Finance Roll

One of the subtle differences of trading Contracts for Difference (CFDs) compared to trading the stock market is the fact that CFD brokers charge CFD finance when holding positions overnight. Today we will take a look at this subtle difference of CFD finance and how that may affect your CFD trading business.

The CFD brokers major source of income

You may or may not know that CFD brokers have significant amounts of money under management and it would not be uncommon for a large CFD broker to have in excess of $100 million in client's funds in the bank. These clients' funds sitting in the bank represent an amazing amount of passive income for the CFD broker and at this stage we haven't even talked about CFD finance.

So what exactly is CFD finance?

The CFD finance is a debit or credit to your account as a result of holding a CFD position overnight. Overnight simply means you hold your position past 5 PM New York time which equates to about 7 AM Australian time. This is known as the roll over time.

In effect the CFD finance is a cost you incur for borrowing the leveraged money that you are trading with in the market. As you would already know, one of the greatest benefits of trading CFDs is the ability to put a small amount of margin upfront in order to control a much larger position. For example $500 will control a $10,000 position in one of the top 20 ASX stocks.

You get credited or debited on the full amount

Traders new to CFDs often get confused with the amount the finance is charged on. Most CFD brokers charge finance on your full CFD position irrespective of the amount of margin you put up front. Having said that it is always important to check your CFD brokers product disclosure statement to ensure that is the case.

So in effect you are borrowing the full amount of your CFD position and as a result you incur a financing charge. This charge or credit is normally the overnight financing rate plus or minus 2%. This is a yearly rate which is then calculated back to a daily rate.

As of January 2009 the RBA rate in Australia is 4.25% so if you held a CFD position long you would be charged 4.25% +2% per year calculated back at a daily rate. So we are talking 6.25% per year and only if you hold the position overnight. If you happen to hold your position during the day and closed before 5 PM New York time then you will not be charged overnight financing allowing you to effectively borrows much money as you like for no charge.

Another way to think about it is if you held your CFD position for a full year then you would need to make a 6.25% capital gain just to break even with your CFD finance.

Do I get paid when I short sell a CFD?

Another great advantage of trading CFDs is the fact that when you are short you actually get paid interest every day you hold the position overnight. Normally the rate you would earn is the overnight cash rate -2% calculated as a daily rate. As you can see that doesn't equate to a massive amount of money but it is still a credit nonetheless.

Consider the cost of incurring CFD finance as the cost of accessing more opportunity than what would be available if you were trading the stock market.

A big part of running a successful business is making smart fiscal decisions. Sure, there are all sorts of other aspects-you've got to have a great product or service, for one-but keeping your business' finances in order is crucial. One great way to help do just that is to make sure you keep building costs down, both in the short term and the long term. If you are building a home for your business, you can use all sorts of fancy, expensive materials. There is practically no ceiling to the price of what you can spend. But is that really a good business decision? Is a hand-carved, dark mahogany fence really essential to the survival of your business, or would a metal fence straight off the roll forming line do the job just as well, but for a lot less money? It's a question every business needs to ask for themselves. Perhaps your business is all about image, and that mahogany fence really adds to the ambiance. For example, a day spa may need such a fence to build the perception that its patrons are in a place of beauty and calm. But day spas are few and far between. Most businesses really just need a quality, reliable structure that will keep their belongings enclosed and safe. That's where metal fencing comes in.

Metal fencing can be used for all sorts of purposes, from enclosing trash dumpsters to acting as a perimeter for an employee break area. The point is, not all metal fencing is the stereotypical rusted-out eyesore that traditionally encloses a junkyard. Sure, it can be used in this situation very effectively, but its uses don't have to be limited to just that. With today's rollforming technology, metal fencing can be created in all sorts of shapes and sizes to fit just about whatever need you can come up with. And with today's business needs as complex and varied as ever, that sort of flexibility comes in really handy.

So it certainly seems like a good financial decision to pay a lot less for metal fencing than something fancier if there is no reason. But what if you want a little style to go along with your sound financial reasoning? Some builders have been known to get creative with their metal fencing, putting a wood border around it, or painting it in all colors of the rainbow. Once the fencing comes off the metal forming machine and makes its way to you, it is in your hands. If you want to express your own personality in some way that nobody has thought of before, you can do it cost-effectively and still make an impression. And that's a win-win for you and your customers.

Whether it's rising fuel prices, production costs, or inflation, the prices we are paying for our food, whether it's eating out or our groceries, continue to climb higher. If you are trying to save more and spend less, trying to get ahead financially, even your food purchases need to be budgeted.

You will find the following money saving strategies will help you gain an advantage in the rising prices at the restaurant and grocery store.

1. Plan, plan, and plan. If you find yourself regularly running to the convenience store, you won't be saving money. You should set up your own system to plan what groceries you need to buy, and what stores you are going to shop at. One simple idea is to have a marker board or chalk board at home, where the family can keep track of what items they are out of and what they are running low on. You would also be able to watch sales for things you know you will need in the weeks ahead. For example, you are going to need some picnic food for the big family picnic next week. Instead of waiting until the last minute, plan ahead and shop for bargains.

2. Become a savvy price comparer. Allow a few seconds for you to look at the price and amount, size and/or weight. Eventually, when you keep buying the same items over and over again, it becomes encoded in your memory of what prices seem cheap and expensive. You will also be better able to discern good buys and the really great buys.

3. Shop for bargains. Skim the store ads to spot good deals. Shop the local discount stores and dollar stores. Buy bread at your local bread store, where you can buy bread at half the price of the grocery store.

4. Use coupons. Yes, this strategy still works. It's almost become a cliché to "use coupons" when buying groceries, but it still works. And now you can get the coupons you want right off the internet. You can check out the product's website or search for the hundreds of other web sites that have free printable coupons.

5. Buy in bigger quantity. Buy in bulk and eliminate most of the packaging and costs associated with the packaging and distributing. For many products, the majority of the cost goes to the packaging of the product. This is why you can buy a litter of pop for the same price as a 20oz bottle! The pop only costs pennies compared to the expense of the plastic bottle. You don't have to necessarily buy in bulk, just buy larger quantities. For example, you will generally get a better deal of you buy a 36-roll of toilet paper versus a small package of 4 or 8 rolls, especially if there is a sale.

6. Start a garden. If you have the space available, the most dramatic way to save on groceries is growing your own food. You eliminate all the middle men. You eliminate the distributing and packaging expenses. And you know where you food is coming from. If you don't have the room, join with a neighbor who does.

7. Eat out Less. You have heard this statement countless times, but it does work. If you're serious about saving your way to success, you need to significantly reduce how many occurrences and how much you spend on eating out. You may want to consider eliminating eating out entirely for a few months as you start on your financial plan to success.

8. Buy the cheaper product. If your debts are rising and your bank account is almost empty week after week, you need to stop buying the steaks and start buying the hot dogs and hamburger. You can never get ahead by saving money when you spend money; therefore, you need to be spending less. Buy the generic brand. Buy the ingredients instead of the pre-ready meal or food item. Buy a 5 pound bag of potatoes instead of the bag of frozen French fries. Stop buying the groceries with the highest price. Buy the cheap potato chips instead of the Doritos.

To find out more how you can be saving more and spending less, visit http://www.savingyourwaytosuccess.com.

Some facts about FHA

Through all of the changes in the mortgage industry, the one shining light is that FHA has recently gone through a huge revamping. This is good news because as the other lenders either go away (close their doors) or substantially tighten their guidelines, FHA has opened doors that the other lenders have closed. As of today, FHA and VA are the only loans that your buyer can obtain 100% financing and have the seller contribute to closing costs. The buyers can essentially purchase their new home with no money out of their pocket. Conforming loans like "My Community" which up until earlier this year used to do this, now they require at least 5% down or more and substantially higher credit scores. That is because the private mortgage insurance companies no longer want the liability of 100% mortgages. If they won't insure them, the lenders won't do them.

Also conforming loans are now risk rated. Anyone with a credit score under 680 will pay more, period. This is an upfront fee that most of the lenders roll into the rate. It is anywhere from 3/4's of a point to over 2 points in fee. Over half of the buyers have to pay this. As of this writing FHA and VA don't do this.

FHA has higher ratio limits than conforming loans. (more debt allowed)
FHA has adjusted their appraisal guidelines (more in line with conventional financing)
FHA allows for gift funds for down payments (thus 100% financing)
FHA doesn't take longer than conventional financing.
FHA allows for non traditional credit in the absence of a credit score
FHA allows for undeclared secondary income (up to 20% unverifiable)
Here is some interesting statistics from HUD:

FHA OUTLOOK

SINGLE FAMILY OPERATIONS

April 1-15, 2008

Department of Housing and Urban Development, Housing - Deputy Assistant Secretary for Finance and Budget, Office of Evaluation Page 1 of 5

Applications

· Another new high! The seasonally adjusted annual rate continued its climb and was recorded at 2,314,000 -- 15 percent above the prior period and three times higher than a year ago when the rate was 742,100.

· This is an average of 9,146 applications per work day -much higher than for late March -- 7,957.

· Of the total, 52,011 were purchase cases, 50,170 refinances and 6,314 reverse mortgage applications.

Endorsements

· During this reporting period, 48,848 mortgages were endorsed -22,030 purchase money mortgages, 22,623 refinances and 4,195 HECM's.

· The average FICO score for all cases was 648, but quite a difference between purchase cases (657) and refinanced cases (639).

· Four out of five purchases were for first time home buyers, most of which were non-minority households (65%).

· For the refinanced transactions, 31.2 percent were cash outs.

· Of the 22,623 refinance endorsements, 6,682 were prior FHA's, 15,683 were conventional to FHA conversions and 258 delinquent conversion cases.

These are amazing numbers considering FHA was barely a blip on the radar two years ago. It is obvious that understanding what FHA can do and how to structure an FHA offer is critical to making every sale opportunity count. I have a feeling that as the rest of this year goes by these numbers will only continue to climb and next year will easily double this year.
Don Davis

When it comes to gadgets, no one seems as passionate about staying up to date with the latest devices quite like Americans do. After all, keeping up with the Joneses has long been a part of the nation's culture. Today, things are only different because instead of focusing on cars and refrigerators, there are computers and smartphones to obsess over instead.

In fact, it's actually a whole lot more difficult to stay up-to-date with the newer technology only because things progress so rapidly that today's must-have phone quickly becomes yesterday's news the moment that Apple makes an announcement that a new model is being rolled out. For those who can't handle waiting for the latest model, sometimes the price tag causes a bit of trouble when it comes time to buy the first generation or the next level. After all, products like iPhones aren't exactly inexpensive, and if anyone has just forked over the cash for the last model only to be blindsided with a new announcement, it's often not possible to simply buy the latest addition to the iPhone family, too.

One of the best ways to afford a new model is quite simple: trade in the iPhone that is yesterday's news so that you can afford the latest hot toy. There are far easier ways to accomplish this than consumers might think, especially considering the hot market out there on the world wide web that caters to those who need to make enough money to afford an upgrade. With so many people who don't have contracts rabid to get their hands on an iPhone, eBay and other online stores make it easy to quickly find a buyer who is not interested in the fact that Apple just released a new model.

The decision to trade in an iPhone also means that purchasing new technology doesn't have to take a toll on one's bank balance. This might even mean more chances in the future to get a great new piece of equipment sooner than you might have expected to. This can be particularly important for those who are using their iPhone as more than just another status symbol for show outside of a work environment. So many people, especially those who are running companies or working in public relations, need to make sure that their image reflects their business. And carrying around an old model might not matter to a college student, but it can sometimes make or break deals in the working world.

So if it's time for you to jump on board with the latest model but the price tag is having a bit of a sticker shock effect, don't get too overwhelmed. Figuring out the best place online to trade in an iPhone only takes a few clicks of the mouse, and the entire process, whether on an auction site or through one of the numerous retailers who specialize solely in buying and selling iPhones, won't take very long at all. In fact, after you've managed to accomplish it once, making sure that the right phone is in your hands at all times will seem almost effortless. Just don't expect Steve Jobs to be slowing down those new announcements anytime soon: if there's one piece of equipment that is quickly becoming the most coveted, it's definitely the iPhone. After all, why stop making new models when so many people want to rush out and pick them up immediately?

It's unbelievable that schools does not teach us everything that we have to know but left out one important subject, that is Personal Finance Management. No wonder we see rising cases of people with bad debts and bad credit.

Here are 5 ideas to better manage your personal finance.

Build a savings account

Your money is something that you work very hard for. If you want to build a savings account for yourself, and for your family, you can do it - but perhaps a little slower than you might like. You can get started by saving all the change you get from shopping at the grocery store, from the gas station and from anywhere else you might go. Putting all this change into a container, you can then fill the container, day by day. As the container is full, roll the coins and deposit this money into your new savings account. You might be surprised, but in just two weeks it is possible you saved twenty dollars, or even one hundred dollars. Your savings account will grow, and you will be managing your money at the same time!

Paying bills on time

Paying your bills on time is going to be a something you need to make a habit for your entire life. Your credit report, your credit rating and your personal credit worthiness is going to depend on how often you are on time when paying your bills. Paying your bills on time is important for a solid financial future. As you pay bills on time, you are less likely to pay higher interest rates, you are not going to pay late fees, and you will build a good credit rating at the same time. To pay your bills on time, all the time, use a system that will have all your bills put into a pile in the same place. Put the bills that are due first on the top of the pile. Put the bills that are due at the end of the month in the bottom of the pile. Look at the pile every day, or at very least every other day. When you have the money, pay the bill on the top of the pile and work your way through all the bills for the month, and then you can start on the bills for next month!

Building good credit

To build good credit you want to pay your bills on time, and avoid paying those higher interest rates. If you have good credit, you want to keep it. What some people do not realize is that you can hurt your credit if you are moving often. Moving every month, moving every year, and moving more than needed it going to lower your credit score. If you live in the same house, the same apartment for over five years this is going to help your credit. Avoid moving when possible. Get a copy of your credit report; review the addresses that are listed for you. Remove addresses that are not applicable to where you have lived in the past.

Use coupons and save money

If you are not using coupons now, you should be. With the price of everything going up, and up, you need to learn to make your money 'go further'. To make your money last longer, and to get more for your money seek out coupons for the goods and services that you always purchase. The secret to using coupons is this: don't use, clip or keep coupons for items that you don't usually use in your home. Coupons are enticing to get you to try other items, and sometimes can cost you even more money. Clip coupons from the Sunday paper, from the Internet online coupon sites, and look for coupons on the products you already purchase. This is going to give you the best savings possible, stretching out the money you have, and that you want to make last much longer for your household budget.

Money management involves working for a living

Money management is a budgetary thing, meaning you need to know how much money you have, and how much money you can spend. If you are spending more money than you are earning, you are most likely relying on your credit cards just way too much. If you are relying on your credit cards, your payments are going up and you will never pay off those credit cards. Money management involves your earning money, and spending the money you earn, and not more than that. If you need more money in your home budget, you can do a few things: get a new job with better pay, ask for a raise, get a second job, or build a business of your own. Relying on others for handouts, making minimums payments on credit cards you can't afford, and living beyond your means is only going to come back to cause you trouble later in life.

Most people associate credit scores with their personal financial situation. Well, businesses also are assigned credit ratings, scores that can be the difference between getting a loan or not. In this article, we take a look at what is involved in building a high credit score for a business.

First of all, you must know that you can begin to build the credit worthiness of your business even before you serve your first customer. To do that, you will first have to register the company. Many people make the mistake of running a business under their personal name. You will have to keep your personal finances and business finances separate if you want to obtain credit for your business.

Your best bet would be to register your company as a LLC or S Corporation. The next step in the process will be to try to get an investment in your business. You can try to achieve this by coming up with a good business plan. Write a detailed business plan that will include your projected financial statements. Show this to potential lenders to attract an investment. When a lender with good financial history is able to back your business with an investment, it will do wonders for the credit worthiness of your business. You can approach vendors with confidence and tell them that you have the backing of a strong investor or a financial institution. Once a vendor is able to see that you are financially sound, they will offer you a line of credit with which you can begin making purchases of your business.

A line of credit from the vendors for your business is another great way to get your business credit history rolling. You will have to pay the vendors regularly. Also, make sure that you are dealing with vendors who will report the transactions to the credit bureau. Typically, large vendors will serve that purpose well as they will report all transactions automatically.

Other ways to build business credit history is by obtaining a business credit card. You have to be a little careful here as there are many high interest business credit cards on offer. Avoid those and pick one with a reasonable interest rate. You should try to opt for only one or two business cards as too many will negatively affect the credit score of your business. You can also try to build credit history by obtaining a loan from the government run Small Business Administration.

Once you have a credit history rolling for your business, check it once a year to check for inconsistencies or areas on which you can improve and better your credit score. Most people and businesses don't consider their credit score till they need to borrow money. If you have a problem with the score, it is then too late to fix it and obtain the funding. Stay on top of yours to avoid problems.

Let's go back to our science classes at school for the moment. Remember, how a plant and then a tree comes to existence? It is the seed which is the beginning of all. You plant a seed and nourish it with water and watch it grow over a period of time. Likewise, seed capital is the initial fund that you infuse in your business. It is the startup finances that you (or along with your team) provide to your business that will help it start.

Starting vs. Running a Business

Seed capital is used to start a business and further investments are made to run the same. The funding in case of starting a business is quite small and can be up to $10,000 for a small business. We are not talking of heavy machinery/equipment based manufacturing industries, though. This $10,000 can be collected by you and your group with the help of parents and other donations that may come to you.

What do you do, when you have started a business? Look for other sources of finance, of course! Without money no business can run (read: funding) - be it then an external or internal source. Once your firm starts to run and money rolling is in place, you might not have to seek other sources of funding.

Angel Investment after the Seed Capital

Just oodles of passion and creativity won't actually help much if you can't implement your ideas in the business. Therefore what you require are funds; what your business needs is money! To see your business grow into a fruit bearing tree, you need to provide it with adequate nourishment and that will come from an angel investor. You should know that the initial seed capital is not enough to make the business stand up on its own - you need a stronger foundation and that will come from the angels.

Another important thing - if your project/business has the potential of making it big on the stage, there are high chances that angel investors will be interested in you. Otherwise, there are thousands of such innovators and creative people just like you, waiting for talking to angel investors. Therefore, you need to have your head completely with your business at all times - you have to convince your investors, why should they invest in your business!

It may be the case that angel investors at some point of time were a startup like you and now they have diversified interests (along with their first startup idea). In such cases, getting funds from them could be a tad easier because they might have gone through the same rigors of finding funds to run their venture.

Remember one thing; since your venture hasn't started making profits, there is a great deal of risk involved for the investor. No one will invest his/her money into a venture that shows no promise. Therefore you have to do your homework before hand and convince your funders that this is the best investment, they'd have ever made!

Figures from the latest Federal Reserve's Survey of Consumer Finances, one of the most comprehensive assessments of what Americans own and owe, shows the average debt in American households with at least one credit card is growing.

The survey is updated every three years. Although most Americans seem to be avoiding the credit card trap, there are still plenty of people on the financial edge:

-More than a third -- 36% -- of those who owe more than $10,000 on their cards have household incomes under $50,000.
-13% who owe that much have household incomes under $30,000.
-The percentage of disposable income used to pay debts is still near record highs.
-The median value of total outstanding debt owed by households rose 33.9% between 2001 and 2004.

All of that is enough evidence to suggest that a large number of people are overdosing on debt. So, what can consumers with rising debt do? There are three main strategies: debt consolidation, debt counseling and debt settlement.

Debt Consolidation

Debt consolidation is typically the most desired debt solution. Not only does consolidation get finances back on track to pay down and eventually pay off debts in full without any harm being done to credit history, it very often frees up more discretionary income.

The most preferred method of consolidation is a mortgage refinance. With this, a new primary home loan is taken against the property to "roll in" other debts such as car payments, credit card payments, and so on. As many and as much of these other debts can be rolled in as long as the added principal does not violate the stipulations of the new mortgage loan program. These debts get instantly paid off in full by the new mortgage at the time of closing.

Often times, even though a higher mortgage payment may come with the new loan, monthly debt payments overall are lower and so more money is leftover every month to continue paying down any remaining debt.

Credit ratings get a boost as well by the paying off of those other debts. Debt consolidation also simplifies finances by combining multiple debts into one monthly payment.

Debt Counseling

Debt counseling, which sometimes gets called "debt management", is a second option for regaining control of debts. With counseling, the consumer starts making just one monthly payment on debts to the debt counseling company. Debts aren't consolidated, because the counseling company just takes the payment and then makes the payments to the creditors.

It becomes easier to get a handle on debt since the consumer is held to a strict schedule of payments. This option, however, can have serious negative consequences on credit history. In some cases, it can actually do more harm than good.

Debt Settlement

With debt settlement, the borrower attempts to reduce the total amount of money owed on debts. This is also called debt negotiation or debt arbitration.

Used as a last resort by a consumer who hasn't paid their bills on time and has already destroyed their credit, debt settlement is used to reduce the total amount of "charge offs", or written-off debts that the creditor has written off. The idea being to have some money collected rather than none at all. Pursuing a debtor legally to payback debts can be very expensive and time consuming for lenders.

Lenders' debt settlement departments negotiate to agree upon a new payment and an ultimately lower payoff amount. Typically settlements range anywhere from 25% to 65% of the original balance. Debt settlement will also have serious negative consequences on credit history.

As lending criteria continues to tighten, obtaining financing for your real estate deals is becoming an ever- growing challenge. Add to that less than stellar credit and it can seem almost impossible. Savvy investors, however, know how to buy real estate with 20% or less down even if their credit is completely tanked.

The first thing that you need to realize is that traditional institutional lending is probably completely out of the question. That's OK. In fact, I regularly advise my clients to look for alternative methods for financing deals that offer the speed, efficiency, and terms needed to be successful.

The second thing to realize is that if it isn't a profitable deal don't do it regardless of the financing. I have seen many investors buy a deal because they can rather than because it is truly a profitable deal. Take a moment to analyze the deal and make sure the numbers truly make sense.

Let's begin the discussion with the types of financing that can be created right when negotiating the deal. Before you even make a purchase price offer to the seller, ascertain the right price to pay [I call this the Maximum Profitable Offer or MPO]. Compare this number their current loan(s) payoff on the property to determine their equity position. If it appears that they will get a substantial amount at closing in cash, you should immediately think about possible seller financing.

Start by asking in a conversational style what plans they have for the cash they'll receive at closing. Often they'll have a litany of bills that they want to pay off that total some small amount of the total available equity. Then ask what their plans are for the balance. Many sellers have no other plans and will simply place the money in a savings account or CD. This is your opportunity to set up some financing.

Let them know that you buy houses many different ways. The most costly method is all cash; however you want to be able to get them the most for their property which is what they want to, right? [Be sure to ask that question] Continue by saying something like:

"Would this work for you? How about if I provide you with $XX down at closing (the amount needed to pay their list of bills) and the balance in one lump sum 1 year from closing? That way I'll be able to offer you the highest price for your home. Will that work?"

You'll discover many sellers willing you accept, and when they do, you have already financed a portion of the purchase. Now let's take care of the rest of the financing.

One of my favorite strategies is buying home subject to the existing mortgage. With this strategy title to the property is transferred to you the buyer, but the loan stays in the original borrower's name. Using subject to financing you take over the existing financing without having to obtain a new loan.

You're probably thinking: "Would anyone in their right mind accept this offer?" The answer is ABSOLUTELY! Remember that many of the sellers with whom you are dealing are extremely motivated to move on with their lives. This strategy allows them to get out from under the mortgage payments and to start over.

There are some disclosures that need to be made to the seller and you need to fully understand how to execute this strategy before attempting on your own, but it is rather simple. Just be sure to be trained by some one reputable first.

Finally, the absolute best way to finance properties is with private lenders. These are every day individuals who have their money in low yield investments who are willing to make real estate loans in exchange for the much higher interest rate with security.

These lenders do not advertise since they don't even know about real estate loans. It is your discussion with them that demonstrates the opportunity available to them. The best way to find private lenders is to talk about it with everyone you meet. The best source of funds is in IRAs. Most people who have an IRA do not realize that the IRS provides them the opportunity to self-direct their funds...in other words, they are able to make real estate loans as long as they have a self-directed IRA which can easily be set up by rolling over their current IRA to a company that provides self-directed IRAs like Equity Trust out of Ohio.

Instead of earning 1-2% on their IRA, they'll be earning 6-8% with your real estate. Isn't an 8% simple interest loan with no bank qualifying and quick close a huge asset to you? Build up your private lender portfolio and you'll be able to purchase more real estate than you ever thought possible.

Use all of these techniques together and create even more leverage. You'll be able to buy real estate with nothing down, regardless of your credit, and you'll even be able to finance your project costs. Don't allow institutional lenders to dictate your purchase ability.

Expect abundance,

Lou Castillo

Picture your Dream Home. Does it have a hot tub? A screening room? A subterranean garage for your collection of vintage roadsters? Everyone knows what their dream home looks like. So why do so few people actually build it? The truth is that building the home of your dreams often costs less than buying a house on the market. All it takes is good plans, an experienced contractor, and the right financing. Today, that means a construction loan.

In the past, the federal prime rate was so high that it made construction loans very expensive. People didn't want to pay large sums to borrow funds, so they would finance their home construction with a line of credit on an existing home or by spending their cash reserves. Problems often would occur if the funds ran out or if the project went over budget.

With lower rates now available, more and more people are turning to construction loans. Not only are they economical, they also provide built-in protection for your project to ensure it is completed on time and on budget.

Even with dropping home values, home construction nearly always costs less than purchasing a home on the market. This includes buying a lot or a "tear down" and building from the ground up, as well as adding improvements to your own home or a property purchased out of foreclosure. Borrowing money for these types of projects is better than draining your own funds because, as all good real estate investors know, using leverage increases the return on your investment and allows you to invest your money elsewhere. With a construction loan, borrowers only need to invest a minimum amount of funds into the project (generally 5-20% of total project cost) and can finance the rest. Simply put, using debt to finance the building makes your home an even greater investment.

They also offer safeguards that help keep your project on time and under budget. First, the bank issuing the loan works hard to ensure you are working with a reputable builder. Most banks require that the construction loan request include a contractor package that needs to be approved. If your builder has bad credit problems, past lawsuits or has received complaints to the licensing board, the bank will generally catch this information and reject your builder. Second, the bank issuing your loan watches the construction process from start to finish. Unlike loans that are issued as a lump sum, with a construction loan the bank requires that your approved contractor submit for draws to get reimbursed as each phase of work is completed. The bank even schedules site visits to ensure that the work is done in a satisfactory manner and on time. The bank is offering to do due diligence on your builder and project.

Upon completion of the construction phase, some loans seamlessly rolls to permanent mortgage which is why they are known as a "one time close". What will you have achieved by building your own home? Even more than the satisfaction of living in your dream home, the result and impact on your balance sheet can be dramatic. Upon completion, you will own a home valued at the full market price of a new home for the cost of the land purchase and construction, often as much as 25-30% less than the retail market value.

Young as you are, preparing for retirement should be in your agenda the moment you get a job. If your company is not contributing towards your retirement, get a realistic plan. Review your finances and get going. The thought that you have your retirement in the works gives you confidence to face the future.

What is a Retirement Plan?

A retirement plan is a setup that provides people income or a pension after years of hard work or retirement security. In the UK, this plan is called a pension scheme and in Australia, a superannuation plan. There are different arrangements for a retirement plan to suit your financial circumstance. Younger job entrants can enjoy a low flat rate, while older workers may pay a higher rate.

You enjoy tax benefits if you're paying for your monthly contributions to your pension plan. If your employer is contributing towards your plan, he can avail of tax breaks. The US government requires a permanent retirement plan to prevent the abuse of tax benefits and the moment payments are not continued, the government will disqualify the plan. Your or your employer will have tax problems later.

It may seem that retirement is a long way off especially, if you're in your twenties. Your interests may range from going out with friends, collecting Colibri lighters, NFL banners, shopping for trendy clothes, and buying a car. A retirement plan seems out of place in your scheme of things.

But eventually, that day of reckoning will come and you'll be left out in the cold, wondering how to survive on nothing. A retirement plan will eliminate those worries and you can enjoy your investment - have vacations and fun - which you rightfully deserve.

On the day you retire, a pension check will arrive at your doorstep every month. The higher the premium you've paid, the higher your monthly pension. If you're getting a plan project into future possibilities - prices of commodities may increase - and your monthly pension may not be enough to cover all your needs.

Types of Pension Plans

Ask your employer about retirement contributions. You might be told that a fixed amount is deducted from your pay each month. This is the Individual Retirement Account or IRA-based plan.

Your employer may or may not contribute towards the fund. Whatever the case, always follow your retirement payments and keep records of all the deductions towards the plan. In case you get another job, you can always follow through with the payment.

The 401(k) plan requires the company to match their employees' contributions and these contributions are not subjected to federal and state income taxes. The moment the fund is withdrawn, the taxes come rolling in. It's like saving money in a pre-tax basis.

If your employer uses the 401(K) Plan, you'll be given the choice where to invest your contributions and how much you will contribute. The Keough Plan is the option for those self-employed. The qualified and profit-sharing plans are the type of plans those working in the private sector can avail.

Thinking Ahead

So you say you're still in your 20s and retirement is a long way off. That's right. But wise young people see the benefits of having a retirement plan. Everybody wants to retire at 40 and enjoy life while they are still able. The 20s is the best time to plan ahead.

Rental Income Might Not Be What the Owner is Representing?

Estoppel agreements insure you that the rental income being presented will be delivered. Suppose you're a prospective multifamily apartment buyer, and you purchase your first apartment building. The good news is that the apartments still have tenants. According to the lease summaries and rent rolls provided by the sellers, the tenants pay a combined $50,000 per month.

Now the bad news. You first month rolls around and the all of a sudden your income is now a combined $25,000 per month! What happen?

Okay, so what did the you do wrong? You and the commercial lender should have obtained an what is known as an estoppel agreement from all the tenants before making the loan.

What the heck does estoppel mean? Estoppel is a a rule of evidence whereby a person is barred from denying the truth of a fact that has already been settled. An Estoppel agreement is a form given to the actual renter of the unit and filled out with the respective rent being paid.

Estoppel agreements are used in various commercial properties where you would have people or companies renting space from from a landlord. It insures that the rental income records being produced by the seller are accurate and up to date. Some lenders will require this to be done as a condition of granting a loan on the property. Regardless of any paperwork or promises made by the seller of a property, a Estoppel agreement should always be fully executed and verified against any and all income statements.

Payroll funding is an under used UK cash flow finance solution for businesses. Whereas factoring and invoice discounting are generally much better known methods of raising working capital, an unsecured payroll loan is a business finance option that offers an alternative to the traditional sale and discounting of invoiced trade debts route.

Financing a salary or wage bill is provided by specialist lenders but as any loan is completely unsecured these schemes are only available to companies with a profitable trading history. Lenders can make fast decisions on whether they can offer a facility that offers up to 60 days rolling credit on payrolls. Where a proposal meets a positive lender response a payroll funding facility can be set up in as little as 10 working days.

The charging model is the same as for debtor finance in that there is a set-up fee, a monthly facility fee and an interest charge on any outstanding balance. Other characteristics of payroll funding facilities are that it is simple and easy to set-up and operate, that can be turned on or off (i.e. is open-ended) on expiry of the initial minimum term. Additionally, a full payroll service can be utilised by those businesses that would prefer that option.

As payroll finance is an unsecured business loan no extra security is required, with no directors guarantees required and is completely confidential. Any other lending arrangements or commitments a company may have are not affected by employing this way of  raising working capital.

Any company that has been trading for 2 years that has filed accounts and meets the minimum criteria in terms of turnover and number of employees can qualify for a payroll loan. This specialist lending option can prove to be a smarter method of funding for many companies, payroll funding no longer a secret but a very useful addition in the commercial finance arena!

WHY OFFER SOFTWARE LEASING & FINANCING

Increase your sales

Shorten your sales cycle

Increase your margins

Increase revenue recognition

Receive payment faster

Make your sales people more effective

Eliminate capital budget delays

Overcome cost objections

Build repeat business

Key Equipment Finance offers innovative and strategic vendor leasing programs for businesses. Our vendor leasing programs will give you the ability to now offer your customers the equipment leasing option for your product.

Vendor Lease Program:

Custom Lease Structure: Our leasing professionals will work closely with your staff to design a program that will provide the leasing alternative for your products.

Sales Training: We offer a lease orientation program for your sales team to show the competitive advantage of leasing vs. purchase.

Lease Rates: Lease rates are continuously updated and will be distributed to your sales team quarterly via e-mail.

Lease Quotation Preparation:We will prepare lease quotations within 24 hours. We will also assist your sales team to provide quotes directly.

Credit Review: Credit reviews are completed within 2 - 4 hours. Leases are non-recourse to you, unless otherwise agreed by you in advance.

Documentation: We prepare, and execute all lease documents. The Master Lease is executed once, and any additional needs simply require a one page Lease Schedule.

Invoice Payment: Invoices are paid within 1 business days of receipt of notice of equipment delivery and acceptance.

Process:

Issue Lease Quote: A lease quote is issued in accordance with the sales quotation.
Submit Credit Application: The customer completes and returns the lease application and financial information for credit review. Key Equipment Finance renders a credit decision within 2 - 4 hours of receipt
Prepare, Forward and Recover Documents: Upon credit approval, lease documents are prepared and forwarded to the customer for signature.

Issue Purchase Offer: Upon receipt of properly executed

documents,Key Equipment Finance issues its purchase order for the products and services to be leased.

Invoice Payment: Upon advice of installation and acceptance, invoices are processed for payment within 1 days of receipt.

Vendors understand the importance of a total solutions sale that includes financing for building repeat equipment sales.

End-users realize many benefits from leasing their equipment but manufacturers and vendors benefit too.

Total Solution Sale

Being able to offer your customer a total solution your equipment and a way to acquire it means you have greater control of the sale. No delays while your customer is trying to arrange financing. Reduce chance your customer will look for alternate equipment solutions.

Easy Upgrades During the Lease; Ideal Position for the Next Sale

When you control your customers financing, you can build-in options for technology upgrades or add-on during the lease and, most importantly, you have a built-in advantage for rolling-over financing of your next generation equipment to your customer.

Larger Ticket Sales

Selling a monthly payment amount that can be designed to fit your customers budget helps you sell additional features that your customer might need, which makes your sale larger.

Your Paid up Front

No accounts receivable problems. You get a check for 100% as soon as the equipment is installed, and installation is verified by your customer.

Makes Closing Simpler

"You can lease this equipment with an option to own. Its 100% financing; 100% deductible with the option to own - at $xx per month over 36 months, or $xx per month over 48 months Which plan is best for your budget?

Helps Close the Sale Now

Leasing gives you the ability to show your customers how to get the equipment they need, when they need it allows you to work within their budget cycles.

Competition

Your competition offers lease finance solutions. So can you.

RJ Grimshaw is director of sales, vice president of Key Equipment Finance's Information Technology Group. Key Equipment Finance (www.KEFonline.com) is one of the nation's largest bank-affiliated equipment leasing companies. Grimshaw has more than 10 years of leasing industry experience. He can be reached for questions at 713.354.4545.

RJ Grimshaw is director of sales, vice president of Key Equipment Finance's Information Technology Group. Key Equipment Finance (http://www.KEFonline.com) is one of the nation's largest bank-affiliated equipment leasing companies. Grimshaw has more than 10 years of leasing industry experience. He can be reached for questions at 713.354.4545.