Friday, June 29, 2012

Five Tips for Managing Finances

In the wake of the Great Recession, personal responsibility is essential for the modern investor. Below are a few tips that can help the average person save and invest like a professional.

One - Use online finance tools to help automate some of the procedures.

Certain online tools such as will help you track spending and will automate a great many of the financial processes that you would ordinarily have to spend a great deal of time on. Invest in the advancements in technology and you will soon find yourself able to free up more time to make more money for yourself with a side job or by monetizing one of your hobbies. You can even sync most of these tools with whatever payroll services your employer uses.

Two - Autopay as many bills as you possibly can.

Many of the bills that have to be paid every month are simply taking up time in your schedule. If you automate the paying of these bills through one of the many resources that are available for this purpose, you will save yourself a great deal of time and hassle.

Auto paying your bills will also get you in the habit of putting aside enough money each month so that you do not have to ever worry about a late payment. This habit will certainly spill over into longer-term liabilities such as taxes and mortgages as well.

Three - Consider your savings plan a bill.

If you have not yet heard or heeded the expression "pay yourself first," make sure that you begin doing that as soon as possible. You should consider your savings account a bill in the same way that your gas and light utilities are bills.

Financial advisors recommend that you pay yourself first before anything – before taxes, before paying bills, and especially before any sort of extraneous purchases that you may make with the extra money in your paycheck.

Four - Do your taxes all year.

If you keep up with your receipts all year, you will not have to take the extraordinary amount of time that it takes to organize them at the end of the tax year. This will save you a great deal of needless headache and time, making your entire financial year more efficient.

If you organize your tax receipts throughout the year, you will also be able to perform a back of the napkin calculation before you take your tax papers into a professional accountant. This will help you figure out some of your own deductions so that you can expedite the process with your accounting professional.

Five - Monitor your impulse purchases.

You could do without most of the things that you buy on impulse. However, if you were to add up all of the money that you could save by simply redirecting those few cents per purchase towards a savings account or some sort of investment, you would soon find yourself way ahead of the curve when it comes to finances in general.

Make sure that you keep up with the minutiae of your budget to the point where you cannot even make an impulse buy without double checking with yourself first. Eventually, those quarters and nickels will add up to a substantial amount that you can put toward any number of savings or investment programs.

Haliegh Adams is a professional writer, specializing in finance, business, HR, and payroll services. She enjoys hiking, biking and spending time with her family.

Thursday, June 21, 2012

Defining and Explaining Annuities

An annuity, in brief and simple definition, is an agreement where in return for a certain fee, an insurance firm provides a steady stream of cash to the person who makes such payment. Annuities are especially appealing to individuals planning to retire and continuously receive income. There are actually many different kinds of annuities and two of its most popular forms are fixed and indexed.

Fixed Annuities
Fixed rate annuities are actually the least risky of all annuities. Fixed annuities provide an assured ROR (rate of return) for a span of time. The assured initial investment return makes it an ideal investment for people with very low risk tolerance or those who want to have access to their funds in a short period of time. Here you get a respectable return and it is tax deferred up until you start to withdraw your money.

These annuities can either be deferred or immediate. Immediate annuity begins making payment the instance the money is deposited. With deferred annuity, payments begin at the end of a particular period that was agreed upon, or once the annuitant reaches a specific age.

Fixed annuities are ideal for elder investors who want a safe and sure return and are not that keen on managing investments.

Indexed Annuities
An indexed annuity typically encompasses a rate that is attached to a monetary market index, an equity market index, in most cases. The benefits of this type of annuity is a potentially higher average return as compared to fixed rate annuity or fixed profit assets, a risk minimizing aspect which permits you to renounce higher returns in trade of a guaranteed return minimum, decreasing the discrepancy of returns when it comes to both low and high end.

An index annuity makes for an ideal fit for some people, yet not for all people, based on the value in which the person investing places on risk reduction as well as yields.

Choosing the Apt Annuity for You
Prior you make the decision on which particular type of annuity is best for your financial goals, retirement as well as needs, make sure to study the different options available to you and seek the help of an expert financial adviser to explain all of the pros and cons of each type of annuity that best matches your particular situation. Evaluate the advantages as well as the disadvantages of the kinds of annuities that the expert explained and then make your choice.

Rogers is a freelance writer that specializes in various financial topics like structured settlement, investments and money management.

Tuesday, June 19, 2012

Bankruptcy Advice for Your Debt Issues

Bankruptcy is a phenomenon that can only generate more problems for you if you know that the filing of the petition will guide you towards more financial issues. Bankruptcy advice in this regard can be successfully required form the many lawyers, attorneys and the accountant sin bankruptcy so that you are able enough to know if it is suitable for you, or, it can harm your financial health.

Bankruptcy advice is not only beneficial in getting advice from professionals in the field of bankruptcy but also on how to avoid it. The last alternative on your mind should be the bankruptcy filing and before that, you need to know about the information on other alternatives to bankruptcy.

Bankruptcy filing can cost you around 700 pounds, but the other alternatives that you may find feasible can cost you in the range of 90-15 pounds. The alternatives to bankruptcy told to you by the professionals can be:

1) Debt management companies
a. Debt management plans
2) Debt consolidation
3) IVA
4) Trust deeds
5) Snowball methods
6) Debt negotiation techniques
7) Collateral based secured loans to pay the previous loans etc

All you have to do is to get information on each alternative. You are the right person to know which option can be the best for you because; the problems are faced by you. You are the judge of your problems and the better you know about each alternative, the better you are in a state to hire a company for such an alternative.

Let me discuss one or two alternatives that can be generally the best for you in any sort of financial issues that you are facing:

Debt Management Plans

Debt management plans are made by the different debt managers in the market. The plan is a type of a renegotiation process among you and the creditors on the severe conditions of the loans that they are asking from you and you are not able to pay them back the loans in this regard. The plan will help the debt management company that you hire, to study your condition and on your behalf, talk to the creditors on lowering the terms and conditions on the payment of loans, along with the installments from your discretionary income every month.

Debt Consolidation

Debt consolidation is another type of technique used by the debt managers dealing in this area. They will merge all your loans in one, with one prevailing nominal rate of interest. The creditors will be legally bonded to get the payments equally with one rate of interest. You are now; the debtor of only one creditor and that is the debt consolidator.

Still, if you need more information, the best source of information for the topics discussed is the websites of all those companies that offer you the services of such financial help. You can also log on to the many websites of the informatory blogs and forums that have been made by the past customers so that you may know what their actual experiences they have with the company.

Muhammad Azam is an expert financial writer and avid financial blogger having experience in the field of debt relief. He has written posts on Bankruptcy advice, bankruptcy register, IVA, Debt relief orders and on other financial topics as well.

Monday, June 18, 2012

IVA Forums and Debt Help

The IVA forum for the help on the advantages and disadvantages of IVA can be accessed through the help of internet on the website

So many other websites and the blogs created by us, help you to get full information on the alternatives to bankruptcy. You know that the filing of the bankruptcy petition will not help you and you need to know about the other, cheap alternatives to bankruptcy.

Those how directed you to file for bankruptcy did not tell you how wrong it is to file the petition when you know that you cannot afford it. It will also get you into trouble. Our company offers the services in every regard to provide you with the consultancy services on every alternative to bankruptcy with the feasibility of helping you out with debt issues. Our professionals make sure that you are out of trouble and see to it, that after that, you plan your financial future with care as well.

What is an IVA

An IVA is a legal way of managing all your debts and managing the burdens of the creditors on your head as well. The installments are revised and scheduled on the basis of your financial health conditions, so that you are able to pay them. An individual voluntary arrangement is also helpful when you have to pay the loans, and have to plan your financial future without the burdens of debts on your head.

However, a word of caution is that, you have to abide by the legal terms. If you do not, and the terms are breached, it will end you in the state of bankruptcy. So for avoiding this, you have to look forward to a strictly rule based financial future.

Debt Consolidation

Other than that, you can also look for the alternatives like the debt consolidation services. We are capable of guiding you on how the debt consolidation services work. A debt consolidator will help you with the debts that are on your head from different creditors with different rates of interest. The debt consolidator, on your behalf, offers you a loan amount. This loan amount pays off all the creditors with equal installment payments and one prevailing market rate of nominal interest.

Our clients that have been successfully served know how we help our clients with their debt issues. You can ask them any kind of question regarding our help and the consultancy that we provide so that you know how reliable out company is in dealing with your issues and telling you how to manage the creditors.

We also guide you on how to look for a better financial future ahead of you where you manage your wants, fulfill all your needs and you do not even have to take further loans as well. If you are looking for more information, you can log in free on the many websites, informatory blogs, and the forums on which we have provide help, and where the readers and the users have uploaded testimonials about us. You will be then satisfied form our service sand can hire us.

Muhammad Azam is an expert financial writer and avid financial blogger having experience in the field of debt relief. He has written posts on Bankruptcy advice, IVA forum, IVA, Debt relief orders and on other financial topics as well.

Sunday, June 17, 2012

Bankruptcy Guide: How an Accountant in Bankruptcy Can Help You

An accountant in bankruptcy is the most appropriate person in the field of advisory services for the debt issues. The debt issues faced by the people are due to the fact that they have not paid their due date based loans in time. The maturity date has passed and they now face the problem of outstanding debts with an increased rate of interest, known as the default rate of interest with risks attached.

Now when you face such situations, this is not appropriate that you go for the filing of a petition for bankruptcy. Bankruptcy should be the last option to avail if you have to look for the best solutions. The best of all solutions can be anything but, bankruptcy. The other alternatives are much cheaper in cost to avail as well. For example, a DRO may cost you only 90 pounds, but the bankruptcy filing can cause you to pay around 700-1000 pounds.

So many other ways of rendering you the ease of debt help are as follows:

1) Debt management companies offering debt management plans
2) Debt consolidation
3) Trust deeds, in case you have borrowed a huge amount of debt and you need collateral
4) IVA
5) Snowball debt management etc

Trust deeds

The accountant can help you in avoiding bankruptcy and can tell you all you need to know about the trust deeds. The trust deeds help when you want to buy property or land on the basis loan. The trustor, the debtor or the person who wants to buy the property will get the loan through the trustee who offers the trust deed and the lender or the beneficiary holds the interest over it. You can be a trustor if you have to get a property or land for good reasons. If however, it is just a want, do not borrow loans for wants. The loans borrowed for wants are never paid and you are never in a condition to pay them either.

Snowball Technique

The snowball technique is a useful way of paying back the credit card debts. It is the easiest way of managing debts by the debtor on one’s own behalf. If you are such a person, and you want to manage all your debts in time without any help, you can just follow this technique. All you have to do is to list all the debt amounts in ascending order and then add up the extra amounts to be paid with the rate of interest with each.

Start paying with the lowest amount, and add the extra charges with the other amounts when you are done with one amount. By this, the overall amount will decrease and the effect will be naturally visible, as the whole amount of the debts will decrease instantly.

You can also look for the details on other methods and the techniques on how to lower the debt amounts, manage hem and then pay them off easily, without letting yourself fall for the short-term benefit based bankruptcy. Log on to many blogs and informatory websites for details online.

Muhammad Azam is an expert financial writer and avid financial blogger having experience in the field of debt relief. He has written posts on accountant in bankruptcy, bankruptcy register, IVA, Debt relief orders and on other financial topics as well.

Saturday, June 16, 2012

Bartering- Expand your Small business by Spending very little Cash

Small business owners often find it difficult to expand beyond a certain point because of the lack of capital funding that is required for driving growth. Some small business owners fail to look at innovative ways to grow their business. They always wait till they get the required funding to get in to expansion mode.

Bartering system

Many small business owners (even the ones that are in the marketing business) have completely ignored the bartering system and the huge business benefits provided by it. There was time in 1998, when only 45% of the media business was purchased by making outright cash payments. The Remaining 55% of the media was bought through bartering system. By getting into bartering, small business owners can get goods and services from other small business owners at a fraction of the actual cost, as they would be exchanging their own products and services for the products and services bought.

Online channels for doing bartering

Now, if you were a small business owner, the next immediate question in your mind would be regarding the availability of a channel through which the bartering can be accomplished. It is best to either contact the company by mail or by phone and see if they are interested. It is a great tool if you are a marketing company selling branded gazebo stands . If you contact the company before a trade fair, you will definitely get what you want. It is essential that you look for sellers who are interested in buying your products at the right time.

Other requirements for engaging in bartering

In order to be successful in bartering, you need to dedicate sufficient amount of time and come with creative solutions that would help you to make handsome profits. You need to look at the idle resources that are lying unused, which could be in the form of

1. Hidden talent or expertise
2. Excess or unsold stock
3. Utilizing your secondary skills
4. Utilizing the skills of people working under you

By constantly looking at different avenues and finding out the availability of a latent or a hidden resource you could save a lot of money.

With over ten years in writing, Maya Johnson specializes in business journalism. Her writing covers various areas in finance, marketing, money markets and investment. Her texts are helpful to everyone who runs a business, from the small-scale businessperson to the established business owners.

She draws her insights from having practiced business herself at management level in Australian outdoor marketing company Star Outdoor. When not writing about business, Maya spends her free time away from it catching up with the latest fashion trends.

Friday, June 15, 2012

Ways to Finance Your College Education

Almost all activities we undertake in this world needs money, so even paying for your college education, you need money, and a lot of it. Paying for college education has become very expensive but we do not have an option, we have to take our kids to college and we too need to go to college. So this article will show you how to finance your college education.

So, stop worrying and read these effective and applicable tips that will guide you on how to finance your college education.

(i) Scholarships :- Scholarships are generally awarded to students based on merit or academic achievements. So if you have a good academic achievement, you can be able to apply for a scholarship. Once you acquire a scholarship, it will cover all your educational needs. One of the best things with scholarships is that you will not have to repay it back after completing your education.

(ii) Grants :- Grants are almost like scholarships only that they are awarded to needy students. So if your family is financially challenged, it is possible to get a grant. And just like scholarships, grants do not require repayment.

(iii) Sponsors :- Another way of how to finance your college education is through Sponsors. Sponsors can be your parents are a relative who is ready to finance and meet all your college needs. Of course the sponsor should be committed.

(iv) Student loans :- Applying for student loans is another way you can finance your college education. Most countries offer loans to college students. This loan is required to be paid back after one completes college education and gets a job.

(v) Work study :- There are some countries that offer part time employments to students. In this way, students can be able to pay for their college education from what they earn. There can be some added advantages in this work study in that the student gains extra skills in the work environment.

(vi) Essay contests or competitions :- This is another good way you can get money to pay for your college education. Some companies or organizations offer scholarships based on essays or competitions that are held mostly annually. These competitions usually involve a number of colleges where the best students are awarded scholarships.

(vii) Self financing :- Yes, it is possible you can finance your own college education needs. This can be possible for you if you are ready to take part time jobs. There many part time jobs available even if they do not pay handsomely, you can be able to save the little you get and pay for education needs. There are hundred of online jobs that can enable one to finance his or her college needs. If you are also a down to earth person there are numerous odd jobs you can do within your city, and whatever you get from them will enable you to cater for your college needs.

So, do not let that dream you have fade away, utilize one or some of the ways mentioned here and you will be able to finance your college education. It is said that education is the key to success.

Thursday, June 14, 2012

The term life insurance and the many factors to consider

The term life insurance is the type of short term insurance that falls under the category of low premium payment and is for a short time period. The people who prefer the short term insurances can go for such a payment. This is because they need to put in a policy for a short term risk. The term life insurance may get messier at the end as they come up in with heavy payments of premiums as time passes.
There are so many companies that can provide you with the term life insurance. The first thing that you should know about term life insurance is that you have to get every bit of quality information on the tem life insurance. This is necessary for your own protection. You do not want to go and mess with the policy makers. If you have the right piece of information on the term life insurance, then you will know from which company you should avail the term life insurance, and even sometimes think of not availing the policy if you do not need it.
The term life insurance is for all those people who have a risk attached to the short term future ahead of them. This can be the risks on life; can be the study purposes of a child who is dependent on you, your travel, etc. there is always online help on the term life insurance. There are help blogs and informatory websites that give you details about the term life insurance and how the policy can be availed.
So many different countries have their own terms and conditions for the insurance policies and same is the case with this policy as well. It is termed as pure protection in some countries. The term life insurance can go on from 5 to maximum 30 years. You can pay premiums till the period ends and then the dependents can avail the policy if the risk happens.
If the risk for which you hired the policy resides, then the policy will never return you anything. It is the term life insurance and it will end after the term for which you signed it in. when you have found out about the whole information on what the term life insurance is, match it with your needs of having the policy. This will let you know how you can get one good policy making company to work for you even.
The biggest catch now is to find a good and reliable company that can work for you. The basic search for such a company can help you out in getting more information on the term life insurance. To get a reliable and trustworthy company for you, you should gather information on any policy providing companies and then you start short listing the companies with respect to the information you have on them. Read the user reviews on the websites of such companies to know the quality of the work they do and how they give you policies with what terms and conditions.
Muhammad Azam is an avid blogger. He has written several blogs on life assurance, term life insurance and on other finance related topics. If are looking for reliable information on term life insurance then read his blogs.

Tuesday, June 12, 2012

Thinking of Getting Into Investing? Be Aware of These Securities Regulations Legal Issues

If you are an investor in the United States (or a foreign investor who wants to invest in a U.S. business), you need to be aware of the web of securities regulations that have been put in place by the federal government over the last century.

There are several major legislative acts which regulate securities in the United States. In response to the Great Depression, and as part of the spate of new federal legislation and programs that came as part of the New Deal, the first major securities law in the U.S. was the Securities Act of 1933.

The Securities Act of 1933 represents the first major federal regulation of securities and investments. One of the major rules it imposes is a registration requirement. Unless a specific exception (of which there are very few) applies, all securities sold, or offered for sale, to the public must be registered with the Securities and Exchange Commission (SEC). The registration must include a description of the security offered for sale, information concerning the management of the security’s issuer, and independently-verified financial statements.

The SEC was created by a later act, the Securities Exchange Act of 1934. In addition to creating the SEC, the 1934 act was primarily meant to regulate the secondary trading of securities. As with the 1933 act, the 1934 act contains significant anti-fraud provisions. Section 10(b) is most often cited as the major anti-fraud provisions. Its language is broad and sweeping, and it has been used to punish conduct ranging from insider trading to price fixing (artificial inflation or depression of stock prices through manipulation). It also creates a few exemptions from the reporting requirement, when such reporting would endanger national security.

One of the biggest rules in securities law is the prohibition on insider trading. Insider trading is any purchase or exchange of a publicly-traded security by a person who has advance inside information on which they are basing their decision to buy or sell a security. It carries significant criminal penalties.

The next major regulation of investments came in 1940, with the Investment Company Act of 1940, and the Investment Advisers Act of 1940. The 1940 act is aimed at eliminating conflicts of interest in investment companies. It requires investment companies to make certain disclosures to their customers, with the aim of reducing the incidence of fraud and conflicts of interest. The act also places some restrictions on mutual funds and short sales of stocks.

That same year saw the passage of the Investment Advisers Act of 1940. As the name suggests, it is meant to regulate the conduct of investment advisers, and the advice that they give to their clients. It requires that investment advisers register with the SEC, as well as make certain written disclosures to clients and prospective clients.

After the wave of new rules brought on by the New Deal, there was not a major update to American securities regulation for nearly 30 years, which came with the Securities Investor Protection Act of 1970. Its main goal is the creation of the Securities Investor Protection Corporation (SIPC). Most brokers and dealers of securities who are registered with the SEC must also be members of the SIPC, which maintains a fund to help protect investors from misappropriation of their money in the event that their broker fails (goes out of business).

In 2002, one of the largest additions to American Securities law in history was enacted, in response to the Enron collapse. It is called the Sarbanes-Oxley Act of 2002 (SOX). SOX requires that enhanced financial disclosures by publicly-traded companies. It also creates a new federal oversight board to monitor the accounting practices of public companies.

And in a significant departure from the usual legal doctrine that corporations are separate legal entities from any individual person, SOX makes individual corporate executives personally responsible for the accuracy (or inaccuracy, as the case may be) of all corporate financial reports. This, in theory, makes it far more difficult for the people who run corporations to hide behind the “corporate veil” while they use a corporation to commit crimes for which they will not be held responsible.

This article barely scratches the surface of the full scope of securities regulation in the U.S. For that reason, if you have any questions about your rights as an investor, or your responsibilities as an investment adviser or broker, you should speak with a lawyer who specializes in securities regulations.

John Richards is a writer for and the Law Blog. The above article is for general informational purposes only, and should not be construed in any way as legal advice relevant to your particular situation. The only person qualified to give you legal advice is an attorney licensed to practice in your jurisdiction, who has been apprised of all the relevant facts of your situation.

Saturday, June 9, 2012

What Is An Unsecured Loan?

When applying for a loan there are generally two types of loans that are available. These types of loans are secured loans. An example of a loan of this type is an automobile loan. The other type of loan is an unsecured loan. These loans use the borrower’s signature as a contract with the lender. There is not any type of property that can be collected if the debtor fails to remit payment. An unsecured loan will generally have a higher interest rate than a secured loan because of the risk that the creditor is taking. Examples of an unsecured loan include personal
loans, which are sometimes called signature loans, and cash advance loans. These loans have many uses. They can be used as a debt consolidation loan, a home improvement loan, student loan, or whatever else the money is needed for.

Credit Risk

When a person applies for a personal loan the lender will take into account all factors of the applicant. The factors include credit history, amount of income and the amount of the loan that is being requested. Personal loans involve a risk to the lender so they are very careful with whom they lend to.

After the lender checks all of the factors listed above the decision on whether or not to give the loan will be made. It will also decide what interest rate to charge on the loan and how much time the loan needs to be paid back within. If the applicant has less than stellar credit and are approved for the loan the interest rate will be higher than that of a person with good credit.

Advantages of an Unsecured Loan

The biggest advantage of an unsecured loan is that there is no collateral or security needed when applying for the loan. Many applicants think that unless they own a home with equity involved they will not be able to obtain a loan. This is not true. Unsecured loans are available to all including renters. The needed money from the loan is usually received quicker than a secured loan because there is not any time wasted in appraising the value of an item that is being used for collateral on the loan. If the money on an unsecured loan is being borrowed over a short
period of time the interest rate paid out will not be extremely high. The longer the repayment terms the more interest paid out will be.

Is an Unsecured Loan Right for You?

An unsecured loan is the perfect type of loan for someone who does not have a home to borrow against or a vehicle that is owned. Sometimes the borrower will have these assets but they are already tied up in other loans or debts. When considering an unsecured loan it is important to be sure that the loan received can be paid back easily and will not cause more credit problems in the future. After all bad credit will not help situations in the future.

This article is written by Dawn Stevens, an expert writer in finance topics like loans, debt, insurance, mortgage etc. Also she works for top loans for bad credit company. You can visit here for more information.

Thursday, June 7, 2012

What is a Loan Workout?

If you’re a small business owner there’s a strong possibility that in order to open your business you obtained a loan from a lender. In the event that your business falls on hard times before the loan is repaid, you may find yourself in a precarious position. Either the loan has to be paid back or the lender may foreclose on the property, putting you out of business for good. So what are your options? In the past, you didn’t really have any. If you didn’t repay the loan, you didn’t run a business any longer. However, recently lenders have become more lenient toward small business owners by offering them a chance to restructure the loan. This is what’s called a “loan workout”. Essentially the lender and the business owner sit down and rework the terms of the loan. Perhaps a smaller interest rate would help you pay it back, or extending the length of time to repay the loan to provide you with more time and smaller monthly payments.
Pre-Negotiation Preparation
Any successful workout begins with a pre-negotiation preparation where you identify the problems within your business and develop solutions based on what caused the financial problems. This should be done prior to approaching the lender so they can see that you have thoroughly analyzed the financial situation and understand the underlying issues at hand.
Workout Negotiations
You should be prepared to respond to whatever loan revisions the lender may suggest. Borrowers are usually in a vulnerable position during workouts and lenders may try to take advantage of that. In a loan workout, almost everything is negotiable: loan length, interest rates, payment schedules and technical loan covenants; therefore, each case is unique and could have a very different outcome.
Legal Assistance
The finance and banking industry is complicated and as banks continue to merge and grow, this complexity only gets bigger. This is why it’s essential to have a corporate law firm represent you and your business. Plus, it’s important that the loan workout be agreed upon by both the lender and the borrower. A corporate law firm is able, legally, to arbitrate such a deal so everyone gets what they want out of the workout.
Loan agreements are legally binding documents and anytime you’re dealing with something legal, it helps to have the backing of a corporate law firm. By doing so you can ensure that you’re not compromising your rights or agreeing to something you missed because it was “in the fine print”. It’s essential for you to protect yourself through corporate law firm representation.
It’s in the best interest of the lender to be repaid and they can’t do that in the face of foreclosure. It’s in your best interest to stay afloat financially until your business rebounds and returns to the black. A loan workout may be the best option for all parties considered. The first step is learning if your lender is open to it at all. If so, then the next step is to hire the experts of a corporate law firm to help protect you from any predatory dealings or aspects of a restructure that would hurt your business further. No one knows the law better than lawyers and you want them on your side.
This article was written by Roger Brent Hatcher, a corporate finance lawyer at Smith, Gilliam, Williams & Miles, a leading Atlanta Law Firm since 1928.

Wednesday, June 6, 2012

State and Municipal Bonds & Financing

Investing can be a serious endeavor and it helps to have a qualified corporate law firm at the ready to help you make wise decisions. As the world of financing becomes ever more complicated and complex, it becomes more difficult for the average person to understand what’s happening financially in their locality. This article aims to show how municipal bonds work in relation to the investor.
Because of the economic meltdown of 2009, many investors are playing it safe by protecting their money in low risk bonds and employing the assistance of corporate law fims. Essentially, a bond is an investment in a company that’s looking to expand, or in terms of the government, to pay for public services like roads, or bridges. Bonds are designed to be a win-win for both the investor and the investee. Here’s how it works.
Let’s say that Company X wants to expand and needs capital to do so. Rather than going to a bank for a standard loan, Company X can sell bonds to investors to acquire the money needed to move forward. The amount of money being loaned is known as its “face value” and in case of Company X, it’s $2,000. After the investor has received sound advice from a corporate law firm, he/she provides the $2,000, and receives what’s known as a “coupon” which is the interest rate on the loan. Let’s assume that the interest rate in this scenario is 6%. Lastly, bonds have a finite amount of time to be paid back to the investor, known as the bond’s “maturity time” which could be any number of years. For this case, let’s say that the maturity time is 5 years.
So an investor loans $2,000 to help Company X expand with a 6% coupon that lasts for 5 years. After some quick math, this is what we come up with. After 5 years, the original $2,000 is paid back with an additional $600 (6% x $2,000 = 120, 120 x 5 years = $600). This is how the bonding process works and is considered, in the investment world, to be conservative.
A state, or municipal, bond works the same way only instead of a private business, like Company X, asking for a loan from investors, it’s the municipality instead. Municipalities, or any entity within the state level such as a city, county, seaport, airport, etc., sell bonds to investors to improve upon or develop projects. These finances are generally secured through revenues and may be tax exempt and traded publically without limit.
Bonds are seen as low risk investments meaning that there isn’t a large amount of money to be made but you will make money. Rather than investing $2,000 and risk losing it entirely or gaining a return of $4,000 like you could in the higher risk stock market, a bond will yield a return closer to the $600 noted in the previous example. But the advantage to this is that you’re much more likely to receive $2,600 in the bond market rather than $4,000 in the stock market. In Las Vegas terms, bonds are like nickel slots (low risk, low return) and stock market investing is more like black jack (high risk, high return). Even though bonds are considered conservative it always help to acquire sound legal advice from a corporate law firm to ensure that you’re making the right decision.
This article was written by Roger Brent Hatcher, a corporate finance lawyer at Smith, Gilliam, Williams & Miles, a leading Atlanta Law Firm since 1928.