Your Financial Manager

Robert Kiyosaki likes real estate investing is because real estate touches each part of his financial statement.  Starting with his best-selling book Rich Dad Poor Dad and continued in many of his subsequent books, Robert explains how real estate gives cash flow to his income statement and on the expense side of the income statement he’s able to deduct the property’s depreciation as an expense. 

When seen from the balance sheet, he’s able to gain appreciation on the asset side and the leverage provided by the bank rounds out the liability side of the balance sheet.      

Through a property management company you can also access the four parts of the financial statement.  Here’s how:

Balance Sheet:  Asset-side

Every property producing monthly rent is an asset.  It is possible to sell the rights to manage the property to another property manager for a lump sum of money. 

Balance Sheet:  Liability-side

Robert uses his banker’s money aka leverage in order to purchase a large property with only a small percentage as a down payment.  When the property goes up in value he is able to keep the entire appreciation amount without having to share it with the bank.  He can use leverage and still get the benefit of 100% of the appreciation.

In the property management business, leverage is achieved through controlling the income of a property.  A property that is producing $500/month in rent gives a property manager $50 in income.  If the property manager feels that $500 is too low for the area, the manager can increase the rents by 10% to  $550 and the management company’s income will go up 10% accordingly.  How many companies can increase their income by 10% without a causing uproar among its clients?

Income Statement:  Income Column

As a property manager, you take your 10% management fee directly off the top after the rents have been collected.  Here again, if the manager feels that rents are too low, the manager simply raises the rent and increases the income to both the manager and the property owner.  It’s win-win!

Income Statement:  Expense Column

While Robert Kiyosaki is able to depreciate the building as an expense, a property manager cannot take this tax advantage because a property manager doesn’t own the building-the owner does, however, a property manager is able to make money off the expenses incurred by the owner of the property. 

Let’s say that a tenant calls to say that the plumbing underneath the sink is leaking.  The property manager sends out his repairman to fix the leak.  The repairman sends a bill to the property manager for the $12.00 plumbing parts plus $30.00 for his hourly rate. 

The property manager now marks up the bill by lets say $10.00 and now charges the property owner $12.00 for the parts and $40.00 for the repair time.  The $10.00 is for the property manager’s orchestration of taking the call from the tenant and sending out the repairman.

Now multiply this scenario by the management of 200 properties and you’ll find that expense mark-up is a significant source of a property manager’s income.  

As you can see real estate allows an investor to utilize all four parts of a financial statement.  As a property manager, you can piggyback on the owner’s shoulders and receive some of the same benefits of cash flow and leverage and you can actually profit from the property in ways an investor cannot i.e. expense mark-up. 

And here’s the best part and the prime example of a property manager’s ultimate leverage:  the manager isn’t responsible to the bank for making the payments on the mortgage.  The owner is responsible!  The property manager is able to make money off the property without being personally responsible to the bank for the asset that creates all the money in the first place. 

What a concept!

I am a wedding photographer and one of my clients is now in breech of contract for nonpayment. I have no use for her pictures and would prefer to have my $$. In my contract I financed interest free for 4 months with payment due before wedding. Bride had sob story and I extended for two month. STILL no money two month later. I am now sending her a Consumer Loan Agreement with interest. I have never done this and can not figure what the payments plus interest will be. HELP!

The principle is $1318.07. The interest is 19.99% and there will be three payments starting Sept 30, Oct 15 and Oct 30.

Any sharp financial types out there able to help a photographer out?
tom, I did not ask for a loan. I am the lender. I simply need to figure my interest.
Kate, I have worked the math but need to verify. That is why I asked the question. I am a I have 20 years of business accounting under my belt but loan interest and payments are a different animal. I have no problem going to court. That is my next step. I simply want to give them another chance to pay but now I want interest.
Yoji, I appreciate your work. Thank you but I need to give her three payments. I don’t want to give her any but I want my $$.

12 on the Money Interview, August 2007 … money business marketing coach lisa moyles lisamoyles

The Student Loan Sunshine Act is the latest response by the House of Representatives over the recent student loan controversy brought to light through a recent nationwide investigation by New York Attorney General Andrew M. Cuomo. The act requires lenders to disclose all financial kickbacks and deals made with educational institutions and prohibits certain types of gifts and incentives deemed “questionable”.

While some analysts claim that the bill will have minimal effectiveness because it fails to address the government subsidies that make student loans popular with lenders, there is little that can be done to curb subsidization without risking the availability of student funding.

Student loans are a risky proposition, and one that fails to generate revenue for lenders up to year post graduation. Critics of the current system claim that the absence of subsidies will force lenders to become more competitive and educational institutions to eliminate preferred lender status. Unfortunately, without subsidization, there is little if any incentive for lenders to offer student loans.

Almost any loan, be it business or personal, garners far better interest rates, produces interest income immediately and aside from mortgages, yields full repayment within a shorter timeframe than a student loan. Additionally, those applying for loans often have the financial security in the form of a steady income as well as collateral to back the loan. Many students, especially those just starting college, not only are not employed or employed at a job that only affords living expenses, but have no intention of pursuing employment for the duration of the pursuit of their degree.

The benefits of an educated society are many, yet most students wouldn’t be able to attend college without the ability to finance it through student loans. While a large percentage of students rely on federal Stafford loans, many are ineligible for federal lending, especially graduate students.

Privatization is only effective when there is market demand on both sides of the equation. Less involvement by the government may sound positive, but in this case, it’s a matter of demand versus subsidized supply, not actual supply. Without subsidization, many lenders would avoid offering student loans altogether. Those who would continue would be forced to charge interest rates that are commensurate with the necessary terms of the loan.

The 5 Step Secret to Financial Security

Most people in the developed world have the financial resources to achieve financial security and in many cases financial independence.  I believe that getting your finances into a position of strength is straightforward if you follow the standard process below.

Step 1 – Current State

This stage is an honest appraisal of where you are at the moment.  The two simple measures that you need to create are Total Wealth and Cash Flow. 

Total Wealth = Total value of all your assets* – Total value of all your debts**

*Assets include all savings, your home and any other valuables that could be sold to release funds if absolutely necessary e.g. car, antiques etc.

*Debts include all loans, hp, credit cards and mortgage

Cash Flow = Total Income each month – Total Outgoings each month

It actually doesn’t matter what the numbers are for the above measures.  What matters is that you have begun to take action on your personal finances.  These measures can be used each month to see the progress you will be making after taking the following steps.

Step 2 – Cash Flow balancing

You must take a critical look each outgoing and write one of 4 comments next to it. 

1)      It can be eliminated immediately – e.g. savings, gym membership, mobile phone, eating out etc

2)      It can be reduced immediately – all utility bills and insurance products

3)      It can be eliminated long term – all debts

4)      It cannot be reduced or eliminated – certain tax liabilities

You must reduce your outgoings and/or increase your income until your outgoings are less than your income.  Ideally the difference should be at least $100 (£75)

Step 3 – Debt Elimination

Use the cash you have freed up in stage 2 to accelerate the payment of each debt in turn until all*** of them are paid off in full.

***You have to decide for yourself whether you want to include your mortgage as a debt

Step 4 – Long term investment

Invest the excess cash you have each month in a long term investment.  Seek advice from a professional financial adviser but please make the effort to understand the products, costs and risks of the advice they give you before you make any investments.  If the financial advisor cannot explain clearly to you what each product they are recommending does, then find another financial advisor who can.

Step 5 – Measure and Act

You must now check the performance of your investments each month.  Make sure that you are achieving the performance you expected.  If necessary move your valuable financial resources to another investment

On completion of these 5 steps you will have moved from financial chaos to financial control and towards financial security and financial independence.

Wishing you good fortune and prosperity

Robert Surgener

www.thesecretoffinancialsecurity.com

They offered me a loan for $7000 at 6% financing with the condition of putting down the first 8 months payments totaling $1313.78. I could not find them when I called information And seem to find no record of them besides there website.

Getting a small business loan for the first time can be a stressful experience, especially during these hard times. Getting a loan from the bank, especially now has also fallen into hard times. So here are plans A and B to help you start your own small business. Plan A is for acquiring a small business loan from the bank, and plan B is your contingency plan, so take notes,

PLAN A

Know yourself. Before approaching a bank or any other lender, be sure you know your own history in terms of personal credit. Is your credit history good or bad? Due to the current recession, you can be sure to see that banks have become more strict in reviewing records before making any decision for business loans. You can obtain your credit history from companies like TransUnion, Experian, or Equifax via fax, mail or online.  Also, be sure to check if the records are right. Companies with credit card services sometimes make errors in logging cancellations or adjustments to your credit limit. These misreported transactions in the past  may appear as available credit to the bank.

Prepare a competitive business presentation. A good presentation should initially be able to make the bank understand what you plan to do with the money and not simply WHY you need the money. Remain objective in your explanations and try not to attach too much personal reasons in your answer. The bank’s concern is not with you, but with the money they will give you. A cash flow projection will be of good help during your presentation because the bank can quickly assess the benefits and risks for them. However, a cash flow projection is different with a cash flow statement. The projection is an expectation on how money will come in and out, while a statement shows how money arrives and leaves the business. You can make a projection on a monthly basis over one year for a better outlook of your expectations for the business.

Prepare other documents. You may need to present other documents like a credit rating report. Though this is not an actual requirement, it will still be useful for the bank to know your loan payment history and other dealings with other credit card services. After all, most banks only approve businesses that are able to accept credit cards.

Get to know the bank. It is also important to do a little research on your lender’s point of view. Again, the first question in the bank’s mind is, “what are you going to do with our money?” The second question would be, “Why should we risk our money for your business?” Providing the bank with the right answer boosts your chances of getting that business loan by more than 50% of the time.

Bear important facts. You need to be honest to the bank on certain areas like, how much money are you willing to put in to the business, the collateral you currently have, and how much do you really know about the industry you’re planning to venture in. Enduring the bank that you’re not completely in the dark on your planned business will somehow put their minds at ease with regards to the loan they will be giving you.

PLAN B

If all else fails with the bank, do not despair. There are other means of acquiring small business loans for yourself. Many business cash advance companies are now available to serve you. Borrowing money from these companies are relatively easier than getting one from a bank. They will review your credit record but they are less strict in terms of seeing a few bad records on your history. With a business cash advance, you will be able to start your own small business, expand, pay off debt or taxes, and get emergency funding. However, make sure that the company you will be applying to is legitimate with negotiable terms with payment.

Good luck!

You have got all of the grants and scholarships you can, but you still need money for your education. It is time to look at loans. But which is better – federal loans or non-public loans?

Fed loans
if you want to take out a loan to help pay for your education, you should generally look at Fed. loans first. The biggest source of education loans around, Fed loans are long term loans with low IRs designed for students who want money for their educations. They have several benefits when compared to other borrowing options, including

- Lower interest rates
- Options to defer payments
- Longer repayment terms
- less complicated credit necessities

Suitability for some of these loans, for example the Fed Perkins Loan and the bankrolled Fed Stafford Loan, are needs-based, while others are not. You’ll need to finish a FAFSA to apply for these loans.

the commonest federal student loans are listed below :

federal Perkins Loan
The Fed. Perkins Loan is a low-interest loan available to students who have remarkable fiscal need, based primarily on the data provided on their FAFSA. Undergraduates can borrow up to $4,000 per year, while graduate students can borrow up to $6,000 each year.

Federal Stafford Loan
The federal Stafford Loan is available to undergraduates and graduate students. Loan amounts rely on a student’s year in school and whether they are financially dependent or independent. Your varsity’s financial help office determines your eligibility.

Stafford loans can be backed or unsubsidized. Fiscal need determines which type a student is suitable for. Backed loans are based primarily on monetary need. The governing body pays the interest while the scholar is in class, in deferment, and in their grace period.

Unsubsidized loans are available to all students, regardless of income. The student is in charge of all interest.

Fed and Loan
The fed and undergraduate student loans is a low-interest education loan for fogeys. Annually, parents can borrow up to the price of attendance, minus other financial help received ( scholarships, grants, student loans, etc . ).

the positive loan is not based totally on fiscal need. Qualified applicants must pass a credit check.
non-public loans
Private loans are designed to supplement Fed loan programs and are available from schools, banks, and education loan bodies. They are typically used to cover education costs that can’t be met by Fed help.

Terms for these loans vary according to the bank and your credit history. Keep these things in mind as you reflect upon taking out a private loan :

- Non-public loans have credit necessities, and you may need a co-signer
- The lender determines the IRs and charges, which may feel the effects of your credit score
- Personal loans may not offer deferment options
- Private loan programs may offer borrower benefits,eg interest rate Deductions or discounts

regardless of what kind of loan you take out, be conservative and borrow wisely! All loans have to be paid back, whether federal or non-public.

The word attorney signifies someone who knows the legality of things. In fact, when things go wrong in the hands of law, people are likely to run to the midst of attorneys. In the field of legality and law, these attorneys are the experts who can provide you with the ample insights you need and the advices that will possible let you be rid of the troubles.

More and more people are also aware that being attorneys who are able to play with the ups and downs of the law, they do earn handsome pays. Half of it is true. Why not? Their services often require a high payment.

More so, there are several people who desire to become attorneys. They think that their financial satisfaction can be achieved through being in the field of law. Indeed, in several states, there are lots of vacancies for several sorts of attorneys whether they are experts in the areas of business, estate, income, international taxes, or with properties.

The aspiring attorneys usually seek to have strong foundations and background from the finest law schools. They even prefer to get their degrees from stable and famous universities. They believe that their luck in landing a job will depend on the school of theirs which they will get affiliated with.

After graduating from the law school and passing the licensure exams, attorneys have the option to either work for the government or be linked with private law firms. They may likewise start to build their own law offices and become private practitioners. If ever they prefer to stick with the government, they can secure posts in the various job openings whether as prosecutors or as advisors in partnership with the government of the state of course.

Just like the doctors, attorneys must also choose a field of specialization. It can be in the area of business, property, tax, estate, or income. Their clients will of course be people who are faced with concerns in the said area. So if you are troubled with your property issues, consult a property attorney.

So who are these tax attorneys? Tax attorneys are legal professionals who specialize in the field of taxes be it local or international. In every state, there are a lot of tax attorneys so you just have to take your pick. In most cases, large law firms would always prefer hiring tax attorneys who’ve had at least three years of experience.

Most of the younger graduates are required to work as apprentices at first and through the course of time as they are able to collect more and more knowledge and experiences, their posts are also moved up. In short, they get promoted. A lot of young attorneys seek valuable experience from big law firms before they finally start up their own offices and practice going solo.

Their main reason is for them to gather enough knowledge, a list of clients, and have their reputation practically stable. Once a tax attorney has gained his reputation in the business, clients will be flocking into his office.

Tax attorneys should possess effective interaction and negotiating skills both with their staff and with their clients. Being meticulous, keen to details, rational and logical, as well as being an efficient communicator are key factors for a tax attorney. A tax attorney must also be familiar with the laws governing the local and international taxes. More so, he should be determined enough to fight off cases of frauds and tax evasions.

My man and I have both been on a deed and title for property and a town home. But neither of us were on the financial contracts. Are we eligible for 1st time home owner loan?