Personal Finance: By Thomas Husnik

Basically, personal finance involves the application of the financial principles to the pecuniary decisions of the family unit or an individual. It normally addresses the manner in which the families or individuals budget, obtain, spend and save the monetary resources over a period of time, by taking various future life events and financial risks in mind. Personal finance has various components that include credit cards, checking and savings accounts, consumer loans, stock market investments, social security benefits, retirement plans, income tax management and insurance policies.

Planning of Personal Finance:

Financial planning is the main component of personal finance. It is a dynamic procedure that involves regular re-evaluation and monitoring. In general, there are five steps involved in personal finance planning. These include setting of goals, assessment, creation of plan, reassessment and monitoring and also, the execution.

An individual can assess his own financial situation with the compilation of simplified versions of income statements and financial balance sheets. Values of personal assets and personal liabilities are listed by a personal balance sheet. In addition, personal expenses and income are listed by a personal cash flow statement.

Another important parameter involved is the setting up of goals. Typical examples include, retiring at the age of 65 by having a personal net worth exceeding 2,00,000 US $ and, purchasing a house within the next three years with a monthly mortgage servicing payment which does not exceed 25 % of the gross income. While some goals are long term based, some are also for shorter term. Financial goals help in direct financial planning.

Other Parameters of Personal Finance:

The process of planning within the personal finance involves various factors such as creation of plan, monitoring and reassessment and execution. With respect to the creation of plan, the financial plan provides information on the accomplishment of the goals. For instance, it may include cutting down on unnecessary expenditures, stock market investment or, increasing the personal employment income.

The process of execution of the personal financial plan includes perseverance and discipline. For execution alone, most people receive assistance from various professionals such as financial planners, investment advisors, lawyers and accountants.

With the passage of time, an individual needs to monitor one’s personal financial plan for reassessments and for possible adjustments. Typical goals that most individuals have are paying off student loan debt or credit card debt, college costs, medical expenses, estate planning and medical costs.

The main factor that has a direct effect on the personal finance is the expenditure factor. A cut in household spending and other such perks at an early stage would help in managing the household and personal finance in a better manner. In addition, saving a certain specific amount keeping the future requirements in mind, such as the educational needs of children would also help in the better management of personal finances. 

Created: Dec 05,2007 2:54 AM

Financing Options for Your Business

One of the challenges of getting started in any type of business structure be it corporation, partnership, or sole proprietorship is getting financing to start or to maintain daily operations. Typically you will have determined what you need for starting up and maintaining operations in your business plan and will go seek a loan from commercial lenders. And the lenders are all different too. They all have different requirements and some have perks to offer for your business. But before you shop for a lender you should know what is available in the way of corporate business financing.

When shopping around for commercial loans and trying to figure out this corporate financing game, the topic of cash flow will no doubt be referred to. Cash flow is the one aspect of a business that can make it work and lack of it can destroy it. If you have any experience with business at all, you know that there will be a delay from the time a business first starts to when the invoices start getting paid. Yet during this time, the corporation still has bills and salaries to pay. Expenses also include paying suppliers just so that they can fill their own purchase orders. Try explaining cash flow to your employees when they have not been paid—not a good scenario. Or, try explaining to your supplier why you have not paid its invoices. This is why you need corporate financing.

One corporate financing option you might be offered has to do with loaning you money based upon the number of outstanding purchase orders you have. They way it works is the suppliers you use to fill your purchase orders are paid directly by the lender. This type of commercial lending program gives you cash flow because your suppliers are taken care of and you can use money for other things. Plus, you can take advantage of any supplier early payment discounts.

Another popular form of corporate financing is known as receivables factoring. How this works is a receivables factoring company will loan your corporation money based upon the value of receivables still open. Your invoices are an asset and are basically collateral for the loan. Factoring is great if a corporation does not want to incur further debt but needs a portion of the money it is owed in order to conduct day-to-day business operations. The factoring company will verify the invoices you want to factor and then loan you a significant portion of the money and hold back a small percentage. The end customer you have invoiced will actually pay the factoring company (even though the check is still made out to your company). When the invoice is paid, the amount held back is returned to your company and the factoring company takes its fees from it.

And of course there are commercial loans for your corporation that is based upon your fixed assets. These loans are secured by equipment or commercial real estate your corporation holds so you will probably get longer payment terms and lower interest.

And commercial lenders may have other programs to help you keep your cash flow at a state that is good for the health of your business without incurring a lot of burdensome debt. Shop around and get all the details before making your decision and prepare a good business plan.

BY Thomas Husnik

Created: Dec 05,2007 2:39 AM

Created: Nov 21,2007 2:19 AM

MY THOUGHT

It never ceases to amaze me at the number of people that continue to think that seo and search engine marketing are two completely different animals, when in fact, SEO is really a part of search engine marketing, or SEM. These types of people are considered naive at best. To better help you explain this, take a piece of paper and draw three circles in a triangular pattern. Have one circle at the top, and two circles at the bottom. In the top circle, write in SEM. In the bottom two circles, write in SEO and PPC respectively. What this simple diagram shows is that search engine marketing consists of two categories: search engine optimization and pay-per-click advertising. Search engine optimization, or SEO, is the free, organic links, while Pay-per-click are the paid links. We all know that Google is discounting paid links, so being ranked in the organic search results as much more value than pay-per-click.

Created: Aug 08,2007 9:27 PM