Income Protection Considerations for Growing Families!

8 August 2011 Sören Zschoche 23 Comments Entertainment, General

There’s a lot to think about as your family grows. Will our house be a safe and nurturing environment for the kids? Which parent will stop working? How will your kids be educated and disciplined? The questions seem to be never-ending! Today we deconstruct one niche, but common, issue for Australian families – how should my income protection insurance policy change as my family grows?

Should the Non-Working Spouse Be Insured?
Many companies now offer income protection policies that pay a benefit if a non-working spouse is unable to fulfil their household duties. This recognises that although there is no monetary income on which to base benefits, this partner makes a contribution to the house which could only be replaced with money if they were injured. Homemaker income protection can help pay for cleaning, washing and cooking services, and more.

However, remember that this type of income protection may not be tax deductible, as a standard policy would be.

Should You Choose a Shorter Waiting Period?
Having a family usually means more bills that are more urgent. You don’t have the same flexibility in your expenses that you do as a childless family, and so you may want to think about choosing a shorter waiting period so that benefits can be paid sooner after you become disabled.

Is Your Cover Guaranteed?
If you’re in relatively good health and with a growing family, now is the time to check that your income protection cover is guaranteed. Your policy document should have a statement saying something like “We guarantee to provide cover for as long as you continue to pay your premiums as and when due, regardless of changes in your health or circumstance”.

Are Pregnancy Complications Covered?
Growing your family is usually a long term project! Even if this pregnancy is uncomplicated, you should check whether your income protection plan pays out for complications of pregnancy that would prevent you from working. This may be useful if you plan for your new bundle to have siblings in the future.

Are You Getting the Best Deal?
There are plenty of informative and neutral price comparison sites for income protection insurance, which take the legwork out of ensuring you
have the best income protection deal.

Utilise these comparison sites, and you may have a little extra cash to spend on nappies and toys!

Advertising for your business

6 August 2011 Sören Zschoche 14 Comments Companies

Having your own business is a great ambition to work toward. Many people dream of having their very own rewarding enterprise so that they can enjoy the perks of working for themselves. Owning a business of your own can create the freedom you have always dreamed of, but it is a lot of hard work and determination. Being your own boss means having to put a lot of long hours in, especially in the beginning. Coming up with the finances to get your business going can be a challenging prospect. Assuming that you are not paying out of pocket for your strat up you’re going to want to create a great business plan to get the attention of possible investors. Your first bet personally is to make sure that you are fully cleared of any personal debt; business cash advances, student loans and credit cards. The reason being that owning a business takes a lot of money and if you are already in debt, I’m sorry to say, but it most likely will not work out for you. This venture will require you to know and understand how to manage funds properly; it’s one of the biggest parts of a successful business. Actually it is the only part to a successful business in the end. If you’re not bringing in the money, then you can’t stay open. There are many types of different businesses out there, and some cost less than others, but whether you are an actual store front business or an internet business, you will need some form of advertising. Next to having start up money, proper advertising is the greatest factor in your success, without it, how will people know you exist? Location is also an important aspect in getting business, but we will focus on the advertising portion today.

Once you are firmly in place with your financing options, you will want to focus on a good marketing scheme, whether you hire someone to do it or do it on your own, is your own choice, but hiring a marketing agency could help you save with time, and believe it or not money in the long run. Marketing firms understand what it takes to make a business successful, I’m not saying you don’t, but if you put your money in the wrong place, you’re the one that ends up losing. Some things in life are better left to professionals. These professionals can take care of everything from logos, to business cards, to ad prints, to TV. commercials or radio ads. They usually also offer some pretty

innovative ideas to the overall picture of your success. If you were a business student, you are quite familiar (or should be at least) with the world marketing and advertising, even just as an entrepreneur, you should have the basic knowledge of the concept. But in case you don’t (I highly doubt) it is essentially the process of selling, promoting, and distributing your product or service. A good marketing and advertising strategy is the key to your ultimate success. It is the foundation upon which you will begin to build your business.

Your goal when starting up should be getting your business out there and known, eventually with a great product and service, word will spread (hopefully) and you will get the greatest free advertising there is, word of mouth. Just be diligent in making sure that it’s positive, and you can do
that by being on top of your employees and product to ensure they are delivering at their best. Well that is all the advice I have for today. Good luck in our adventures!

Motorcycle On-line

6 August 2011 Sören Zschoche 4 Comments Entertainment

Summer is here and there is nothing better than going for an afternoon ride on my motorcycle.
Last year I purchased a Honda Gold Wing and absolutely love it. The ride is very comfortable for me
and my wife but I would like to have a way to communicate with her. I have been looking online for
several months but everything I have found has been very expensive. I recently found a website cycle-
who has helmet communicators and they were much cheaper than buying the helmet with
the communication system already installed. When I ordered the communication device I even received
free shipping. I have been using cycle-parts now over the past few weeks to order several different
motorcycle accessories and have been very happy with the customer service, shipping and products
offered. They even sell aftermarket parts which has saved me a lot of money. I don’t have a local
motorcycle dealer in my area so this website has saved me a lot of time, hassle and gas! This online
motorcycle parts company has definitely won over my business and I plan on doing much more with
them in the future.

What is the Impact of Materialism on Economics ?

23 February 2011 Sören Zschoche 57 Comments Investing

Economics is a science that studies how societies share their resources to meet their needs. In this study we can see how the resources are utilized by the consumers to fulfill their desires and requirements. As they try to satisfy their needs they often incur debt and then these indebted consumers are forced to take the help of a debt settlement programs. But are you aware that materialism has an immense effect on economics in both positive and negative ways?

Growth and expenditure of the consumers

Economists at Hoover Institution, Stanford University state that the consumers spend nearly 70% of the US gross domestic product (GDP). GDP is the calculation for total economic output. The consumers are forced to spend their non-refundable income to obtain more goods due to an approach towards the economic materialism. As the demand in the market is high so the firms have to supply more products to meet the demand of the consumers that renders into economic growth. Therefore, this boosts the spending which consequently increases the GDP.

Conspicuous Consumption

Most of the consumers spend for the purpose of flaunting their wealth as this is the ultimate motive for conspicuous consumption. Materialism can be coined as conspicuous consumption. People who are in awe with materialism focus their attention to “keeping up with the Joneses,” a popular phrase for conspicuous consumption. In this situation you gauge your wealth by comparing it with your neighbor’s prosperity. In order to prove his power of wealth he will invest more money on a larger house, more expensive cars and other luxury goods.

Savings Rate is low

Consumer’s approach towards materialism instigates them to spend more to acquire more goods. Presently, people are not interested in saving as they spend their full income to purchase goods and services. The economists in the government as well as in the private sectors have cautioned about the severe impact due to the diminishing savings rate of the Nation. Capital investment is decreasing with low savings rate amongst the Americans. Lack of investment capital fails to give scope for economic expansion. In a way, the U.S economy is controlled by the foreign investors.

Consumer Debt

The psychological impact of materialism on people drives them to buy things that exceed their budget. They usually incur insurmountable debts on credit cards with high interest or huge amount of mortgage for large houses. Mortgage is taking a serious shape in the U.S economy and around the globe. People are taking out loans to buy large and expensive houses but they default with the crash in the housing and credit market. Even post recession, many Americans have come across a dangerous situation as there is lack of financial security and no job security.

Learn about Fisher Investments, one of the top investing resources.

What´s a fair valuation for facebook?

26 January 2011 Sören Zschoche 13 Comments Investing

A few days ago the Clients of Goldman Sachs and Digital Sky Technologies estimated the value of Facebook at 50 billion USD. As an investor, I have to question what Facebook’s value is to an investor and what it’s value is to a speculator.

Facebook: an investor’s valuation

So lets begin with the view as an investor. An investor would estimate the earnings and the assets and would come to a value he could live with. If it´s an intelligent Investor he would pay less than the real worth of the assets, so that he can make profit. So let´s assume that Facebook’s sales are 2 billion USD . Facebook has more than 1,700 employees, and offices in 12 countries. If we assume that facebook pays an average salary of 60.000 to each of its employees that gives us salary expenses of 102000000 USD. Add to that the costs of the server landscape the EBITDA is probably no higher than 20 to 70 Million USD. If we are fair investors we will probably also pay a price for the Facebook brand. So let´s value the assets of facebook at 2 billion USD. So in the end an investor would probably not pay more than 400 – 500 Million USD for Facebook.

Facebook: a speculator’s valuation

But if we evaluate Facebook from a speculative point of view – and high tech companies are always a speculative investment when they begin to grow – the price of Facebook is probably closer 150 billion USD. The idea is that also google was not that profitable in the first years but google subsequently discovered a way of converting search queries into money. Perhaps you also could convert facebook users. But the question is how to convert facebook users into money? Facebook could have some very interesting answers for this question. Facebook could enter into the ecommerce sector, build little games, sell market research and could earn a lot of money with customized advertisements. But is this really currently worth a valuation of 50 billion USD? Probably not, but there are other ways to earn money. For example by steering facebook users into real brick & mortar shops with facebook places or by offering skype-based voice communication for the price of 50 USD a year. Anyway the basic idea is that if you have 580 million (or even better one billion) Facebook users, if you only make 40 USD from every user, you end up with sales of 23 to 40 billion USD. In 2009 google had sales of 23 billion and a margin of 27 % and today google is worth 197 billion USD.

My own valuation

To be honest I personally don’t really have a valuation for this company, as I really don´t know what I would pay for it. I belive that a possible IPO of Facebook could reach 50 billion USD and the value could also rise in the first few weeks after their flotation. But if the numbers facebook presents don’t impress, the value of facebook will be assessed through the eyes of an investor – and that means the market capitalization will fall to 500 or 1 billion USD. So in my eyes 50 billion is far too much at the beginning. If may perhaps be a fair value when the numbers are right but not yet. You have to remember in 2004 when google went to the stock market the estimates were around

2.7 billion USD and at that time google had 1900 and sales of nearly
1.5 Billion USD. But then again – google was already much more profitable by then.

What a Double-Dip Recession Could Do To the Biofuel Industry

2 December 2010 Sören Zschoche 12 Comments Investing

Biofuel stocks are hurting. In fact, due to the very bleak economic outlook in the United States for the 2nd half of 2010, those prices could be headed much lower and this economic downturn is only serving to increase investor hesitancy toward investing capital into the biofuel industry.

Possibility of Double-Dip

The U.S. recovery was moving along quite nicely in early 2010, but the weight of the EuroZone Debt Crisis and domestic problems in the United States led to very disappointing U.S. economic data in June and July. Consumer demand dropped, employment began to fall as the U.S. Census season ended, retail sales figures disappointed, and several other key data combined to clearly communicate that the U.S. recovery was hitting a major wall of resistance.

In late July, Fed Chairman Ben Bernanke testified before Congress and stated that his economic outlook for the U.S. economy and economic recovery is “unusually uncertain.” If the leading economic minds of our times are unsure of the economic outlook, it means we are most likely in for a bit of pain during Q3 and Q4. This very bleak outlook from the Federal Reserve has begun to weigh on equity markets, and on August 11th, the Dow tumbled over 200 points. There is just no bright spot in the economy right now.

The term “double-dip recession” has begun surfacing in news commentaries and editorials throughout the United States. The housing sector is showing strong signs of possible contraction, and if it does begin to contract significantly, that could push an already fragile U.S. recovery back into recession. The Federal Reserve has made it clear they will do all in their power to prevent this from happening, no matter how much money that have to print.

This economic downturn could not have come at a worse time for the biofuel industry. Currently, the Renewable Fuels Standard is mandating a consistent increase in the amount of next generation ethanol that is produced in the U.S. By 2016, the RFS estimates that 16 billion gallons of it will be produced yearly. This goal is huge and in order for it to be reached, there must be a massive amount of expansion and growth in the industry; however, there is a correspondingly huge shortage of cash available in the industry right now. It is estimated that $500 million will be needed for each facility that will be built, and capital has been extremely hard to come by as many investors are still on the sidelines. Even the forex has not reached the daily volume of pre-Crisis levels.

The Effects of a Double-Dip

Due to a myriad of reasons, investors have been somewhat turned off to the idea of putting up large amounts of capital. This problem will only be exacerbated by a severe economic slow-down, or, even worse, a contraction. If capital is difficult to raise during the decent economic growth of early 2010, it will be nearly impossible during a slow-down. Venture capitalists, of course, do not like to take risk during times of economic uncertainty. All of the cash that investors have sitting on the sidelines may stay there for the foreseeable future.

Projecting further into the future with our economic analysis, if the United States does enter into another recession, it will be nothing less than devastating for the economy over the next decade, and it will increase deflationary fears, which will scare off investors even more. Another recession at this point in our fragile recovery would set the U.S. economy back years and would most likely result in an extended period of very slow economic growth for 5-10 years. This sort of economic climate will make it almost impossible for raising capital, and it could serve to deal a deafening blow to the industry.

Independent Financial Business Advisors: How They Can Help Your Business Through the Cuts.

17 November 2010 Sören Zschoche 27 Comments Investing

All business owners, as I’m sure you’re already aware, are having to ride out not only the recession, but also now the cuts that were announced in the Spending Review last month. With
statements such as “unemployment to rise to 3 million” and “500,000 public sector jobs to go”,
there’s no doubting it’s going to be a tough time, but surely this should be the time when small to
medium businesses can really flourish? Not only providing jobs, but acting as a crucial part in the
recovery of the economy.

So, maybe your wondering how financial business advisors could help? Well, everyone can do
with a helping hand at some point and independent financial business advisors want to get your
business not only through the recession, but also to formulate your business a strategy to ensure
you survive the cuts, and grow through them, too.

What Services Could Independent Financial Business Advisors Offer Me?

If you’ve never dealt with independent financial business advisors before, an important point to
be aware of is that they are independent-they have no affiliation with any lenders, meaning all
businesses will get totally impartial advice and the best strategy possible. If this is your first time
dealing with independent financial business advisors, you might be wondering, what exactly can
they do for me? Well, all services are aimed at maximising your profit, these can be accountancy
services, business cost reduction and invoice factoring.

At a time when money may be tough for your business, but you still want to grow, invoice
could prove to be the perfect solution. Seen as the modern day equivalent of a bank
overdraft, businesses will receive immediate cash to continue their growth in exchange for a
portion of your accounts which you sell to a third party.

As well as lending you money, independent financial business advisors can also save you money
and time. Debt recovery services are becoming increasingly important as going through the
traditional way of using the courts is becoming both a lengthy and costly process. By outsourcing
debt collectors you can save yourself valuable money and time enabling you to concentrate on the
growth of your business.

If you’re a business owner and you are wondering what help you can get to help you through the
cuts, get in touch with independent financial advisors Target Business for impartial advice and a
wide range of services tailored to your business.