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It has been said that nearly 61% of businesses are launched with either private capital or capital that is invested into their business by family and friends but investment doesn’t have to stop with merely just your family and friends, which is why equity finance exists.

Equity finance is cash that is invested into your business in return for a share of your business. These investments of cash never have to be repaid and don’t have interest attached to them. Equity finance is true risk capital as there is no guarantee that the investor will get their money back at all and these investments are not tied to assets that can be removed from your business should it fail.

The way in which investors get a profit from their investment is the fact they have a share in your business. This share means that investors either get money that is generated either through a sale of the shares once the company has grown or through dividends, a discretionary payout to shareholders if the business does well.

There are several types of equity finance such as business angels and venture capitalists. Each type of equity finance varies in the amount of money that is available for investment and the process of completing the deal.

If your business can support a growth rate of a least 20% you are more likely to be able to get equity finance. If you can’t generate a growth rate of at least 20% in your business then you are unlikely to be able to gain equity finance. It is the idea of control and the prospect of higher returns if your business is successful that attracts people to invest in your business

Sadly however many people are still highly reluctant to seek the help of equity finance as they see the idea of it as ‘relinquishing control’ of their business. Many small businesses are especially reluctant if their business is growing fast. As a business owner you should ask yourself the following questions below making any decisions about choosing to use equity finance:

o Are you prepared to give up a share of your business as well as some of its control?

o Are you and your management team confident in the business and the products and services that are on offer?

o Does your business have a unique selling point?

o Do you have drive to grow your business?

o What industry experience and knowledge does your management team have?

You should also consider the following when it comes to obtaining equity finance:

o How much funding do you need?

o How much control are you hoping to retain?

o How long do you need your funds for?

Each business should investigate the options that are open to them when it comes to finance. Equity finance is medium to long term finance and is the perfect type of finance that is open to small businesses, especially if you are an entrepreneurial business. Entrepreneurial businesses are what private equity investors are mainly interested in. This is because they have aspirations and a high potential for growth.

If you are interested in the use of equity finance it is important that you speak to a financial team who can put you in touch with people who will be able to put you in touch with the right investors.

By: Helen Cox

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In the good old days, personal finance for most people meant simply balancing their checkbook once a week and making sure they had enough money in the bank to cover the monthly bills. Of course that was long before the days of multiple credit cards, electronic fund transfers, PayPal, and the dozens of other complicated financial transactions made by even the average person on a daily basis. These days, keeping track of person finances can be quite a chore and can often overwhelm you, leading to a less than perfect financial situation.

Modern life has created additional headaches in our daily lives, but fortunately it has also provided new tools to use to control them. Personal finance software is the best option for keeping one’s personal finances organized and up to date.

Personal finance software comes in many varieties, each offering a specific set of financial tools. The simplest forms simply keep track of multiple bank accounts, including credit card accounts. The most complete versions offer tax tracking, investment tracking, budget analysis, electronic banking and a long list of other features. How much you need depends on your situation and how closely you want to track your finances.

Most banks now offer free electronic banking to their customers. Make sure that whichever program you choose, it is capable of taking advantage of electronic banking. The vast majority of programs offer this feature as standard so you shouldn’t have to look hard. With electronic banking, you can easily check your balance, automatically download statements, transfer funds among accounts and have all your information seamlessly transferred into your electronic account register.

The two powerhouses of financial software are Quicken from Intuit Corporation and Microsoft Money. Both companies offer several versions of the program and generally offer the same features. The interfaces are slightly different and one’s preference will likely come down to which one appeals to you most. New editions are released each year to account for changes in banking and tax law and owners of the previous year’s edition will receive discounts to upgrade.

Another option that is growing in popularity is software that is kept entirely online. You never actually download a program to your computer and can access your information from any computer connected to the Internet, including SmartPhones. This is referred to as “cloud computing.” Some websites offer a low monthly fee to use the software and other sites are free and entirely advertising supported. Some people prefer this method for its convenience and other people stay away from these programs due to security fears.

Once you begin to use personal finance software you’ll wonder how you ever managed your finances without it. People become addicted to seeing the computer generated reports of exactly where their money goes each month. They often find this makes it easier to create a budget and stick to it. Even if you simply want to keep your basic checking account up to date, personal finance software is worth the small price.

By: Victor Kramb

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When talking about investment management firms, it is very important to understand profit maximization and wealth maximization. According to the objective of profit maximization, the ultimate goal of a business enterprise is to maximize its profits. All the efforts of the organization are to be directed to achieve this goal. The profit maximization objective is justified, as business is conducted for earning profit. When profit earning is the aim of the business, profit maximization should be the obvious objective. Profitability is an indicator of the efficiency with which the firm is managed. The higher the profit, the better the efficiency. For growth and expansion, profit is the main source of finance. To meet unforeseen contingencies reserves are necessary, which is possible only if there is enough profit.

However, the profit maximization objective is objected to on some grounds. The term profit is vague. It may assume different meaning in different contexts. It may be short-term or long-term. The concept of profit maximization generally ignores the time value of money. All profit gained in different time periods are taken together. The risk involved in any given project and the uncertainty of return are not at all considered. Accounting bias influences profit.

On the other hand, according to the objective of wealth maximization the ultimate goal of a business enterprise is to maximize the wealth of the shareholders, which is represented by the market value of the shares of the firm. Wealth is defined as the net present worth of the firm, i.e., the present value of all future returns.

Though the wealth maximization objective seems superior to the profit maximization objective, it is to be noted that the former is based upon the latter. The market price of shares, which is the indicator of the wealth of the firm, is based on the long-term returns of the firm. The returns that accrue to the investor would be a function of the earnings of the company. Thus it can be said that these objectives are not competing.

By: Thomas Morva

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The area of personal finance covers a broad variety of topics involving money which include areas such as budgeting, expenses, debt, saving, retirement and personal insurance among lots and lots of others. It can almost seem a little overwhelming for those of us without a good plan how to tackle it. Understanding how all of your incomes and expenses work together can lay the groundwork for a solid financial foundation for you and your family.

My advice if you feel that you’re a little over your head financially is create you own personal financial statement. A statement, done the right way, acts as financial roadmap; guiding you from where you are now to where we want to be tomorrow. A personal financial statement can also provide fixed points of reference when measuring progress over a period of time. They also help you make smart decisions about financial matters.

Here is how you can create you own personal financial report quickly, easily, and most important, correctly:

The first thing you need to do is find the type of financial report which will be the easiest for you to maintain on a monthly basis and for this I recommend Microsoft Office. Their programs make it quite simple to use. You can even find some pre-formed financial reports and monthly ledgers at most of the leading office supply stores. Organize all of your monthly bills together and then and separate them into categories for housing, utilities, medical expenses, school loans, and car payments. There should also be a separate category put together for things like dining out and other miscellaneous expenses. Now that you have your entire monthly expenses organized, begin to enter them into your personal financial report by whether or not they are tax deductible. Also make sure it contains payments you make on both an annual or semi-annual basis, like insurance. This is done by dividing the annual payment into twelve equal installments. Gather all of your sources of incomes such as pay stubs from work, pensions, retirement income, rentals, child support, etc., and add them all together. Simply divide your payout by twelve, if you receive an annual payout, for determining what your monthly income would be. Once again, you’re working in the financial report. In the appropriate space enter you total income, the net amount from your paycheck. Your net amount would be the amount you take home after all the taxes have been deducted. The total amount of all of your monthly expenses should next be added together. Once you have that number, enter that into the financial report. Subtract the number you get as your total monthly expenses from the total monthly income you figured out earlier. That amount is your monthly cash flow which could then be saved or used for extras expenses. Keep the financial report up to date every month by choosing at least one day a month for updating.

By: TL Kleban

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The various ways and methods you use to obtain money and the things you spend it for are what make up your personal finances.It implies not only the various channels through which you acquire funds for your personal use like loans and credit cards; it also includes the process of budgeting, saving and expenditure.

We need to, first of all, take a glance at the differing ways we borrow money. If you borrow money through credit cards you have to pay it back later with interest. Today the use of credit cards is quite widespread, but it is necessary to take caution when using them. Overspending when you are using credit cards is easy to do, so you may regret it when it comes time to make payments on the high interest balances.

In contrast, personal loans will reduce your spending because you will be borrowing only the amount you need for the purpose of your loan. You may use a personal loan for differing purposes, like home loans, auto loans, debt consolidation loans and to do cosmetic surgery. A personal loan has interest attached too, so you must abide by the terms of this loan to make repayment. If your loan is secured by collateral, you have to be more careful because if you fail to repay, you stand a chance of losing your assets.

The best results with the financial opportunities you have offered to you may be simple to arrive at and it could begin with you. The characteristic of prudence, and being economically minded and taking the time to research the loan market are all helpful. When you understand your financial limits and ability to repay, you can create a proper budget and maintain the habit of keeping with it. If you keep accurate record of your expenditures and begin to understand your spending habits and make the changes you feel are necessary, you will also be given an understanding of your credit card usage.

The loan market has trends and offers you must become acquainted with before you make any final loan deals. Do not hesitate to ask for a loan quote, this is the best way to get an idea of the cost of the loan. When you have the loan quote you will better understand whether or not you can afford the loan and comfortably pay for it, however, make sure you read the fine print to carefully look for hidden fees and costs.

Personal finance controls your quality of life and measures your ability to keep the economy of it under your control. When handled well, your finances will take care of the other parts of your life, but when mishandled, your finances will cause you nothing but anxiety and concern. If you gather as much information as you can on personal finances and learn how to handle your own you will be able to live a relatively safe and stress free life. Personal finance for each one of us consists of our own particular puzzle pieces to fit together to form a complete financial picture for us.

By: Alisdair Cosgrove

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personal finance

In order to make self directed IRA investments, you first have to find the right custodian, if you want the most options. Under the law, there are numerous IRA permitted investments, but many brokers do not offer them.

Before you decide to make self directed IRA investments, you might need a little education. The right custodian can offer some guidance, concerning the law, but otherwise is merely an account manager, responsible for filing the appropriate paperwork.

If you are unaware of the legalities, you could be forced to liquidate your account. There are many IRA permitted investment types, but there are some types of transactions that are prohibited. First let’s look at those.

Self directed IRA investments that are not allowed include artwork, rugs, antiques metals, gems, stamps, coins, alcoholic beverages and other collectibles. So, you cannot put your original Picasso in the name of the custodian of your retirement account. It makes sense, if you think about it.

A bottle of thirty year old scotch may be very valuable, but in order to get the best price, it would have to be put on an auction block or a buyer would have to be located. IRA permitted investments are easier to “liquidate” or sell.

There are a few other self directed IRA investments that are not allowed, because they are considered “self-dealing”. You cannot use the account to purchase property that you will live in now or plan to live in after retirement. Neither can you allow your family members to live in a property held within your account.

IRA permitted investments include residential and commercial real estate, as well as raw land or vacant lots. You may also hold notes, foreign currency, gold bullion and private stock offerings, as long as you are not the majority stock holder in the company. And of course, there are the more tradition stocks, bonds and mutual funds.

Certificates of deposit may also be self directed IRA investments, but the return or yield is considered very low. Most people who choose to go the self-directed route are looking to grow their balance quickly, but if you need some security, CDs are the lowest risk.

As you can see there are more IRA permitted investments than those that are not allowed. Some accountants find the whole thing a bit confusing. Some brokerages are not familiar with all of the choices that you have available.

It’s best to get help from professionals that are experienced in self directed IRA investments. When it comes to real estate, if you need help finding the right deals, there are a few investors willing to teach you the ins and outs of the business.

You can never have too much education. Learning through trial and error is very risky. Remember, you are trying to fund your retirement. This is just a brief overview of what you should know about self directed IRA investments. It’s probably just enough to get you to the next step.

By: Ronald D. Frommert

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