Relationships – A Stock Market Game

by: Tom Tessin

You’ve moved out of your parent’s house and you’re finally on your way to financial freedom. There’s one thing you don’t have yet to complete your life goals. A relationship. Relationships are funny in way because every person you meet may like you, hate you, or have no idea what they think of you. That’s the beauty of dating. But after a while you soon realize that you can’t save money like your pals and you’re soon deeply in debt.

What a lot of people don’t realize is a relationship is an option in life. People may look at you differently if you don’t date but soon after awhile, you may notice a nice return on your money and little less stress on your life. I’m not saying to drop relationships completely but I’m trying to recommend that relationships are a temporary debt relief strategy.

Let’s take a scenario here and chart out the numbers. Say, you meet a partner and you decide to eat out three times within the week. You’re going to be the nice fellow and pay for all three. The dinners will average forty bucks a dish totaling out to be one hundred and twenty dollars. The next week, you get a phone call and that relationship is now over. If this pattern keeps going, that’s $6,240/year. After that full year, you’re still single, $6,240 poorer while the other man working on his career track and investments is now $6,240 richer.

Now, you’re probably getting the idea that I’m sexist. I’m not. When people get into debt, they try to see where the money is going. Credit cards, clothes they don’t need, and food. They don’t open their eyes and realize it’s on the worthless dates they go on week after week.

After all this, I’m sure you’re still thinking “Hey, I’m still going to date, money is not as important as love and I don’t want to be lonely my whole life.” That’s great, you have to have an optimistic view on your future and plan accordingly. While you still try to find that partner, you are going to have to write all your expenses down on paper and include “relationships” as one of them. This is of course, if you’re single and dating. If you’re married, you shouldn’t be reading this article anyways. Once you figure out your “relationship” budget, you will then be able to determine how much you can spend on movies, dinners, vacations, etc. This way, when the month ends and you look at your bank statement, you will be able to determine where the money has gone.

Of course, there are many other ways to save you money. Cutting back on your groceries, getting rid of the things you don’t need like satellite radio, cable television with the three hundred channels, or just eating at home.

More of Tom Tessin’s articles can be found at http://www.gotalkmoney.com

About The Author

Tom Tessin is the founder of http://www.gotalkmoney.com.

This article was posted on April 19, 2006





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Flexible Payment Mortgages

by: LendingTree Editorial Staff

With most mortgages, your payment is the same every month. But what if your paycheck isn’t so regular? Would you like to be able to vary your mortgage payment depending on your cash flow? An option ARM -- also called a flex-ARM or pick-a-payment loan -- allows you to do just that.

How does it work?

An option ARM is an adjustable-rate mortgage with a twist. You don’t pay a set amount each month. Instead, the lender sends a monthly statement with up to four payment options. You simply choose the amount you want to pay that month and then submit your payment.

The options vary, but here’s the most common menu:

Minimum payment: This is calculated using an “initial” interest rate that can start as low as 1.25 percent. Because this payment is so low, it’s useful for months when you don’t have much cash on hand, perhaps because you are waiting for a commission or bonus check. But any unpaid interest gets deferred, or added to the principal of the loan, so your principal grows.

Interest only: You pay all the interest due, but none of the principal. This doesn’t reduce your mortgage balance, but it allows you to avoid deferring interest.

30-year amortized: This matches the monthly payment of a mortgage amortized over 30 years at your current interest rate. It includes both principal and interest.

15-year amortized: The same as above, but amortized over 15 years. This is the highest monthly payment. Choosing it allows you to reduce your principal faster than any other option.

The fine print

The biggest caveat with option ARMs is that those enticing initial rates are short-lived. The low minimum payments that make these mortgages so attractive can increase dramatically. In addition, every five years, the loan is recast -- that is, a new amortization schedule is drawn up to ensure that the remaining balance will be paid off by the end of the loan’s term. When that happens, the minimum payment can be pushed even higher.

What’s more, if you defer too much interest, you can reach what’s called negative amortization. If your balance grows to 10 percent to 25 percent (depending on state law) greater than the original principal, your loan is automatically recast and you have to start paying the fully amortized rate, which will increase your monthly payments.

Another potential downside of option ARMs is that they’re more complicated than most other mortgages. Home buyers may be seduced without fully understanding how much the minimum payments will increase over the long-term. When the monthly amounts go up, these people can experience payment shock.

To learn more about flexible payment mortgages, visit http://www.lendingtree.com/cec/yourhome/yourmortgage/open-arms.asp

About The Author

The editorial staff at LendingTree is committed to helping consumers become smarter borrowers. Visit http://www.lendingtree.com/cec for more information and tips on buying, selling, and financing a home. Copyright 1998-2006, LendingTree, LLC.

This article was posted on April 19, 2006






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5 Key Components Of A Small Business Acquisition Loan

by: Brent Finlay

Qualifying for a small business acquisition loan can be quite an ordeal to say the least.

If the business being sold is very profitable, the selling price will likely reflect a significant amount of goodwill which can be very difficult to finance.

If the business being sold is not making money, lenders can be difficult to find even if the underlying assets being acquired are worth substantially more than the purchase price.

Business acquisition loans, or change of control financing situations, can be extremely varied from case to case.

That being said, here are the major challenges you'll typically have to overcome to secure a small business acquisition loan.

>>> Financing Goodwill

The definition of goodwill is the sale price minus the resale or liquidation value of business assets after any debts owing on the assets are paid off. It represents the future profit the business is expected to generate beyond the current value of the assets.

Most lenders have no interest in financing goodwill.

This effectively increases the amount of the down payment required to complete the sale and/or the acquisition of some financing from the vendor in the form of a vendor loan.

Vendor support and Vendor loans are a very common elements in the sale of a small business.

If they are not initially present in the conditions of sale, you may want to ask the vendor if they would consider providing support and financing.

There are some excellent reasons why asking the question could be well worth your time.

In order to receive the maximum possible sale price, which likely involves some amount of goodwill, the vendor will agree to finance part of the sale by allowing the buyer to pay a portion of the sale price over a defined period of time within a structured payment schedule.

The vendor may also offer transition assistance for a period of time to make sure the transition period is seamless.

The combination of support and financing by the vendor creates a positive vested interest whereby it is in the vendor's best interest to help the buyer successfully transition all aspects of ownership and operations.

Failure to do so could result in the vendor not getting all the proceeds of sale in the future in the event the business were to suffer or fail under new ownership.

This is usually a very appealing aspect to potential lenders as the risk of loss due to transition is greatly reduced.

This speaks directly to the next financing challenge.

>>> Business Transition Risk

Will the new owner be able to run the business as well as the previous owner? Will the customers still do business with the new owner? Did the previous owner possess a specific skill set that will be difficult to replicate or replace? Will the key employees remain with the company after the sale?

A lender must be confident that the business can successfully continue at no worse than the current level of performance. There usually needs to be a buffer built into the financial projections for changeover lags that can occur.

At the same time, many buyers will purchase a business because they believe there is substantial growth available which they think they can take advantage of.

The key is convincing the lender of the growth potential and your ability to achieve superior results.

>>> Asset Sale Versus Share Sale

For tax purposes, many sellers want to sell the shares of their business.

However, by doing so, any outstanding and potential future liability related to the going concern business will fall at the feet of the buyer unless othewise indicated in the purchase and sale agreement.

Because potential business liability is a difficult thing to evaluate, there can be a higher perceived risk when considering a small business acquisition loan application related to a share purchase.

>>> Market Risk

Is the business in a growing, mature, or declining market segment? How does the business fit into the competitive dynamics of the market and will a change in control strengthen or weaken its competitive position?

A lender needs to be confident that the business can be successful for at least the period the business acquisition loan will be outstanding.

This is important for two reasons. First, a sustained cash flow will obviously allow a smoother process of repayment. Second, a strong going concern business has a higher probability of resale.

If an unforeseen event causes the owner to no longer be able to carry on the business, the lender will have confidence that the business can still generate enough profit from resale to retire the outstanding debt.

Localized markets are much easier for a lender or investor to assess than a business selling to a broader geographic reach. Area based lenders may also have some working knowledge of the particular business and how prominent it is in the local market.

>>> Personal Net Worth

Most business acquisition loans require the buyer to be able to invest at least a third of the total purchase price in cash with a remaining tangible net worth at least equal to the remaining value of the loan.

Statistics show that over leveraged companies are more prone to suffer financial duress and default on their business acquisition loan commitments.

The larger the amount of the business acquisition loan required, the more likely the probability of default.

About The Author

Brent Finlay makes it easy to understand business financing. Learn how to locate and secure proper financing for your business. To receive your free 6 part mini-course visit http://www.businessfinancespecialist.com.

This article was posted on April 19, 2006







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Work From Home - Telecommute And Make Money

by: Charissa Bear

Telecommuting jobs are great opportunities to make money working from home. There are however, a great many scams that claim you will earn a lot of money in a very short period of time. Many of these so-called opportunities are designed to take your money, for which you will receive nothing or instructions as to how to place an add identical to the one you responded to and charge a fee to pass on the same instructions. The good news is that there are some very good telecommuting jobs available. You will need to research any work from home job offers you are considering very carefully to make sure the offer is legitimate and the company is reputable.

A legitimate telecommuting job will require you to have some skills. The type of skills will depend on the job, and you will most likely need a high-speed internet connection, a fax and possibly a second phone line. Many large corporations outsource clerical and administrative work to telecommuters. When applying for a work from home job with an established company, treat the interview and the position as any other job. Submit your resume and demonstrate professionalism. There are also online companies offering telecommuting job opportunities that are legitimate and will provide you with a regular income. It is important to research the online companies and make sure the job offers are legitimate.

Scams are quite common among work from home job offers. If any job you are considering requires you to pay a fee or purchase materials, then it is most likely a scam. You can find good telecommuting jobs if you apply only for those positions that are with an established company that pays you a regular wage. Any legitimate job will require you to have skills, perform actual work, and report to a supervisor. Make certain you avoid any job offers that seem to good to be true, because they usually are. There are many successful telecommuters. If you make wise choices, you can find a great job working from home.

About The Author

Charissa Bear is the owner of http://www.momsinc.biz, a work at home resource site dedicated to helping moms find home based careers. Stop by today and sign up for her 5 day ecourse, Starting and Choosing a Work at Home Business,or get your free ecourse by sending a blank email to: mailto:wahguide@aweber.com

This article was posted on April 19, 2006





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