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Posted by on Oct 14, 2014 in Blog, Finance & Money | 0 comments

Being A Socially Responsible Investor: Your Money, Your World.

When you have strong feelings about something that you believe is important to our world–the preservation of natural environments for wildlife, the use of alternative energy, human rights, or anything else–you don’t want to invest your money in a company that violates your beliefs. Learn how being a socially responsible investor might be right for you.

It’s Not All About The Money

Yes, you want to make money. You wouldn’t be investing if you didn’t think that you could increase your future retirement fund. 

However, when you decided to invest in your future and the future of the world you live in, you have to accept the possibility that the financial returns on your investments might be lower than if you simply hand your money to an investment firm, shut your eyes and say, “Put it where it will make the most money.”

The reason the returns on your investments might be lower when you decide to invest in a socially responsible way is that the companies that support your beliefs may not be big enough (yet) to have the same revenues that larger firms do.

What Is A Socially Responsible Company?

Social responsibility is still a new concept in the corporate world, but it’s basically a belief that a corporation has a duty to contribute to the communities it’s in, the country as a whole, or even the entire world.

For some corporations, that means taking some of their profits and giving it to someplace most people would see as important. An example would be a company that takes 1% of all its sales and gives that amount to a charity that feeds the hungry.

Then, that company publicizes what it’s done, and the publicity makes people more inclined to buy more from that company later. The small amount that the company contributes toward the charity doesn’t make a big dent in its profits, and the money it earns by publicizing its charitable efforts actually helps profits in the end.

It’s a cycle that both benefits society and benefits the company, in the long run.

Other companies take the idea of corporate responsibility even further and put their social responsibilities first, their profits second. An example would be a company that only uses beef that hasn’t been treated with steroids in its food, even though that beef costs more.

The company can pass a little of that cost onto consumers by pricing its food higher but has to absorb some of the cost itself. That reduces its profits quite a bit, especially because those sorts of companies tend to be smaller than their competitors.

Where Do You Start?

Luckily, it’s easy to figure out where to invest your money in order to be socially responsible. You can do several things:

  • Check listings online through sites dedicated toward the socially responsible investor.
  • Check with any organizations you support for a list of its donors.
  • Look through a company’s website to see what it says about its investments
  • Talk to your investment company. If you use an investment firm, you want to make it clear what you are, and are not, willing to invest in. For example, you could tell the investment firm that you don’t want to invest in any tobacco companies because you believe smoking is bad, but you want to invest in natural hemp products where you can.

There are a lot of small ways you can do your part to change the would that you live in, but one of the most effective ways is giving your financial support to companies that believe in the same things that you believe. It’s your money, after all. Why shouldn’t you invest it where you think it’s going to benefit both you and your world?

For more information, contact Painter Smith and Amberg or a similar investment firm.

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Posted by on Oct 13, 2014 in Blog, Finance & Money | 0 comments

The Quick-Cash Loan Guide: What You Need to Know Before You Borrow

Quick-cash loans such as those offered by payday and auto title lenders can help you out of a tight bind by getting you cash in 24 hours or less. In return, you pay interest on the amount you borrow and promise to repay the loan within 30 days. Although quick loans can solve immediate, short-term money problems,  they can also land you deeply in debt if you don’t borrow responsibly. Use this guide to determine whether a quick-cash loan is the best choice for you.

1. Loan Basics

Payday and auto title loans require an application that asks for your Social Security number, income, bank account number and contact information. There’s typically no credit check.

Auto title lenders also collect information about your car, because you’ll use it as collateral for the loan. This means the lender can take your car if you don’t repay the loan. You must have a clear title with no liens to qualify, and the car must meet the lender’s minimum value standards. The lender may or may not hold the title until the loan is repaid, but either way, the loan constitutes a lien on your title. This means the lender has ownership interest in your car, so you can’t sell or give your car away until your loan is repaid.

Quick loans are usually repaid by a pre-arranged direct debit from your checking account 30 days after you borrow the money.

2. Nonrepayment

Payday and auto title lenders usually allow you to roll over your loan if you’re unable to repay it on the due date. Payday loans often roll over automatically when the borrower misses the due date. However, you may need to contact your auto loan lender to arrange a rollover; otherwise, the lender can repossess your car.

3. The Cost of Borrowing

Payday and auto title loans usually cost about 25 percent of the amount you borrow, according to Bankrate.com. That’s assuming you pay on time.

The annual percentage rate is higher. The APR is the total amount you’d pay if you were to keep the loan for a year or longer, as would be the case if you rolled it over. APRs of as much as 300 percent are common, Bankrate notes. However, as long as you repay the loan on time, your actual percentage rate is likely to be closer to 25 percent.

4. The Costs of Borrowing Vs. Not Borrowing

An interest rate of 25 percent is very high if you’re borrowing the money for a non-necessity. If you’re borrowing because you’re in a temporary crunch and are in danger of missing credit card payments, on the other hand, 25 percent might be a bargain compared to the fees the credit card companies charge for late payments.

The quick loan might also work in your favor if you need a car repair that, if not made, would result you having to take public transportation or rent a car, or you’re facing eviction and have no other way to raise rent money.

5. Shop Around

It pays to compare loan costs and terms before you commit to a particular lender. Although the APR is the best tool for comparison because accounts for all loan costs, it assumes you’ll miss the due date and pay the loan for at least a year. If you’re confident that you’ll be able to repay the loan on time, give equal weight to the lender’s standard costs, which include the interest rate plus any upfront fees.

If you’re taking an auto title loan, also consider whether you’re required to increase your insurance coverage or purchase add-ons such as a roadside service policy.

Payday and auto title loans can be good, short-term solutions to short-term money problems. Used responsibly, they can give you the breathing space you need to get your finances back on track.

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Posted by on Oct 11, 2014 in Blog | 0 comments

What You Need To Know About Creating Cash Flow Statements For Your Small Business

One of the biggest considerations for investors and creditors is your company’s cash flow statement. It is a straight-forward look at where your money is going, and it isn’t affected by accounting adjustments like amortization and deferred taxes. Cash flow statements show your company’s position in terms of access to cash and the way that cash is used. If you’ve never created one, building your first cash flow statement can be intimidating. Here’s a look at each section of the cash flow statement and what you need to put into it.

Cash from Operating Activities

The first thing to focus on in your cash flow statement is the cash generated and spent in the activities associated with routine operations. In this section, you’ll illustrate the changes in the account balances for all of your current assets as well as the current liabilities. These are the accounts associated with your prepayments, unearned revenue, accounts payable and accounts receivable activities.

Cash from Investment Activities

In the second section, you’ll want to list the activities associated with investments. Include information about any property transactions as well as investment in equipment and facilities. All of your long-term investment accounts, capital equipment accounts and vehicles are part of this section. For example, if you operate a small diner, any investment in new kitchen equipment belongs here.

Cash from Financing Activities

The third portion of the statement focuses on your financing activities. When you buy stocks or bonds, it gets reported here. All of the company dividend payments belong here, too. Paid-in capital, retained earnings and notes payable need to be reported in this section as well. If you took out a loan with the Small Business Administration, that’s reported in this financing section.

Supporting Information

Sometimes, significant changes in your operations or in the way your accounts are handled can have a material effect on your cash flow. For example, if your tax liability changes significantly or you change your business operations, you need to make that known. The “Supporting Information” section is reserved for this.

The goal is to use this section to clearly identify any anomalies. It makes it easier for potential investors to evaluate your financial position this way, because they can identify any potential issues with the existing information and make educated forward projections.

When you understand what the cash flow statement sections mean, you can create a statement that will not only accurately represent your business but may also put you in a position where you can secure financing for growth and research. Work with an accountant or bookkeeping professional like Kamphaus Henning & Hood to help you finalize your records and create an accurate accounting report.

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Posted by on Oct 10, 2014 in Blog, Finance & Money | 0 comments

3 Things To Keep In Mind When Buying Gold As An Investment

Whenever the economy gets bad, people start looking for alternative ways to make investments. One of those ways is to buy gold. However, as with all investments, you need to think very carefully before you actually start investing in gold. Here are three things to keep in mind when buying gold as an investment.

1. The value of gold can change daily.

Some people are under the misunderstanding that the price of gold doesn’t change. However, this is not true. The truth is that the Gold Fixing, which is a group of five people in London, conduct meetings over the telephone twice a day to determine the value of gold. Even though they don’t do it to set the official value of gold everywhere, it is still used as a daily standard all around the world to determine the value of gold. 

Because of the fact that the value of gold can change daily, maybe even more than once in a day, buying gold as an investment is a lot like the stock market. You never know when the value of your gold is going to plummet or when it will increase significantly in value, which can be worrisome for some people.

2. There’s more than one way to invest in gold.

When you think of investing in gold, you probably imagine buying a lot of gold bars or even gold jewelry. While that can be a worthwhile way to go about it, it is not the only way to invest in gold. You can actually buy gold exchange traded funds (ETFs) through a stockbroker. This is a very easy way to invest in gold without having to keep anything in a safety deposit box or locked safe. You won’t have to worry about keeping your gold protected and hidden, so you can focus all of your attention on how well the ETFs perform that day.

3. Gold will likely always have value.

Unlike many companies that trade on the stock market, gold will likely never be worthless. If a company goes under, then their stock will have no value. However, there is nothing that can cause gold to depreciate in value to zero. Gold has been around as a form of money for centuries and has never been valueless. Even if a civilization didn’t value gold as a form of money, they valued it for jewelry and as a means for making household goods – and this is not likely to change anytime soon.

As with any type of investment, buying gold isn’t without its faults. Before you decide if buying gold is the way you should go with your investment funds, discuss all of your options with a reputable stockbroker or financial expert. For more information you can also consult an exchange company, like Rocky Mountain Gold & Silver Exchange.

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Posted by on Oct 8, 2014 in Blog | 0 comments

Why You Should Resist The Urge To Run Out And Buy New Furniture after Signing for a New Home Loan

You’ve been approved for a home loan with closing just days away. You sigh with relief thinking you are in the clear. But then your lender does a last-minute credit check and discovers that you’ve opened a new account to furnish your first home in style.

You are surprised to learn that the lender isn’t going to close on the loan. You ask, “How can this happen with the moving van packed and ready to go?” In your excitement over owning your first new home, you may not realize there’s a difference between signing the loan documents and actually closing on the loan. It’s a lot for a first-time home buyer to understand.

Lender Rights

Getting loan approval generally comes with conditions you must satisfy before the lender agrees to lend you the money to buy a home. Your credit standing is a key consideration during the loan approval process. Therefore, any changes to your credit profile up until the final hours before closing can delay or cancel the loan.

Charging new appliances and furnishings on your credit cards changes your debt-to-income ratio (DTI). Your DTI is how much of your gross monthly income you use to pay your bills. Along with your credit score, your DTI gives the mortgage lender a general idea of your overall financial picture. This helps the lender determine whether you are able to repay the money you borrow and are a safe risk for first time home loans.

Buying furniture by adding the debt to your charge cards raises your debt-to-income ratio. A high DTI means you have more bills to pay, which could make it harder for you to make your mortgage payment on time each month.

Until you actually close on your home loan, it’s best to keep your DTI low. Most lenders like to see a DTI less than 36 percent, says the online real estate marketplace Zillow. A DTI lower than 20 percent is even better, as it can get you a lower mortgage interest rate, saving you mega bucks over the loan term.

Borrower Behavior

Even if you think you are being level-headed by keeping your spending to a minimum, simply opening a new credit account can lower your credit score. This could spell trouble if the lender pulls your credit report again the day before closing. Lenders don’t like anything about your finances to change before the settlement date.

You may think you are balancing things out by closing an old credit account before opening a new account at a furniture store. But you can still get yourself in trouble.

Although closing an unused account may seem like the right move, you are lowering the amount of credit you have available, and that can drop your credit score. By eliminating one of your lines of credit, it looks like you are using more of the credit available to you. That’s a no-no when you are trying to buy a house.

Lenders also like to see credit accounts that have been established for a while. Opening new accounts may make your lender worry that you won’t have enough money to keep up with your mortgage payments. Your lender may worry more, too, if you’re young and don’t have a long credit history.

Using your savings to buy furniture isn’t a good idea either. You will need to lay out some cash at closing, so it’s best not to dip into your reserves. Your lender likely will be on top of things and check to see that the funds you need for closing are still in your bank account.

So what do you do if you want new furnishings to go with the new house you are buying? Be happy for now packing what you have, and wait until you close on the loan before you go shopping.

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Posted by on Oct 7, 2014 in Blog | 0 comments

4 Tax Filing Methods Compared

Every citizen with income has to pay taxes, but there’s no reason to pay more than you owe. In order to keep as much money as possible, you need to choose the least expensive tax filing method that will maximize your deductions and credits. The tax preparer’s ability to do this is usually correlated to the training and credentials that he or she has within the financial industry. However, the more a preparer can do for you, the more their services are likely to cost. Furthermore, certain tax professionals will be better suited to serve you based on your financial circumstances and needs. Here you will find four types of tax preparation methods and how you might benefit from each.

1. Tax Chain Franchise

Taxes can be expensive to prepare and file, which is why many preparation franchises have popped up all over the country in recent years. These franchises are staffed by trained and certified employees that use special preparation software to prepare your taxes. This software will help the preparer detect any errors throughout the process so that hurdles are preemptively avoided.

However, if you own a business, getting your taxes done at a franchise may not be the best idea. Entrepreneurs almost always have complicated tax filing issues and will require more specialized preparation skills. But, if you work in a job that sets aside the right amount for taxes already, then you’d save the most money getting your taxes prepared at a chain franchise.

2. Enrolled Agent

An enrolled agent is someone you ought to see if you are an entrepreneur or have complex taxing issues. Many enrolled agents are former IRS agents, which means they know many inside tricks of the trade that only a few other people are privy to.

3. Certified Public Accountant (CPA)

CPAs are not usually as expensive as other, more specialized professionals, but there’s still plenty they can help you with. If you have gone through a significant change in your life that has heavily impacted your finances, then you’d want to see a CPA to prepare your taxes.

4. Do-It-Yourself (DIY)

It is possible to do your taxes yourself, especially if you are willing to pay for a service that guides you through the process. There are many types of tax preparation software services available.

Each of these four tax preparation methods has its advantages. The benefits among those listed above that are most attractive to you will likely be the best fit for your circumstances. Contact a company like Tri-Check Income Tax Service for more information about tax filing methods.

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