Monthly Archives: July 2016
Investments can be both short termed or long termed covering the interest and financial planning done by the investors. This is because behind the management of money, investments plays a major role which every investor cares to understand and plan accordingly. To begin with an individual interested in investing should decide upon the percentage of his income he care to put on a short term investment plan. Based on the savings and financial conditions these plans related to investment should always be made touching all the factors of risks and loses. To avail the benefits found in the present market condition, many individuals go for investing for a shorter period of time. This is because fast changing rate of interest on commodities like silver, gold and other stocks attract the investors to put some amount based on the same after certain worth countable planning that can incur a profit subsequently.
It is found always necessary to set some financial goal for a better and secured future. Such plans based on the economical and financial conditions of an individual can be either purchase of a house, a retirement policy or any similar aims that involves discipline investment planning before achieving it. People go for long time investment plans to meet their goals related to economy and finance. But if he fails to appear in any optimized solution before investing on such plans, he should approach or hire a financial planner with no trace of hesitation. This is because these financial planners can provide best services catering all the demands and expectations of any client or customers that seeks his profitable advises.
A financial planner has the potential to look and estimate about all the unseen risk factors and can perfectly estimate if any losses can erupt abruptly behind any short term investment policy. He is a skilled person to elaborate every nook and corner of an investment plan showing both the positive and negative aspects of the same. Moreover, in long term investment policies, the factors concerned with the tax benefits, money management, etc can be best monitored by these financial experts. So at any point of time slot an investor should consider these factors and consult a financial if unless he fails to focus on all the possibilities and outcomes behind an investment.
An awesome lion’s share of us apply for credits sooner or later in our lives. They could be for purchasing a house, auto, property, instruction, or some kind of speculation. The most importantly thing one does while applying for a credit is to go to a bank. While a few of us take this alternative, there are individuals who lean toward experiencing a home loan agent. This is favored by numerous for specific reasons. There are numerous components to be considered while needing to choose both of these two organizations, for which a bank versus contract merchant correlation graph should be drafted for a superior comprehension. A brief of the same is given in the passages beneath, which lets you know how to pick between a home loan specialist and bank, and the explanations behind the same.
In layman’s language, a mortgage broker is a go-between or an agent between borrowers and lenders. He is the one who will lead you to the lenders. He will listen to your loan requirement and get the necessary paperwork and documentation done from you. Then, he will negotiate with the people who will lend you money and pass on all your details to them. He will then take their approval for the loan, and you will handed the funds in the lender’s name. The broker will collect a commission from the lender for his services.
A bank is a financial institution, which accepts deposits and uses them for lending. In this case, you need not go through an agent; you can do it alone. When you approach a bank with a loan requirement, you will either be dealing with a loan officer or a mortgage banker. Here, the officer will represent the bank and will sell the loan directly to you, while continuing to service the loan. Generally, this approach is preferred by people who have an account/s at that particular bank, as well as a good credit history.
Factors to be Considered
Choosing between two options can be quite a daunting task. Go through the following list to know what things need to be considered before making a decision.
Mortgage Broker Bank
He has access to many lenders, and this includes banks, trust companies, finance companies, credit unions, and other credit institutions. It has limited access to its only line of products. The people you might deal with here are under different profiles, like mortgage bankers, portfolio lenders, loan officers, etc.
Independence and Objectivity
He will work only for you. While he will have contacts with a number of lenders, he is not tied to any of them. The officers here will work for the bank. Their loyalties lie with the institution and not with you, so you may or may not get the best deal here.
He will not charge you anything (mostly). He is paid a commission by the lending institutions for which he works. You do not have to pay anything here either, since you are not going through an agent.
He will keep you updated for annual reviews, debt consolidation, and renovation financing. It gets you your statement (annual) and notice for your mortgage.
Since he knows a number of lenders, probably even those you might not be aware of (perhaps due to less advertising), he might offer you some of the best rates in the market. He might be able to guarantee you an interest rate of 3 to 6 months. It will offer you a decent rate as well, but only for that specific bank. You may not be able to get access to a better deal from a better institution.
Flexibility and Time
He is flexible and helps you save time and money. You do not have to undertake the cumbersome task of visiting the lending institutions yourself. Also, he is aware of the entire market, he knows the best products available, and he knows where you can get the best deal. He can also be available for you anytime you wish. You will have to adhere to their rules and code of conduct, and your loan may take a long time to get approved. You have experienced help here as well; however, you are not a priority here, the bank is.
Things to Remember
There are certain issues, which need to be taken note of. These are summarized by keeping their pros and cons in mind.
✦ Mortgage Broker
- Although he has access to a number of lenders, if he has a personal relationship with certain institutions, there is no doubt that he might work against you. Sometimes, he may want to provide business to an institution that gives him the highest commission; thus, he may not work in your favor.
- While he may not charge you, at times, some of them do charge a sizable amount as their fee. This kind of a situation arises if you have a bad credit history, poor credit score, or a low income. In fact, he might charge you so much that you might as well approach the lending institution directly. So, if he is charging you and you wish to continue with this, make it quite clear as to how much the fees will be.
- Some of them might be inexperienced, not knowledgeable, and may not know of all the schemes available in the open market.
- As much as they assure you that they know the best of lenders and will give you the best deal, this may not be true always, i.e., if you leave all the paperwork to them, they might talk only with a handful of institutions to speed up the process, and you might end up with the wrong deal. Hence, be sure to do some research yourself.
- The bank, as mentioned in the table above, will allow you to have access only to its own products. So, you might not be able have a better deal somewhere else.
- They have a corporate and impersonal approach, so unless you have been a long-term customer or an eligible customer with a good credit history, you may not get any discounts or preferential treatment.
- The officer will work for the bank (exclusively), so you can be sure that your advantages are not taken into priority.
- The process might take a long time; also, you have to keep visiting according to their timings.
- Banks follow strict ethics and guidelines and are more regulated, and although this is a much disciplined approach, your loan approval process may be full of complications and hassles, not to mention, time-consuming.
Points to Discuss
Whichever option you choose, make sure to share the following points with them; in fact, put them down in writing so that there is no complication ahead.
✦ Frequency of Payments
Discuss how often the payment must be done. It could be weekly, fortnightly, monthly, or quarterly. Select a time frame that is suitable for you, and let the lender know.
You must discuss with your agent or the financial institution, within how much time frame you will be able to make additional payments on your mortgage, and if so, how much of an amount you can pay.
This is the most important issue to be tackled. Please make sure you know what the penalties would be, if you decide to opt out of your mortgage term.
Now this is an individual perspective. You need to ask around, do some extensive research, gather and analyze the pros and cons, and then decide which one to opt for. While some prefer the bank, either due to a long association or comfort zone, some others prefer going through a mortgage broker, especially if they can be sure to trust him, and if he is highly reputed and well-read. You need to make the right choice considering the factors mentioned above.
Ratio analysis is one of the important tool to analyze financial statements, it might not inspiring for big multinational CEO’s, but its significance is very much clear in front of small investors and people who have little background of finance and business. Despite the fact, ratio analysis is very significant tool for investment decisions, but still small investors fails to utilize it properly. They fail because they are not aware of the fact that, ratio analysis can do handy job for them.
But it is not necessary that ratio analysis only helps you in right directions, very often it also misleads you, so in order to protect you from any unwanted loss, you need to know about limitations of the ratio analysis. Every method has its own boundaries and limitations and ratio analysis has no exception.
These are the most crucial things to consider before using ratio analysis:
Make sure calculations are perfect:
Yes ratios are superb tool; it can convert complex data set into simplest of one or two digit outcome, which tells you the volume but, beware what if your underlying complex data is not accurate? Many complications will arrive if slightest of calculation will be mistakenly placed, because ratios are already in small numbers and slightest of variation will change complete outcome. Ratios should not be based on questionable data; make sure data is accurate and perfect.
Always use comparable data:
It is really difficult to compare two different firms, even in same sector. Of course, both have different depreciation methods, different dividend policies, different valuation methods etc. All these issues make them very difficult to compare. But even comparison of different years of same firm can be tricky. Some times companies maintain higher values of turnover while accounting position but when we look closer into ledgers we find inconsistency in posting of different transactions. So this sort of recording makes data doubtful and authenticity of ratio analysis affected badly.
Another problem while using ratios is that it only reflects outcomes from financial statements. It never shows factors that affect business scenes, due to which these numbers in financial statements are changed and some factors we can not define in accounting terms.
These are the basic limitations of ratio analysis; you must consider these before using ratios technique to take decision for any investment or any kind of financial evaluation.
In the rodent race to exceed expectations in the expert field nowadays, yearning experts don’t leave a solitary stone unturned. One of the umpteen routes in which yearning and eager hopefuls attempt and inspire the businesses is through their resumes. A very much made one not just says a lot of your identity all in all additionally depicts your qualities viably. Discussing monetary expert, it is one of the most sweltering employments up for snatches in the vocation market.
Role of a Financial Analyst
This person, simply put, does an assessment and scrutiny of the profitability and stability of a business, or a project, or even a sub business. This analysis can be done for in-house clients or external clients. ‘Sell-side’ analyst job is all about writing reports and notes giving opinions, while ‘buy-side’ does not need this. These people see the big picture and help a great deal in financial management.
The fact that you need to give your skill sets, strengths, and qualification and experience at a glance, before the actual resume starts does not need to be told. It is absolutely inevitable. So, if you are a financial analyst, with a good enough experience, may be you can write (if you have the qualifications) – Chief financial officer with 12 years of corporate accounting and management experience. Have an expertise in accounting systems development, reporting, and fiscal management. Have developed and implemented financial and operational control, which can improve Profit & Loss account. This has to be proved by record. Along with the resume, attach the requisite documents.
The objective and the purpose may differ from one individual to another. But, on the whole, it has to reflect clearly your career and professional aims and aspirations. For instance, it can be something like: To obtain a responsible and challenging position with a growing company, where my work experience will be duly applied and appreciated, and utilization of my opportunity for advancement will also be achieved. These two aspects are very crucial. These things may undergo a bit of change and will be altered, in case it is, let’s say a senior analyst resume. This will look pretty heavy duty, with a detailed description of job profile – reports handled, financial statements reviewed, contribution in financial planning, and a lengthy summary. On the other hand, entry-level ones will have lesser job experience, with little or no achievements and major objectives.
The above factors are isolated now; let us take a look at what a resume will need to have. These things are:
- Contact information with full name, campus and permanent address, telephone numbers, and email
- Career objective
- Summary of qualifications and experience
- Areas of expertise
- Achievements and accomplishments
- Educational qualification and background
Financial analysts need to have graduate-level training in finance, such as MSF or MBA degrees, or they are qualified accountants (that is CMA,CCA, ACCA, CGA, or CA designation). Experience in the industry is most of the time preferred and that has a major impact on the salary.
At the end of the day, it is all about your work experience and career objective.
There are a few sources through which understudies can get credits rapidly. These incorporate private loan specialists, money related organizations, open moneylenders, banks, and even some administration offices. The government and state advances incorporate Federal Family Education Loan Program (FFELP), Stafford Loans, Perkins Loans, and Free Application for Federal Student Aid (FAFSA). The benefit of such advances is that they are the best wellspring of financing for understudies, however they are frequently thought to be terrible credit. Government advances accompany a low loan fee (between 4.5% – 6%), are given without a credit check, and in the wake of auditing scholarly execution. These advances are not accessible to all, which strengths understudies to chase for private financing.
Requisites to Obtain a Loan
Requisites are the terms and conditions that have to be fulfilled when applying for a loan. Now, we can divide the fast loans for students into two categories, namely the ones that are granted at the start of the course and those that are granted in the middle of the year for some crisis or unforeseen expenditure.
The loan which is granted at the start of the year is used to pay for the tuition fees, teachers’ and universities’ fees. These loans are the biggest of all student loans and the principal amount is huge, whereas the term/time period is long and the interest/Annual Percentage Rate (APR) is quite low. Most of these loans are secured loans and usually, a parent acts as the cosigner. Apart from having a security, you need a background proof and good grades. Please note that not having a credit rating is ideal, as it will be a hindrance in the process of sanction.
The second type of loan is a smaller one and the principal amount is granted in the middle of the year. This is usually a cash advance loan to meet miscellaneous expenses such as insurance, dormitory fees, etc. Approval time is really quick, within a few hours. There are no major requisites as these loans are similar to unsecured personal loans. Hence, you will need only a cosigner or a guarantor. The credit score report of the guarantor or cosigner is really important as the interest rate and approval depends on this.
Applying to a public institution or a bank, during mid-year, is the best option, as Federal loans are granted only at the term’s beginning. The alternative is to approach a private lender, who will provide these loans very quickly, but will charge quite a high interest rate (sometimes higher than 18%).
Overall, consistently good academic performance, timely repayments, and researching the market for good lenders can get you a good deal.