Tuesday 10 May 2011
Real estate
Please GOTO www.canadianrealestatemagazine.ca to learn about investing in Real estate in Canada.
Fashion
Please GOTO www.frugal-fashionsta.com for the latest fashion trends.
The site www.dollstar.com is also a good web portal.
The site www.dollstar.com is also a good web portal.
Tuesday 3 May 2011
Bonds
Government Bonds provide long term security and income and you should buy bonds when interest rates on Bonds are high and hold these bonds till maturity. You may have to wait many years to get this opportunity and making money is a waiting game and you may have to hang on to your dear CASH for years.
Bond prices fluctuate and bond prices go up when the interest rates go down. Interest received on the market price of the bond is called Yield.
If Government Bonds are held till maturity you would get your principal back. It is said that compound interest is the eighth wonder of the world and compounding your interest income in Government Bonds is a safe option. It is said that native indians who sold Manhattan island to the Dutch for less than 65 dollars in 1626 would have made substantial wealth in billions of dollars if they had kept their sale proceeds in interest bearing Bonds (@ 7 % or more) and they could have bought the island back after many years of compounding interest income.
The bond screener page in investing in Bonds in the web site www.yahoo.com/financewould give details of yield and safety regarding Bonds available in the market.
There are currency and hyper inflation risks when you invest in bonds in countries with high budget deficits.
If you want to invest in Bonds issued by commercial firms you must ensure they are highly rated (A, AA or AAA) and there are enough profits to cover interest and dividends. A French leader said that others should wake him up from his sleep to tell the bad news and good news can wait till he wakes up. You must get the bad news before you invest and exercising caution would safeguard your funds.
You would need professional help from an experienced and licensed broker who works for a major reputed firm for the selection of specific Bonds.
The web site www.morningstar.com would give you the safety and performance rankings of mutual funds investing in Bonds.
Starting a Business
IT takes three to five years for a business to be successful and many businesses fail within the first year.Young entrepreneurs should check the web site www.cybf.ca for financing and other business tips. The web site www.bdc.ca is a good source for entrepreneurs. You should hold on to your job till your business is successful and you can have partners who have differen skills and you can also get additional funds for start up costs.
Most 9 to 5 jobs are dead end jobs and routine in nature & starting a business - either online or on the ground would develop your creative skills. The web sitewww.gotomeeting.com would enable you to be in touch with your customers and partners around the world and it costs $40 per month.
The web site www.businessplanpro.com has a good selection of business plans for a venture.
Starting a business in a mall would get you a lot of business in winter time since traffic is higher and people spend more time inside the mall but you business would be restricted to mall timings and your rent cost as a percentage of sales would be higher. The web site www.smallbusiness.bc.ca is a source to learn about business issues.
You should try to have an online presence to promote your product and the Google business solutions would give you a jump start for your venture. The web sitewww.paypal.com is a quick way to collect funds from your customers and the social net working web site www.tweeter.com would enable you to sell your products. You should try to work in the businees you wish to buy before you decide to buy to ensure you like it.
Buying a good franchise unit is a quick way to start a business and the web sitewww.thefranchisemagazine.net would give you many options. You may have to pay a franchise fee of 6% or more on your sales and a good franchise name attracts customers and you would get repeat business.
You may have to pay minimum wages to your employees since the profit margin may not be high after paying rent and franchise fee. You have to pay performance bonus to retain productive employees and you should have three business units to make more than $ 100,000. You should locate your business near four lane street crossing or near a bus stop. You need to circle your customers to be successful n business. The web sitewww.salesforce.com is a good source to generate sales leads and track your customers. Some of the popular franchises are subway, Mcdonald and Budget car rental.
You could look also at the web sites www.franchise.org, www.oneminutefranchisefinder.com.
The web sites www.businessexchange.ca and www.businessacquizition.com are good souce of information to buy or sell a business.
If you buy the commercial building you could get a secured loan at low interest rate and If you establish your business in your commercial Building you will not have the uncertainty of higher lease rates or relocating to a new location when the lease expires. You can write off the mortgage interest against the taxable income when you use it for a business purpose.
Sam Walton started Walmart with just one small store in Arkansas and Walmart is the largest company now and. Sam Walton accumated lot of wealth over a period of years and the Key success factors are low cost, good quality products and passion for retail business.
For financing options you can look at www.bmo.com/franchise
Corporate tax rate for a small business( CCPC) in Canada is less than 20 % (upto $ 400,000) and salary can be charged to the company for services rendered and RRSP( retirement pension contribution) deduction can be claimed on salary income. (www.sbr.gov.bc.ca). The capital gains are exempt uoto $ 750,000 per shareholder on sale of shares in CCPC. For exact details refer to www.cra-arc.gc.ca
Please GOTO www.cybf.ca and www.csbf.ca for your financing requirements.
The accounting software 'first Step' sold by www.simplyaccounting.com costs less than $40 and is a good software for start up companies. The web site www.quickbooks.com has an online accounting software program.
If you want to buy a existing business you could GOTO www.acquizition.biz
If you want to bulid a web site for your business within 24 hours please contact Sharad at sharadcm@hotmail.com
Retirement Planning
Retirement has become a distant dream for most people due to high cost of living. Retirement planning starts at age 25 and not at age 55. It is better to work for a firm that provides good pension plan or you should take an annuity policy and start your own retirement fund.
Good pension plans deduct 7 % of your salary and contribute 100 % of your contribution and hence 14 % of your salary goes to long term savings. Good pension plans pay 2 % of your pay per year of service and if you contribute to pension plan for 25 years, you would get 50 % of your last drawn salary. Individual pension plans might vary, but if you don't get 50 % of your pay, you may have to negotiate better terms. The word Salary is derived from the word Salt and an employer who does not provide good benefits may not be worth the Salt. Salt was a valuable item during Roman times and soldiers were paid in Salt at that time.
If you work for a good firm in Canada almost 25 % of your salary would go towards long term savings. In most countries you may have to work part time after retirement to get additional income since the pension income may not be enough to pay for the high cost of living and medical costs.
Retired people earning below C$35,000 can get rental assistance and the web site iswww.bchousing.org .
The insurance company Aflac (www.aflac.com) is a good company to get medical coverage.
The web site www.manulife.com has a wealth of information on annuity policies.
You should read One upon wallstreet by Peter lynch and The Warren Buffet Way by Robert G Hagstrom to understand the importance of long term investments or you will wait for ever to retire.
If you want to maintain good health and extend your life expectancy GOTO
Shares
Stock market could become a shock market if your portfolio does not have consistently profitable consumer, pharmaceutical and oil companies which are in business for over 30 years and increasing their dividends periodically. Dividend yield should be calculated on your original cost of shares and compared with interest rate on Bank deposits. If the rate of interest is less than 1 % p.a. it will take about 100 years to double your money. If you divide 72 by the rate of interest you would get the number of years it would take to double your money.
PE ratio is important and a PE ratio of 10 for a profitable company with profits growing at 10 % per year would result in price increase of 100 % after 7 years. Investors should try to understand that the market is always nervous and this makes share prices fluctuate but the long term trend is important.You can only be approximately right while predicting share prices or you would be precisely wrong. The videos in the web sitewww.ft.com is a good source to develop business & financial sense.
The web site www.berkshirehathaway.com will give insight into the importance of holding profitable companies for a long period of time. Some people have paid more than $1 million to have lunch with Warren Buffett, Chairman of Berkshire Hathaway and learn from him. The share price of Berkshirehathaway was about $2,000 in 1990 and it is over $98,000 now and has gone up almost 50 times.
The ketchup company Heinz made profits of $845m in 2008 and paid dividends of $485m in 2008 and is in food business since 1869 and this is LONG TERM. The five year financial summary page in www.heinz.com would give profit trends of this company. You could also look at www.cococola.com for the profits trend of the most valuable brand in the world.
Cost of extraction of oil is cheaper than dirt in some countries and an Oil company could make fee income of more than $1.50 per barrel and the potential gains could be $15 billions if the size of the oil field is 10 billion barrels. ExxonMobil made profits of $45 billions in 2008 and $ 25 billions in 2004 and you may refer to the financial highlights in the web site www.exxonmobil.com .
You should also look at the 10 year financial hlghlights for Pepsi, Coco Cola, Walmart, Cisco, Intel, Microsoft, Procter & Gamble, Pfizer and Abbot Labs.
You could also look at the financial highlights of major Canadian Banks ( RBC, TD and BMO) since Canadian Banks have avoided credit crisis due to strict controls on Capital, liquidity and leverage ratios. Shareholders can reap substantial benefit due to lack of competition and dominance of few Banks in Canada.
In 1599 in U.K. 125 shareholders formed East India Company to trade in India and got 200 % dividends and shows that a few people in 1599 understood the importance of dividends and wealth is accumulated by collecting dividends for many years. It is very difficult for companies to increase dividends every year and by investing in these dividend paying companies you could reduce your risk and increase your wealth. If you understand history vou can predict the future. No one really cares about your money and you need to understand the risks and rewards on your own.
If you want to invest in shares of foreign companies (Shell oil, BP, Nestle or any Global foreign company) you could buy American Depository Receipts (ADR).
Professional firms have lost money trading in shares and some firms have gone bankrupt by taking too much risk and the fund Long Term Capital didn't last long and went bankrupt. Risk arbitrage means buying shares of the target stock and selling shares of the acquirer. In the current situation selling Kraft shares and buying the target company -Cadbury choclate shares. Cadbury company is in play now and Hershey has entered the takeover game and bid up the price of Cadbury shares. If the share price of the target company goes up by 10 % and the holding period is 2 months the gain on an annual basis is 60 %.
It takes many years to understand stock market and it is critical to develop deep knowledge before you get into this high risk venture. The risky part is the lack of questioning skills and thinking independently is the best way to develop questioning skills.
You can open an investment account in a major company to hold your investments.www.fidelity.com or a major bank. www.hsbc.com
You would need professional help from an experienced and licensed broker who works for a major reputed firm for specific selection of stocks.
Sunday 1 May 2011
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