Finance, Credit, Investments – Economical Categories

Scientific works in the theories of finances and credit, according to the specification of the research object, are characterized to be many-sided and many-leveled.

The definition of totality of the economical relations formed in the process of formation, distribution and usage of finances, as money sources is widely spread. For example, in “the general theory of finances” there are two definitions of finances:

1) “…Finances reflect economical relations, formation of the funds of money sources, in the process of distribution and redistribution of national receipts according to the distribution and usage”. This definition is given relatively to the conditions of Capitalism, when cash-commodity relations gain universal character;

2) “Finances represent the formation of centralized ad decentralized money sources, economical relations relatively with the distribution and usage, which serve for fulfillment of the state functions and obligations and also provision of the conditions of the widened further production”. This definition is brought without showing the environment of its action. We share partly such explanation of finances and think expedient to make some specification.

First, finances overcome the bounds of distribution and redistribution service of the national income, though it is a basic foundation of finances. Also, formation and usage of the depreciation fund which is the part of financial domain, belongs not to the distribution and redistribution of the national income (of newly formed value during a year), but to the distribution of already developed value.

This latest first appears to be a part of value of main industrial funds, later it is moved to the cost price of a ready product (that is to the value too) and after its realization, and it is set the depression fund. Its source is taken into account before hand as a depression kind in the consistence of the ready products cost price.

Second, main goal of finances is much wider then “fulfillment of the state functions and obligations and provision of conditions for the widened further production”. Finances exist on the state level and also on the manufactures and branches’ level too, and in such conditions, when the most part of the manufactures are not state.

V. M. Rodionova has a different position about this subject: “real formation of the financial resources begins on the stage of distribution, when the value is realized and concrete economical forms of the realized value are separated from the consistence of the profit”. V. M. Rodionova makes an accent of finances, as distributing relations, when D. S. Moliakov underlines industrial foundation of finances. Though both of them give quite substantiate discussion of finances, as a system of formation, distribution and usage of the funds of money sources, that comes out of the following definition of the finances: “financial cash relations, which forms in the process of distribution and redistribution of the partial value of the national wealth and total social product, is related with the subjects of the economy and formation and usage of the state cash incomes and savings in the widened further production, in the material stimulation of the workers for satisfaction of the society social and other requests”.

In the manuals of the political economy we meet with the following definitions of finances:
“Finances of the socialistic state represent economical (cash) relations, with the help of which, in the way of planned distribution of the incomes and savings the funds of money sources of the state and socialistic manufactures are formed for guaranteeing the growth of the production, rising the material and cultural level of the people and for satisfying other general society requests”.
“The system of creation and usage of necessary funds of cash resources for guarantying socialistic widened further production represent exactly the finances of the socialistic society. And the totality of economical relations arisen between state, manufactures and organizations, branches, regions and separate citizen according to the movement of cash funds make financial relations”.
As we’ve seen, definitions of finances made by financiers and political economists do not differ greatly.
In every discussed position there are:

1) expression of essence and phenomenon in the definition of finances;

2) the definition of finances, as the system of the creation and usage of funds of cash sources on the level of phenomenon.

3) Distribution of finances as social product and the value of national income, definition of the distributions planned character, main goals of the economy and economical relations, for servicing of which it is used.

If refuse the preposition “socialistic” in the definition of finances, we may say, that it still keeps actuality. We meet with such traditional definitions of finances, without an adjective “socialistic”, in the modern economical literature. We may give such an elucidation: “finances represent cash resources of production and usage, also cash relations appeared in the process of distributing values of formed economical product and national wealth for formation and further production of the cash incomes and savings of the economical subjects and state, rewarding of the workers and satisfaction of the social requests”. in this elucidation of finances like D. S. Moliakov and V. M. Rodionov’s definitions, following the traditional inheritance, we meet with the widening of the financial foundation. They concern “distribution and redistribution of the value of created economical product, also the partial distribution of the value of national wealth”. This latest is very actual, relatively to the process of privatization and the transition to privacy and is periodically used in practice in different countries, for example, Great Britain and France.

“Finances – are cash sources, financial resources, their creation and movement, distribution and redistribution, usage, also economical relations, which are conditioned by intercalculations between the economical subjects, movement of cash sources, money circulation and usage”.
“Finances are the system of economical relations, which are connected with firm creation, distribution and usage of financial resources”.

We meet with absolutely innovational definitions of finances in Z. Body and R. Merton’s basis manuals. “Finance – it is the science about how the people lead spending `the deficit cash resources and incomes in the definite period of time. The financial decisions are characterized by the expenses and incomes which are 1) separated in time, and 2) as a rule, it is impossible to take them into account beforehand neither by those who get decisions nor any other person” . “Financial theory consists of numbers of the conceptions… which learns systematically the subjects of distribution of the cash resources relatively to the time factor; it also considers quantitative models, with the help of which the estimation, putting into practice and realization of the alternative variants of every financial decisions take place” .

These basic conceptions and quantitative models are used at every level of getting financial decisions, but in the latest definition of finances, we meet with the following doctrine of the financial foundation: main function of the finances is in the satisfaction of the people’s requests; the subjects of economical activities of any kind (firms, also state organs of every level) are directed towards fulfilling this basic function.

For the goals of our monograph, it is important to compare well-known definitions about finances, credit and investment, to decide how and how much it is possible to integrate the finances, investments and credit into the one total part.

Some researcher thing that credit is the consisting part of finances, if it is discussed from the position of essence and category. The other, more numerous group proves, that an economical category of credit exists parallel to the economical category of finances, by which it underlines impossibility of the credit’s existence in the consistence of finances.

N. K. Kuchukova underlined the independence of the category of credit and notes that it is only its “characteristic feature the turned movement of the value, which is not related with transmission of the loan opportunities together with the owners’ rights”.

N. D. Barkovski replies that functioning of money created an economical basis for apportioning finances and credit as an independent category and gave rise to the credit and financial relations. He noticed the Gnoseological roots of science in money and credit, as the science about finances has business with the research of such economical relations, which lean upon cash flow and credit.
Let’s discuss the most spread definitions of credit. in the modern publications credit appeared to be “luckier”, then finances. For example, we meet with the following definition of credit in the finance-economical dictionary: “credit is the loan in the form of cash and commodity with the conditions of returning, usually, by paying percent. Credit represents a form of movement of the loan capital and expresses economical relations between the creditor and borrower”.

This is the traditional definition of credit. In the earlier dictionary of the economy we read: “credit is the system of economical relations, which is formed while the transmission of cash and material means into the temporal usage, as a rule under the conditions of returning and paying percent”.
In the manual of the political economy published under reduction of V. A. Medvedev the following definition is given: “credit, as an economical category, expresses the created relations between the society, labour collective and workers during formation and usage of the loan funds, under the terms of paying present and returning, during transmission of sources for the temporal usage and accumulation”.

Credit is discussed in the following way in the earlier education-methodological manuals of political economy: “credit is the system of money relations, which is created in the process of using and mobilization of temporarily free cash means of the state budget, unions, manufactures, organizations and population. Credit has an objective character. It is used for providing widened further production of the state and other needs. Credit differs from finances by the returning character, while financing of manufactures and organizations by the state is fulfilled without this condition”.

We meet with the following definition if “the course of economy”: “credit is an economical category, which represents relations, while the separate industrial organizations or persons transmit money means to each-other for temporal usage under the conditions of returning. Creation of credit is conditioned by a historical process of fulfilling the economical and money relations, the form of which is the money relation”.

Following scientists give slightly different definitions of credit:
“Credit – is a loan in the form of money or commodity, which is given to the borrower by a creditor under the conditions of returning and paying the percentage rate by the borrower”.
Credit is giving the temporally free money sources or commodity as a debt for the defined terms by the price of fixed percentage. Thus, a credit is the loan in the form of money or commodity. In the process of this loan’s movement, a definite relations are formed between a creditor (the loan is given by a juridical of physical person, who gives certain cash as a debt) and the debtor.
Combining every definition named above, we come to an idea, that credit is giving money capital of commodity as a debt, for certain terms and material provision under the price of firm percentage rate. It expresses definite economical relations between the participants of the process of capital formation. Necessity of the credit relations is conditioned, from one side, by gathering solid quantity of temporarily free money sources, and from the second side, existence of requests of them.

Though, at the same time we must distinguish two resembling concepts: loan and credit. Loan is characterized by:

o Here, the discussion may touch upon transmission of money and also things form one side (loaner) to another (borrower): a)under the owning of the borrower and, at the same time, b) under the conditions of returning same amount or same quantity and quality of the things;

o The loaning of money may bear no interest;

o Any person may take part in it.
With the difference with loan, credit, which is somehow a private occasion of the loan, represents:

o One side (loaner) gives to the second one (borrower) only money, and _ for temporal usage;

o It may not bear no interest (if the assignment doesn’t foresee something);

o In it creditor is not any person, but a credit organization (at the first place, banks).
So, a credit is the bank credit. To our mind, it is not correct to use “credit” and “loan” as the synonyms.
Banking crediting is the union of relations between bank (as a creditor) and its borrower. These relations touch upon:

a) Giving a certain amount of money to the borrower for definite purpose (though, we meet with the so-called free credits, aims and objects of crediting are not appointed in the assignment);

b) Its opportune returning;

c) Getting percentage rate from the borrower for using the sources under his/her disposal.
The essential foundation of the credit essence and its important element is existence of trust between the two sides (in Latin “credo”, from which comes the word “credit”, means “trust”).
From the position of circulation of money forms (in the abstraction, historical process of formation economical relations and social budget and banking systems expressed by them) comparing different definitions of finances and credit, the paradox conclusion appears: credit is the private occasion of finances. And truly, from the position of movement of the money forms, finances represent the process of formation and usage of the funds of cash means. Very often such movements are fulfilled without returning, but sometimes, it is possible to give loans from the budget for the investment projects of other needs. Also, when a manufacture or corporations use their cash funds and we mean the finances of industrial subject, such usage may be realized as inside the manufacture or corporation (there is no subject about returning or not returning of the usage), so gratis under conditions of returning. This latest is called commercial form because of transmitting the sources to others, but even in this occasion, it is the element of financial system of the manufacture and corporation.

From the point of cash means movement, main character of credit is the process of formation and usage of the funds of cash means under the conditions of returning and, as a rule, taking the value-percentage. If gating the credit value doesn’t take place (even in the exceptional occasions), according to the movement form, credit becomes a private occasion of finances, as from the net financial funds (consequently from the state budget) the loans which bear no interests may be used. If gating credit value takes place, by the appearance form, credit is discussed to be financial modification.

From the historical point of view, finances (especially in the sort of the state budget) and credit (beginning with usury, later commercial and banking) were developing differently for considering credit to be the part of finances. Though, from the genetic-historical point of view, previous loaners, before giving loan, needed gathering the permanent capital not returning, that is the net financial foundation. The banks analogously needed concentration of the important own capital for influxing the consumers’ means and for getting higher percentage rate under the conditions of returning. Herewith, exactly on the financial basis, in the sort of financial fund (which later partially becomes loan fund) part of the bank capital appears to be the reservation (insurance) part of the fund, which by nature is financial and not loan. So notwithstanding the essential distinctions between finances and credit form the genetic-historical point of view, credit appears to be formed from finances and represent their modification.

From the essential position of expressing economical relations of finances and credit, we meet with cardinal distinctions between these two categories. Which mostly expressed by the distinction of the movement forms notwithstanding they are returnable or not. Finances express relations in the aspects of distribution and redistribution of social product and part of the national wealth. Credit expresses distribution of the appropriate value only in the section of percentage given for loan, while according to the loan itself, a only a temporal distribution of money sources takes place.
Herewith, there is a lot of common between the finances and credit as from the essential point of view, so according to the form of movement. At the same time, there is a significant distinction between finances and credit as in the essence, so in the form too. According to this, there must be a kind of generally economical category, which will consider finances and credit as a total unity, and in the bounds of this category itself, the separation of the specific essence of the finances and credit would take place.

Funding of the cash means is common to the researched economical categories. It takes place in any separate system of finances and credit, which have been touched upon during the analyses of defining finances and credit. Word combination “funding of the cash sources (fund formation)” reflects and defines exactly essence and form of economical category of more general character, those of finances and credit categories. Though in the in economical texts and practice, it is very uncomfortable to use a termini, which consists of three words. Also, “unloading” with an information hardens greatly its influxing into the circulation even in the conditions of its strict substantiation and thoroughness.
In the discussing context we consider:

1) wide and narrow understanding of economical category of the finances;

2) discussing finances in narrow understanding under general traditional meaning;

3) discussing finances, as funding of the cash means, in wide understanding, which concerns finances – in narrow meaning and credit – in complete meaning.
Termini “funding” and its equivalent “fund formation” are used by us as the purposeful structuring of cash means, which is based on two poles – accumulation of money sources (gathering) and its usage for definite purpose in the way of financing and crediting.
We have established a new termini – “finance-investment sphere” (FIS). Analyses about interrelation of finances and credit made by us give us an opportunity of proving, that in the given termini, the word “financial” is used with the meaning of funding cash sources, its purposeful structuring. In this process we consider at the same time financial, credit and investments’ economical categories.

Let’s sum up middle results of discussing new concept – “finance-investment sphere” and discuss its investment consisting parts.

The concept “investments” was brought into the native economical science from the West. In the Soviet economical science they for a long time used in the place “investments” the termini “capital placement”, which expressed the usage of the industrial factors in the sphere of real industrial activities during realization of capital projects. From one glance, this termini in its concept is identical to the “investments”, consequently it is possible to use them as synonyms. Though the termini “investments” and “investing” have the advantage towards the termini “capital placement” from linguistic and philological points of view, because they are expressed with one word. This is not only economical and comfortable in the process of working with the termini “investment” itself, but also it gives an opportunity of termini formation. More concretely: “investment process”, “investment domain”, “finance-investment sphere” – all these termini are much more acceptable.
Changing native economical termini with foreign ones is purposeful, if it really matters (by keeping parallel usage of the native termini for the inheritance). Though we must not change native economical termini into foreign ones all together, when by ordinal traditional language easy to explain private and narrow concrete processes and elements get their own termini. The “movement” of these termini is approved in the narrow professional bounds, but their “spitting out” into the economical science may turn economical language into the tangled slang.

Let’s discuss termini – “investment” and “capital placement’s” usage in the economical literature.
Investments are placement of funds into the main and circulation capital for the purpose of getting profit. “Investments in material assets – are the placements of funds into the mobile and real estate (land, buildings, furniture and so on). Investments in financial assets are the placements of funds into the securities bank accounts and other financial instruments”.

We don’t meet with the termini “investments” in the earlier economical dictionary, but we meet the combined termini “investment policy” – the union of the industrial decisions, which guarantee main directions of the capital investments, the activities of their concentration in the determinant suburbs, on which the reaching of planned rates of development of the society production is depended, balancing and effectiveness, getting more and more production and profit of the national income for every lost Ruble”. For today, in the most actual definitions, the capital investments are bounded only by financial means, when not only financial, but also the investment of natural, material-technical and informational resources takes place. Labour resources take an actual place in the investment process. They themselves fulfill this or that investment process.

A positive side of the discussed definitions is that they connect investment policy and capital placements (investments):

- economical development according to the key directions to the concentration;

- providing high rates of economical growth;

- raising an economical effectiveness, which is expressed:

a) by growing the throw off of the production and national income for every lost Ruble;

b) by fulfilling the branch structure of the investments;

c) by improving their technological structure;

d) by optimization of their further production structure.

Compared with such definition of the investments (capital placement) the definition of investments in the dictionary attaching the “Economics” seems to be unimproved: “investments – the expenses of gathering production and industrial means and increasing material reserve”. In this definition current expenses (production expenses) are mixed with the investment (capital) expense. Also, not the investment expenses but (though the investments are followed by the appropriate expenses) exactly advancing. It differs from the expenses by that the means (means) are put by returning the advanced values, also, under the conditions of growth, to which the concept-advanced capital is corresponding. the advancing may be realized in the money, natural-material and informational forms.

Except the termini “investments”, there are two more termini related with the investment. They are shown below.

“Human capital investment” – any activity provided for rising the workers labour productivity (in the way of growing their qualification and developing their abilities); at the expenses of improving the workers’ education, health and raising the mobility of the working forces”. It is very useful to use the mentioned termini, though it needs one correction: the human capital investments do not concern only workers, but also the servants, representatives of every kind of labour.
“Investment commodity, capital goods – a capital.”

In the official manuals of political economy of the reformation time the capital investments are discussed as “expenses for creating new main funds and widening, reconstruction and renewing the active ones”. In this definition the investments (capital placements) during separation of the forms (types) of further production of the main funds are bounded only by main funds (without increases of the circulation funds and insurance reserves):

a) creating new ones;

b) widening;

c) reconstruction;

d) renewing.

Also, the concept of the industrial gathering appears, at the expenses of widening of basic, circulation funds and also insurance reserves takes place”.

You’ll meet below the definitions of investments from “the course of economy”: the investments are called “placements of fund into the basic capital (basic means of production), reserves, also other economical objects and processes, which request long-termed influxing of material and cash means. “According to the division of capital into physical and money forms, the investments too must be divided into material and cash investments”.

They apportion investment commodity, to which belong industrial and nonindustrial building objects, vehicles purposed for changing or widened technical park and the furniture, increasing reserves and others.

“They call the total investments of production an investment product, which is directed towards keeping and increasing the basic capital (basic means) and reserve. Total investments consist of two parts. One of them is called the depreciation; it represents important investment resources for compensation of renewal till the level of before industrial usage, wearing out and repairing of the basic means. Second consisting part of the total investments is represented by net investments – capital investments for the purpose of increasing basic means”. Depreciation is not a compensation resource of wearing the basic funds out, but it is the purposeful financial source of such resources.
Human capital investment is “a specific kind of investments, mostly in education and health protection”.

“Real investments are the investments in the economical branches and also, they are kinds of economical activities, which provide influxing the increases of real capital, that is increasing material values of the industrial means”. We can agree with such definition with one specification that material and nonmaterial values too belong to the real capital (wealth), consequently science-researching experimental-construction results, various information, education of he workers and others. Such service as organization of the excitable games, also the service of redistribution social wealth from one private person to another (except charity).

“Financial investments represent placement of funds into the shares, obligations, promissory notes, other securities and instruments. Such investments, of course, do not give increases of the real material capital, but they help getting profit, consequently at the expenses of changing the course of the securities in the time of speculation, or distinguishing the course in different places of sell and purchasing”. We share wholly such definition, hence it follows that financial investments (if it is not followed by real investments as a result) do not increase real material wealth and real nonmaterial wealth. According to this context, the expression below is very important: “we must distinguish financial investments, which represent placement of the funds in the ways of selling and purchasing the securities for the purpose of getting profit and financial investments, which become cash and real, moved to real physical capital.”

In the “economical course” quoted before long and short-termed investments are separated. Recognizing the existence of the bounds between them, the authors ascribe short-termed investments to “one month or more” investments. If we get such conditioned criteria, that we can call the investments which overcome the terms of some months, long-termed ones, which is very doubtful and we don’t agree with it. A long-termed character of the fund placement is a significant feature of the investments (short-term doesn’t combine with the concept of investments). Principally, it would be better to point out quick compensative, middle termed compensative and long-termed compensative investments:

- less then 6 months – quick compensative;

- from 6 months up to the year and a half – middle termed compensative;

- more then the year and a half – long termed compensative.

We stopped at the definition of the investments in the capital work “economical course” for the special purpose, as, in it the author tried to discuss the concept of investments systemically and quite completely, herewith the book is published just now.

We’ll return to the discussion the definition economical category of “investments” in different publications in the following chapter. The definitions given here are quite enough for having a notion of the level of lighting up the given category in the economical literature.
What conclusions may be made according the definition of the mentioned economical category in the published works, except the made notions and specifications?

There is quite deeply, concretely and thoroughly defined the concept of “investments”, different definitions in the economical literature; but mostly in every works about the investments discussed by us until now, there is not opened the essence of investments as an economical category. In every monograph , even if it has a title investment, as an economical category , there is given only the definition, concept of investments. But, as the Academician Vasil Chantladze explains, “a concept is a discussion, which proves something about the distinguishing feature of the researched object. A concept out of much essential characteristic features represents only one, and essential in it is only – definition”.

But the categories are much wider; it is “a key, the most fundamental concept of every science”. Economical categories theoretically represent real, objectively existed productive relations. A category is the defining of occasions of existed characters, connections, relations of the objective world. Generally, any educational process is fulfilled by the categories, which give opportunities for dividing the processes and occasions semantically, for expressing the definitions of a subject and realize their specific peculiarities and economical relations of a material world.
Our goal is exactly to substantiate investments – as an economical category and also, as a financial category in the narrow understanding.

Here we apply for another manual thesis made by the academician Vasil Chantladze: “every financial relation is an economical one and every financial category is and economical one, but not every economical relation and economical category is financial relation and financial category”.
In the process of defining the investments, it is important to take in mind the sides of resources, expenses and incomes, because investment, from one side, is the result of the manufacture’s activity, and, from another one, – a part of income, which, in this case, is not used for usage.
Another occasion: it is advisable to discuss investments in two aspects: as a category of reserve and flow, which will reflect exactly the connection between “placement of funds” and “investments”.

As we’ve mentioned above, not long ago, in the well-known Soviet literature the concepts of “the placement of funds” and “investments” were accepted to be the synonyms and concerned to be investment of sources for further production of the main funds and formation of the turnover funds. We meet with such understanding of the concept of “investment” (here, they separate three types of the investment expenses: investments in the basic capital of investments, investments in the house building and investments in the reserves) in the modern economical publications and it is mostly used on the macro level during a statistical analyze of economical processes. In this concrete occasion investment is the category of reserve.

How To Save Money On Your Two Wheeler Insurance

Tips to save money on two wheeler insurance

Many people in India own two wheelers. It is compulsory for you to buy a two-wheeler insurance policy if you own a bike or a scooter. But can you reduce the insurance expenses? Sure you can! Just follow these tips and you will see a difference.

Avoid making smaller claims: Before you make a claim, see how much the bill amount is. If it is a small amount, pay it yourself. Making numerous small claims will unnecessarily bring down your NCB to zero which will overall lead to a loss.

Attach anti-theft devices: A car insurance plan offers protection against theft and other dangers to the car. So if the car is found to be safe and less susceptible to thefts and break-ins, the insurer will offer a discount on the premium. Therefore look to install some anti-theft devices to the car to not only keep it safe but also to reduce your insurance costs.

Be a good driver and earn No-claim bonus: Driving carefully will reduce the chances of your car getting into mishaps. This will reduce the need to make claims and you will earn NCB. The NCB will in-turn pull down your insurance premium costs.

Renew two-wheeler insurance before expiry: Do not wait for the two wheeler insurance policy to expire before you renew it. If you have a lapsed policy, you may need to pay some fees and fines to get a new plan. So always try to renew the policy on time to save money.

Buy online: It is known fact that insurance bought online is cheaper. So buy a two wheeler insurance plan online and save a considerable amount of money.

Choose the right kind of cover: If you have a two wheeler that you use occasionally or is almost on its way out, opt for a third party cover. If however your bike is used daily and is a valuable vehicle, go for a comprehensive plan. Knowing which cover you need will help you save money.

Deductibles: Every two wheeler insurance plan has a deductible component. This means that as the policyholder, you will have to pay certain amount at the time of a claim and the insurance provider will pay the rest. A high deductible will lower your premium costs and vice versa. If you are confident of your driving skills and feel you won’t need too many claims, opt for a higher deductible. This will help you save money on your two wheeler insurance plan.

Compare: Last but not the least, you most definitely need to compare the available car insurance plans to get the best deal at the best rate. This is one of the easiest and quickest ways to save money on your bike insurance plan. Compare when you buy a new plan or renew an existing one.

Does Social Media Help In Getting An Auto Loan?

We live in a world dominated by technology and social media. Whether they are your shared posts, status or your connections, social media platforms play a key role in carving your virtual personality. A well-known fact is that technology is an inevitable yet an integral part of our lives. When it comes to financing your car, social media is building its way and becoming a relevant medium of profiling. For instance, John walked into a dealership to purchase and obtain financing for a car. The quickest and easiest way to search for a tentative background of John would be to get a grasp of his personality on the basis of his behavior on Facebook and Twitter account, respectively. Currently, a small percentage of lenders use social media for judging an individual’s creditworthiness. However, the developing presence of social media is gaining mind share of the lenders.

Can Social Media help in ascertaining the Creditworthiness of an individual?

1) Facebook can build your Credit Circle

The very essence of Facebook lies in networking. A creditworthy profile does not require millions of posts or many friends. However, if you have a genuine profile and do not pose any abnormal social behavior, your profile is likely to get approved for an auto loan. Additionally, the presence of certain contacts in your friend list with a clean history and a strong credit score further add to your creditworthiness. Lenders can look for mutual contacts that have been previous customers. The payment history of the mutual contact can then be used as a basis to judge your creditworthiness. In order to get the most out of your circle, seek a person with a good credit score and make him a cosigner and your auto loan process will become smooth.

2) With LinkedIn, lenders can check your Employment Stability

A stable employment speaks volumes about your personality and trustworthiness. LinkedIn can serve as the best source of obtaining information regarding your job history, duration, professional position and interests. The documentation of an auto loan requires you to display evidence of a source of income through pay stubs. However, there is less proof one can gather regarding the stability of employment. Social media can become a tool to ascertain not only if there is job-hopping, but also the financial strength of the individual. A person with a 500+ connections, long duration of employment history and a considerable profile activity can become a favorable applicant in the eyes of the lender.

Buying a Car: Making the Most of your Social Media Profile

Social media has made its way into the minds of auto buyers as well as lenders. As primary sources of guides, nothing comes above your credit score, current income status and payment history. However, virtual platforms such as Facebook and LinkedIn are starting to occupy mind share in terms of creditworthiness. Once the primary sources of information seem insufficient, lenders may turn to social media to get an idea of your personality. A few helpful ways to make sure your social media positively adds to your credit score is to be careful with your online posts, invite only genuine friends into your virtual circle and to always keep your professional profiles updated.

Private Placement Loans – Alternative Mortgage Financing for Buying and Refinancing Properties

With current interest rates hitting historic lows, one would assume it should be easier than ever to obtain a mortgage loan, especially since the mortgage payments are more affordable due to lower interest rates.

However, pretty much 100% of loan products offered by institutional lenders today are strictly “prime” loans and they are available only to the best qualified borrowers with perfect, or nearly perfect credit, income, and employment. In addition, the property, which serves as collateral, must be in top shape as well to qualify.

One of the most significant bi-products of the most recent financial crisis, and the ensuing “great recession,” was effective disappearance of “alternative,” also called “non-prime,” mortgage loan products.

In the past, when borrowers buying or refinancing property did not have a high enough credit score but had solid jobs and incomes, they could qualify for alternative mortgage loans which compensated for the extra risk with higher interest rates.

Lenders which were making these types of loans demanded between one to three percentage points higher interest rates than those on the “prime” loans. The higher rates were deemed sufficient to compensate for the extra lending risk.

In today’s market that would make the interest rates on “non-prime” mortgages around 5% – 7%. However, a plethora of strict financial regulations and the effective disappearance of the private secondary mortgage market virtually eliminated these mortgages.

At the same time, due to the tough economic times, many real estate buyers and owners who have solid down payments or good equity in their properties, cannot qualify for prime mortgages due to lower FICO credit scores or because they are not meeting some other loan qualifying requirement.

In some cases, it is the property, not the borrower, which does not qualify for the financing. This is common in case of purchase or refinance of foreclosure properties or the so-called “fixer-uppers,” which are properties requiring significant repairs.

Private Placement loans, some time called “Bridge Financing” or “Hard Money,” can provide a viable financing alternative for borrowers or properties, which do not qualify for the prime loans.

What is a Private Placement loan? In short, it is a mortgage loan funded through a non-institutional lender such as non-public pension fund, IRA retirement account, hedge fund, investment group, mortgage broker, and/or private lender, which is primarily asset-based.

These loans require higher down payments (purchase), or substantial equity positions (refinancing). In some cases multiple properties can be cross-collateralized as a security for the loan.

Typically, the Private Placement loans are short-term (two to five years) and it they are used as temporary (bridge) financing, not a permanent loan. Here are two real-life examples how this type of financing was used effectively.

Bob (name has been changed) was a real estate investor who wanted to purchase a short-sale condominium property at a substantial discount. Bob was a solid borrower with excellent credit, job, income, and a large down payment. However, the project in which the condo was located had a pending litigation between the Homeowners Association and the developer.

None of the prime lenders would not lend on it, even though the condo unit was not directly involved in the lawsuit. Bob got a really good price on the condo, which was about 30% below the market value.

He put a considerable down payment and our firm obtained for him a Private Placement loan, which funded in about three weeks. Bob thinks will sell, refinance, or pay off the property within three years. In the meantime, this condo is an excellent investment rental for which he paid about 70 cents on a dollar.

The second example illustrates how Private Placement was used to assist property owners with saving their equity through refinancing. Mark and Joan (names have been changed) were successful business owners and operators for over 30 years. They owned a commercial building and several income properties, most of which had significant equities.

After Mark was diagnosed with serious illness and could no longer work, their business deteriorated and eventually had to be closed down. Their primary source of income was gone and so were their savings and good credit rating.

Soon they defaulted on their mortgages and the bank called the loans due and payable. The lender started the foreclosure and Mark and Joan were unable to refinance their properties due to poor credit rating and reduced income. In addition, there was some deferred maintenance on their properties, which made them very difficult to sell in as is condition.

When Joan contacted us, their situation was urgent. They had no funds to cure the defaults and they were about to lose their properties with substantial equities. Our firm was able to arrange a Private Placement Loan with a non-institutional lender, which was funded in about four weeks.

The new mortgage paid off all existing loans and gave Mark and Joan much needed cash reserves, including additional funds to fix up the properties. About one year later, Joan was able to sell their commercial and income properties and cash out their equities. The private placement loan was paid off in full and the borrowers saved hundreds of thousands of dollars in equity.

Here are basic characteristics of Private Placement financing:

Loan must be secured by real estate (all types of properties are considered, cross-collateral can be accepted)
Loan-to-Value (LTV): 50% – 75% of the appraised value (lower in case of vacant land)
Loan amounts range between $100,000 to $5,000,000+
Typical loan term: 2 – 5 years (longer terms are available)
Typical interest rates: 8.9% – 12.9%
Quick funding, usually in 3 – 5 weeks

Obviously, Private Placement loans are not appropriate for every lending situation and seldom are used as permanent or long-term financing. They require solid equity and the interest rates are higher than those of prime loans. However, these kinds of loans can be especially useful when prime lenders are unwilling or unable to lend due to borrower or property requirements and/or when there is a need for a quick funding.

In most cases Private Placement loans are used as “bridge” financing, allowing borrowers to either quickly acquire an attractive property or to refinance their property in order to preserve equity or get a cash-out. The typical exist strategies are refinancing or sale of the property.

Lead You To The Authentic Zone Of Money Transfer

If you have an international business and you have to move to many countries for the purpose it is the urgent requirement to find a reliable and efficient money transfer service. Business with any other country will require a resourceful money transfer. This transfer should be fast efficient and safe. Your trade shouldn’t be forced by the variation in exchange rates either. For all these reasons, it is prudent to take the assistance of International money transfer Services available. It will be better to find the reputed and quality one on the internet. It is an internet era and you get different types of information on the internet.
Process Involved
This service helps you find a provider that you are comfortable with. After you decide on the money exchange provider you will need to complete some forms. Once you have established contact, you will be informed about the rules, terms and conditions involved with a deal. Finally, you will be asked to complete some forms to set up your account. You can fix a standard rate for your exchange as well. The whole process is hassle free and once you learn how to go about it, the upcoming transactions will be smooth, effortless and quick.
Exchange Rates
When you wish the inexpensive currency transfer to be done, you should be careful about the rate you choose. With large amount of money a little change can make a big variation for your commerce. When you transfer your money to a bank, they will transfer it at a great exchange rate that you are happy with on the day you have mentioned. Exchange rates promised may differ between agencies that are why you should be careful while choosing one.
Staying in the circle
Most good free currency transfer companies will make sure you are kept in the circle about where your money is. When the transaction is being made, you will be sent a verification message and sometimes even a message. You will be consulted before and after the deal, which assures that nothing can go wrong with the deal. This feature gives you more control over your money.
Expediency and safety
Foreign Exchange is a very expedient way of sending money across countries. When you choose a reliable company, along with good customer service, you will also safer transferring your money. This service is as useful for the common man as it is for businesses. Having an overseas exchange agent working for you is an immense way of saving money. In some websites, you get to check the exchanging rates promised before you sign in to transfer money. This makes it easy for you to select the best in the record.
Currency Exchange near me, this thought is quite wise and intelligent as there is lower risk for the safety of your cash. If you are in Adelaide, you can find a good currency exchange company that has a strong team for a powerful deal of money transaction. A reputed and trustworthy company always offers the better rates and a higher security.

Sip Calculator Magnetizing The Investors Towards Online Investing

Online investing option has reached to a higher level with the introduction of SIP calculator. Making the calculation of SIP amount easy, the tool is handy to use as well. Let us understand the concept of SIP calculator with a story. There were two friends Yash and Rohan. Both had passed out college and were placed in MNCs. With the commencement of their career, they took a resolution of initiating their investment also. Yash was very trendy, and new technologies magnetized him. On the contrary, Rohan was simple and was not much of a techie. As both of them decided to invest, Yash did all the research online and also prompted Rohan to take up the online investment method. But, as for Rohan, it was not his area of expertise. So, Rohan relied on the mutual fund agent, and Yash went for online investing. When it came to deciding the amount to invest as SIP monthly both were confused. Yash took the help of an SIP calculator, and Rohan trusted the agent. But, the outcome was that Yash got the exact amount required for investment and the agent failed to calculate the precise amount and thus took an approx figure. Thus, for the same scheme Yash paid the correct amount that was required and Rohan had to pay a little more due to the inaccuracy of calculations.

The story signifies the importance of SIP calculator in the investing process, because the amount of SIP decides the corpus (the main aim of investing). Especially in the online investing the role of an SIP calculator is of vital importance. The investor advances towards being free in order to make the optimal use of their money. SIP calculator acts as a catalyst in aggravating the process investment through proper channel.

Features of an SIP calculator:-

There are a lot of features which motivates an online investor to use SIP calculator. A few amongst them are stated below:

Easy to use:

SIP calculator is an easy tool to operate on. The user-friendly approach is the striking feature of the tool. Providing an environment of smooth functioning and quick calculations, an SIP calculator in India is making online investments attain new heights with each passing day. The main reason of the increasing inclination towards online investment is the handy tool (SIP calculator), which ease out the complex calculations manifolds.

Using CAGR:

SIP calculator uses the formula of CAGR (Compound Annual Growth Rate) to calculate the returns. CAGR is the most widely accepted concept for the growth calculation of investment over a period extending one year. The calculation of CAGR is very complex and not beyond the grasping power of non-financial people. It is a mind wrecking concept and takes time to understand. But you need not worry. The CAGR calculation is simplified with the help of SIP return calculator. Paving the way for quick and easy calculations, SIP return calculator has become a defining point of online investment.

Targeting accuracy:

The goal of an SIP calculator is to provide results that are 100% accurate. But, it works on the inputs that are fed to it. Any mistake in the input data leads to an erroneous result. Otherwise, the result shows the exact and accurate outcome without the mistake of a decimal place. A perfection of that level is surely a strong feature of SIP return calculator.

The Benefits Of Trading The Commodity Market

Like trading in the Stock market, trading in the commodity market is also very interesting. While one trades on the basis of Stock Cash Tips in the stock market, the trader can trade on the basis of commodity tips in the commodity market. ProfitAim Research is one such advisory firm, which provide both the best Stock Cash tips as well as commodity tips to the traders.
Commodity market seems to be a lucrative avenue to a lot of traders and Investors. In the Commodity market various commodities are traded and one can take benefit of the price fluctuations to trade effectively in the commodity market. Various commodities are listed on the Commodity exchange and the relative prices of various commodities are traded on the exchange. There are various benefits of the Commodity trading like a trader can make huge profits by trying to forecast the Commodity signals. The most important part of the Commodity trading is to anticipate the Commodity trading signals.
Scalping: Intraday Trading Strategy For Commodity Market
One of the important benefits of the Commodity market is that the trader can form a strategy and trade on the basis of it. The Intraday strategies like First hour strategy or scalping techniques can be followed to earn good profits from the trades. Scalping is a technique to look at the price range during the first hour of trade and then look for a breakout from this range. Thus, if the prices break from the high it’s a buy call and a rise in the prices is anticipated. On the other hand, if a breakout from the lower limit of range is observed a down trend is anticipated. Thus, scalping is an important strategy in achieving good profits from the Commodity markets.
Also, there are other strategies available like trading for small profits. In this case small changes in the Commodity signals are generally traded for the profits. Also, a large number of trades are executed to add up to large profits, this will be applicable in Stock cash tips as well. The Commodity trading signals are unassuming but still with a proper plan and a proper strategy good profits can be made through Commodity markets. The trader can also base their trade based on the advice from the advisory firms who provide free Commodity signals initially and then charge a nominal amount for their services. Thus, the Commodity trading is beneficial if done with proper planning and strategy.
Trading based on the Charts
Trading in the stock or commodity market is an art difficult to master. People use various methods and strategies to trade in the stock markets. Trading based on the charts is one of the ways out of them. Various types of charts exist like Candle Stick charts and line charts. These charts can be plotted with varying time scale. The price movement depicted by chart can be an important way of forecasting future prices.
Thus, one can trade on the basis of charts and by applying suitable indicators of the technical analysis, one can anticipate the price movement. Trading on the basis of intraday Stock Cash Tips is the other way of trading.

Fill Your Real Estate Financing Gap With Mezzanine Financing

Real estate transactions are usually financed with two sources of capital – first mortgage financing and equity. But what do you do when there is a gap between the amount your bank is willing to lend in a first mortgage position and the amount of equity you want or can invest?

Too much equity and your returns go down. Not enough equity and the deal might not get done. While it is certainly possible to negotiate seller financing in the case of a property purchase, but what do you do if you are developing a piece of property and there is no seller?

As an example, consider a project where the mortgage lender will only lend 60% of the cost. If your return expectation were built around 20% or 25% equity contribution, you have a financing gap that needs to be filled.

Consider using a slice of capital known as mezzanine. Mezzanine is defined as “a low story between two others in a building, typically between the ground and first floors”. In this same context you can think of mezzanine financing as that capital that sits between the equity in a deal and the first mortgage.

Mezzanine financing is a debt instrument that is higher yielding – read more expensive – than first mortgage financing, but lowering yielding, cheaper, than equity. The reason that mezzanine is more expensive than traditional first mortgage financing is because the first mortgage lender has a preference over the junior capital (the mezzanine and equity) in the event of liquidation. Conversely, the mezzanine has a preference over the equity in the event of liquidation. Mezzanine financing can either be secured by a second mortgage or be unsecured.

The returns for mezzanine are generated through a combination of higher yielding coupon and a participation in the equity of the project. There is a balance in the ratio of the how the mezzanine return is generated. Part of the equation is based on the mindset of the mezzanine investor. Some investors are more equity oriented, and so will accept a lower coupon for more of the upside of a transaction. Other mezzanine investors are more debt oriented and will want to generate more of their return from the coupon.

If your mezzanine investor is more debt oriented, but there is a limit on the amount that can be paid on the mezzanine instrument, due either to the cash flow of the deal or covenants of the mortgage lender, you’ll have to partition the coupon into cash-pay and accrued payments. To the extent there are accrued payments, you should be aware that i) the accrued interest payments will have a preference to distributions to the equity – meaning that they get paid first; ii) since some of the payments are pushed out to the maturity date of the mezzanine, you will probably have to give up more equity than if all of the interest payments were paid currently; and iii) be careful in structuring the accrued payments to avoid, if you can, compounding of interest payments.

Institutional investors regularly participate in the mezzanine debt offering of real estate transactions, but these are typically large transactions. For smaller deals, look to tap into your network of individual investors, some of which may find the current yield potential secured position more interesting than the equity of a transaction. And, of course, when you go out raising capital, whether it’s debt of equity, you’ll want to present your investment opportunity with a private placement memorandum.

Top 5 Benefits Annuities Can Bring Except The Lifetime Income

Earning a consistent income in their retirement life is a major concern for the seniors approaching their retirement and many of them invest in different annuity insurance plans. These annuities help the insured to receive a guaranteed income for life protects from the fear of outliving their savings. Also, if a senior couple hasn’t saved enough or doesn’t have someone to support after their retirement, these policies help greatly to take care of their daily expenses and maintain a better lifestyle. However, the majority of seniors isn’t aware of all the benefits an annuity can bring. Most of them buy an annuity solely to receive a guaranteed income in their retirement life but the annuities have a lot to offer. Here, we are going to explain five more benefits of a retirement annuity plan that you might not be knowing.

Benefit to your loved ones

At times, seniors pay a long series of premiums to earn them back during their retirement but die at an early age without receiving the complete benefits. Many seniors die soon after their retirement and insurance providers keep their share of investment with themselves. But, the new additional feature allows transferring the benefits to the beneficiaries, if the insured dies early. Along with the immediate annuity plan, you can choose a guaranteed period of 10-20 years that are calculated since the time you start receiving the payments. If you opt for a 20-year guaranteed period with the annuities, your insurer will provide a series of payments for exact 20 years. You can name your spouse or kids as the beneficiary and they will receive the benefits for rest of the period, in case you die early.

Tax deferral on earnings

Most of the investments are applicable for state and federal taxes, but the investments such as interests, annuities, dividends and capital gains earn a tax-deferred status. These investments are tax-free until you withdraw the accumulated amount. The tax-deferral is similar to 401(k)s and IRAs, but there isn’t any limit on the amount and you can put any amount into the annuities that you assume enough to spend your retirement comfortably. Moreover, the minimum withdrawal criteria have more flexibility than that of to 401(k)s and IRAs.

Tax-free investment transfers

Market performs differently at a different time and an investment performing strong today may perform poorly after a certain period. Hence, investors keep transferring their investment amount form one to another fund and there are financial advisors to help with the same. Usually, these investment transfers or rebalancing are applicable for taxes but the annuity retirement plan has no such tax consequences. That means, you can rebalance your investments as per your financial advisor’s suggestion and you won’t have to pay any taxes on that.

Protection from lenders

People take different types of loans to match a better lifestyle and pay the due amount in installments. At times, people reach a stage where they only have the money enough to take care of their fundamental requirements and aren’t able to pay the loan installments. In such cases, if the lender files a lawsuit, they may lose the return on the investments made. Annuities insurance policies also help protect your investment return even if you can’t make the installments. Usually, the premiums you have made to your insurance provider, belongs to them and there are laws that restrict that money to be accessed by the lenders.

Variety of investment options

Insurers help the investors with a range of annuity options at retirement including the fixed and variable one. The first one credits a certain rate of interest on the amount you deposit while with the later, your money is invested in the stock or bonds like mutual funds and provide a return based on the market performance. Also, various insurance providers have introduced different types of floors that set a limit by which your investment value may not fall further. That means, if you have invested in a variable annuity, you return won’t fall below a certain value, despite the fluctuations in the market.

Undergraduate Courses at a Finance University

Undergraduate Business and Finance courses are available at a host of universities across the United Kingdom. However, studying at a specialist finance university gives students the best possible opportunity to receive industry-standard teaching both on a theoretical and practical basis.

Studying at a specialist finance university enables undergraduates to be fully prepared with the key skills that will maximise career prospects. London boasts specialist business schools and are prime examples of an institution which provides a learning environment and an undergraduate programme closely linked to the industry with professional placements, with the opportunity to study abroad.

Such institutions set rigorous entry requirements, as students fortunate enough to enroll in such a course will have a significant edge over those who study a business or finance course at a university that specialises in other areas. Meanwhile students with particularly strong academic grades from across the UK, European Union and on a global scale are often eligible for scholarships and bursaries that can provide a significant financial boost in the first year of study.

A host of courses at specialist finance universities cater for short-term internships and even year-long professional placements that enable students to gain professional experience that is valued by graduate employers. Some students impress sufficiently on their placement to be offered a permanent contract at the end of their studies.

London finance universities also benefit from being able to boast a lively and friendly social scene which makes student life significantly more comfortable when moving away from home to a metropolitan campus. With well-oiled student unions and societies it provides the complete student experience making it the best possible investment for future employment.