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Tips to Raise Your Credit Score

Jul 12, 2016   //   by admin   //   Credit Information  //  No Comments

Your credit score plays a big role anytime you plan on purchasing an item which requires financing. Whether you plan on purchasing a new house, automobile, boat, or other large item in the future, it’s extremely important that you have a good credit rating before you go in and apply for the loan. In case you didn’t already know, there are some quick and easy steps you can take to actually improve your credit rating before you go in. These tips can help you quickly raise your credit score and have better odds of getting approved at a lower interest rate. If you follow these easy steps, improving your credit rating quickly is definitely possible!

Reduce the Amount of Debt You Owe – Before you rush and apply for new automobiles, boats, or other large items – Try to payoff some of your smaller items first. Credit cards with low balances (and high interest rates) should always be focused on before taking out any new loans!

Don’t slight bills in favor of a down payment – If you plan on purchasing a large item then you may be scrambling to try and come up with a big sum of money to put as a down payment. Don’t let this situation make you get delayed on other responsibilities. Even if it means digging into your savings a little, it’s better than a drop in your score!

Setup Payment Reminders – It’s important that your credit card and other bills get paid on time each month. This is a guaranteed way to help improve your credit quickly and get approved for more loans. Setting up a simple payment reminder will handle that payment for you each month so you don’t have to worry about it anymore!

Don’t hint at risk – Sometimes the best thing you can do for your credit score is not take risks. Don’t take our new credit cards when it isn’t needed and don’t buy items that you can’t afford!

Don’t get me wrong, this might not be enough to raise your score hundreds of points or anything, but when applying for new loans every little point can help! While you might not be able to raise your credit score astronomically overnight, this can always be done over a longer period of time!

Raising Capital State Law Issues in Offers and Sales of Securities

Jul 10, 2016   //   by admin   //   Credit Information  //  No Comments

For many businesses seeking capital, whether to purchase equipment, fund research, expand manufacturing capabilities or enhance marketing efforts, the most viable funding source is the sale of securities. Before a business begins a securities offering, however, it is imperative for the issuer (that is, the entity that will offer and sell the securities) to become familiar with the basic legal requirements of selling securities. If the issuer does not comply with the applicable securities laws, purchasers can require the issuer to refund their money, usually with interest at a rate prescribed by statute. Furthermore, officers and directors (if the issuer is a corporation), partners (if the issuer is a partnership), members (if the issuer is a limited liability company) and other people who are involved in the offering may be personally liable for the issuer’s failure to comply with securities laws. In some instances, failure to comply with the securities laws can result in criminal punishment, including imprisonment.

All securities offerings are subject to both federal and state securities laws. This article does not address the federal securities laws but rather summarizes some of the important state laws and regulations with which an issuer must comply when offering and selling securities. All fifty states have laws regulating the sale of securities. Each state also has a securities commission or agency and a securities commissioner or administrator. The laws adopted by state legislatures are frequently supplemented by rules and regulations adopted by state securities commissions or agencies.


A single securities transaction can be subject to the laws of more than one state. This is because the issuer may make an offer from one state to prospective purchasers located in other states. Depending on the law of the states involved, the issuer of securities being offered and sold may be required to comply with the laws of the state where an offer to sell is made or where an offer to buy is made or both. The situation can be made even more complex if the issuer is in one state, a prospective purchaser is in another state, and an agent making the offer to the purchaser on behalf of the issuer is in a third state.

Regardless of which state’s law governs the transaction, a security must either be registered with the securities administrator(s) of the applicable state(s) or an exemption from registration must be established before the security can be offered or sold in that state.


State laws provide a number of ways to register a security. It is important to note, however, that registration does not mean that the state has approved the securities being offered or passed on the accuracy or completeness of the information contained in any offering materials.

Rather, registration is a means by which states supervise the securities business being conducted there. There are three primary ways to register securities:

Notification. Only securities that satisfy conditions specified by a particular state can be registered by notification. In those states that permit registration by notification, the conditions typically require that the issuer of the securities be an entity that has operated continuously for a prescribed number of years and that during the prescribed period the issuer has met prescribed earnings criteria. To register securities by notification, the issuer usually must file with the state securities administrator a statement showing that the securities are eligible for registration by notification. The statement must contain the issuer’s name and address, a description of the security, the total number of securities being offered and the number being offered in the state in which the statement is being filed, the offering price, and a copy of the offering document pursuant to which the securities will be offered. Once the statement has been filed and the filing fee has been paid, the security is registered and the offering can begin.
Coordination. Securities that are being registered with the Securities and Exchange Commission under federal securities laws can be registered by coordination in most states. To register, the issuer files with the state the same registration statement that it files with the SEC. The issuer will also be required to file its organizational documents (the articles of incorporation and bylaws for a corporation; the certificate of limited partnership and partnership agreement for a partnership), and any underwriting agreements. The securities administrator may also require the issuer to file additional documents. Registration by coordination is generally effective (meaning that the issuer can begin selling the securities) at the time the SEC declares the registration statement effective, provided that the registration statement has been on file for the required number of days (typically about ten).
Qualification. Any security that cannot be registered by some other means and that does not qualify for an exemption from registration must be registered by qualification. The issuer must file with the securities administrator a registration statement describing, among other things, the issuer’s business, management and financial results. The registration statement must be accompanied by specified documents, such as agreements with underwriters, organizational documents, financial statements and a consent to service of process. The issuer must also pay a filing or registration fee. Registration usually becomes effective upon the order of the securities administrator or commission.

Since registering securities can be an expensive and time-consuming process, it is frequently desirable to find an exemption from registration.

There are two categories of exemptions: exempt securities and exempt transactions.

Exempt Securities. Certain kinds of securities do not have to be registered because they are considered to be of such high quality that regulation is not required or because regulation is achieved through some other method. (Note that even though a security is exempt under state securities laws, other state agencies may regulate the sale of securities by certain classes of issuers, such as banks, utility companies and insurance companies.) Exempt securities generally include securities issued or guaranteed by the United States, any state, a bank or savings and loan organized and supervised by a state, securities issued by a public utility, and securities listed on a major stock exchange or the Nasdaq National Market System.
Exempt Transactions. The states have adopted a number of transactional exemptions, that is, exemptions that apply to a particular sale but that do not permit the security sold pursuant to the exemption to be resold; any subsequent resale would be subject to the registration/exemption rules. There are transactional exemptions that apply for initial issuances by the issuer and others that apply only to the resale of securities by parties other than the issuer. Transactional exemptions vary dramatically from state to state. The exemption most commonly relied upon by issuers is the limited offering exemption.
Virtually every state has adopted some form of limited offering exemption permitting an issuer to sell securities to up to a specified number of people (generally 35) during a one year period. The specifics of the exemption vary from state to state. In some states the limit on the number of purchasers also applies to the number of persons to whom the issuer can offer to sell securities. Accredited investors are typically not included in calculating the number of purchasers. Accredited investors are entities and individuals who are considered sophisticated and knowledgeable enough to fend for themselves without the protection of the securities laws. The term “accredited investor” generally includes banks, savings and loans, registered brokers and dealers, insurance companies, registered investment companies, individuals who meet specified wealth criteria (typically an individual must have a net worth of at least $1 million or annual income in excess of $200,000 to be an accredited investor), certain trusts, and directors, officers, and general partners of the issuer.

Many states place no limit on the dollar amount that can be raised in reliance on the limited offering exemption. There are, however, a number of requirements in addition to the number of purchasers limitation. Some states require that even unaccredited investors who are included in the maximum number of purchasers meet income or net worth tests, although these standards are much lower than the accredited investor requirements. Also, the securities usually cannot be offered through any form of general solicitation or advertisement, such as television or newspaper ads, but can only be offered to persons with whom the issuer has a pre-existing relationship. The purchasers typically must buy the securities for investment, that is, with the intent to hold the securities for the foreseeable future. In many instances, the issuer cannot begin offering the securities to prospective purchasers until it files with the securities administrator an offering document that sets forth all the material information about the issuer, and the issuer may be subject to a waiting period after filing the document before it can sell the securities. Also, the issuer is prohibited from paying any commission or remuneration for sales of securities. (This prohibition would not typically prohibit the issuer from paying to employees their regular salaries, even though the employees may be assisting in the selling effort.) Finally, the issuer may be prohibited from using the limited offering exemption if it or persons associated with it has violated the federal or state securities laws. For example, an issuer is usually prohibited from using the exemption if one of its directors or officers has been convicted of a crime involving the purchase or sale of securities within five years of the securities offering.


Regardless of whether a securities offering is exempt from registration, state (and federal) anti-fraud provisions will apply to the offering. These provisions require the issuer to provide to all prospective purchasers all material information about the issuer and the securities to allow the investors to make an informed investment decision. Information is material if a reasonable investor would consider the information important in making an investment decision. While materiality is a difficult concept to define precisely, at a minimum, a fact is “material” if the issuer does not want to disclose the information because if the investors knew about it they would not buy the securities. Facts that are disclosed must be developed fully. For example, the issuer cannot state that it owns a building and not disclose that the property is subject to a mortgage, a fact that does not conflict with ownership but affects the economic value and other attributes of ownership.

The anti-fraud provisions collectively prohibit any person in connection with the purchase or sale of any security from (a) employing any device, scheme or artifice to defraud, (b) misrepresenting or omitting a material fact or (c) engaging in any act or practice that constitutes a “fraud” or deceit upon any person. Fraud, for securities law purposes, is much broader than one might think. It includes omissions in disclosure (sometimes even unintentional ones) rather than just deliberate misrepresentations. Therefore, regardless of whether the issuer intends to defraud an investor, if it fails to disclose a material fact, it may be liable.


In addition to finding an exemption for the security or the transaction in which it is issued, the person selling the securities may be required to register with the state as an agent or broker-dealer. The term “person” in this context can include the issuer and any individuals involved in the selling process, including the issuer’s directors, officers, partners and promoters. (A promoter is a person who takes the preliminary steps in founding or organizing a corporation or other entity, such as filing articles of incorporation with the secretary of state and soliciting subscriptions for securities of the entity.) An agent is generally an individual who represents a broker-dealer or an issuer in buying or selling securities. A broker-dealer is generally an individual or entity engaged in the business of effecting offers, sales or purchases of securities, but an issuer cannot be a broker-dealer. Broker-dealer and agent exemptions vary from state to state, but the issuer and its officers and directors or partners will in many cases qualify for an exemption.


Failure to comply with the registration requirements or the anti-fraud provisions can result in civil liabilities (i.e., money damages and civil fines) and, in the case of knowing and intentional violations, criminal penalties. Purchasers of securities that were sold in an illegal or fraudulent offering may rescind the transaction and recover the purchase price from the issuer. In some circumstances, purchasers may also be able to recover their legal fees and other expenses. Alternatively, the purchaser can keep the security and sue for damages.

Any person involved in the offering, including partners, officers, directors and promoters, is subject to criminal and civil liability for non-compliance. A purchaser may choose to pursue his or her remedies against the individuals involved in the offering. These individuals generally can avoid liability if they can prove that they did not know and could not reasonably have known of the facts upon which liability is based. Issuers are strictly liable for securities violations, however, meaning that even if they did not and could not know of the violation, they are liable for illegal or fraudulent offerings.


Each state’s securities administrator has a staff that is available to answer questions from persons interested in offering and selling securities in that state. A brief telephone call to the staff to discuss the issuer’s plans with respect to offers and sales in that state should give the issuer a good idea as to whether an exemption is available and what the general requirements for the exemption are. However, since the laws and regulations concerning securities offerings are complex and the consequences of non-compliance severe, is advisable for any business considering the sale of securities to consult an attorney specializing in securities law.

Managing Your Expenses

Jul 8, 2016   //   by admin   //   Credit Information  //  No Comments

It can be quite a challenge to eliminate your debt. In order to free yourself from debt and live a life without additional stress your bills have to be paid. To achieve this you will need to create a plan starting with prioritizing which bills have importance over others. You will also need to play investigator and find out a bit more information on the creditors that are sending you the bills. Which one is charging you the most interest? Once you find out which company is charging you the highest interest rate you should work towards eliminating this bill first. The reason you will want to pay off the higher interest bills first is because the less you pay on them and the longer they are outstanding the bill will only grow overtime. The quicker you pay off the higher interest bills the sooner you will notice that your credit score will improve. This rule of thumb should be applied to all of the additional bills as well. Put them in order by which carries the highest interest and pay them off in that order. Also make sure to pay off ones that are past due as well since you may be charged a penalty for being late.

You will want to analyze your personal budget or combined household budget if you are married. Create a list of any personal expenses for each month. This list should include normal expenses such as electric and gas bill, groceries, childcare, lawn expenses, or any other type of expenses such as eating out, shopping allowances, etc. You will then want to create another list for any monthly income that you receive including salary, bonuses, or other monthly income that you may generate on the side. Compare the two lists in order to remove things that are not must have expenses. Thing s such as eating out, shopping trips and hiring someone to mow your lawn can all be cut out. Anything that you pay others to do for you that you are able to do for yourself such as haircuts, mowing your own lawn, cleaning your house, or walking your own pet can save you a ton of money overtime. This extra money can be used for debt elimination and will help you in the long run.

Eliminating Debt by Lowering Your Monthly Bills

Jul 2, 2016   //   by admin   //   Credit Information  //  No Comments

If you are currently working on debt elimination there are many things that you can do to save money. One of the biggest things that you can save money on is by cutting down on the amount that you pay on utilities and other bills each month. This will not only give you more money to pay off debt but will also give you more funds to work with in the future. To start with compile a list of all of the bills that you pay each month including luxuries such as Satellite TV, gym membership fees, and other things that are not essential. Some of the most common things that you can cut out are dining out which can dramatically lower your monthly expenses.

When it comes to utilities such as gas and electric you can start by lowering the thermostat or turning off the air conditioner all together. If the weather permits trying opening the windows to keep your home cool instead of constantly running the air conditioner or ceiling fans. Wearing an extra layer of clothing in the winter time will allow you to keep warm without having the heat turned up full blast. Spend the small amount of money to ensure that all windows and doors are properly sealed which will also help to keep your home properly heated or cooled depending on the season. Making sure all leaks are repaired can also help to keep your home insulated properly.

The next thing to consider is the type of Internet, phone, TV, and cell phone bills that you have. If you and your partner or children all have cell phones it may be worth it to look into new providers in order to save money on them. If possible try cutting off a few of the lines until you have extra money. You may also consider doing away with your home phone and using your cell phone for contacting others. There are many companies that offer a special price for customers who have Internet, Phone, and TV services through them. Contact your local provider to find out if they offer any type of bundle price. You can often save hundreds of dollars per year with a bundle instead of paying for each service individually.

Making small changes in your life will save you money which will add up to a large amount over time. This gives you the extra money you need to help with debt elimination and to help pay off those high interest credit cards that you may currently have. This may seem drastic but will prevent you from being put into foreclosure or from filing bankruptcy.

Good Books for Beginner Investors

Jun 30, 2016   //   by admin   //   Credit Information  //  No Comments

Good Books for Beginners

It is common for people who are starting at investing to want to learn more. Below we have listed some recommended books that we think are excellent for beginners. As we find time to read, we will add any new books here that we think are of value to the beginning investor. We don’t sell books and we don’t get paid by the publishers. That means that our advice is unbiased. It may not be perfect, but it is honest. The opinions are only those of the reviewer. Of course if you simply can’t find a listed book in your local bookstores, send us a note. (We may need to be in the book business and just don’t know it yet). The date and number of pages (where listed) are from our copy. There may be later editions available.
We have a bias towards individual stocks. Consequently, you may not see many (or any) books here on mutual fund investing, futures, commodities, etc. If there is a reader with specific books they wish to recommend, please contact the webmaster to submit your review for publication on this page.

If you know nothing about managing money.

Get one of the many “basic” money books. We don’t have a specific recommendation, but they are all essentially comparable. They write about income, savings accounts, checking accounts, mortgages, car loans, health insurance, life insurance, home insurance, saving for college, stocks, bonds, savings bonds, taxes. They don’t cover anything very deeply, but they paint a broad picture for people new to managing their money. This includes young people, the newly divorced or widowed, and the newly out of poverty. They are not a good place for investment advice as a rule, if only because they over-simplify the issues.
So you want to buy stocks. (Stocks 101)

One Up on Wall Street by Peter Lynch

In my opinion, the number one best book for beginners. One of the most famous money men of the 1980′s, Mr. Lynch retired from manager of the Fidelity Magellan Fund after making it the largest mutual fund in history. He covers the basics of reading an annual report, and tells you how to do fundamental research on a company. What to ask when you call. Who to call. How you can get maximum benefit of your advantages over the wall street crowd. It is very easy to read and good use of anecdotes makes it fun.
Stocks 102

In no particular order, here are a few of our favorite books for your second view on investing.
Winning on Wall Street by Marty Zweig

This was my first exposure to a numerical approach to the market and to market timing. Marty Zweig is one of the recognized masters of monetary market analysis. He clearly explains classic investment maxims such as “Don’t Fight The Fed” and “The Trend Is Your Friend”. Not the visual technical analysis rooted in “head and shoulders formations”, his approach is one of extremely quantitative economics and market measurements. Instead of mastering his emotions, he strives to eliminate them from his investment decisions. If you want to learn traditional technical analysis and stock charting, this is not the book. But if you are a fundamental investor, and want to learn a bit about market timing, this book might be for you. 1990 – 288 pages
The Warren Buffett Way by Robert Hagstrom

A relatively quantitative analysis of the strategies of one of the great investors of our time. The book was prepared without the assistance of Warren Buffett, but does an admirable job of describing his investment philosphies and how he did what he did. Several of the most basic Buffett paradigms are covered, including the very important concept of “Owners Earnings”. The author also illustrates the owners earnings and future value concepts with several spreadsheets at the back of the book. This book will probably teach you a great deal, but leave you wanting more. 1994. 262 pages.
How to Make Money in Stocks by William J. O’Neil

reviewed by Bob Bradley
An excellent book for beginners, novices, and professionals. Covers everything from picking good, strong companies to using charts and watching price action. Shows how, using William O’Neil’s proven CAN-SLIM stock selection strategy, to pick the winning companies and avoid getting mislead by faulty indicators and advisor recommendations. Gives in-depth explanations on how to use price and volume to see exactly what a stock is doing and why. Shows how to use stock charts to recognize and interpret winning price patterns and weed out the faulty patterns glamorized by so many professionals. Also has a large section on determining the general market direction and when tops, bottoms, and intermediate declines occur and why. In my opinion, the best single source of information on making money in the stock market.
It’s Not What Stocks You Buy, It’s When You Sell That Counts by Donald L. Cassidy

The subject of selling and actually collecting your profits has only been dealt with a few times. Covers quickly the numerical aspects of selling stocks. But primarily it deals with the emotional bariers to successful stock investing. How to recognize the impact of your ego, separate your cost basis from your selling decision, how to recognize the greed trap, and contrarian thinking. How the characteristics of the stock affect your selling tactics. Bad stocks of good companies. A very easy writing style, with short, very focused chapters. 1991. 299 pages.
Market Wizards – Interviews With Top Traders by Jack D. Schwager

Jack Schwager has written a best seller by interviewing some of the most successful money managers, traders and investors of this era. These are not the Peter Lynches and the John Neffs (see John Train’s The New Money Masters for them). Jack interviewed traders in a variety of areas, including stocks, options, futures and t-bonds. Some are pit traders, and others lock themselves in their office. A great book to understand a variety of thought processes, temperaments, and strategies, all of which can be successful. The bottom line on the book is for each investor to find her “style” and then stick with it. 1989. 456 pages.

When Debt Consolidation is Necessary

Jun 24, 2016   //   by admin   //   Credit Information  //  No Comments

For many individuals who work hard to make sure their bills are paid can become overwhelmed when making ends meet becomes tougher while bills continue to grow. When you find that paying all of your bills on time or not at all it may be time to consider debt consolidation. This normally means that your credit card debt is so out of control that you’re residential living bills are being pushed aside in order for you to be able to cover the revolving debts. This is a point that you do not want to get to but it does happen and if changes are not made quickly it can cause extreme hardship on you regardless of how hard you try to dig your way out of debt.

If you have reached the point of being unable to pay the minimal credit card debt without dipping into your residential pay structure it is time to consider debt consolidation. We have gathered a few basic signs that will alert you when debt consolidation isn’t just a desire but a necessity as well. Read over the listed information in order to determine if you and your family are currently in distress and may need to rethink your game plan when it comes to debt elimination. If you think that you are in over your head it may be time to contact a debt consolidation specialist who will offer you a free consultation.

- Unable to pay the minimum balance for credit cards

- Unable to pay off the entire balance of your credit cards

- Your credit card debt is larger than your monthly salary

- Your credit card is being declined

These are few things that you may be experiencing if you are deeper in debt than you realized. Many individuals know they have debt but have it in their mind that they can work their way out and that it’s not a serious issue. In fact many families are forced to file bankruptcy or foreclosure due to not being able to rectify their current debt situations. A debt consolidation specialist normally contacts all of your creditors in order to get you a lower payoff amount and then compiles all of your bills which will allow you to pay a single amount each month instead of paying different bills you will only pay one.

Stock Purchasing for the Independent Small Investor

Jun 18, 2016   //   by admin   //   Credit Information  //  No Comments

Start Small, End BIG!

Are you ready to invest in individual stocks?

Here are the main things you should make sure you’ve done before you plan your initial purchases for your small portfolio:
Spend some time reading some of the books suggested elsewhere on InvestorWeb (Lynch, Graham, Hagstrom, etc.).
Spend time doing your homework on the companies you are interested in. This includes reading financial statements, reading reports, doing some work on finding independent information about them;
Pick out a few companies whose financial situation, competitive situation, management, and price you like.
Make sure you are ready for a long term hold of up to 5 years or even more.
Make sure you will not bolt at the first sign of share price volatility.
Do I need a full service or a discount broker?

To buy stocks, you will need to have a brokerage account. There are three main kinds of brokerage services: a full-service broker, a discount broker, and a deep discount broker. The full service brokerages cost more because they offer complete service to the point of suggesting what companies you could choose to invest in. Because you are making your own choices about what companies to invest in, the full service brokers offer you a service you don’t necessarily want, so why pay for it?
For a beginning investor who wants to make independent decisions, what is called a discount broker, or what I call a “some service” broker, like Charles Schwab or Waterhouse, is probably the best way to go. As little as $1000 will open a brokerage account at these “some service” brokers. The “some service” broker makes available to you, for small fees, objective company reports, industry reports, stock quotes, and other information that can benefit the independent investor in a timely manner. These “discount” brokers are also willing to hold your hand a little bit (though not a lot) through investment transaction decisions (such as an all or none execution).

The deep discount brokers, on the other hand, offer you a great deal at lower prices, but they have no patience nor desire to serve beginners. These deep discounters are meant for very experienced investors. You pay a little more at a “some service” broker, but for an independent beginner it is worth it.

Why shouldn’t I buy stocks for short term holds?

Unless you use illegal information, or are blessed with ESP, you probably won’t make money doing this with a small portfolio in the long run. You can’t make money trading in and out of just a few thousand dollars worth of shares. The commissions alone will kill any chance at profit if you do this. Also, although experienced investors know that it is possible to be smarter than the big bulls or bears of Wall Street, it is just not possible for a small investor to be faster than they are.
How much cash do I have to accumulate before I can begin buying stocks?

The small independent investor can start, I think, with as little as a few thousand dollars to invest in two companies.
Why only two companies? Don’t I need to diversify to spread the risk?

This is a matter of some debate, but if you, for example, only have $5,000 to invest, it isn’t worth the commissions you generate to jump on board to buy $500 worth of 10 stocks all at once. And, the investor who puts $5,000 into the market today is likely to have more to put into the market tomorrow (after all, no one ever spent their last dollar on a share of stock). Therefore it is best to start with a few issues and then decide to build from there up to a larger (but not too large) number of individual investments. If you are investing a windfall such as an inheritance, or a retirement payout, you definitely need to think about whether it all belongs in the stock market! Even once you do decide what amount of money you want to put in the market, you don’t need to feel compelled to put all of your allotted funds into the market all at once.
So, I invested $5000 in two companies. What now?

Hold onto them! And check on a quarterly basis how they are doing. Also consider the basic questions about the business about every six months. Are their earnings steady? How do the company’s financial statements look — are there any pleasant or unpleasant surprises? Has the company launched new products? Are they maintaining market share? What are their competitors doing? Read what you can about the company, and not always just what the company tells you in its annual reports. This is where the information services offered by a “some service” broker come in handy.
If you continue to consider the company a good one, make a decision to keep it. The adage that “it doesn’t cost anything to take profits” is not that true for the small independent investor. Why would you sell shares of your favorite company at a good price when all logic told you that because the company was strong, the shares will go to a higher price? If the shares seem cheaply valued or fairly valued, consider buying more shares when you can.

Or, if you find another company that spreads your interests out a little more and that also looks to be a high quality company, and seems fairly valued, then buy shares in that company.

Here’s an example that is not too far-fetched if you successfully invest that hypothetical $5,000 in two companies and were able to add a subsequent $5,000 investment to your portfolio every year. If you split the annual $5,000 of new annual funds between investing in a company in which you already hold shares and in a company you have not invested in before, nine years later you will have invested $50,000 in a total of 11 companies.

In possession of a portfolio with an initial investment of $50,000, and hopefully worth a whole lot more, you are no longer a small investor!

As you can see, there are as many possible combinations of this pattern as there are investors. If history is any guide, even if you make some mistakes along the way, the value of your thoughtfully selected shares will hopefully increase to a value well over $50,000.

How many companies should I invest in?

For an independent investor who spends time periodically checking the company’s “story,” it depends. Typically, though, I’ve found that people will find a comfort level in investing in between 5 and 10 issues over time. This way they can follow events at these companies without it being a full time job, and their investment funds are spread out enough as to not put too many expectations on just one or two firms.
Where is the disclaimer?

I am qualified to hold opinions (aren’t we all), but I am not qualified to serve up professional advice. This is not professional advice and I haven’t been paid for this. This article is based on opinions that I hold, and is not to be considered an offer or enticement to buy, sell, trade, or actually *do* anything whatsoever. The companies mentioned in this article are not endorsed by me, they are mentioned here to serve as an example or illustration of my opinion.

Financing Your Project 101 – Profit by Proper Preparation

May 27, 2016   //   by admin   //   Credit Information  //  No Comments

To proceed with a project which is heavily “Investor oriented”, there are (1) several materials will be needed, and (2) you will have to be aware of the process of raising investor capital, as a method of financing your project.
You will first need an Executive Summary, one or two pages long, which tells what your project is, why you have chosen it, and other details that will arouse an investors curiosity, including how the investor may expect to be rewarded. This will be used to secure presentations to investors.

Then you will have to outline your responses to the investment and risk items that you will have to support: The forecasts, back-up information, the desirability of the project. You can’t make unfounded promises, and much of this information you will have to impart personally in front of an investor, who will expect knowledgeable, thoughtful answers. It may be advisable to translate this into a marketing brochure or business plan.

Then we will need a full-blown Prospectus. By the time a project, requiring the capital funding that you are seeking, is ready for presentation to investors, it must be thoroughly documented and summarized. It is not unusual for such a summary, variously referred to as an Offering Memorandum, a Private Placement Memorandum, or a Disclosure Letter, to be 50 or 100 pages long. This document will spell out to an investor, with a high degree of detail, all the terms and risks of the proposed investment.

You should do as much work as you can, and then consult a good corporate attorney and a CPA, both of whom should be well practiced in doing these Private Placement Memorandums.

Investors spend most of their time studying the “projected performance exhibits” or “Pro-Formas, as they are commonly called. They tell the investor what return on investment (ROI) to expect. He will look at it’s internal rate of return (IRR) as well as the time value of money, so if you are not familiar with financial matters, I suggest you get top quality assistance.

Your most important effort is to develop a solid and understandable forecast of investor returns. Remember, everyone is chasing money, and an investor won’t give you the time of day if he can’t understand what he will get, or if it is not competitive with other memoranda he is reviewing.

The investor has many opportunities for his money, and sees many of these Private Placement Memos. To make yours stand out, you should work on completing the financial forecasts, and then work up the tax consequences and other back up information to give them credibility and support. Anyone can make generous estimates of revenue from the project they are proposing. Therefore, the Memorandum that may move the investor to participate may be the one which is based on (and includes a copy of) a persuasive outside market study which shows a documented market demand, supports the revenue projections, and demonstrates that the financial forecasts really are conservative.

Stressing the scope of effort needed to raise capital through an offering is not meant to discourage you. Nor do I suggest the expense of attorneys and accountants lightly. You need to review the availability of seed capital for retainers, as I don’t think you can do a proper prospectus without them. You will ultimately have to disclose, in writing, information that is accurate, and for which you will be legally liable. As project director you will be responsible for the accuracy and completeness of any and all information delivered to prospective investors.

Investors are invariably interested in data which demonstrates the success record of the participants in a similar prior enterprise, or if this is a first effort, that you have retained management consulting experts whose skills and availability will assure them that the project will have skills and experience you cannot demonstrate to possess. Their credentials must be included.

Investors typically expect their funds to be locked up for no more than five to seven years. You must develop an “investor exit scenario”, which could be a planned sale of the project, or a take-out commitment from a lender, etc. You will undoubtedly identify other areas which you need to resolve, as you work out the Memorandum. You may not even know they exist until you have made considerable progress in developing it. You must be prepared to answer all possible questions, because you rarely get a second chance with an investor. Lack of completeness translates into doubts to the investor.

A few last words. Most of the investors I am associated with, indeed most investors, will not be hurried. You must have holding resources while they are reviewing your proposals, and holding reserves while starting up. Your project has to be good enough to get early acceptance. Projects that have been around for a while, or have been shopped extensively, have little chance of being funded, ever!

You will profit by proper preparation!

Frugal Living

Apr 22, 2016   //   by admin   //   Credit Information  //  No Comments

There are many ways to successfully eliminate debt. The best way to live a debt free life is to prevent it from ever escalating. Choosing to live debt free is the first step in financial freedom. Paying with cash and living frugal is two ways that can help you to live a happy life and allow you to build a budget for things that are really important. Living debt free isn’t as easy as it sounds so it takes determined individuals to be able to succeed at doing so. It will require a commitment from you to purchase only necessities and very few wants in life in order to stay above the game. Living frugal normally comes with a complexity that many of us may find hard to deal with. If you are careful about what you purchase you may be referred to as stingy, tightwad, or even selfish which may be a hard stereotype to shake but be strong and deal with it. While many individuals may believe you are depriving yourself by living frugal they are missing out on the real benefits that come along with this lifestyle. This will allow you to grow into a responsible individual giving you the resources and platform needed to make informed decisions throughout your life. There are also many consequential environmental and economic benefits from this lifestyle as well. There is nothing bad about eating healthier or putting your resources to good use.

Managing your money before you spend it will allow you to purchase only the things that you really need and occasionally splurging on things that you want. By having a financial plan for yourself you can save money overtime allowing you to purchase the things that you really want such as a house, new car, pay for education, and even luxury vacations from time to time. Maybe you intend to start a business when you have received your degree but how can you do it without no startup money. If you budget yourself properly you will have the cash when you need it.

If you are constantly spending money that you do not have or spending more than your monthly salary you will have a hard time being approved for future loans. You may also put yourself in a bind where you will have to work fulltime or get a second job just to keep your head above water. This will prevent you from getting the degree that you want or spending time doing other things that you enjoy.

With each passing decade more and more individuals are falling into debt due to a failing economy and overspending. Relying on credit cards for normal living expenses or necessities is becoming routine for many households which is not a good thing. The overspending happens when new products such as digital cameras, computers, gaming systems, cars, or other high ticket items that we think that we must have just because they are the new thing. When a new item is first released the price is always elevated from what it will be within just a few months but many individuals rush to be a part of the crowd that has to have it first. By being patient you can get that exact same item within a few months when the hype is over and the item is being replaced with something new. This may not be ideal but will save you a ton of money overtime.

A typical shopping trip can put you over your budget if you are not careful. When shopping for groceries, household items or personal items such as shampoo, makeup, deodorant, garbage bags, cleanings supplies, and other related items you may consider buying in bulk or changing brands. Many stores carry their own brand at a much cheaper price than the name brand but are basically the same thing without the label. Why pay $12.00 for a pack of toilet paper or paper towels when you can pay the exact same amount and get double the product when purchasing the store brand? This goes for other things such as clothes, groceries, and other products that you buy regularly. Using things such as coupons can help to save you money.

There are so many things that you can do in order to save money in order to build a savings account or pay off debt. Save on gas by walking to close locations, riding a bike or car pooling with others. Save on your utilities by paying for bundles that normally include TV, Internet, Phone, and occasionally cell phones. Save money on your electric and gas by ensuring that your home is properly insulated. Only use the heat or air conditioner when it’s absolutely necessary. You can save a ton of money by only having one vehicle for your household. This will eliminate the costs that are associated with tags, insurance, repairs, taxes, and regular maintenance.

Frugal living isn’t for everyone for those who do choose this lifestyle often have a stable life when it comes to finances and spending. They have the ability to save and manage money which is an important part of being free to make choices or purchases that many others do not have the luxury of doing.

Debt Elimination

Apr 15, 2016   //   by admin   //   Credit Information  //  No Comments

Debt elimination is something that can take months or even years to accomplish but can be done with persistence and patience. The first step in financial freedom is determining how you ended up in debt to begin with and how to prevent it from getting worse. You will want to examine your financial history including current monthly salary, monthly expenses, and expenses that you can eliminate.

What caused you to go in debt? Did you lose your job? Are you spending too much money on unnecessary expenses such as eating out, new clothes, vacations, secondary cars, etc.? There are many reasons why individuals fall into debt but often it could have been prevented by being more responsible with their money.

You cannot change the past but you can change how the future plays out. Once you have determined why you are in debt to start with you can use that to avoid making the same mistakes. The next step is to make two lists of expenses. The first list will be for expenses that have to be paid such as utilities and the second list should be used to determine expenses that are more of wants instead of needs. Total the two and compare them to your monthly salary. For most individuals that are in debt are spending more than they need to on luxuries that could be cut from their spending which could be used to pay off debt.

Expenses that can typically be cut includes things such as eating out, shopping trips, cell phones, vacations, gym memberships, massages, hair salons, casinos, movies, and other types of luxuries. While this may not be one of the easiest things to do it will give you extra money needed in order to work on your debt elimination. By eliminating these activities from your life you will be able to create a savings account that will eventually allow you to manage your debt successfully. Living frugal for a few years may not be easy but will definitely help you to become financially stable and free of debt.

For those individuals who are deep in debt and cutting expenses just isn’t enough you may need to consider other options available to you. Debt relief can come in many forms including debt settlement, debt consolidation, and even bankruptcy as a last resort. The one thing that you want to avoid if at all possible is bankruptcy. Debt consolidation will allow you to consolidate all of your bills into one place instead of having them scattered in different areas. Many individuals find that it’s much easier to eliminate debt if they have to pay only one bill instead of several. Debt settlement is an option that allows you or a hired specialist to negotiate with the creditors to get you a pay off amount for each bill that you owe. Most creditors are not happy with debt settlement but will work with you if it means preventing you from filing bankruptcy which will leave them with nothing in the end.

Regardless of which method you choose for debt elimination you will want to always pay off high interest rate debts first. The longer it takes you to pay these off the more money is tacked on to the owed price in the form of interest rates. Paying off the higher interest rate bills should be your first priority since it will help to reduce your payout amount each month and also help to improve your credit score.

Debt elimination is important for many reasons other than being able to afford to live a stress free life. If you plan on applying for loans in the future for things such as purchasing a home, car , starting a business, or attending college you may be shocked when you are denied due to having a horrible credit history. A clean credit history or at least one that has been repaired can weigh heavily on your future in more ways than one. It can also affect others in your home such as your wife or children so make sure to do what you can to prevent and eliminate debt as it happens.