Archives: 2008 December

We’re all very much aware of the global financial crisis going on and its effects on us and our families. Retailers are reporting a record low for sales this year because everybody is trying to keep up with the times. It’s not a very good idea, therefore to let loose our teenagers out on the mall with their credit cards as this could be disastrous to your family’s finances.

As a parent, there are a lot of things that we can do to avoid overspending on ourselves but there’s only so much we can do to stop our kids. So here are a few tips that could help you get started on Finance 101 from parents to kids. Make sure they’re all sitting down.

Get a job. Not for you, for your kids. If they’re old enough, you might want to consider asking them to have a job. Teenagers are more likely to give more value to money especially if they worked hard for it. Working also teaches them diligence and discipline. But you have to make sure this doesn’t mess around with their other responsibilities like chores or school.

Tell them to save up. That’s right. Sit them down and talk to them about having bank account and all the jolly good things that come with it. Tell them all about interests and how this increases their savings. Or you could also try and get them to start a college fund for their future. It might surprise what they can do with it.

Show them how to keep a budget. The best way for you to show your children how to allot some funds for different aspects of living is by showing them how you do it yourself. Let them observe, or walk them through while you fix up the household budget. Tell them all about the advantages of being able to plan ahead and prepare for things that might come.

In a recession all small business owners need to be alert, keeping a watchful eye on their enterprise.

So, what should they scrutinize?

What is most important?

Is extra ‘sales’ or ‘turnover’ or ‘profit’, one of your answers? You’ve made a mistake! – The most significant is ‘cash’.

It could be silly or unlawful to trade without revenue, but it is impossible to deal in business without cash.

As economic downturn begins to bite there will be victims; weak or unstable firms will be ruined.

Amazingly profitable businesses with robust business models will also go bust; despite their sound business, it will be the lack of cash that pushes them over the edge.

So how do you raise your revenue during an economic downturn? The majority of small business entrepreneurs will say “The best technique to raise revenue is to increase sales, marketing effort and spending, do more trade”… “by lowering prices we can gain more business”.

Invariably incorrect. This is the method to turn into a busy fool. Do yourself and your family a huge favour! Relax and use 10 minutes playing with the numbers. (or ask an accountant to do this with you). Look at how much additional revenue is generated by a 5% or a 10% price increase. It may be 30 or 40%. Yes, you might lose some business, but overall it’s likely your revenue will be higher….., your workload will be reduced.

Concentrate on the value you provide to your customers, this could be making things convenient for them, providing quality, providing great customer service – all these things matter to customers much more than price.

Therefore, getting back to what matters you need a system to tell you what your position is – to predict if you are going to run out of it, we are talking of course about the cash.

The most valuable step to make in order to become a professional real estate investor is to understand property investment. If you are just a beginner in the real estate business, it is important to develop a good understanding of what is required when buying an investment property. Understanding property investment is the best way to feel comfortable about putting considerable sums of money into a home that you aren’t even going to live in. People often ask a question: “What is the best real estate tip for beginners?” One of the best advices that could be given to get a real estate education and completely understand property investment before you will start purchasing property.

The point is that that there are a lot of people who want to run before they can walk. Some people decide to buy a house and then want to buy the first bit of property for sale that they see. Whilst this enthusiasm is great it is much more beneficial if you take things a little bit slower and develop a wide and complete understanding of property investment.

For example you should take into consideration the following points:

• Should you purchase residential or commercial property?

• Which real estate agents should you talk to?

• What is stamp duty and how much will it cost you?

• What is capital gains tax and how much will it cost you?

• Where are the best real estate listings?

Of course, there are a lot of others questions that you want to be answered but these could be considered as the basic concepts that any real estate beginner should know. You will be well on you way to completely understanding property investment if you understand these concepts.

• Should you purchase residential or commercial property?

For those who are beginners in property is highly recommended to stick with residential property. There are a lot of advantages to commercial property but it is generally slightly more advanced and risky.