Month : September 2013

Insurance

The Importance of Landlord Insurance

Take a look at http://www.totallandlordinsurance.co.uk/ to learn more

As far as personal finance goes, one of the most profitable ventures that a willing investor can enter into is to buy a property which can then be subsequently rented out for a regular profit. With the rise of affordable housing and condominium units that are attractive for students, young professionals or people who simply cannot afford to buy their own house at this point in time, the opportunities in this thriving business segment is indeed bright and abundant. 

However, it is fairly common knowledge that one of the more established deterrents to renting out a property is the risk that the landlord absorbs in case the tenants inadvertently damage the property. Ever so often, we hear of scary stories where properties are damaged by tenants who are unwilling to shoulder the expenses necessary to have the property repaired. As a result, landlords shell out their own personal money to have the properties repaired before it can be rented again. 

Thankfully, now it is possible for a property owner to secure landlord insurance to protect himself or herself from the risk of property damage without having to shy away from the renting business altogether. Some financial institutions actually specialize in providing landlord insurance and offer a variety of packages suited to one’s landlord portfolio. Whether you are a first-time landlord or you own a vast array of properties that you rent out for residential and commercial purposes, you are guaranteed to find a landlord insurance that works for you. 

Like most types of insurance, one only needs to come into an agreement with the insurance provider as to the specific coverage of the policy. Afterwards, all that remains is for the landlord to pay the appropriate premium fees for the policy to take effect. During the period of coverage, the insurance firm will shoulder the repair expenses for properties that are insured provided that the damage is in accordance with the insurance agreement. In this way, the landlord is insulated from all the repair expenses while continuing to reap the benefits of having rented a property. 

With landlord insurance now available, property owners no longer have to fear the idea of inadvertent property damage after they rent out their property. Gone are the days when a landlord sits down and agonizes over how to pay for property repair. Now, all that one worries about is getting the right landlord insurance and everything else falls into its proper place. 

Consider this a golden opportunity to grow your personal finance portfolio by renting out your properties and then securing the right insurance to cover the risks. With the right landlord insurance, you can sleep soundly and still earn comfortably without having to worry about your property. 

Money Management

Budgeting: For The Just Getting Started

So you have come to the realization that you need to control your finances. Well I’m here to help you get started. Starting a budget is somewhat easy but there are a few steps that can trip you up. What I’m going to do is walk you through the mine field so you can have a budget that you can call your own.

Starting out

What your first step needs to be is make a list of categories of bills that you have every month like rent or mortgage, phone bill, etc.  Here’s what mine looks like:

budget

The reason to list those first is so when you decide how much goes into each category you can get the necessary bills out of the way first and know how much you have left over for the rest of the categories.

Next make a list of all of your monthly variable expenses like this:

budget 2

If you want to make the categories more detailed go for it. You can make eating out into breakfast lunch and dinner if you want. Customize it to whatever works for you. Don’t worry about making it perfect the first time around though. Budgets tend to evolve over time so just make a first one that will get the ball rolling. The Spouse 1 and Spouse 2 is for fun money for each person FYI. Be sure when you put the two groups together that you add a line for savings between them.

Divvying Up Your Money

After you’re done making categories for your spending it’s time to find out your spending. This step is to find out how much money you spend in each category. There’s a few different ways to do this.

One way is to guesstimate how much you spend in each category. Your regularly monthly bills will be pretty accurate but your variable spending will probably be pretty off. With this method you’ll be adjusting your budget a lot and can be frustrating so I wouldn’t recommend it for most people.

The other way is to track your spending for a few months and fill in the categories with those amounts. If you have a debit card I would use that because then you can see your transactions online and it’s so much easier to keep track of. If you don’t have a card and you just use cash then think about getting a small note pad and writing your purchases down. This isn’t the most fun step but it is the most eye opening experience. When you actually see how much you spend a month you may be very surprised.

At the end of each month put all of your purchases in their different categories. This will give you an idea about how much you spend in each category. Now comes the meat and potatoes part. The point of a budget is to control your money instead of letting it control you. So this is where you decide how much you want to cut back on variable spending. I’d recommend you cut back slowly so that it’s not a big shock and turns you off. If you spent $300 on entertainment try to cut back to $250. If you cut back a lot you might get frustrated that you can’t stay within budget and could cause you to give up. so each month just cut back a little more and eventually you’ll figure out where a comfortable level is for that category.

Once you figured out your budget write it down on a piece of paper or put it in a spread sheet. I write down my budget in a notebook so I can carry it around wherever I want to and work on it. I have mine set up like this:

Budget 3

Another reason I write in a notebook is because I fill out, on the page after my budget, columns with the different variable spending categories and amount budgeted. Then through the month I write down the expenses as they occur in the correct category. This helps me save a lot of time.

budget

That’s pretty much it. Not hard at all. Over time your budget will be customized to your situation. What you just created is a gateway to a better financial life.  This is a tool that’s going to help you get control over your finances.

How was your experience setting up your first budget?

Money Management

Should Politicians Tell You How To Spend Your Money?

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David Cameron got a little heat recently for “instructing voters to pay off their credit card bills” in a recent speech he was going to give. Because of that heat they changed the line. It was read out of context and I don’t think it was really a financial lecture, but none the less, it brings up the question of whether or not politicians that are dealing with our nations debt problems should be telling you how to handle your finances.

My take is that it doesn’t really matter. It’s just words and you can take the advice or not. It’s really up to you. Some of the best advice is given by people that don’t follow it.

Just because the advice is coming from a bad source doesn’t necessarily mean that it’s bad advice.

Another point brought up is that some people worried that what he was telling people would cause them to stop spending thus slowing down the economy. I say good. What got us in to this mess in the first place was spending too much money. We cry that the government has a lot of debt and needs to cut back yet we shouldn’t do that ourselves?

Of course we should.

Will that cause us to lose more jobs?

Yes!

But it’s not that jobs are just going away, it’s that they’re moving into different sectors and even newly created sectors.

For instance, after the housing boom tons of jobs were lost in the real estate and housing sector, but do you know what grew? Businesses that make money from bankruptcy. They grew at incredible rates, and what were they doing? Hiring people!

Debt consolidation companies and all of the other financial education companies grew too.

If a job goes away, there’s another job popping up somewhere to fill that void.

So what can be done about jobs?

Reeducate people so that they can find jobs in a new field.

All jobs aren’t going to be around forever. If I’m not mistaken, there aren’t any more Pony Express Riders. Do you think they rolled over and died? No they used their skills for something else, or learned how to drive.

So, if you don’t have a job and it’s not looking bright, Google something and learn all about it. Maybe start your own business.

What do you think?

Investing

Binary Options: Money saved through lesser liquidity requirements

Except for a job, doing any business or investment venture requires that you maintain working capital. In a job you don’t have to set up a supply chain, pressure debtors to pay full and quick, or think of delaying tactics when paying creditors. However, when you are doing any business, you need to maintain cash or bank to continuously fund running core operations until a profit is attained. Insufficient funds just halt to a grinding stop any business.

In the same manner as any business, trading derivatives also requires maintenance of “working capital”. This is particularly the case in trading regular options. Whenever a trade starts to go bad, you have to make good the margin calls to avoid closure of your position in a loss. Even so, you never know for how long or deep the loss position will go on. And until you find an amicable position, you need to keep funds at the ready. In regular options trading, you decide at the inception of any trading account the leverage you wish to use. The higher leverage you use, the greater will be your funding requirements in case of an ongoing loss.

Trading binary options would also require one to keep his funds at the ready. However, the requirement is never as intensive as it is in regular options trading. You do not have to worry about margin funding once you run a loss; when you run a loss, it’s a loss. You do not have to maintain liquidity for margin funding. In this aspect, binary options save you money inherently. For example, unlike regular options trading, if trades get deeply out of the money, traders borrow from the broker or banks at very high interest rates to remain liquid.

So what exactly do you need the working capital fund in binary trading? The answer is, to make more trades. You have to remain liquid enough to make trades whenever you see the “technicals” on your interface blinking an opportunity. If a 10 minute binary option leads you to a loss, it does not matter. If the loss is a one way slide, make another trade with the funds available and may be use a shorter trade time frame. This way you can always recover your losses quickly and save your money.

Consider a situation in regular options trading. You make a loss by big margin, that leads to a margin call. You have no other way but to close you position with a higher amount of loss then your original investment. You have to start over again to recover all those losses, “capital plus what you lost in margin call”. Now if this was a binary options trade, your position would have expired in a short period leaving you a loss of your invested capital. However, you minimize your loss and save money quicker, by making another trade considering the market slide; there is no requirement to recover “capital plus loss in margin call”.

Therefore, it is comfortably proved that operating a binary options trading portfolio, practically requires minimum liquidity maintenance, and hence save you quite a lot of money.

Business

Types of Credit Card Readers

The popular use of cards instead of cash has made credit card readers quite popular among business owners. A credit card reader is a device that is used to obtain encrypted information from credit cards. There are credit cards that use magnetic strip technology while others use chip technology. Credit card readers come in a wide variety of designs and dimensions. They are widely advised for business owners since they enable the making of secure, quick and convenient transaction of payments using customer credit cards.

Credit card readers can be divided into three major categories with a variety of options under each.

Point of sale terminals

There are credit card readers that are situated at a fixed location in the business. Point-of-sale terminals usually have a wide range of capabilities. These terminals often have the ability to read cards with magnetic stripes such as gift cards, IDs and Credit cards as well. Point of sale credit card readers are connected through a broadband or telephone connection. This type of credit card processor is great for businesses within a fixed location.

Portable terminals

These are also quite popular among businesses in fixed locations. These terminals use blue-tooth or wireless technology to communicate to servers for transactions made. They are quite commonly found in bars and restaurants where waiters take the device to the customer for a transaction. Portable terminals are very convenient, professional and create a trustworthy relationship between the business and the client as it shows a lot of transparency.

Mobile terminals

There are also mobile credit card readers that you can attach to a smart phone or a tab for credit card processing. Most mobile terminals are attached to the earphone jack of your phone. The use SIM cards or GPRS to communicate with the service provider while making transactions. These devices allow you to swipe a variety of credit card types. These devices are extremely convenient for businesses that are not located within a fixed operating premise.

With the wide variety of options available, businesses owners have the choice of selecting the system that best suits their business. The best part of using a credit card reader is how amazingly affordable it is to buy.