particular has great bearing on whether or not a display is designed to travel. In many cases, a roll up stand for a large display can be a wonderful advantage.

These stands operate the very same as a roller shade. A banner or display clicks into stand and then can be rolled out. The other end is then pulled up and connected to the top of a pole. There are some in which the roller portion attaches at the top and is pulled down, just as a projection screen.

Learning how to set one up is fairly simple. Some of them can be rather tall when fully set up, so it may actually require two people in order to do. Once getting the hang of it, these can be quickly set up. Knowing that they will not incur additional time to set up can be comforting to many managers. The ease and speed factor is something that should be considered when deciding what sort of stand to buy.

Having a stand that easily portable is a feature that is extremely valuable when needing to travel, or having to give the same presentation in several different locations. These are compact and easy to carry. Though heavier than many other stands, the fact that they are not bulky tends to make up for it. That makes it ideal to select for this purpose.

When compared to other types of display stands, these do tend to be more durable. Again, this fits very well with traveling. They will stand up to car travel, but also train or air travel. Though they should be handled with care, they can in fact take quite a beating and still work well.

As with anything, there are drawbacks. In this case, it happens to be the cost. These are time and labor intensive to create, and therefore are considerably more expensive that other stands that function in the same way. Should one require repairing, that can also become costly. Generally speaking, once damaged they need to be replaced.

Acting with care and attention when setting up and taking down a display stand such as this will avoid most damage. Acting in haste would risk tearing the display itself. Think about the issues that roller shades have when the shade does not line up properly when it goes up. It can get stuck, or even torn. The same issues persist with these stands.

The roll up stand can cost more money up front. In the event that it is damaged it can be costly to repair or replace. These are clear disadvantages. The advantages are that they travel quite easily, they are simple to set up, and they are durable. These may not be suitable for every purpose, so be certain to carefully consider what is really required for the situation.

In the same way that the other lending fields have been feeling a crunch in recent months, it is expected that the credit card industry is going to be tightening it's belt soon.

The mounting problems for most lenders right now relates to mortgages. Many banks and lending institutions gave much more in lending than they should have to many of their customers. Eventually it started catching up with them, as their customers could not make their mortgage payments (because they were more than they should have been in the first place) and then started defaulting on those mortgages.

Now the concern is that the same thing has happened in the credit card market. Many people have been allowed to get more and more credit cards with higher limits in recent years. Many credit card companies kept upping their limits so they would spend more because they didn't foresee a backwards spiral from their actions.

Now many people are in too deep of debt and are filing bankruptcy, leaving the banks with the debt. This is causing them to rethink what they had approved in the past. Many are rolling back credit limits and tightening the usage of cards they have issued.

What does this mean for you? This means you better know what your limit is and know how you will deal with a lowered limit from your credit card company.

Read the Mailings

Your credit card company will have to let you know if they are going to change your limit. But, if you are like a lot of people you get so many mailings that you don't pay close attention. Change that habit. It could be one line in a statement or other notification that tells you they are lowering the limit.

Additionally, many credit card companies are upping the interest you will have to pay on your cards if you keep a balance on them.

Use Wise Credit Practices

The next thing you need to do is use the best credit cards practices you can. If you have debt on your card here's what you need to do:

Charge what you need to and make sure you can pay a lot of it off at the end of the month - This way you will not be surprised if you suddenly have a lower limit as it will not impact your monthly credit card usage.

Don't miss a payment - One missed payment looks like you are having tough times and can cause the credit card company to clamp down on you.

Try to keep your overall debt at ½ or less of your credit limit - Some credit card companies are chopping credit limits by as much as ½. If you know this and keep your outstanding debt below this point you should not be damaged even if they decide to cut your credit.

A greater sense of freedom is the basis of most people's desire to have more money in their lives. Having more money doesn't guarantee more freedom, but it is the belief that inspires the desire.

Now, let's take a look at a person who wants more freedom and has decided to significantly increase her wealth. How does she go about it? Where does she begin? Where will she make her first million?

There are a few general areas where a person could direct attention: real estate, stock market, internet, information marketing, and business of all kinds - from network marketing to producing widgets.

In their eagerness to create wealth, people sometimes make the mistake of trying to make a go of it in all of these areas at once. And it is true that ultimately, a person should have multiple streams of income.

But most people who eventually do create massive income from a variety of sources made their breakthrough by initially focusing intensely in one area.

If you'd like to join them in financial success, instead of being all over the map, choose an area to develop expertise. Once you've achieved success in that area, you'll have the confidence and foundation to move on to the next area and the next after that. But first, focus.

How do you choose where to focus?

First, take a personal inventory. Wherever you end up making your first million, it will be related to something you already enjoy. If it isn't innately satisfying work, you're unlikely to stick with it, no matter how surefire a get-rich idea it seemed at first.

Second, does it have leverage? You can never get rich trading your time/expertise for money. You might get the resources to invest in real estate, or business, or the market by trading your time for money, but if you have to be physically present in order for whatever you do to make money, then it's an unlikely ticket to massive wealth - even if you're providing a high end service like a lawyer, doctor, etc.

The income doesn't have to be passive, such as royalties from intellectual property; residual income is fine, such as overrides from network marketing. But the area of focus has to be a venture that can make money while you sleep, so to speak. In real estate, that might be a matter of appreciating value or rental income. Online, that might be an information product that clients download. You get the idea.

Third, can it be systemized? By creating a system, you remove your personality from the equation. Anyone can step in and do what is necessary to keep the ball rolling. With a system, you are replaceable. You can still own whatever it is that makes the money, but you don't have to *do* the money-making actions.

Once you've narrowed your focus, what next?

Find a mentor, someone who has succeeded doing something similar to what you want to do. The mentoring could come via role models you never personally meet, but who have shared their expertise through books or other media that you can study. In addition, however, a personal mentor or coach is tremendously helpful to you in maintaining focus.

Once you've narrowed your focus and have studied what others have done to succeed in your area of interest, you're ready to make a plan of action and take the first step. Then, keep taking steps and keep your focus; you will create the wealth you desire.

The economy has taken a nose dive as far as real estate is concerned. Those that do not understand that it takes being able to roll with the changes, will be rolled over. Of course, with each change comes great opportunity. Right now, the savvy investor that gears themselves towards short sales, reo's, wholesaling, and subject too type investing will be certain to reap some SERIOUS REWARDS before this real estate market turns.

The trick to making it though, is to have the cash available to make deals immediately. Forget hard money lending as that is nothing more than glorified traditional lending with a fancy name. Sure, pure hard money lending used to be where you borrowed a certain amount, no questions asked, and you repaid the money at a higher interest rate. Now, you still pay the higher interest rate, but unfortunately, you have to jump through many of the same hoops that residential lending requires AND you have to wait for a closing, etc. This means too much time and the REAL DEALS will be lost. Don't get me wrong, there are still probably a few mavericks that operate like they did in the past, it's just a matter of finding the honest ones that REALLY do exist.

There is also private money. This is similar to old fashioned hard money and can work IF you get the right person and the right scenario. Trying to get someone to come off of their retirement account or hand out money just because they have it is NOT as easy as it may seem. Again, it can happen, but how much time are you willing to put into locating the right person, explaining how everything will work, getting the proper paperwork (legally) in place and then HOPING that the person will not hound you for updates or want to be involved in every issue you have? Too much hassle for me.

What I do and now recommend and do for others is to obtain unsecured lines of business credit. Yep, you may have heard this touted as the last frontier lately, and it is great, but be careful here too. Most individuals that are set up correctly (and herein lies the tricky part) can easily obtain cash lines that are 100% THEIRS TO DO WITH WHATEVER THEY WANT. This seems to be the best way to capture the market as it now stands. Again though, I want to warn you to be careful. There are many so-called pros out there trying to line up money for people without the foggiest idea of how to do it. There is a method that takes experience and connections here...It's not about simply calling the bank and saying I have good credit and want to invest. If things are done incorrectly, you can not only be denied the line of credit, but your credit score will take a hit, your company could be blackballed by lenders for a year and in some circumstances, it could be red flagged for life.

Unsecured lines of business credit is indeed one of the best avenues to capture and control the current real estate market, just make sure you obtain competent counsel before you attempt obtaining them.

The substantially tougher legal demands on all finance departments started with the Sarbanes-Oxley Act (SOX) in the United States (US). It states that companies must report most errors the auditor finds as 'material misstatements' and 'material weaknesses', unless they can prove their own controls and processes would have found the error.

This means that US-operating businesses can no longer rely on an auditor as a part of an internal control process for spotting mistakes - mistakes must be found before the auditor even arrives.

Recent changes to financial regulation in Europe and in the US, have also focused largely on financial auditing and business record checks, particularly for Small and Medium Enterprises (SMEs).

Auditors are now not only checking the accuracy of our financial reports, but also the account reporting process itself.

An example of this, played out on 1st November 2012, the United Kingdom's tax office (HM Revenue & Customs - HMRC), will be using their new programme to identify SMEs who have inadequate checks and account reporting processes. The HMRC's pilot programme, which ran for most of the 2011-12 tax year, found that 36% of businesses had some issue with their accounting processes, of which 10% were serious enough to warrant a follow-up visit. Similar controls are due to roll out in all EU countries - we must not allow any room for slip-ups!

Reconciliation: The final test of your process before the auditor arrives

In the face of these new regulations, reconciliation management processes are now fundamental, provided any mistakes are filtered and corrected before closing the books - making the pressure on month-end close processes even tougher. Hence, Account reconciliation is the final 'check and balance' test of the books, it allows businesses to catch and remedy any mistakes in the accounts.

Which must take place before the auditor even arrives, now a derived demand.

However, many businesses, especially SMEs, struggle to find the time to reconcile their accounts before filing with the taxman - making the auditors' new focus on internal controls all the more challenging.

Finding time may mean investing in more staff, new technologies and or a review of your reconciliation management processes.

The reconciliation can be automated

When it comes to reconciliation process management, financial directors and CFOs should investigate automating solutions beyond their accounting system. Separate Auto-reconciliation tools can match more of your accounts data instantly, a fraction of the time it takes a human; it makes fewer mistakes and can even make suggestions for fixing mismatched items, and gets you much more of the control that is legally mandatory (and an impressive audit trail of the reconciliation work).

The speed and accuracy afforded by auto-reconciliation software could be exactly the solution to the tighter book-close deadlines and the growing necessity for accuracy in mandatory financial reports.

A recent poll from the Co-Operative Bank has shown that inflation is already beginning to kick in - and the public are changing their shopping patterns to suit. This is a classic example of how inflation can change society in unexpected ways. If there was a massive tropical storm and the banana crop was wiped out people would eat more apples rather than pay extra for bananas. This type of thinking is now being reflected at Supermarket checkouts up and down the UK. The interesting point to me is that the list of 20 luxury items being left on the shelves by shoppers shows nothing (absolutely nothing) that a frugal shopper would be buying anyhow. Here is the list, alongside my comments:

1. Flowers - available for free in every woodland and hedgerow in the UK.

2. Magazines - it's hard to find a magazine nowadays that doesn't have the same (or very similar) content available on the web for free.

3. CDs - rather than buy a new CD just listen to your current one, or adapt a "one in/ one out" strategy - for every new CD you buy; you need to sell an old one on one of the online marketplaces.

4. Bottled Water - Evian backwards is Naïve. Enough said.

5. Hand wash - nothing beats good old fashioned soap.

6. Quilted toilet paper - "ownbrand" does the job.

7. Candles - these might look nice, but they haven't served a valid purpose (outwith power cuts) since the days of Thomas Edison.

8. Branded washing up liquid - as per the toilet roll, "ownbrand" will do the job. Think about it this way, Tesco, Asda et al don't have their own brewery. The "ownbrand" cans of Lager on their shelves are being made somewhere. It may well be the case that Tesco's own lager is in fact very, very similar to the brand sold elsewhere on the shelves. The same applies to almost every other item in the store.

9. Organic produce - organic produce could be available for free every day of the year...In your own back garden.

10. Branded food - use the Credit Crunch as an excuse to go fresh. Lay off the macaroni and cheese and go for a homemade dish.

11. Fresh coffee - I'm not a coffee drinker so it would be unfair for me to comment too much on this one. I do know, however, that your body craves whatever you have to eat or drink a lot. If you drink a lot of Coke then your body will crave coke. If you drink a lot of wine then your body will crave wine. Taking things forward, if you drink a lot of low cost coffee your body will end up craving low cost coffee - problem solved (the knack of course is sticking to an inferior product whilst your body adapts).

12. Uncut bread - the best thing sliced bread is (wait for it) Sliced Bread! Don't mess around with bread; it all tastes the same after a couple of chews. If you are only using it for toast then it is really irrelevant which brand you go with.

13. Nail polish - like it or lump it, beauty products are going to have to take a back seat during the Credit Crunch. If the thought of doing without cosmetics makes you cringe then now might be the time to discover natural alternatives. Remember - less is more!

14. Fake tan - such self indulgence should be consigned to the waste bin of the 90s. The Dale Winton look is out!

15. Multi Vitamins - if you follow point 9 then there should be no need for extra vitamins.

16. Fabric Conditioner -I don't even know what this is!

17. Teeth whitening toothpaste - this is another area where a trip to your granny's can help. People had white teeth before the days of teeth whitening toothpaste. The secret is Bicarbonate of Soda. You will find that by looking, you can find alternatives to all of today's luxuries within easy reach.

18. Wine - I promote abstaining from alcohol completely but if you can't then seek alternatives. The theme throughout has been either abstaining, finding a cheap "ownbrand" alternative or making it at home. In my opinion I'd lean towards a cheap alternative. If I had a pound for every time I had heard people say that you can get an excellent bottle of wine at Tesco for a fiver I'd be a rich(er) man.

19. Desserts - if you fancy a dessert then why not have some jelly - another occasion when thinking back to what your granny would've done when times were tight.

20. Napkins - this list must have been written by a Lord! Unless you are having candlelit dinners every night then I'm pretty sure that the average family will be able to live without these.

Now, why stop with the items listed in this survey. The next time you can back from the supermarket, take the chance to go through each item and spot where you could either abstain, "down-brand" or go homemade. Every little saving will roll-up into massive annual savings. Necessity is the mother of invention and there has never been a greater need to make savings than today.

Listen to the chickens in the media and you will hear that the sky is falling! Unfortunately, this time they seem to be right. With the economy in the tank and banks running for their lives, one has to wonder if it is still possible to get a loan from a bank.

When you picture the President of your bank, what comes to mind? A portly gentlemen smoking a cigar with a leering grin on his face? Well, not any more. The banking executive of today is more likely to be found curled up in the corner whimpering about subprime loans and government takeovers. The banking industry is simply in the middle of a financial tsunami of its own making.

For many, seeing the fat cats of finance get their comeuppance is more than a bit satisfying. This feeling of satisfaction quickly becomes heartburn, however, when we realize that financial hardship in the banking industry rolls downhill. The banks may be getting a $700 billion dollar bailout, but does that mean they will be issuing loans?

The answer is banks will be giving loans...if you meet very strict requirements. The theme with banks now is avoiding risk at all costs. Tailor all your borrowing efforts towards this. Let's take a closer look.

First off, you better have absolutely stellar credit. I mean it better be so perfect that you can barely look at the credit score because of the lights of heaven shining off of it. If you show late payments or defaults, you are going to have a tough time. Banks have historically looked back two years at your credit, but count on them becoming far more interested in years farther back.

Secondly, you better need the loan for something that is viewed as low risk by the banker. If you are looking for financing to develop a project in an area that is seeing property values decline, then the banker is not going to be lending you dollar one. Remember, banks are risk adverse. This means they are looking for slam dunk financing opportunities.

Third, you better be prepared to put down a sizable chunk of coin and perhaps a first born child as a down payment. Banks are risk adverse at the moment, so they will look for you to put something on the line as well. 20 percent down should make most of them happy. On commercial projects, you can expect to put even more down.

How tight are the banks being with money these days? The White House had to issue a statement "encouraging" banks to start loaning money. I doubt the order of an unpopular, lame duck president had much influence, but it gives you a snapshot of the current situation. If you are going for financing, make sure to have all your ducks in a row.

To envelope budget means take all of your finances and spread them out into categorized envelopes. This is an excellent way to take control of your household finances.

It means that you will live well within your means, that you won't be spending frivolously outside your budget, because you will put the funds into their designated areas.

Start out making a list - at the very top of your list put your monthly income (take home pay). Under this list all of your bills, all areas you need money for each month.

For example:

• Utilities
• Rent or Mortgage
• Vehicle Payment
• Vehicle maintenance including gas
• Phone
• Credit Card Payments
• Other Loan Payments
• Groceries
• Clothing
• Entertainment
• Savings
• Insurance
• Etc.

Then provide as many envelopes as you have categories. On the paper - list amounts that each bill will require. Keep all amounts within what your take home pay is - if you go over, adjust accordingly until it fits.

Then place the funds into each envelope - and it might be helpful to write the due date of bills on the outside as well. When that bill comes in - or when you need the funds for that particular category, simply take the funds out to pay the bill.

If you have extra funds left over - place these into one of your debt envelopes to help get ahead and pay off the debt. A good rule is to pay off the smallest debts first, then as you pay them off take the amount you were paying on it and roll it over onto the next debt in line. This helps you to become debt free faster.

This system helps to keep you in check of where you spend your finances each month. Many practice the envelope budget with great success every month by helping you to gain and keep control of where your money goes.

Can too much expert knowledge in financing a franchise business ever be a bad thing? We certainly don't think so and we'll show you how to obtain finance for a franchise business that you have chosen to purchase.

When talking to clients about franchise finance in Canada we generally talk about the Boy Scout motto. You will recall that their motto is ' BE PREPARED ' and that's the total strategy around financing a franchise successful that you must adopt.

Getting the money to purchase your franchise of often the biggest worry of new entrepreneurs such as yourself. People search out franchising opportunities because they are essentially looking for a combination of opportunity and wealth - there is usually only one major obstacle to that road to success, it's the funding for the acquisition of the franchise business.

If we had to summarize in a very simple and basic what you need to be successful in franchise financing we would boil it down to a few key issues. Want to know what they are? From our perspective it all comes down to a reasonable history of business or management experience, a decent personal financial profile - more about that one later, and access to the ' inside secret ' of franchise financing in Canada, which, you may be surprise to know, is the government of Canada!

Let's circle back on those points - and as always it comes down and back to our Boy Scout motto - be prepared. We can see our client's eyes rolling back now when we tell them we need a crisp business plan. That's a key requirement of your ability to obtain finance for a franchise, simply because it's the ' proof', if you will, of your ability to understand and run your business properly. In that document you have info about yourself, the business you are purchasing, the industry you are in, and the financial performance you expect to achieve in your new role as business owner and entrepreneur.

From a lenders perspective financing a franchise business is all about one thing - getting paid back for the loan. So the lender will look at how you have structured the financial portion of your business plan to reflect ability to repay your franchise loan, as well as how much cash flow and working capital is left to pay yourself a salary and run your new business. Could anything make more sense than a properly crafted and positioned business plan - we don't think so.

Your money - you have it, you want to keep it - don't we all. However, whether it's a franchise business or any business for that matter OPM never works - OPM is ' other people's money' and you can't rely on 100% of outside financing to obtain finance for a franchise in Canada. So be prepared to invest anywhere from 25-50% of the purchase price into your acquisition. Coupled with that and this is critical, you must be able to demonstrate that you have run your personal and business affairs respectably from a credit perspective. Obtaining a copy of your credit report, in advance, by you, is strongly recommended.

And, oh yes, what about that Government Issue we mentioned. That's one of the great secrets and tips we promised to reveal. Did you know that probably 90% or more of financing a franchise business in Canada revolves around a special loan program called the CSBF/BIL loan? It's a federal program, and administered by financial institutions. Whats so great about it - limited personal guarantees, great rates, terms and structures.

Speak to an expert in franchise financing when you are looking to obtain finance for a franchise - seek out someone who is trusted, credible and experienced. Be prepared, and get ready to be successful.

It's one of the country's fastest growing crimes - but how do you stop someone from stealing your personal details and using them to get credit in your name? There are a number of ways in which you can help to defend yourself - and your finances - from identity fraud.

The electoral roll is used by lenders to verify that you live where you say you do - if you're already registered, an identity thief will be unable to register in your name. If you haven't already done so, protect yourself by contacting your local council to register to vote.

An unidentified or suspicious transaction is often one of the first signs of ID fraud. Ensure you thoroughly check your credit card and bank statements for unusual entries. Your credit report can also indicate that someone is using your identity to apply for credit, so check it regularly for applications you didn't make or accounts you didn't open. You can view your free credit report online by signing up to a credit monitoring service that will alert you every time there's a change that could indicate fraud.

If you have had key items stolen, such as credit cards or your passport, report these to the police and any other relevant organisations in order to warn them of potentially fraudulent activity in your name. Thieves may also intercept mail to steal vital information so if any of your mail is going missing, notify the Post Office immediately, and ensure you have mail forwarded when you move.

If you go away on holiday, arrange for your post to be collected regularly to avoid it being stolen and used to commit Identity theft.

An old catalogue with your name, address and account number on it could be useful to fraudsters so ensure that you don't throw away anything containing personal information that could be used to steal your identity. If in doubt, shred it. Also avoid carrying important documents around unless you really need them. Your passport, driving licence and payment cards can all be used by criminals, so make sure they are kept in a safe place.

Several criminal ploys exist to get hold of your personal details, including cold calls and unsolicited e-mails, so be wary of sharing confidential information with anybody. This includes PINs, bank account details and passwords.

What's more, steer clear of opening attachments to unsolicited e-mails or visiting dubious-looking web sites - they could contain a virus that will steal important data from your hard disk. Always make sure your computer is protected by installing the latest security patches and anti-virus software on your computer. Increasingly popular social networking sites are ideal for Identity thieves as they can use personal details such as your full address, date of birth, children's and pet's names to obtain your password or PIN.

In summary, to protect yourself from ID thieves, use the tips above to ensure that you keep your confidential information secure and stay on top of ID fraud by checking your credit report on a regular basis.

The message to CLOs is becoming clearer and clearer. Company leaders want them to align educational offerings with the organization's strategic objectives.

That's not an easy challenge. They must ensure that education and communication initiatives reinforce the company's goals. They must help employees understand these goals and develop the skills and motivation to contribute to them.

And at the most basic level of alignment, they must make sure that every employee understands how the company makes money. That includes understanding how profitability is driven, how assets are used, how cash is generated and how day-to-day actions and decisions, including their own, impact success.

Developing business acumen is fundamental to business alignment. Consider Southwest Airlines, which was founded in 1971. With 33 straight years of profitability, the airline has become widely recognized for the motivational culture it creates for employees and its extraordinary dedication to customer service.

Much of the industry has suffered during the years of Southwest's growth, including many airlines that have merged or declared bankruptcy. Southwest buys the same planes and the same jet fuel as other airlines, and pays its employees competitive wages and benefits. What's the difference?

Unlike some of its competitors, Southwest's management team involves employees in the company's financial results, explaining what the numbers mean and, more important, helping to link everyone's decisions and actions to the bottom line. The airline has an open culture, one of inclusion at all levels, and employees understand their roles in providing great service and keeping costs in line.

Certainly there are other factors that contribute to the success at Southwest, but it's difficult to ignore the positive impact of an approach that develops the business acumen of all employees and managers so that they can contribute to the airline's success.

An Educational Challenge

Unlike those at Southwest, individual contributors and managers in many organizations today have not been educated about the big picture of their businesses. They have a narrow focus on their own departments and job functions and aren't able to make the link between their actions and the company's success. Multiplied by hundreds or even thousands of employees, this lack of understanding - the lack of true business acumen - means that too many decisions are being made and too many actions are being taken that don't align with business objectives.

How can training help bridge this knowledge gap? For many companies like Southwest, implementing learning programs designed to develop a strong foundation of financial literacy and business acumen has made the communication of financial results to employees easier and more effective.

Business Acumen: A Definition

Very simply, business acumen is the understanding of what it takes for a business to make money. It involves financial literacy, which is an understanding of the numbers on financial statements, as well as an understanding of the strategies, decisions and actions that impact these numbers.

Someone with financial literacy, for example, would be able to "read" the company's income statement. This employee or manager would understand the terminology (revenue, cost of goods sold, gross margin, profit, etc.) and what the numbers represent (i.e., gross margin equals total sales/revenue less the cost of goods sold).

With business acumen, the individual would be able to "interpret" this same income statement, taking into consideration how company strategies and initiatives have impacted the numbers during specific periods of time.

Consider a simple comparison: In football, it's necessary for players to know how the game is scored as well as how to play the game to change the score. In business, financial literacy is understanding the "score" (financial statements) and business acumen is understanding how to impact it (strategic actions and decisions).

Asking the Right Questions

When business acumen spreads through an organization, employees and managers begin to ask questions. These questions are directed not only at the organization, but also at themselves and their departments - questions about processes, products, systems, staffing and more that can lead to necessary and innovative decisions and actions.

Business acumen helps everyone understand that it's not enough to ask, "How do we cut costs?" or to say, "We need to increase sales." Digging deeper, employees with higher levels of business acumen will ask questions that take into consideration the far-reaching impact of potential decisions and demonstrate a greater ability to make the connections between performance and results.

Questions that could get to the root of disappointing operating ratios:
• Have production costs gone up? If so, why?
• Have we changed prices? If so, how has that affected our margins?
• Are there any competitive issues impacting our performance?
• Have there been any customer requirement changes?
• If our costs per unit produced have gone up, can we better control the efficiency of our production or service delivery?
• Is there a way to produce a greater product volume at the same cost?
• Can we raise prices, still provide value to the customer and remain competitive?

When questions become more specific, the right decisions can be made.

Business Acumen for Managers

Managers at all levels need a high level of business acumen to do their jobs. Every day, they make decisions about employees, projects, processes, expenditures, customers and much more - decisions that ultimately roll up into larger organizational results. Managers who make these decisions while looking through a departmental lens only, with a limited understanding of how these decisions affect financial results or how they are tied to the organization's goals and objectives, are working in silos that can ultimately damage the company.

Managers are often promoted to their positions of responsibility because of their "technical" expertise. They've been successful customer service representatives, great salespeople, innovative researchers or well-respected IT professionals. They are now entrusted with decision making, budgets, projects and people. They often do not have financial literacy, nor have they developed a higher-level perspective about the business. Over time, especially if they move up the managerial ladder, they may develop these. Or they may not.

Organizations need managers who operate as part of the management team, taking accountability for their own results as well as the results of the entire company. Therefore, more and more organizations have built financial literacy and business acumen into managerial competency requirements and have integrated business acumen training into management curriculums.

Business Acumen for Employees

Although there is little debate about the need for managers to develop business acumen, organizations sometimes question the need for this understanding at employee levels. But frontline contributors, those who are most directly involved with production or customer service, for example, take actions every day that impact business results.

Consider the salesperson who discounts products, or the service representative who deals with an unhappy customer, or the maintenance person who notices a problem. The actions each of them takes might erode profit margin, lose a good customer or allow safety issues to escalate. Without an understanding of how their actions impact the company's results, they might not have the context to consider alternatives.

Many organizations have determined that financial literacy and business acumen aren't just for managers anymore. They have decided to develop a company of people who understand the business; who know what return on assets and return on investment mean; who know how inventory turnover rates affect results and the importance of positive cash flow; who see the connection between the company's financial success and their own health benefits, 401(k) plans and more. In other words, they need people who understand the "business" of the business.

In his book Good to Great, Jim Collins says, "We found no evidence that the 'good-to-great' companies had more or better information than the comparison companies. None. Both sets of companies had virtually identical access to good information. The key, then, lies not in better information, but in turning information into information that cannot be ignored."

With an increased level of business acumen, managers and employees can better interpret information, making the connection between their actions and the company's results.

Another Reality of Today's Business World

A public company's operating results are well known at the end of each quarter. Analysts, investors, the media, employees-everyone has access to a company's financial results. With a significantly increased focus on accounting improprieties over the past few years, senior management has become highly conscious of the need to provide accurate and timely financial information. And employees have become much more likely to wonder about these numbers. "Is my company being honest? Are the numbers telling the whole story?"

Without a fundamental understanding of financial results and an ability to interpret them, employees may become suspicious and, ultimately, disengaged. Disengaged workers, in turn, negatively impact productivity and profits.

CEOs of public companies, then, must ensure that managers and employees are able to understand the numbers and have confidence in them. That means effective business acumen education as well as ongoing and open communication from the top.

Former GE chairman Jack Welch said in his book Straight from the Gut, "Getting every employee's mind into the game is a huge part of what the CEO job is all about...There's nothing more important."

The Big Picture

As we have become a nation of specialists, armed with new information technology and enterprise-wide operating systems, it has become easier for managers and employees to become myopically immersed in their own jobs. This immersion can have the effect of obscuring their view of the big picture. They may not consider the cumulative effect of wasted assets. They may have little regard for the objectives and responsibilities of other team members, departments or divisions. They may lack the motivation to invest personal energy in critical project work.

Organizations that engage in developing business acumen provide a clearer vision and an overall context within which employees can work, while creating an environment that is more likely to break down internal barriers. There is less waste and less ambivalence. There is increased innovation. Employees are more engaged, they understand their role and its impact on business results, and they are more likely to believe that their efforts really matter. They are more likely to think like a business owner.

Think Like an Owner

To be successful, business owners must be able to helicopter above day-to-day issues and see the big picture. They must understand how the pieces of the business fit together to impact profitability and cash flow, and they must be able to assess the risks and rewards of potential decisions. The best business owners study the numbers, ask themselves tough questions, analyze their mistakes and take decisive action.

To truly understand the business, owners have to understand how that business makes money - in other words, how it produces sales, profit and cash. Organizationally, they know that it's about people, processes and productivity. On the customer front, it's about satisfaction, loyalty and market share. Ultimately, every action taken and every decision made in any of these areas will impact sales, profit or cash.

When managers and employees begin thinking like owners, they, too, look at the big picture, understand how all the pieces fit together, and assess risks and rewards. They understand, like an owner, how the company makes money, how it stays in business and how they contribute to its success.

The benefits to an organization of engaging managers and employees in this kind of ownership thinking are obvious. So how can a company develop the business acumen of its people?

Developing Business Acumen: Two Stories

Entrepreneurs are generally forced to develop business acumen on their own. They are hands-on with their businesses and have to make all the decisions as they go along, whether good or bad. They either learn from their mistakes or fail.

It's very different for managers and employees in an organization.

They aren't involved in all aspects of the business, and they make decisions primarily within their own areas of responsibility. Since seeing the connections isn't easy, they need to learn in some other way.

Books and lectures can help. But business acumen is best developed experientially. Learners must be able to analyze situations, ask questions, discuss issues with other learners, consider options, make mistakes and see results.

Although there are a variety of ways to accomplish this kind of experiential learning, many companies have found that simulations, which mirror reality and allow learners to experiment in a safe environment, are one of the best ways. Here are the stories of two companies who chose to educate their learners with business simulations.

Comcast Cable Communications

The NorthCentral Division of Comcast - one of the country's largest entertainment, information and communications companies, specializing in cable television, high-speed Internet and telephone service - set out to ensure that managers and employees throughout the organization had the financial acumen required to make good decisions. A companywide survey had clearly demonstrated this need - especially for managers of employees who had direct contact with customers.

For example, if a customer calls with a service problem, frontline employees and their supervisors can issue credits to the customer's account in an effort to resolve the issue. Although this may be exactly what is needed for the situation, Comcast realized that employees making these decisions didn't necessarily understand that a $10 credit could ultimately require more than $100 in revenue for the company to break even. Similarly, a service technician's visit to a customer's home might cost $50 directly, but the company might have to sell an additional $500 in services to cover the cost.

"The lack of financial acumen among supervisors and employees was largely understandable," says Mark Fortin, senior vice president of finance for Comcast's NorthCentral Division. "Almost 75 percent of the company's employees are on the front lines in roles such as call center personnel or field technicians. They are trained to be good at what they do, but their backgrounds typically don't include emphasis on financial literacy."

Comcast human resource executives determined that a fundamental approach to the development of business acumen was needed. However, this approach also would need to be fast, engaging and job-relevant. Expanding upon its already robust Comcast University management curriculum, the executives chose to integrate a high-energy, tailored learning experience that would provide the "basics" and, at the same time, deal specifically with Comcast terminology, concepts and strategic imperatives.

As they participated, learners made decisions about products, processes, pricing and more, and they saw how those decisions impacted financial success. In the end, it became easier for them to make sharper day-to-day choices.

"The thing that sticks out for the frontline leaders, the field technicians, and the call center supervisors and managers who attend, is the high cost of sales in our business," says Sophia Alexander, senior manager of curriculum and metrics for the division. "It's like a bell goes off in their heads when they realize what it costs for us to earn what we need to earn to run the organization."

Attending the learning session is not mandatory for supervisors and managers. However, there is an unwritten expectation that they will participate in business acumen training as well as other Comcast University core programs, according to Jan Underhill, senior manager of leadership development for the NorthCentral Division. That expectation, coupled with the fact that manager compensation has recently become tied to meeting specific financial goals, has kept attendance high.

Senior executive support also has been an important factor in creating interest and awareness around financial literacy. "Getting people to sign up is much easier when senior executives like Mark Fortin are strong advocates for the program," says Underhill.

Feedback has been resoundingly positive. On average, for example, Level 1 feedback about the discovery learning based business acumen sessions has been 4.5 on a 5-point scale. That means that the program has exceeded expectations. Better than that, says Sophia Alexander, senior manager of curriculum and metrics for the NorthCentral Division, is the empirical evidence that the new insights and knowledge have made a difference. For example:

• Participant self-evaluations indicate that financial literacy has increased by at least 25 percent as a result of the business acumen training.
• After the training, there was a 20 percent increase in the participants' ability to use basic financial terms and concepts on the job.
• Almost 45 percent of supervisory participants report that they are using their business acumen knowledge in daily communications with staff and peers.

"Some people, particularly in big companies, feel like there is an open checkbook. They think... I don't own the company. It's not my problem. Somebody will pay the bills. But in today's environment, with some very large companies in trouble, everyone needs to be part of the solution. Business acumen education for managers and employees helps the company as a whole, but it also helps employees. It's about self-preservation to some extent." comments Fortin.

Southwest Airlines

Southwest Airlines is one of the consistently profitable companies that makes "business literacy" a core component of its employee training programs. Every employee has a solid understanding of what a new customer, and new revenue, means to the company. Employees also know how the loss of a customer can impact the business.

According to Elizabeth Bryant, director of leadership training at Southwest Airlines, "Our training covers how the financial ratios such as return on assets and various margins are determined. Knowing that team managers, supervisors and all employees have this knowledge enables the company's leadership to present detailed financial reports and explain to the teams where the margins need to be. Management can speak more in depth to all the employees, and the employees understand what the objectives are."

Bryant added, "Because we don't waste the little things, because we track every penny and every activity, we've all come to know the importance of each cent. With the pennies in hand, we spotlight the idea of compound interest- for example, how the small savings help us by year's end and how small amounts of waste can conversely add up to hurt us."

Consider the importance of a key operating metric for the airline industry - operating cost-per-seat mile. This is how much it costs an airline to fly one seat one mile. All the operating costs are divided by the total number of seat miles (the total number of miles of all the seats that were flown for a given period, whether a passenger was in the seat or not). Much of the industry has had cost-per-seat mile results at or over 10 cents. Southwest Airlines' cost-per-seat mile is about 6.5 cents. The lowest cost-per-seat mile in the industry almost 25 years ago was just over 5 cents.

How do they do it? Certainly there are a number of factors that lead to success. However, one of the key influences is Southwest's ongoing training in business acumen. This training ensures that employees know:

• How challenging it is to ensure ongoing profitability; making a profit can never be taken for granted
• The importance of utilizing the benefits of the good years to prepare for the tough years
• The impact of individual actions and decisions to the bottom line

In other words, Southwest invests in training to help employees think like business owners. This, in turn, produces real results, like its consistently low cost-per-seat mile. When Southwest's learning team decided to implement a business acumen simulation several years ago, there was some initial concern about how well it would be received.

Bryant explained, "Some people, especially those without financial training, were nervous about the topic. We are such a people-oriented company that we didn't want people to think that now we're just a financially oriented company and everyone will be judged purely on financial performance. But we positioned the need for the business literacy training as another way to prove that we actually care tremendously for each employee. We explained that if you understand what the numbers mean then you can better understand how your work provides an integral contribution to the business."

Southwest Airlines, according to Bryant, has never had a layoff - a rarity in the airline business. The more their employees understand the challenges of the business, the better they appreciate the importance of making smart decisions every day.

Bryant concluded that the discovery learning techniques in a robust business simulation work well in the Southwest culture because of the team orientation. "All the participants learn that they can't individually make it all happen," said Bryant. "They learn that they have to look beyond themselves, act and think like an owner, and realize that our efforts and financial results here are not just for a career, but for a cause. It's this cause-oriented philosophy toward delivering a low-cost, high-quality service that allows people the opportunity to travel. Our success at achieving positive results translates to individual opportunities to work, to grow and to continually think of innovative ways to improve our business and serve our customers."

The Classroom Advantage

These two companies chose to develop the business acumen of managers and employees by using a classroom-based simulation, facilitated by instructors at company sites. Although online options were available and were used in some cases to supplement the instructor-led training sessions, they decided that there were significant advantages to tackling this subject in a "live" session where they could leverage the power of:

• SHARED KNOWLEDGE AND EXPERIENCE: Learners bring their own perspectives and issues to the session.
• TEAMWORK: Learners work together, make decisions together and rely on each other as they learn.
• COMPETITIVE FUN: Small teams "play" against each other and enjoy a competitive environment.
• COMPANY-SPECIFIC DISCUSSIONS: The learners' common interest in their own company's financial and strategic issues allows for greater analysis and depth of discussions and a true "connection" between the learning simulation and the organization's reality.
• LEARNING MOTIVATION AND COMFORT: Learners who may not be comfortable with the subject of finance find themselves playing a game in the comfort of a team environment.

Although there are a number of educational approaches available to organizations in the area of business acumen, classroom-based training that brings together teams of learners can help ensure that learning occurs and that connections to the business are made in ways that prompt action back on the job.

The Bottom Line

More than ever, successful companies will need to focus on developing the business acumen of managers and employees. These companies will realize that when their people understand the numbers, when they understand how their departments contribute to the company's objectives and when they see how their own decisions and actions make a difference, they will begin to operate as part of a team rather than in a departmental or personal silo. And a critical piece of the alignment puzzle will be solved.

With widespread business acumen, companies can have a powerful asset - educated, knowledgeable and motivated employees. And with this asset, those will be the companies best positioned to succeed.

With all the financial planning we do, there are still bound to be a few emergencies in life. It could be a huge medical bill, an unexpected insurance payment, urgent repair work or even a broken down car - the reasons could be many. When you are in dire straits and you need money urgently, cash advance loans or payday loans can help you bridge the gap.

What are cash advance loans? These are unsecured loans that are designed to meet short term emergencies. These loans are high risk loans and therefore come at premium rates of interest. Cash advance loans require minimal verification. Therefore, these loans are approved almost immediately and the amount is disbursed within a few hours. These loans are available to almost all borrowers, regardless of their credit rating. Full repayment of the loan with interest has to be done in 14-30 days. Generally, these loans can be rolled over once or twice only.

The first step in availing cash advance loans is to find a reputed lender. Some of the common mistakes borrowers make include applying for payday loans through unsolicited emails that land in their inboxes, ignoring the fine print on the agreement and choosing the lender without ascertaining their reputation. If companies offer loans without any verification, their interest rates will be correspondingly high because they are financing a high risk loan. In such cases, it is important to check out the credentials of the lender.

The second step is to apply for the loan. These days, most lenders have a strong online presence. This means, borrowers can submit their application online and wait for the check to arrive in their account. Most lenders require standard information like your banking details, basic identification details and the loan amount. Once the application is submitted, the lender will verify the information and upon approval, send in the payment to your bank account. The exact term and amount will be fixed by the lender. At the time of loan repayment, the amount will be withdrawn automatically from the bank account through a post dated check collected by the lender from the borrower at the time of disbursing the loan.

A crucial part of the process is reading the loan agreement form upon receipt. This form contains details about repayment. In case the borrower is unable to repay the full amount with interest at the end of the term, they will have the option of rolling over the loan. This is an expensive process as it involves extra fees and additional interest rates. That is why it makes financial sense to repay cash advance loans as agreed, failing which you might end up in a debt trap. Most reputed loan vendors have a friendly customer service cell. The duty of this cell is to explain the loan, its utility and terms to customers. This makes it possible for borrowers to procure loans that suit their financial means.

In case you need a large amount, you may not be able to get cash advance loans from a single lender. In this case, you will need to approach multiple lenders. But keep in mind that lenders make use of highly accurate systems to learn details of outstanding loans and default payments.

The savvy home buyer is the one who shops around for the home loan finance before shopping around for a property to buy. That way, he or she knows exactly how much he or she can (or can not) afford to pay when buying a home. The buyer can then confidently seek out, only properties, within his or her pre-qualified home loan price range.

The only certain way of knowing how much you can borrow is to go through the home loan pre-qualification process. Loan pre-qualification is not difficult, and if you are not a cash buyer, it is an essential part of the whole home buying process.

Home loan pre-qualification starts the ball rolling and is the first step in formally applying for a home loan. It lets the buyer know what is and is not possible.

Pre-qualifying for a home loan also puts the buyer in a much stronger negotiating position with the seller. The fewer sales conditions included in the contract the better.

A loan pre-qualification can also help a real estate agent to better meet the needs of the buyer. A real estate agent can waste a lot of time searching for properties that are out of the home buyers financial reach.

By knowing what the financial boundaries are, a real estate agent can concentrate on finding properties that fit within the home seekers budget. This will save the agent time, and it will save the buyer time, by not having to inspect properties that he or she can not possibly afford to buy.

As I said earlier - The big advantage in pre-qualifying is that it puts the buyer in a much stronger negotiating position.

If the seller gets two similar offers to buy the property, the offer from a fully pre-qualified buyer with most likely get preference over an offer with conditions attached. Most vendors are wary of signing contracts subject to the buyer applying for home loan finance and getting the application approved.

The seller might even accept a lower offer from a pre-qualified buyer, rather than take the chance the other buyer might fail in obtaining the required loan financing.

There are two methods of applying for a pre approved loan. The standard way is to supply a home loan agent with your financial and credit history. The loan agent will then 'crunch the numbers' and 'run the ratios' to calculate the level of borrowing that can be approved. A major flaw in this scenario is when the borrowers forget to reveal all. They (conveniently) forget to tell about their three overdue credit card payments, their new car payment or they push their income figures beyond reality.

The preferred method is to first complete an application and provide income and employment records. The loan agent would then run a credit report and actually submit the file to a wholesale lender for underwriting before receiving approval and commitment for loan finance.

The message is simple; get a pre-qualified first, then find your dream home. Remember, getting the order right will save you money when negotiating the contract. Having a pre-qualified loan also tells the seller you are serious and really can afford to buy the property. Pre-qualification is a powerful negotiating tool when presenting an offer to purchase.

As an African safari guide once told me, "you do not go tracking a lion, find him and then worry if you have any bullets in your gun!"

By the way - we were not hunting lions to shoot... we just did not want to be eaten alive!

Good luck in your house hunting!