Author: Elizabeth Collins Page 2 of 3

Stock Exchange

This Is Everything You Need To Know About Owning A Listed Company

Perhaps the biggest financial event for millennials this year is the listing of Snap. The concept of owning a piece of a company that is a daily part of our lives is apparently the reason why a great deal of millennials started investing in the stock market.

If the listing of a millennial-owned, millennial-driven company could lead to so many of us taking interest in the stock market, then surely the listing of more millennial-owned companies should be much sought after.

Citi bank

Meet Donna Nemer. She is the Director at the Johannesburg Stock Exchange (JSE) and a former Managing Director at Citi bank in New York. Donna found herself in the world of global banking when she realized that it would afford her the dream of working and travelling extensively throughout the world.  We decided to tap into her well of knowledge to learn more about what it would take to get more millennial-owned businesses listed on a stock exchange.

Millennials are known to be the entrepreneurial generation. An article by Fortune has labeled us as “millennipreneurs,” as we are starting more companies, managing bigger staffs, and targeting higher profits than our baby boomer predecessors. How important is it that startup founders think about the possibility of listing their companies as they grow in profits?

The growth of small- and medium-sized (SME) businesses is crucial to the health of emerging economies, as these companies are key employers.

It is with this in mind that the stock exchanges such as the JSE created AltX. The AltX is for companies that are well established, but not yet ready to list on the JSE’s Main Board.

Given our tough economic climate, many countries are increasingly looking to SME businesses to promote growth and make a dent in the unemployment figures. However, access to financing remains a challenge that hinders expansion for many businesses, as banks are increasingly unwilling to lend to smaller businesses.

This is where a listing on AltX can be an exciting opportunity for smaller businesses to raise capital. With this said, it is important for stock exchanges to attract SMEs and market to them in the way that they need to be marketed to. We need to be speaking the same language as them, using more online and digital platforms and using faster and better technology, making it easier for them to do business with us.  Access to capital markets is critical to small companies that are looking to expand their brand and grow.

We are very proud of the track record of AltX in that over a third of the companies that have listed have successfully grown and migrated onto the main board of the JSE.

When can a startup founder start considering listing their company?

The decision to list your company’s shares on a public market is a significant one. It must be based on an honest and realistic assessment of your company. A listing on the JSE improves the ability to access capital to fund acquisitions and organic growth. Local scrip or local fund raising can be used to fund the company’s expansion plans.

As your company grows and matures, listing on the JSE may be the best vehicle for your company to raise capital, improving your profile.

The minimum criteria to satisfy a listing are as follows

Share Capital
R2 million ($151,000)

Historical financial information on listing
Minimum of one financial year required

Profit forecast
One full financial year required unless three year profit history is provided

% held by public shareholders
10% ( applicable on listing)

Board of Directors
Competition of the AltX Director Induction Programme (this can be done prior to or after the listing)

A listing means that the company will go public so even if a company meets the listing requirements, timing is important.

Finance

Key considerations for going public include:

Financing:

Have other alternative financing sources been explored and/or exhausted?
Does your company need public financing for growth?

Management:

Is your management team experienced and balanced?
Does it include directors and senior executives with a proven track record in managing public companies

 Business Plan:

Is there a well-developed business plan that identifies potential revenue and income as well as the resources necessary to sustain growth and success?
Is your company prepared for the compliance and disclosure requirements that public companies are required to follow?

 Growth Potential:

Is the market size for your company’s product or service sufficient to sustain the growth plans and expectations that will attract broad investor interest?
Is your company profitable, or has its product reached commercialization with evidence of market acceptance?

 There are also other factors to consider such as transparency and costs. When it comes to ownership, the owners and founders of the company must consider how much control they want to retain. When a company goes public, a reasonable percentage of shares must be publicly owned and tradable.

Can you briefly take us through the Initial Public Offering (IPO) process.

Interact with the Primary Markets Team of the JSE
Decide where your company will feel most at home – on the main board on the smaller AltX board, which is for small to medium companies
Find a sponsor (Main Board) or a Designated Advisor (AltX)
Submit all required documents to the JSE Issuer Regulation division
Embark on a capital raising roadshow
Finally, List

What is the most interesting Initial Public Offering (IPO) process that you have been a part of and why?

All IPOs are different and I must confess that I have found them all exciting.  To see the company CEO and executive team, together with advisors, accountants, legal advisors all together to open the market is truly exceptional.  Here in South Africa we call the sound of the kudu horn and beat the African drums to announce our listings which is not just steeped in our cultural heritage but gratifying after all the hard work that goes into a listing.

That said, two recent listings stand out for me personally.  One was the SA listing of AB InBev, a large multi-national company that, while acquiring SAB Miller, listed on our local market.  It was one of the largest listings in JSE history and really put the high quality of our country’s capital markets in the international spotlight.

The other one would be Choppies, a Botswana based retailer that listed in SA and raised capital for its African expansions strategy, thereby demonstrating the role that the JSE can play to grow intra-African trade and investment ties and positioning SA as a regional financial center.

 In your experience do first time founders usually get support from a leadership perspective when they list their companies? Especially considering the age of some startup founders, like Evan Spiegel of Snap who listed his company at only 27.

There is no question in my mind that first time founders gain enormous insight and experience when they open their companies up to public shareholders.  Firstly there is the requirement for a much higher level of transparency and disclosure which go way beyond what is done when companies are in private hands.

The need to explain strategy and performance to a broad range a stakeholders requires founders to be open, honest, to really understand their business and to publicly demonstrate the duty of care that he or she has.

For some founders, this comes naturally but for others, the support from the executive team, the outside accountants, legal advisors and others are critical to their success and being able and willing to accept that support is an important character trait.  There are plenty of examples of both successes and spectacular failures as far as this goes!

 Lastly, what is the best advice on money that you’ve ever received and who was it from?

I’m an old fashioned investor that believes in diversification and investing in real assets, as opposed to financial assets.  It’s typical of all that we learned in my generation.  Time will tell if it was good advice!

Bearer Share

What is a Bearer Share?

What is a Bearer Share? A carrier share is a value security completely claimed by whoever holds the physical stock endorsement, consequently the name “conveyor” share. The giving firm neither registers the proprietor of the stock nor tracks moves of possession; the organization scatters profits to carrier shares when a physical coupon is introduced to the firm. Since the offer isn’t enrolled to any position, moving the responsibility for stock includes just conveying the physical archive. Understanding Bearer Share Carrier shares come up short on the guideline and control of regular offers since possession is rarely recorded. Carrier shares are like conveyor bonds, which are fixed-salary protections having a place with the holders of physical authentications as opposed to enrolled proprietors. Key Takeaways Carrier shares are unregistered value protections claimed by the owner of the physical offer reports. The giving organization delivers out profits to proprietors of the physical coupons. The utilization of conveyor shares has dwindled overall since they cause expanded expenses and are helpful instruments to make sure about financing for fear mongering and other crimes. The Dwindling Issuance of Bearer Bonds Carrier shares are regularly worldwide protections, basic in Europe and South America — in spite of the fact that the utilization of conveyor partakes in these countries has dwindled as governments get serious about namelessness related criminal behavior. While a few purviews, for example, Panama, permit the utilization of carrier shares, they force reformatory duty retentions on profits gave to proprietors to demoralize their utilization.

Bearer Shares

Marshall Islands is the main nation on the planet where the offers can be utilized without issues or additional expenses. Numerous huge remote companies over the previous decade or so have additionally decided to change to full use of enrolled shares. Germany-based pharmaceutical mammoth Bayer AG, for instance, began to change over the entirety of its carrier offers to enrolled partakes in 2009, and in 2015, the United Kingdom abrogated the issuance of conveyor shares under the arrangements of the Small Business, Enterprise and Employment Act 2015. Switzerland, a purview known for its accentuation on mystery in banking exchanges, has additionally started the way toward changing over carrier shares into enlisted shareholdings. As of March 2019, the Swiss Federal Council has just started the procedure of interview to cancel conveyor partakes in the nation. In the United States, conveyor shares are for the most part an issue of state administration, and they are not customarily supported in numerous purviews’ corporate laws. Delaware turned into the main state in the U.S. to boycott by rule the offer of conveyor partakes in 2002, per the state’s site page on corporate law. Advantages of Using Bearer Shares The main unmistakable advantage to be picked up from utilizing conveyor shares is protection. The most elevated level of namelessness conceivable is kept up as for proprietorship in a partnership by a holder of carrier shares. In spite of the fact that the banks that handle the buys know the contact data of the individuals buying the offers, in certain wards, banks are under no legitimate commitment to uncover the character of the buyer. Banks may likewise get profit installments for the benefit of the investor and give proprietorship affirmation at investors’ comprehensive gatherings. In addition, buys can be made by a delegate, for example, a law office, of the genuine proprietor. Burdens and Risks of Bearer Shares The responsibility for shares regularly agrees with an expanded expense brought about from employing proficient portrayal and counsels to keep up the secrecy that conveyor shares give.

bearer-shares

Except if the carrier investor is a money related as well as legitimate master in these issues, dodging the numerous lawful and duty traps related with conveyor offers can be a troublesome test. Likewise, in a post-911 world in which the danger of fear based oppression lingers vigorously, some portion of the procedure to counter the danger is to remove the wellsprings of psychological militant subsidizing. Thusly, in an overall exertion to discourage psychological oppression financing, illegal tax avoidance and other unlawful loathsome corporate movement, numerous locales have ordered new enactment that places exceptionally close limitations on the utilization of carrier shares or, as referenced, have through and through abrogated their utilization. For instance, the Panama papers embarrassment broadly utilized carrier offers to disguise genuine responsibility for. This has brought about the hesitance of numerous banks and monetary establishments to open records or have any relationship with organizations or investors that bargain in carrier shares. The selection of locales and monetary organizations ready to bargain in carrier shares has limited fundamentally. Employments of Bearer Shares Carrier shares have some substantial uses, yet their innate drawbacks. Resource insurance is the most well-known motivation to utilize conveyor shares on account of the protection they give. For instance, people who would prefer not to chance their benefits being seized as a major aspect of a legitimate continuing, for example, a separation or an obligation suit may fall back on the utilization of carrier shares.

Business From Home

How To start a business From Home

With today’s internet technology, it’s not hard to start a business from home. The benefit of Home based business is that it’s not spend you so much money to start an own office for your business but you can still get good income and connect with millions of people from all over the world just by using a computer with internet connection from your home. If you intend to earn a good income by just working from your home and want to plan on starting a home based business. This article gives you some vital resources on how to start a business from home and steps by steps to start a business from home immediately without spending a large amount of money.

From Home

How To start a business From Home

All Resources & Steps You need to start a business From Home

1. Decide what kind of business you want to have when you start a business from home.

Before starting a business you always need to research your niche carefully. There are many difference niches to start a business at home but you need to choose what is between talents you have and things you enjoy. If you choose only things you enjoy that may not mean you will be good at it.

Resources:

Steps To Generate Niche Business Ideas
3 simple steps help you to generate Niche Business Ideas

Niche Keyword Research – The Right Approach
Easy guide to Learn How to Research Your Niche Market

Introduction to niche research and Clickbank
This video is a great look into how to go about doing your research with Clickbank

8 Step Blueprint For Doing Niche Research
Steps by steps to research niche to start business.

How to Research Your Business Idea
Your business idea may indeed be brilliant–or it may need some work. Here’s how to find out whether you’re ready for startup.

2. Know the competition in your niche.

The competition of a niche is sometimes very huge but that’s not mean you must stay away the niche you chose. You just consider for choosing a smaller niche. If you live in a smaller area, you have a better chance of landing that job.

Resources to learn how to research the completion in your niches:

How Niche Marketing Helped My Business Compete Against the Big Chains

Get to Know the Competition
A simple, 4-step competitive analysis will help you rise above the pack.

12 Ways to (Legally) Spy on Your Competitors to start business from home
Here are some time-tested methods that predate the Internet, as well as newer techniques to mine the wealth of information readily accessible online.

10 Tips on How to Research Your Competition for starting business from home
Keeping tabs on your competition is a great strategy for growing your business. Follow these tips, from fellow small business owners, on which tools are best and how to get started.

3. Understand the needs of your area.

Listen to what people say, what they want and what they need & meet them.

Resources:

Understanding People’s Needs
What kinds of needs do people have?, Why should the leader try to understand people’s needs?, How can a leader best understand people’s needs?

The analysis phase: Understanding what the customer wants

Understanding Customer Needs
The secret to start a successful business is to place your customers in the heart of the. An effective way to do this is to find out what they want and understand their needs.

4. Figure out your profits before starting a business.

Profits are all things you want so that you need to figure out before your business is started. To do this you must ask yourself two questions: How much will people pay for your services? Can you make a good income off this?.

Work at home

5. Check into legal barriers before starting your business.

Different countries/areas have different rules and regulations for home based businesses, and you need to check into those at your town’s city hall before investing much time and money in your business. Otherwise, you may get banned in the future.

6. Create a business plan on starting a business from home.

Think of what things you will do for your business & what time you can do such things. It’s that pretty hard to figure out a business plan but it’s very useful for you in the future.

VC Fund

Dividends and Preferences: How to Invest in a VC Fund

So you always wanted to be a partner in a venture capital fund? Well, here’s how it works. The following is Part 3 of my five-part series on how to invest in early stage technology companies as an angel investor or through an investment in a venture capital fund. Privately held companies in emerging technology sectors–such as nanotech, clean tech, biotech, info tech and new media–frequently have exciting upside potential that can only be fully harnessed by investing in them when they’re in their infancy. In Part 1, I gave a general overview of the playing field and in Part 2, I examined the stages of an emerging growth company’s lifecycle and the types of investment that it hopes to obtain at each relevant stage. Here, I’m going to explain how you can invest as a limited partner in a venture capital fund. When you invest in a venture capital fund, your role in the early stage company will be completely “hands off.” You’re investing in the vision and/or track record of the venture capitalist and will rely on the venture capitalist to make and manage your investment decisions. It’s crucial that you match your investment goals with venture capitalists sharing similar goals. For example, an investor that wants to maximize exposure to nanotech and its commercialization would not want to invest with a generalist venture capitalist or a venture capitalist focused on the Web 2.0, SaaS or cloud computing sectors. Before you invest in a venture capital fund, there are several things to consider which I detail below the fold.

VC Fund Structure

1. An investment in a limited partnership in a venture capital fund is long term and illiquid. Long term in this case typically means it will be 10 years before all of the fund’s investments will be liquidated, sometimes even longer. Money will only be distributed to you as the venture capital fund liquidates these individual investments. There’s no easy way for you to get your money back and there’s typically no market for you to sell your limited partnership interest.

2. You’ll be required to qualify as an “accredited investor.” For an individual, this means you must either have a net worth (or joint net worth with your spouse) in excess of $1,000,000; or have income exceeding $200,000 in each of the two most recent years; or joint income with your spouse exceeding $300,000 for those years; and a reasonable expectation of the same income level in the current year. Some funds have even higher net worth thresholds. If you’re unable to meet the fund’s investment criteria, they won’t accept your investment.

3. The fund will require you to make a sizable upfront investment coupled with a substantial commitment for future investment. Most funds require, at a minimum, a $100,000 up-front investment with a minimum commitment in the $500,000 to $1,000,000 range. These numbers vary greatly depending on the size of the fund and the experience of the venture capitalist, however, they very rarely fall below these thresholds. The remaining bulk of your commitment will be tapped by the venture capital fund over a period of four to six years known as the “drawdown” period.

4. Investing in emerging technology companies is exceptionally risky and there’s a strong possibility that a number of the venture capital fund’s investments will be worthless and that none of these investments will see significant returns. The risk of losing all of your investment is higher when investing in a venture capital fund than when investing in public equities. However, it’s probably lower than if you invest directly in companies as an angel or angel syndicate. The reason for this is twofold: You’ll have exposure to a larger number of potential and actual investments through a venture capital fund; and the venture capitalists are theoretically better at identifying emerging trends and companies that are good bets than angels or angel syndicates. Now, if you meet these criteria, can afford to have your capital locked in for a long period of time, and don’t mind the risk of substantial losses, the potential benefits are substantial–annual returns can often reach up to 30 percent for successful venture capital funds. If you decide to pursue investing in a VC fund, you’ll be given a private placement memorandum that describes the fund’s objectives, the experience of the venture capitalists and the terms of your investment. It also includes a comprehensive “risk factors” outline that provides extensive detail on the various risks that you’ll be assuming. You’re also given the subscription agreement you must complete to make your investment and a copy of the limited partnership agreement that will govern the legal terms of the fund. Familiarize yourself with these legal terms and consult with your attorney and other professional advisors before you pull the trigger. Bear in mind, the terms of the limited partnership agreement are typically not negotiable. This makes a certain amount of sense since the venture capitalist fund will usually have 20 to 30 different investors and may talk to hundreds of potential investors. These investors commit at different times and commit different amounts of money, so it would be extremely time-consuming and arduous to negotiate separately with all of them. Now, if you were going to commit for a substantial percentage to the fund, then you’ll have more latitude on terms and conditions. However, the typical individual investor is investing a relatively small amount when compared to the public pension funds and other large institutions investing and, consequently, he/she has relatively little bargaining power. Fortunately, the terms of venture capital funds don’t vary much from “market” rates that have evolved over the last 20 to 30 years. This can make it easier for you because you can simply check to see if the terms you’re being offered are in the market range. A few of the most common economic terms are the management fee, the carry, and reinvestment rights. Typically, governance rights for limited partners in venture capital funds are minimal. The management fee is the lifeblood of a venture capitalist. This is the money that they live off of from day to day. Usually, the management fee will be a percentage of committed capital. That is, the total capital that everyone has committed to the fund, not the capital the fund has actually drawn down. Traditionally, this fee has been 2 percent but anything from 1.5 to 2.5 percent is common, depending upon the size of the fund. With a larger fund, the percentage may be lower and vice versa for a smaller fund. This fee is taken annually and can add up relatively quickly. For example, if the fee is 2 percent, on a $200,000,000 venture capital fund, the venture capitalists collect $4,000,000 a year for 10 years-–or $40,000,000. And this is completely independent of whether they make good investments. Occasionally, the management fee will be capped at actual budgeted expenses or will scale downwards to reflect the fact that more work is required during the funds early years; however, a flat percentage is the norm. The carry is the second form of compensation for venture capitalists. However, unlike the management fee, the carry is directly tied to success. The carry is the percentage of the fund’s profits that the venture capitalist gets to keep, typically 20 percent. Often, the investors are guaranteed some ordinary rate of return on their investment (eg, 6 percent or 8 percent) that the fund must first deliver before the carry will kick in. However, the latter distributions will be tiered up so that the venture capitalist ends up with 20 percent of all profits. Occasionally, there may be some deviation from the 20 percent figure, but this is rare. One thing to look for is whether the fund looks at the profits of the fund as a whole or on the profits from each individual investment. If the former, there’s often a “clawback,” so that if an early portfolio company has a home run but all the rest are losers, you’ll be able to take back the excess profits that are distributed to the venture capitalist. Reinvestment rights are the right of your venture capitalist to take profits from early successes and reinvest them into new investments rather than pay them out to you and the other limited partners. This may be a good thing for you because it means you have more capital at work and, in a sense, this is free to you since the management fee doesn’t apply to reinvested money. On the other hand, it may be a good idea to take some money off the table. Some form of reinvestment right, at least for the first few years, is relatively common. Just make sure you understand what it means to you. The next part of this series will look in detail at angel investing and its important characteristics, including typical legal and business terms.

personal budget

5 reasons why a personal budget fails!

If in a previous article I have talked about the 10 reasons you should use a personal budget, now we are talking about the reasons a personal budget fails to reach its purpose.

You know very well that a budget helps you plan from a financial perspective any activity you have and it gives you an objective image on your personal finances.

Most of the times, after we start using a personal budget, we end up failing to take it into consideration and it stops coinciding with the financial activities we make.

I have to tell you ever since the beginning that it is not easy to make a personal budget. The most difficult part is to stick to the plan.

Personal budget is a plan you make at the beginning of the month and you have to comply with it without any deviation. Most of the times, we see at the end of the month that we have failed to take it into consideration and that we have spent more.

Personal-budget

Before analyzing your own personal budget, let’s see what the main reasons for its failure are:

5 reasons why a personal budget fails

1. You have very high expectations!

Each time someone makes a personal budget, he/she has high expectations from it. It takes a while until you achieve your own personal budget.

At the beginning, as you are not used to it, you will see that the planned budget does not coincide with the achieved one and differences between them occur.

Do not get scared and do not lose motivation. It is normal!

A good budget is not created over night, or in the second night.

You end up having a budget after at least 6 months. After 6 months, while you were focusing a lot on your expenses and your income, and made a habit out of it, you can say that your budget is good.

Until then, take your time, do not lose motivation and give yourself as much time as necessary to plan your budget each month.

2. Personal budget is not at hand!

We are human. Humans generally forget. We are forgetting small things happening to us daily.

This can be a problem when it comes to organizing a personal budget.

If you are a forgetful person, I recommend updating your personal budget daily.

Give yourself 5-10 minutes each evening and update your budget. See what you have spent that day and how much money for spending you have left for the next days.

3. Maybe you are not using a budget model which is in your advantage

There are many budget models you can use. Some of them are online, some even directly on your phone, others in Excel.

I, for one, use a budget model in Excel, which I update each time I go to the computer. I am spending quite a lot of time at the computer and it helps me be in contact with it.

HERE you can find the budget model I use. It is in Excel and easy to use.

I recommend it with the utmost trust.

4. You are forgetting about the expenses for fun!

When we are planning our budget we are tempted to write absolutely all expenses for invoices, food, but we are forgetting the expenses for fun.

We are thinking that we will not have that much fun in that month and we write a small amount.

The reality is completely different. In reality, you go out each week (sometimes daily) and you are spending more than you have set.

It is crazy if you do not plan the expenses with fun. It is a very important category where the amounts can be very high if you are a “party person”.

5. You forget about the “Unexpected or extraordinary expenses” category

You have many expenses in a month. Many invoices, much shopping to do, you have many places to go to.

Once with these “many”, you will end up finding it very difficult to foresee them. Then, there are the extraordinary expenses, which you had no way to foresee, such as: something in your car breaks, the TV/phone/computer etc. breaks.

All these are expenses that can affect your budget.

Best solution: Add 10% of the total amount in the “Unexpected or extraordinary expenses” category.

This category will help you get off a lot of trouble without affecting your financial planning.

These are the most important 5 reasons why a personal budget fails. Make sure you are not breaking them and always take into consideration the 10 reasons you should use a personal budget.

In the end, I am waiting your opinion about why a personal budget fails.

Why do you think people cannot comply with their personal budget?

debt

41 Techniques That Can Get You Out of Debts. How to Get Rid of Debts!

I think that when you end up having debts is one of the most difficult moments of our life. We end up depending on multiple persons, persons depending on us and the stress grows limitless. How to get rid of debts? is the most important question…

Each day we think only about this and this is not helpful, in all situations, for getting rid of these debts.

Maybe the debt cannot be settled in a very short amount of time, but if you are willing to make more sacrifices than you usually do, your debt will be gone in a quite short time.

unsecured-debt

I will show you below a series 41 practical ways you can get rid of debts:

41 techniques that can get you out of debts

  1. Choose the right attitude. Do not let negative thoughts overtake your mind. Think positive.
  2. Make a list with all your debts (including bank credits, interests etc).
  3. Do not add more debts. Those you have are enough. Your task is much too difficult as it is.
  4. Find a second or a third job. Any additional income helps you pay your debt faster.
  5. Remove any other passive expenses you may have (the fully comprehensive car insurance must go, the savings for additional pension must be removed  etc)
  6. Analyze your assets. See what you need and what you do not need. Sell what you do not need!
  7. Think if you are using your cable TV or your internet at maximum level. If not, cancel them or have a cheaper subscription.
  8. Pay your smaller debts first. It is a psychological game called the Debts snowball.
  9. Try using cash. Do not use the card, because you lose a certain amount of money for each transaction. Give up cards for a while!
  10. Pay as much as possible from your debts each month! Do everything possible not to get rid of money quickly. The quicker, the lower the interest.
  11. If you receive a bonus/raise, use it to pay your debt.
  12. Make money out of your hobby. See what you like doing and try to make money out of that.
  13. Develop your financial management part. Use a personal budget to manage your money better.
  14. Make money out of affiliate marketing. Try selling goods online for a fee.
  15. Make a personal blog and try to make money out of it. If you are involved enough, you can end up making enough money out of advertisements or affiliate sales.
  16. Never miss a debt payment. Each missed deadline will bring penalties, namely amounts added to the debt.
  17. Evaluate your consumer behavior. If necessary, reduce consumption!
  18. Use a calculator or even your mobile phone when you go shopping so that you know when you have reached your limit. Thus, there are no surprises when you get to the cash register.
  19. Read books about financial education. They will help you figure out how to earn more, how to manage your money better and how to spend them “wisely”.
  20. Set your own income objectives. Tell them to a close friend or a family member, so that your responsibility grows. Usually, if you tell your objectives to people around you, it will be more difficult to give up on them.
  21. Celebrate any victory you had on settling your debts. It will help you motivate yourself more to get rid of debts. (Not by drinking. You can buy something you needed for a long time).
  22. Never lose heart. Always fight as if it is the last thing you do. Successes will not be late.
  23. Follow financial blogs. Keep an eye on the best blogs of this area and find out how others managed to earn more money.
  24. Stop eating out. This costs you more. Eating at home something you made is cheaper and healthier.
  25. Reduce your costs for going out. Try to watch movies at home or, when you go out, buy cheaper drinks. This does not need too many costs.
  26. Analyse your closet. Try to use the clothes you have and stop buying others. Buy clothes only if it is really necessary.
  27. Get rid of the smartphone. It costs quite a lot (electricity, internet etc). With it, you can get rid of the internet subscription. (only if it is necessary 🙂 ) For the moment, we can live without it.
  28. Do not buy expensive phones. Buy a phone for talking and a minimum set of activities. They are more efficient.
  29. Start a small business, in your free time. Ex: painting, pictures, babysitter, web design etc.
  30. Always ask your creditors how you can reduce the interest. Reducing this interest to the lowest amount leads to the reduction of the owed amount.
  31. Rent a room. If you are staying in an apartment, try living only in a room for a while, and the other room you can rent to other people.
  32. If you live in a rented apartment, try moving in the cheapest apartment or even in a studio. The utility expenses are much lower for a studio.
  33. Develop yourself a businessman mind. Buy things cheaper and sell them on olx.ro or on other websites with a mark-up.
  34. If you know a subject very well (ex. Maths, Romanian, Geography etc), give private lessons. You can earn somewhere around 30 lei for 2 hours.
  35. If you have a photo camera, take some artistic photos and sell them on ShutterStock.com. You earn money for every sale you make.
  36. Stay more hours at work if they are paid extra.
  37. Follow store sales. Buy products only if they are on sale.
  38. Take only the money you need out of your card at the beginning of the week. Forget it at home 🙂
  39. Participate at various contests. You never know when luck might show up and you win some money.
  40. If you have too high debts, uses refinancing. Interests can be lower than those you have now.
  41. Give up expensive vacations and parties. Try to stay at home and have fun with as least money as possible.

These were the ideas I had. Some are applicable for you, others are not. Try to make a list of 10-15 which might fit you. They are not all generally valid.

I wish this list continues up to 50 or 100, but I need your help for this.

If you know other useful and practical ways to help us get rid of debts, you can leave them in a comment below and I will add them to this list.

Stock Market Analysis

Navigating the Markets by Fusing Fundamental and Technical Analysis

As we end the year, the Eurozone debt crisis has taken centre stage. Even for the most hardened technical trader it has been difficult to ignore the fundamental noise emanating from Brussels.

This reached fever pitch after the EU summit on 8-9 December was deemed a massive failure. So as we enter a New Year, traders who want to keep their profits need to get used to fusing fundamental and technical analysis when they trade the markets.

This is fundo-technical analysis in action, which makes up the basis of my philosophy for analysing markets: fundamentals determine the medium-term trend, while the technicals point to shorter-term price movements. For most retail FX traders it’s the short-term movements where you make or lose money. Thus, although you may know all about the weak outlook for the currency bloc and the fact that Italian bond yields are surging this means nothing to you because you can’t make profits from this information alone.

Hence the question on every good trader’s lips is “what now?” Since we are at such an important level for EURUSD I have decided to look at point and figure charts to see if there are any key support levels that jump out at me. I like using point and figure when we get below these key levels because it strips out the noise in the market. Usually around big moves prices can become sticky as traders get nervous about breaching such a key support zone. Thus, prices can move up and done like a yo-yo and you risk firstly losing your nerve that you made the right trade and secondly, getting taken out by the whipsaw price action.

So, if you think that EURUSD is going lower then point and figure (“P&F”) charts are a good way to pick significant support and resistance levels since P&F charts strip out time – they only show you price. As you can see in the chart below, the next key level to watch is 1.2900, below here opens the way to 1.2600 and then we are back to the sub-1.20 lows from the peak of the Greek crisis back in mid-2010.

So what are the future fundamental and technical risks that could impact the currency’s movement from here?

Looking at the fundamental factors first, Italy has EUR 112 billion of debt to auction in the first three months of next year, the EU authorities have so far failed to come up with more money for the bailout fund and the currency bloc is expected to experience a mild recession in the first six months of 2012. So from a fundamental standpoint the outlook is fairly gloomy.

But what does the euro’s technical history tell us about where the pair might go? On a very long –term basis the euro is actually fairly strong within its range. Back in 2001 EURUSD was trading at 0.85. But since 2002 (with a little help from global central banks to get going) the euro has been on a long-term up-trend. In the medium-term after peaking at 1.60 in 2008, the pair has been stuck in a range between 1.50 to 1.19 – the July 2010 low.

The break below 1.30 is significant not just because it is one of the lowest levels in this pair for nearly a year, but also because it opens the way to 1.20. This is a level that hasn’t been convincingly breached since 2005. When it broke below 1.20 back in July 2010 it didn’t last long and the single currency soon bounced back. This is a major support level and it also coincides with the 200-week moving average.

So, if we are to see EURUSD fall below this level then something serious is going on. Perhaps a failed Italian debt auction, a disorderly Greek default or even a break-up for the currency bloc could be triggers. While all of these events are possible no one can predict with any certainty when they might happen. Also, because they would also be first-time-ever type of events then it is difficult to know how to price in the probability of them happening with any type of accuracy.

Interestingly, the average EURUSD rate since 2000 is 1.2425, according to Bloomberg data. And in the current environment where the politicians seem to have the will to save the Eurozone although they lack the way out of this crisis, we could see this pair meander back to the mid-1.20’s over the next few months if sentiment does not change.

But we can’t forget that the euro is a strange currency, it can prove very resilient and in recent months it has not declined in a straight line. So traders beware. All of the fundamental and technical analysis in the world can’t protect you from unusual moves in the market and if you trade euro then your trading plan needs some contingency built into it to account for central bank and petro-dollar reserve diversification, which tends to be euro positive.

So traders, if you are hooked on the news coming out of Europe and think it will end badly, don’t think the euro will follow suit. Short-termism is the name of the game when it comes to the single currency and it could be more like death from a thousand cuts than an outright collapse.

Dividend Stocks for Beginners

Investment is one of the crucial decisions to make, whether for personal or business purposes. There are many things to consider before you make it, especially if your company will benefit from it. One of the best ways that those companies do is invest in dividend stocks. But you need to have more information about this matter. You need to make sure that it can be a big help to your company, especially if you are a beginner.

Dividend stocks are an extra payment, which is made in additional shares rather than a payment of cash. Thru this, you can generate your income, and it will help you grow your savings collection for long years. This is a big help to increase the share of your company regularly.

Why should you invest in Dividend Stocks?

Investment is essential when you decided to make the right decision. If you are in the field of business, you need to be wiser enough so that you are assured that it will grow and it will be a big help to your business.

Things will be easier if you have enough knowledge about dividend stocks. It is also helpful if you are guided by those who are expert in this field. Here are some of the reasons why you should invest in dividend stocks.

  • Dividend stocks will produce consistent income streams, and it has the potential for outstanding and longstanding compound returns.
  • Thru this, you can pay shares to stockholders, reinvest in the business, or buy back your stock. Reinvesting is essential for the growth of your business, and at the same time, it can help to maintain a competitive benefit.

As a beginner, you need to have enough reason before you decide to invest in one thing. You need to consider your company. Make sure that you will get a significant advantage in the investment that you are going to do.

Stock Investing

Important Dividend Stocks Dates

If you are one of the beginners in this field, then you should remember some of the important dates for dividend stocks. You need to be aware of this date because it will help you to determine if you will receive the stocks on the next payment of dividend.

  • The pay date is the day when you need to pay the dividend to the shareholders.
  • Record date occurs in two business days after the date of ex-dividend. In this date, you will determine if you already get the dividend.
  • The ex-dividend date is the first day of the trades of stocks without the dividend. When you purchase a shares before the date of ex-dividend, then you are entitled to the payment of dividend, but when you purchase after the date, then you are not going to pay on the cycle of dividend.
  • Settlement date occurs in three business days after the date of the trade. It represents that the purchase is being finalized and you will have the record of the shareholder in the book of the company.
  • The date of trade refers to the day when you purchase the stock.

The given important dates about will provide you with an assurance that you have to undergo the process of dividend stock. It would help if you remembered those dates for you to be guided appropriately by your payment.

Advantages of Dividend Stock for Beginners

Dividend stock is one of the recommended investments for beginners. This will give them a great advantage that will assure them that they have made the right decision. Here are the benefits of choosing dividend stock for beginners.

  • The track of growth record because dividend stock will assure you to have consistent growth to your business or income. The good traits that these investments have will ensure that this is the right thing to do.
  • When you are a beginner, you are aiming to have a good growth to your investment. You don’t also want to fall by a lower amount. In dividend stock, you will have low instability.
  • If you are in a company, you aim to have continues good record. This investment will help you with that goal because of the sustainability traits that it has. It will provide you a firm track record about the payments of dividend.
  • Consistency is one of the excellent characteristics that this dividend stock has. Thru this, you are assured that the growth of income to your company will be achieved.

Dividend Stock Investing

Things to know in Dividend Stocks

Beginners should have some critical information that will help them understand the investment that they are in. It is essential that you are knowledgeable enough about the dividend stock to make it successful. The following information will serve as your guide to do the right thing in the field of investment.

  • Dividend stock is not only about income. Beginners should know the importance of dividend income trap, which is referred to stocks with remarkably high shares.
  • You need to know if you will get paid. Your brokerage account probably has several dates, and you need to pay attention to this detail. This will give you awareness about the process of payment.
  • It would be best if you also enrolled dividend stocks in a DRIP (Dividend Reinvestment Plan) for the all-out prospective.

The investment will not be possible if you will not become wiser in choosing the right choice. You need to have enough information before you go for investment, especially when you are a beginner. There are many things to consider for it to be successful. The given information above will help you a lot, and you will be assured that you have made the right decision.

Dividend stock will assure you that you are on the right track. This is the best investment that you are going to make for your company. You will never regret choosing this because it is proven and tested for many years. Do not hesitate to trust this because the information given to you is reliable and proven.

How to Buy Stocks the Right Way

Buying and selling stocks is an easy task – you can find clear instructions on your favorite online stock broker on how to properly use their trading platform. However, if you want to yield higher rewards in the long term, you need to learn all the fundamentals of stock investing – how to pick the right stocks that can generate high profits in the stock market.

In this article, you will find all the necessary information on how to buy stocks. Here’s all that you need to know:

1. Getting to Know How Stocks Make Money

When purchasing a company’s stock, you are buying an ownership share in that particular company. In fact, there are two ways to generate profits from stock investment. First, you can hold onto your shares and benefit from the dividends, which are the portion of the earnings of a company distributed to the different shareholders.

Typically, dividends are distributed quarterly, which makes it a great way to gain a steady stream of profits. Second, you can sell your shares for a higher price than their initial one. For instance, you can purchase 100 shares of a company’s stock at $10 per share. Then, the price rises to $15 per share during the next several months. By that time, you can sell all your shares at a higher price and make $500 of profit on the sale.

How Stocks Make Money

2. Long-term Thinking is the Key to Success

Many investors get into the stock market business in the hopes of gaining high profits within a short period. However, the truth is that generating high revenues in the stock market is a slow process which requires a lot of patience and persistence. That’s why you need to adopt a long-term strategy when investing in individual stocks. It is quite simple: look for great companies to invest in, then hold onto the stocks for longer periods.

3. Look to companies you understand

As long as you are familiar with the company and have a good understanding of how it makes money, you won’t have a hard time determining whether you should buy its stock or not. For instance, if you are more into the technology industry and you have enough knowledge about it, it would be easier to compare two smartphone companies and decide which one you should invest in. But still, you need to do additional researches before buying up shares to further increase your chances of success.

4. Pick Companies with a Competitive Advantage

When it comes to buying individual stocks, you need to pick the right companies. Besides, it tends to be riskier than buying index funds or mutual shares, yet it can generate higher revenues. When looking for potential companies, you should look for some particular components that determine whether a specific company is successful or not.

Competitive advantage is one of these characteristics. It is basically a leg up over similar companies. The more sustainable competitive advantage of a particular company is, the more likely it is to keep growing and generating higher profits in the long term.

For instance, Amazon.com (NASDAQ: AMZN) is one of the most popular companies with a sustainable competitive advantage. Its cost-effective and strategic warehouse setup, as well as its essential relationships with couriers, are the key features that allowed the company to maximize profits and optimize efficiency. Even more, Amazon.com has its army of robots to facilitate the process of fast shipping.

5. Look for Companies with Solid Management

Having a strong management team is a key feature that determines the success and prosperity of the company. They are responsible for making critical decisions that will influence the companies’ values over time. So, it is highly recommended to find companies with excellent and reliable leadership teams. During your search for your next potential companies to invest in, make sure to check if the managers have a strong track record, specific talents, and ample experience.

6. Recognize Growth Avenues

You need to pick the right companies that provide the best growth opportunities if you are willing to invest in the long term. Growth investors are interested in companies that are anticipated to accelerate at a faster rate than their rivals, and that generate above-average profits. However, growth avenues can take different forms and shapes. So, when you are analyzing different companies, make sure to understand where they are going in the near and far future; not just how they are currently doing.

For instance, since its initial launch, Amazon.com has continuously branched out. It started as a web-based bookseller, and it has been evolving ever since. Now it sells all sorts of products, from apparel to groceries. So, it is easy to see how it may continue growing to dominate new corners of the market over the years.

Growth Investing

7. Tune in to Recent Conference Calls

If you want to learn more about the company of your interest, you should tune in to the earnings conference calls. Typically, companies perform conference calls quarterly, usually right after the release of financial information.

You will find valuable information about any particular companies during these conference calls: the latest financials discussed by the management, major factors that influenced the performance, and estimations for the next quarter or year. Besides, you will have a better understanding of how the company’s management copes with the different changes in the performance, for better or worse.

It is quite possible for a specific company to have high profits for one quarter and low profits the next. But still, the way the management handles these changes can have a big influence on the long-term viability and value of the company. Also, in most cases, you can find the conference call schedules on the company’s website, and everyone can listen to it online.

8. Determine the Value of the Stocks

As a stock investor, you need to figure out the value of your different stocks, and whether the trading price is fair. To have a better understanding of the different values of your stocks, there are simple formulas and tools you can use.

Typically, companies are valued based on their revenues and earnings per share (EPS) – which is the portion of the profit of a particular company allocated to each share of common stock.

Alternatively, you can use the price-earnings ratio (P/E ratio) to measure the value of any specific company. It measures the current share price of a company relative to its EPS. As a simple formula, it is calculated by dividing the stock price per share of a particular company by its EPS.

Generally, a company with a high P/E ratio is anticipated to have strong future growth. However, having a high P/E ratio doesn’t necessarily mean that the company is overvalued, and a low P/E ratio doesn’t necessarily mean that the company is undervalued. Besides, the P/E ratio is very helpful when comparing companies of the same industry.

9. Start Small and Diversify

With experience, you will be able to spot very rewarding stocks with high potential for great revenues. But still, every great stock comes with a certain risk level, generally higher risks than any other average-revenue stocks. That’s why you should never put all your money in one individual stock, even if it has 100% chance of success. I believe that you don’t want to lose all your money if anything unexpected happens. Even the highest companies face harsh times from time to time.

Additionally, once you have identified a great company with a potentially high revenue to invest in, it is best to start by purchasing a quite small position of its stock. That would undoubtedly minimize your risks of losing. Moreover, make sure to diversify your portfolio to increase your chances of success further while keeping a low-risk level. Besides, when buying stocks from different industries, you significantly lower the possibility of losing a considerable sum of money when a particular sector fails.

Beginner Investing

10. Keep Track of Your Investments

It is natural to keep track of your investments once you are done with buying your stocks. However, you shouldn’t keep checking them all the time, every day. That would turn you crazy and even lose your temper, especially when you don’t notice any significant changes from day to day.

As long as you are willing to invest in the long term, you don’t necessarily need to follow up on your investments very often and within short periods. Due to many factors, it is totally normal that a stock price fluctuates a lot.

With that being said, checking your investments once a month would be enough to see how they are doing. In addition, make sure to check up on the invested businesses and search for any potential red flags. For instance, if they are planning on changing the manager, and that doesn’t make you feel comfortable, you may want to pull out instead of taking your chances.  

How To Pick The Right Stocks

How to Pick the Right Stock – The Do’s and Don’ts

Picking the right stock is a crucial step when it comes to investing in the stock market. The stock you invest in will determine whether you are going to gain or lose money in the future. Sometimes, a stock might seem the perfect one at a particular moment, but it turns out to be a loser in the new few weeks or year. Alternatively, maybe you didn’t put high hopes and a lot of interest in a specific stock, but you end up regretting it when it turns out to be a winner stock.

The stock market has never been a game of luck and will never be. To make the best out of the stock market, you need to adopt an excellent investment strategy, which involves picking the right stock at the right time that will help you generate high profits in the future.
If you are a stock investor, or just getting started in the stock market and want to know how to pick the right stock, you can start with this guide. You will find all the dos and don’ts when choosing a stock.

How To Pick The Right Stocks Intro

What to Do When Choosing a Stock

Buy what you know

As a general rule, it is very beneficial to start with a company or industry you are familiar with, for many reasons. The more you know about a particular company or industry, the more your head is in the game. For instance, if you are in the medical field, you will more likely have a better idea which pharmaceutical companies are on top of the industry and how effective they are in terms of customer service and sales. Also, bear in mind that any nonpublic information you receive in an official capacity might be considered insider information. But still, any public information that is not widely spread can give you a significant advantage.

On the other hand, make sure to avoid the hype because you might end up losing money when these emerging companies turn out to be losers. Many investors fall into the trap of buying a stock that they don’t fully understand, and just because a particular industry went viral at that time, which might not last for long periods.

Consider price and valuation

Expert investors often look for individual stocks that are “undervalued” or “cheap.” This generally means that the different investors are paying a fairly low price for every dollar a company earns. It is measured by the price-to-earnings ratio (P/E) of a stock price. (it is the share price of a company divided by its net income). When comparing the P/E ratio results, a stock price is considered cheap when it is below 15 and expensive when it is above 20. But still, there is more to consider:

  • Expensive doesn’t necessarily mean bad, and cheap doesn’t necessarily mean good. Sometimes, the reason behind the low price of a stock is that the company is slowing down or growing less. Alternatively, a stock is expensive sometimes because it is predicted that the company is going to overgrow in the coming few years. So, if you want to buy a stock that will more likely be worth a lot later, look at the value combined with predictions for future earnings.
  • Know your stock. Generally, a company that is expected to grow significantly and rapidly in the near future will more likely be more expensive than an established company with a slower growth rate. Before locking your choice, make sure to compare the P/E ratio of a particular company with the P/E ratio its competitors of the same industry and check whether it is more expensive or cheaper than its peers.
How To Pick The Right Stocks Price

Analyze the financial health

It is essential to have an in-depth analysis of the financial reports of a particular company you are interested in. Besides, it is easy to find these reports since most of the public companies tend to release them quarterly and annually. Make sure to check the Investor Relations section in the company’s website, or look for official reports listed in the SEC online. To make your research even more efficient, don’t just focus on the most recent releases. Instead, put more emphasis on a solid track record with a consistent history of financial health and profitability, for long periods.

  • Look for revenue growth. Stock prices tend to significantly increase when companies are generating more money in the long term, which typically begins with growing revenue. Analysts usually refer to revenue as the “top line.”
  • Check profit margin. The profit margin of a company is the difference between its revenue and expenses. Generally, a company tends to expand its margins when it is growing revenue while successfully controlling costs.
  • Get to know how much debt the company has. To do so, make sure to check the balance sheet of the company. A company with more debt generally have a more volatile share price because more of its income has to go to the debt payments and interest. Also, check whether a company is borrowing an unusual amount of money from its group peers for its industry. That would positively affect its price share in the short and long-term. 
  • Find a dividend. A dividend is an amount of money paid regularly by a company to its shareholders, and it is a sign that a company is in an excellent financial health. Make sure to look at the history of their dividend payments, whether they are increasing or not.
How To Pick The Right Stocks Financial Health

What NOT to Do When Choosing a Stock:

  • Don’t rely on price alone. Just because the price of a stock has dipped 10%, doesn’t mean that it is a bargain and you should buy it right away. It is very important to know the reasons behind its fallout and have a better understanding it is going to rebound.
  • Don’t count a lot on analyst recommendations. It is always a good idea to listen to the experts’ advice. They can provide you with valuable information about the health of the business. However, be cautious that they tend to favor ‘buy’ ratings. That is why a sell rating, especially a new one, might be a red flag from an analyst perspective. You should always keep an open eye on those calls
  • Don’t neglect the stocks’ volatility. Compared to a diversified mutual fund, an individual stock tends to be more volatile. So, make sure to check the stock’ highs and low within every week of the year to have a better idea of how the prices swing all year round.
  • Don’t forget to sell. You should always have a solid strategy when investing in stocks. You need to know when to buy a particular stock as well as when to sell it. To do so, make sure to set some criteria to know when is the right time to sell that stock: if the price goes high or down to a certain point if the particular company cuts its dividend, if an analyst depreciates the stock, etc. This will undoubtedly help you better manage your stocks and avoid rushing to selling over a short-term fluctuation in the market. When following these criteria, you increase your chances of success and minimize the risk of losing your stocks during unexpected events.    

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