Financial Strategies

Personal finance is an individual’s financial status. It’s about how much money you have, and how much you need. It is about managing your money – today and for tomorrow. Money is the currency on which all world economies function. Income – expenditure -bills- debts – savings: These are a fact of life. A constant for most is the endeavor to tip the scales in favor of savings.

Successful financial management includes planning and keeping records of income and expenditure, budgeting, balancing your check book, insurance and investments – whether in real estate, the share market, funds or any of the other available mechanisms. You cannot overlook the necessity of planning your savings, your tax savings and your retirement.

A very interesting way to look at Asset and Liability is in the following terms:

An Asset is anything which brings in money or does not change the status of your money in the bank. A liability is anything which causes money to flow out – whether under the pretext of taxes, interest or fees.

Budgeting – This ensures that you are financially healthy and flourishing. It is a good idea to create and use a budget worksheet which allows you to make a detailed expenditure plan and helps you discover any shortage or unplanned expenditures.

Some useful tips in planning your finances:

- Handle your own money. If you choose a financial consultant, ensure you understand how your money is being managed. – Save a huge amount in interest by opting for a shorter tenure of loan term – home/ car/ personal. – Debt: Should ideally not be indulged in, or repaid at the earliest. – Savings: it is easier to save more if you start early – you can put aside small sums and over the years watch it accumulate and earn interest for you. – Retirement planning: don’t wait till you are 40 to start. Begin today – and ensure a comfortable lifestyle in your old age. Avoid cashing out your PF or breaking your Funds. – It’s a good idea to do an Annual/ Quarterly financial health check up.

Finance :The main techniques and sectors of the financial industry:

An entity whose income exceeds its expenditure can lend or invest the excess income. On the other hand, an entity whose income is less than its expenditure can raise capital by borrowing or selling equity claims, decreasing its expenses, or increasing its income. The lender can find a borrower, a financial intermediary such as a bank, or buy notes or bonds in the bond market. The lender receives interest, the borrower pays a higher interest than the lender receives, and the financial intermediary pockets the difference.http://equity-finance-info.blogspot.com

A bank aggregates the activities of many borrowers and lenders. A bank accepts deposits from lenders, on which it pays the interest. The bank then lends these deposits to borrowers. Banks allow borrowers and lenders, of different sizes, to coordinate their activity. Banks are thus compensators of money flows in space. http://equity-finance-info.blogspot.com

A specific example of corporate finance is the sale of stock by a company to institutional investors like investment banks, who in turn generally sell it to the public. The stock gives whoever owns it part ownership in that company. If you buy one share of XYZ Inc, and they have 100 shares outstanding (held by investors), you are 1/100 owner of that company. Of course, in return for the stock, the company receives cash, which it uses to expand its business in a process called “equity financing”. Equity financing mixed with the sale of bonds (or any other debt financing) is called the company’s capital structure.

Finance is used by individuals (personal finance), by governments (public finance), by businesses (corporate finance), as well as by a wide variety of organizations including schools and non-profit organizations. In general, the goals of each of the above activities are achieved through the use of appropriate financial instruments, with consideration to their institutional setting.

Finance is one of the most important aspects of business management. Without proper financial planning a new enterprise is unlikely to be successful. Managing money (a liquid asset) is essential to ensure a secure future, both for the individual and an organization.

http://equity-finance-info.blogspot.com

Bill Rammell not so long ago announced new plans for the transformation of the delivery of student finance in England. It now seems that all is not well with the system and over 21’000 graduates continued to make repayments to the Student Loans Company (SLC) even though they had cleared their debt.

The figures are quite horrifying with an exponential upward trend since 2001, increasing from a mere 267 to 21’774 in less than 7 years. What is more worrying is that with the increase of student debt as reported by The Student Zone towards the end of last year, it can only compound the problem further.

The system to end repayments may be a contributing factor towards the problem. Once a student graduates and providing they earn more the £15’000 a year, nine per cent is deducted from their salary by HM Revenue & Customs. When the graduate is about to repay the loan amount the SLC sends them a letter asking them to send a copy of their P60 or all pay-slips from their final tax year as proof they have paid. It is only then that the SLC will send “stop notice” to HM Revenue & Customs.

So the SLC sends you a letter you send them one back and then they send a letter to the Taxman who only then stops deducting the repayments. So what happens if you’re a graduate that has moved house recently or there is a postal strike, not forgetting that it maybe a good number of years after graduating and you could even be abroad at the time. So what happens? Well it’s quite simple really they keep taking the money until the end of the financial year and only then is it automatically stopped.

Mike Harding of The Student Zone and the Student Debt Reduction Solution (SDRS) commented on the news

“When you look at the figures and the time scales it makes for worrying reading, yet another over complicated government system handling a simple process, it reminds me all to much of the failed Child Support Agency. I would like to ask and be interested to find out where all this money ends up before it is refunded to the students”

In fact on Monday 3 July 2006 the SLC released a Press Announcement entitled “SLC welcomes unveiling of new Student Finance delivery system” At the end of the document a handy “summary of key changes” was included in the editors notes and under the heading “Timely payments:” it states “We will be able to contact students – by texting their mobile phones,…” surely if the SLC can be this efficient with payments they could use the same kind of efficiency and insight into notifying the students they have made all their repayments.

Or indeed use of email could be one solution, after all its not often we change our personal email address and when we move house it doesn’t change and the internet is not often likely to go on strike due to a pay dispute with a bunch of Cisco Reuters

So Bill how are you going to sort this one out?