Personal Finances and Loans Solutions » personal finances

Meeting your payday loan requirements

admin — Fri, 16 Apr 2010 09:32:12 +0000

The subtitle of Harvey Mackay’s book Swim with the Sharks Without Being Eaten Alive (1996) offers this advice: “Do what you love, love what you do, and deliver more than you promise.” There’s no better way to develop a trusting partnership than to do more than the minimum your partner expects. Trust isn’t automatic; it has to be earned. Trust levels are relative and can increase or decrease depending on what the partners do or don’t do to build trust. If doing what you promise to do builds trust over time, exceeding your promises multiplies the impact of your actions.

We should try to exceed—rather than merely meet—the requirements of our promises. “Exceeding expectations” sounds like you expend full effort and enthusiastically complete the task, whereas “meeting requirements” sounds like you grudgingly perform the minimum. A law of physics states that for every action there is an equal and opposite reaction. Exceeding performance expectations triggers a reciprocal reaction.How do you feel about doing your part when your partner has already given 110 percent?

Credit status will persist as hard evidence

admin — Sat, 21 Nov 2009 19:54:05 +0000

Aggregate financial ratios give a reliable picture of the state of the highyield market and should not be neglected irrespective of technical factors. Technical factors driving the high-yield market can change fairly quickly but credit status will persist as hard evidence and change only slowly over time. The most important fundamental measures are:

Free cash flow generation
Refinancing calendar
Access to capital markets (bank lending standards)
Reported earnings and earnings outlook
Equity performance
Growth prospects
CAPEX needs
Leverage trend
Coverage trend.

Leverage and coverage ratios are particularly important for the analysis of high-yield issuers. We find significant correlations between the spread levels of selected high-yield issuers and their coverage ratios and their leverage ratios.

Picking stocks by the numbers

admin — Mon, 07 Sep 2009 13:02:09 +0000

Most managers pick stocks by the numbers: P/E ratios, earning growth rate, EBITDA to enterprise value, and so on. Hundreds of studies have shown that you cannot outperform the market looking solely at numbers. Insight is required. But insight can cost a manager his job and a $500,000 annual salary. Picking stocks by the numbers as does everyone else, keeps those paychecks rolling in. In interviews and slick marketing brochures, mutual fund managers boast that they have one-on-one contact with company managers. Unfortunately for you, every mutual fund manager talks to the same company managers at your expense. Trips to New York, Boston, Silicon Valley, and Los Angeles are paid for by you. Investment conferences in Las Vegas, Honolulu, and Hong Kong cost you even more money. Because all the fund families talk to all the companies and go to all the conferences, no one gains any insight and all return home to the same numbers.

Fund gathering, job security, and indexing has resulted in most funds, index and non-index, owning the same stocks. Overowned stocks have huge market capitalization. It requires larger and larger purchases of stock to move prices up. In essence, $100 million in new money will increase the value of a $1 billion stock by 10 percent; a $100 billion stock will only increase in value by 0.1 percent.

How to deal with college costs

admin — Tue, 21 Jul 2009 19:22:29 +0000

By getting your debts taken care of as soon as possible, you can begin taking care of this goal, so that it, too, doesn’t overwhelm you later. After all, your goal is not to just eliminate debt or save for the future, but to do what you need to do, so you can get on with enjoying today.

Just like with retirement, there are things you should be doing today, even in the midst of getting out debt, to help prepare for future college costs:

Move to a different state. Just kidding. But there are some states that offer their residents a matching contribution for putting money into a Section 529 plan. For example, the Arkansas Aspiring Scholars program will match a $250 contribution to their state savings plan with up to $500 (depending on income).

Check with your state treasurer’s office to see if such a plan exists. Contribute toward college for holiday and birthday gifts. Consider opening college accounts for your kids at your local brokerage house and asking the grandparents to divert some of their holiday spending there. Trust me, your kids will appreciate it way more than a pair of socks.

Use UPromise and BabyMint. Both of these services are free to sign up for, and set aside money into a college account for your child every time you shop. It doesn’t actually increase the cost of your purchases, but instead is a way for stores to reward you for your loyalty. You can also have your friends and family register their cards to contribute to your child as well.

College costs

admin — Tue, 07 Jul 2009 21:00:28 +0000

I’m not going to bore you with every possible financial goal, but if you plan on putting yourself or someone else through college in the future, it’s imperative that you begin to save for that now. Again, to save adequately, you’ll need to eliminate your monthly debt obligations as soon as possible.

Failure to plan for college expenses has two major effects in my experience. First, many people who have not planned and saved adequately usually stop saving for their other goals while scraping to pay for tuition. Even a small delay in getting started on saving can have a huge impact on what you’ll have to save later to play catch-up. Second, the failure to plan for college usually results in the accumulation of more debt in the form of student loans. While these are often a necessary evil, they can be one more financial weight around your already exhausted neck. (See Chapter 15 for more on student loans.)

The Magic of Growth Multipliers

admin — Fri, 12 Jun 2009 13:18:29 +0000

The magic by which seemingly small income streams get magnified into huge market valuations is intimately tied up with the arcane mathematics of perpetuities. It sounds dull, but it is well worth understanding because it is the mathematical foundation of Wall Street wealth.

Aperpetuity is defined as an investment offering a level stream of cash flows forever. What is the value of a perpetuity paying $100 per year forever? Using a cost of capital of 12 percent, it would be the present value of the first payment, plus the second payment, plus the third payment, . . . , plus the fiftieth payment, and so on; that is, $89.29 + $79.72 + $71.18 . . . . The value of the payments gets progressively smaller. The value of the fiftieth payment is only 3 cents!

It turns out that the present value of this stream, no matter how far one goes out in time, cannot exceed $833.33. That number is the free cash flow of $100 divided by the cost of capital, 12 percent, or 0.12—a very simple relationship that we introduced earlier.

Mathematicians say simply that this series converges to a finite limit. This one converges fairly quickly—it reaches 90 percent of the limit in 20 years, and 95 percent in 26 years. So in a practical sense, realizing the value of a perpetuity does not take forever, just a period of time that is consistent with the lifetime of a durable business.

Strategic Financial Alliances

admin — Tue, 28 Apr 2009 10:19:39 +0000

Service relationships—with vendors, consultants, and law and accounting firms—have been mentioned as a hidden part of a company’s intellectual capital. Partnerships and alliances can be even more important. To the extent that a company can effectively muster the energies and the brainpower of a powerful strategic partner, it can speed its product development, reduce the cost of manufacturing, and rapidly penetrate its target markets—all enormous competitive advantages. Major companies such as IBM enter hundreds of such relationships. These relationships are intellectual capital of a most important type—mutual understanding of capabilities and costs and trusted working relationships.

From the viewpoint of the real options solution, strategic alliances only create value when they enable plans. It is possible they will be formed because of personal relationships and a vague sense that working together can help both parties, as when two top executives meet on the golf course. But value will not be created until an option is framed. In time, when that option is exercised, the strategic capital represented by the alliance is translated into economic capital.

Cisco, which produces networking devices (the king of routers) and software, owns only two of the 38 plants that assemble its products. It connects component manufacturers, assemblers, logistics providers, systems integrators, and its own employees and customers in what is known as a b-web (business web). The arrangement leverages the strategic capital of the participants and appears to provide exceptional value. Nortel has embraced the same approach.