Archive for the ‘Finance’ Category

In these times of economic uncertainty, more people are becoming interested in gold as a safe haven to invest their savings. Some people are afraid of their other assets losing value, while others see the tremendous gains made in recent years and want to get some of the profits. As with all bull markets, the later one buys in, the greater the risk; the least knowledgeable investors inevitably are the ones who buy at the end of the bull market and get slaughtered when the bear market arrives. So you need to arm yourself with knowledge before you start investing in gold. In this article I will give you the most basic considerations for investing in gold.

Paper or physical?

The first decision you need to make is whether to buy physical gold or paper gold. Physical gold you can actually touch, usually in the form of coins or bars. Paper gold are assets whose value depends on the price of gold. These can be promises to deliver physical gold at a later date, stocks in gold mining companies, or exchange traded funds (ETFs). Which is right for you depends on your needs and goals.

• Physical gold never becomes worthless.
• Throughout all of history gold has always had value. Paper gold, on the other hand, can and does become worthless; Bre-X is the most spectacular recent example.
• Paper gold is much easier to trade.
• ETFs and gold stocks can be bought and sold on stock exchanges, so they are good for profiting from short-term fluctuations in the price of gold.
• Physical gold never generates an income.
• With physical gold, the only time you ever actually realise a profit is when you sell it, but gold mining stocks do frequently pay dividends.

Prices are not uniform

For both physical gold and paper gold many variations in price exist. For gold bullion, the price to buy gold from a dealer is always higher than the price to sell, at the same time. The difference is usually a noticeable percentage. Popular gold coins such as the American Eagle, the Canadian Maple Leaf, and the South African Krugerrand sell for close to the price of their gold content, but rare gold coins usually sell for considerably more, especially older coins.

Gold mining stocks can also vary widely in their prices. While all gold stocks are fundamentally tied to the price of gold, the value of of a mining company not only depends on how large a deposit it has the rights to mine but also the difficulty of mining, refining, and transporting the gold to market.

Ownership has costs

When you own physical gold, you need to protect it. Usually this entails buying a safe, renting a safety deposit box, or purchasing insurance. ETFs will also charge a maintenance fee, too.

Gold can lose value

Even though you will never lose everything when you buy physical gold, you can easily lose money investing in gold. Every rational person should realise this, but the dot-com bubble of the 90s and the real estate bubble of the 2000s illustrate that people aren’t always rational. Someday people will likely start to look at how much gold has gone up and will conclude that there is no way to lose money. That is usually a good time to start thinking about getting into something else.

You need to learn more

As I said at the beginning, this article only covered the most basic aspects of investing in gold. You should have a better idea of whether you want to invest in gold and how. If you want to do more than buy a few bullion coins, though, you need to do more research before you invest any significant amounts. If you are interested in rare coins, you should familiarise yourself with how to grade the quality of a coin and learn which coins are more rare. Evaluating gold mining stocks is a very complicated subject; in addition to financial analysis, geology plays an important role. For other forms of paper gold, you need to do due diligence on the companies you will be dealing with, because you are relying on their word that their value truly is tied to the value of gold.

This guest post was contributed by GoldCreditCards.com.au, Australia’s only website dedicated to the comparison of gold credit cards from the big banks and smaller credit unions.

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Positive cash flow s the life blood of any business. So when it’s starts to go wrong, alarm bells should be ringing in your head. Managing your business’ cash flow is a process as important as your marketing strategy or product development because without it, none of these things would exist. To help you get your cash flow under control, check out these useful tips.

1. Stay on top of invoicing-  The quicker you get paid by customer the better for your cash flow. Always invoice a customer as soon as you deliver or complete the service. A greater delay in payment hurts the cash flow.
2. Offer incentives to pay quickly – Consider offering a small incentive if a customer pays within a short period of time upon being invoiced. For example, one can offer a 2% discount off the invoice total if the customer pays within the first 5 days of receiving the invoice. If the majority of your customers take you up on this offer, your cash flow can benefit greatly.
3. Evaluate credit histories – Before extending credit to new or existing customers it is recommended that one performs a credit check. Customers that are unable to pay their invoices will not help your cash flow because your cash will remain in accounts receivable for long periods of time and may not be paid at all. If customers have negative credit histories that does not exclude them from doing business with you, but you may be able to customise another discount that works for you and your customer.
4. Invest adequately – During periods of increased cash flow, one must remember to invest the excess. Money is not working for you if it simply sits in a checking account that does not earn interest. To make the most of your money one needs to invest excess money in either savings accounts, money markets or certificates of deposit. Your business banker can likely connect you with a wealth management professional that is well versed at business investing and can guide you if investing is not your expertise. Simply contact your business banker to get your money working for you.
5. Budget, budget, budget – Sticking to a budget is the first step to successful business management. It allows one to know when to stop spending and it also guarantees that your business can pay its bills on time.
6. Pay on time but just before the due date – Definitely avoid paying your bills late but paying just before the due date keeps cash in your account longer which improves your cash flow. For example, because one of your invoices indicates terms of net 30 days means that you are safe to ensure payment is received on the 29th day and no sooner. You do not get billed with a late fee and your cash remains in your account for the maximum days possible before payment is made.
7. Access your pricing structure – Some companies fail to increase prices for different management reasons. However, staying in-line with competitor’s pricing is important and business occasionally need to make sure that their pricing is competitive. Raising prices can boost cash flow quickly. Businesses simply cannot stay in business if they are not competitively pricing their services or products. Before raising prices, conduct a comparison with your competitors to determine your new pricing scheme.
8. Have a backup plan – Excessive debt is never recommended, but having available credit outlets is recommended. Opening a line of credit or a business credit card is a perfect backup plan. You can fall back on this option if you want to buy yourself some time and keep your cash flow untouched. Contact a financial institution that you currently do business with since they are familiar with your needs and your history.
9. Limit excess supplies – Every business needs a surplus of supplies and inventory, but watch your numbers carefully. Stagnant inventory hinders cash flow because it is not generating revenue on the shelf. Hence, only order adequate inventory to keep you afloat according to your current orders and performance. This reduces unnecessary expenses on excess inventory as well as product that is not generating income.
10. Work quickly and efficiently – The quicker that you get your products to your customers, the quicker they receive the invoice and pay which generates cash flow. That being said, work effectively, but ensuring that you are getting your products delivered efficiently ensures that you will have improved cash flow.

Contributed by FinanceChoices.co.uk, a money comparison service based in the UK.

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While the existence of frequent flyer miles is pretty common, many people think they are too much trouble to get into using them particularly in a business setting. There are some great ways to turn the common work expenses that are going onto your business credit card into frequent flyer rewards points without much effort at all, though.

1. Know the Restrictions that Might Apply
Some credit cards and airlines apply restrictions to their rewards plans. It is extremely important to look into the card’s terms before applying. Some plans have pretty wide blackout dates that extend over popular times, such as holidays, weekends, and peak travel periods. They do this so that they can maximise their profits, allowing paying flyers to have first choice, and reduce the traffic into tourist destinations. These blackout dates can change around the year, as well, so check them often.

2. Know How Much Your Miles are Worth
The most confusing thing about frequent flyer miles is that they don’t actually mean what it seems like they should mean by miles. They don’t have anything to do with how many actual, distance miles that your flight travels. Typically, an airline will offer you a free ticket for every 25,000 to 50,000 miles that you have to spend. This depends on the company, though. This means that your business credit card, which typically offers one mile per dollar that you spend, will have to have at least $25,000 charged to it before you can obtain your free airline ticket. The actual, monetary value assigned to a frequent flyer point ranges from one to three cents for a single mile.

3. Know the Status of Your Card
Business cards are not all the same. Some will bring you far more rewards than others, so don’t simply take the first card you are offered. For example, your basic credit card will not bring you as many frequent flyer miles as a platinum business card will. Doing a bit of research will help you a great deal. The better cards also sometimes include travel insurance at no cost as well as other benefits.

4. Making the Most of Your Business Credit Card
Use your business credit card for everything you possibly can, including bills, travel, groceries, hotel expenses, etc. This will help you to build up miles on it. Just make sure that you don’t purchase more than you can pay for when the bill comes each month, or you won’t actually be saving money.

5. Use Tools Offered Online
The Frequent Flyer site and Frequent Flyer Club website have features that help people to redeem their accumulated points. The best thing about these? They’re free. They can also help you to figure out exactly how your points translate into miles. Many people are at a loss when it comes to figuring up how many miles it takes to make a plane ticket. These sites are also a great help when it comes to getting information that will allow you to make the most of the points on your business credit card.

6. Transferring Your Points
Many people trying to build up frequent flyer points don’t know that they can transfer those points to different airlines. However, if you are considering this, make sure that you are not losing out. Some airlines don’t value points as much as others, meaning that you might lose quite a few miles. Be sure that you won’t end up with a worse deal by transferring your miles before converting them.

7. Consider the Exchange Value
When you decide to spend your frequent flyer points, consider how much they are worth. For instance, it might be a better value to pay for your own ticket rather than spend all of the points you have accumulated on a very short flight, if you would be spending a large portion of them. This can vary between cards, as well; one card might use 40,000 frequent flyer miles for a $200 airline ticket, while another might provide you with a $500 flight for 25,000 points. You may get much more for your money by holding out to use your points on longer, more expensive flights, or other upgrades altogether.

For more information on how to get a frequent flyer card for your Australian business, click here.

This is a guest post by David Boyd. David is co-founder of CreditCardCompare.com.au where he has reviewed many of the top company credit cards available to Australian small to large businesses.

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There are so many credit cards for businesses available, so choosing the right one may be a confusing task. You want to find a card that is right for your business and makes it easier for you to be able to quickly reimburse employees. There are several things that you need to known when getting a business credit card:

1. Look for a card with rewards: There are many cards that offer extra bonuses for purchases made. You could possibly receive discounts on flights and hotels, as well as reward points. There are cash back credit cards in which you can receive cash back for every purchase that you make with the card. If your company travels a lot, it makes sense to get a credit card that has a rewards program.
2. Save with a balance transfer: There are several cards that offer a 0% balance transfer rate. You need to make sure that you know when the period ends, as some only offer the rate for the first few months. It’s also important to know what the interest rate reverts to, which is typically either the standard purchase or cash advance rate.
3. Factor in the cost of the annual fee: Credit cards that do not charge an annual fee sound very appealing. However, you need to look at the other charges that might occur when having a card with no annual fee. Some cards with an annual fee might offer better benefits; therefore, the annual fee could be worth the cost. Cards with an annual fee also provide a longer grace period, which will give you extra time to make payments. If you do settle on a rewards credit card for businesses, then you’ll most likely be charged an annual fee.
4. Look at the interest rate: Some banks might try to entice you by offering a 0% interest rate for the first few months on balance transfers and/or purchases. Some cards might offer a fixed rate, which cannot be raised. Interest rates on business credit cards are normally a little higher than those for consumers, and a few percentage points can make a significant difference in the amount of money that you pay. You should also take into consideration how a business credit card reports credit. Some companies can influence your personal credit; therefore, your credit score could determine the amount of interest that you will pay. However, if you plan to pay off the balances each month, the interest rates are not as important.
5. Customer service is really important: There is a good chance that you will encounter problems somewhere along the way, e.g. you max out the credit limit on your card or the account is frozen due to possible fraudulent activity. If problems with your card arise, you will need to make sure that you have a customer service team who will work with you to quickly fix any issues that might occur. Many websites have customer satisfaction ratings in which you can view what other people are saying about a particular card, which is one way to see what’s you’d be getting in to.

Business credit cards can be very beneficial in helping manage your business’s cash flow, but getting the best business credit card that suits your needs requires research before you hit the apply button!

This is a guest post by David Boyd. David is co-founder of CreditCardCompare.com.au where he has reviewed many of the top company credit cards available to Australian small to large businesses.

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