What can an individual who lives on a small salary do to invest and augment his income somehow? Here are some tips to follow:
1. Invest in something close to your heart
Whether it is in music or cooking, investing in a small venture will have a greater chance of surviving and even achieving reasonable success if it involves doing something close to your heart or within your experience as a person or as a worker. If you work as a waiter, why not learn as much as you can about some way of improving a recipe or a drink and come up with your own sideline you, or with a partner, can run during weekends or after work?
We hear this advice often and yet not many take it to heart or are brave enough to actually do it. Many feel it takes too much effort and money to start a business. This is not true, in general. Making a single unique jacket or fashion accessory and selling it can be the one step you need to encourage yourself to make more. Even a used item such as a broken sofa, if repaired and furbished to look attractive might bring you some income you never thought you could have from what you already have.
Oftentimes, all it takes is a lot of imagination and a dose of courage to jump right ahead on a new venture you never tried before.
2. Learn the basic math
Any business, small or big, will depend largely on good and proper basic accounting. Learning the fundamental methods of bookkeeping will go a long way to controlling the flow of resources and understanding the nature of your business finance. We all knew about the Chinese who, for many centuries, used the abacus to make sure they got all the math figured out. With the calculator or the PC today, the job has become even easier and more efficient as we can keep records as well of our transactions.
Still, there are other tricks we can avail of to make the task easy and more enjoyable. Finger-Math can be a tool one can learn and use during those hectic moments when technology Is not around to your aid. Mental math is a trick we can also develop to enhance our acuity in this area. Whatever suits your personality and style, make sure the math is a primary focus in your business. Remember, math is but a tool to make your work easier; but loving the work can make a lot of difference in how you conduct the business.
3. Know you product
Knowing your product is as important as how much you price it eventually. You may have a good round figure for your product’s price; but if you have not truly known your product (what it directly provides, what value it adds to its user, how it can be enhanced beyond its basic use), you will not fathom its true worth for you and for your customer.
Knowing your product goes beyond appreciating its innate value. Peanut butter is not just for making bread taste better or eating by itself. It can also be used for adding flavour to other recipes or with other food (try it with banana). And unless you tell people it can be used as so, they will never discover its other uses. Advertising or showing it in your packaging can be the step you need to do to enhance your product’s value and appeal as well as its price.
4. Know your customers
Not all people will want to buy your product or service. How to change their mind is the challenge you must never give up on. Changing your approach may allow you to capture certain customers you know patronize other brands. Price reduction, although it is not always the best thing to do or other come-ons, such as giveaways or freebies, may help promote your product in certain market locations you wish to capture.
Talking to people and being sensitive to their needs will help you get a clearer picture of your prospective customers.
5. Know your competitors
Knowing your customers will teach you how to appreciate and know your competitors indirectly as well. If you feel your product is better than your competitors and yet you cannot break into the bigger share of the market , then there must be something wrong with your product or your marketing approach.
Companies who have been in the business for many years have a lot to teach you how to go about your own venture. Get as much information from them directly through visiting their stores and factories or indirectly through reading books, magazines and websites.
6. No matter how many competitors you have, you can still join in if you are unique
Unless every corner in your area has a small variety store, you can still put up your own as long as you provide a unique feature in your business. Delivering your product while others wait for buyers can be your advantage in these busy times. Or, you can have orders picked up at certain times to encourage people to buy fresh vegetables, fruits or meat, for instance. The trick is to make your customers feel special and given a personal touch. Adding something nobody else provides may be the advantage you need to keep the competitors behind.
7. Find out what works for you and your product
Eventually, you will have to experiment and make a lot of mistakes as to how you can improve your product, your price and your style of operation. But things will change as economic and social realities also change ad adapting creatively will allow you to stay afloat. Being prepared for such eventualities ahead of others will help you reduce risks and manage your business well.
In the end, running a business may take more and more of your time and may lead you to give up your day-job. If you feel the time is right, then go ahead. Most business-people started that way. Make up your mind at the very start that the option is always present. It is just a matter of time when you will take the brave jump.
McAfee report paints grim picture of lucrative industry, despite incomplete data.
Cybercrime could be costing the global economy as much as $575 billion annually, according to a new report from McAfee.
The Intel-owned security company based its estimate on a range of sources, from government agencies to NGOs and academic institutions, counting both direct and indirect costs.
The report, Estimating the Global Cost of Cybercrime explained the methodology as follows:
“This study assumes that the cost of cybercrime is a constant share of national income, adjusted for levels of development. We calculated the likely global cost by looking at publically available data from individual countries, buttressed by interviews with government officials and experts. We looked for confirming evidence for these numbers by looking at data on IP theft, fraud, or recovery costs. In addition to a mass of anecdotes, we ultimately found aggregate data for 51 countries in all regions of the world who account for 80% of global income. We used this data to estimate the global cost, adjusting for differences among regions.”
However, the vendor cautioned that “differences in the thoroughness of national accounting”, as well as underreporting of incidents and the difficulty of valuing IP all make calculations an imprecise art.
High income countries lost more as a percentage of GDP, which could be because they have better accounting systems in place and/or that their IP is more valuable and therefore a bigger target for criminals.
The $575bn figure therefore comes from extrapolating a global total from high loss countries. It could be as low as $375bn if McAfee had extrapolated from “all countries where we could find open source data”.
On the other hand, the figure would be $445bn if the firm aggregated costs as a share of regional incomes, it said.
Whatever the final figure, it’s clear that richer countries in Europe, North America and Asia lost the most, because they are bigger targets and provide a better return on investment for the hacker. For example, G20 countries are said to have lost $200bn to cybercrime.
The UK, at 0.16%, had one of the lowest losses to cybercrime as a percentage of GDP, while the US (0.64%), came just ahead of China (0.63%) but trailed the most affected G20 nation: Germany (1.6%).
McAfee warned that as more businesses and consumers move online and more devices connect to the internet of things, cybercrime will continue to grow. IP theft, a “tax on innovation” will also increase as those countries which acquire it become more adept at building a competitive advantage.
Aside from calling for improvements to technology and defences, the report urged governments to work harder on creating best practice cybersecurity standards and cross-border law enforcement agreements.
It added that they must do a better job on accounting for cybercrime losses to provide a more comprehensive picture on where deficiencies lie.
For the record, McAfee’s report last year estimated cybercrime losses of $100-500bn annually.
By Maria Gallucci – Global economic growth is expected to dip this year, following the fiercely cold winter that plagued the United States and turbulence in Ukraine and the world’s financial markets.
The World Bank on Tuesday said it reduced its global growth forecast to 2.8 percent this year, down from a January projection of 3.2 percent, Bloomberg News reported.
The U.S. forecast was cut to 2.1 percent from 2.8 percent, and outlooks for Brazil, Russia, India and China also fell — a sign that emerging economies aren’t moving fast enough or investing sufficiently in domestic structural reforms, which are needed to accelerate economic expansion, according to the Washington-based institution. It recommended smaller budget deficits, higher interest rates and productivity-boosting measures to stave off future financial unrest, Bloomberg said.
The growth setbacks, however, might be short-lived. The 2015 projection for global economic growth held steady at 3.4 percent, Bloomberg noted, and growth is expected to regain speed this year despite earlier weaknesses, the World Bank said in its Global Economic Prospects report.
“The financial health of economies has improved. … But we are not totally out of the woods yet,” Kaushik Basu, the lender’s chief economist, said. “A gradual tightening of fiscal policy and structural reforms are desirable to restore fiscal space depleted by the 2008 financial crisis. In brief, now is the time to prepare for the next crisis.”
The World Bank’s most recent Global Economic Prospects (GEP) report, released this week, says a global economic recovery is underway, underpinned by strengthening output and demand in high-income countries.
Global GDP growth in 2014 will be 2.8 percent and it is expected to rise to about 4.2 percent by 2016, according to the report, which the World Bank publishes twice a year.
Average GDP growth in developing countries has reached 4.8 percent in 2014, faster than in high-income countries but slower than in the boom period before the global financial and economic crisis of 2008.
Demand side stimulus or supply side reforms?
The global economic slowdown that struck in 2008 was caused by a financial crisis that resulted in large part from the bursting of an enormous, fraud-ridden mortgage lending bubble in the US.
The crisis led to varying responses in different countries. The GEP report’s authors said that in general, developing countries privileged demand stimulus policies over structural reforms during the past several years.
For example, in 2008 to 2009, China implemented a four trillion-renminbi ($586 billion) stimulus program as a direct response to the slowdown in global trade caused by the global financial crisis.
Critics pointed to over-investment in China as a risk to continued fast growth. The country is now struggling to contain a real estate bubble of its own.
The World Bank wants China and other emerging countries to refocus on structural reforms.
“A gradual tightening of fiscal policy and structural reforms are desirable to restore fiscal space depleted by the 2008 financial crisis,” the bank’s chief economist, Kaushik Basu, has said. “In brief, now is the time to prepare for the next crisis.”
The World Bank’s mantra: Fiscal discipline and structural reforms
Yet the World Bank is well known for nearly always prescribing fiscal “tightening” – or cutbacks to government expenditures – and “structural reforms.”
What is the rationale for public expenditure cutbacks? And what does the World Bank mean by “structural reforms?”
The World Bank consistently urges policymakers to prevent annual deficits from growing faster than the rate of GDP growth. Rising debt-to-GDP ratios mean that an increasing share of the public budget is devoted to servicing debt, leaving proportionately less money available to pay for government-provided infrastructure and services.
However, sometimes countries fall into recession when households, in aggregate, attempt to pay back previously incurred debt faster than they take up new debt. In the jargon of economists, this is called “deleveraging.”
Large banks and trading firms are frantically trying to determine whether they have fallen victim to a suspected commodities fraud emanating from the giant Qingdao Port in northeast China.
Citigroup and several other large Western banks are concerned that their loans may lack the appropriate collateral, big stockpiles of copper and aluminum at the port. The banks have inspectors on the ground who are trying to assess whether enough of the metals are there.
The worry stems from suspicions that a Chinese company pledged the same collateral for multiple loans. Chinese authorities are investigating the matter.
The case could have broad repercussions for the commodities market and the Chinese economy. Banks have funneled billions of dollars into the Chinese economy through these murky transactions, and commodities prices have been falling over concerns that such lending will dry up.
Western banks, including Citigroup, are bracing for any potential fallout.
Just months ago, Citigroup fell victim to a multimillion-dollar fraud in Mexico. If the Qingdao developments harm the bank, regulators and shareholders are likely to press it to explain why its controls had failed again.
Chinese companies are at risk, too.
Citic Resources, part of the state-controlled conglomerate Citic Group, plunged nearly 10 percent on Tuesday after it disclosed that it might be affected by an investigation into stockpiles of metals held at the port. Citic Resources said on Monday that it had asked the local Chinese courts to secure its metals stockpiles. The shares recovered on Wednesday.
The potential fraud is linked to an opaque corner of China’s financial system that has grown substantially in recent years, bringing huge amounts of capital into the country. Many Chinese companies and investors, struggling to secure traditional loans from the state-dominated banking sector, have instead turned to alternative, unregulated financing methods involving imports of materials like copper, aluminum and iron ore.
These commodities financing deals are part of a growing number of nontraditional lending activities that have pushed credit in China to levels that are raising fears among investors and analysts. Jonathan Cornish, the head of North Asia bank ratings at Fitch Ratings, estimates that total outstanding credit in China rose to more than 220 percent of gross domestic product last year, up from 130 percent in 2008.
A typical commodities financing deal works like this: Copper is imported using letters of credit, warehoused in duty-free zones and pledged as collateral for cheap bank loans. The loan proceeds are used by the importer to speculate in higher-yielding, short-term investments. The importer then either sells the commodity or the investment product after a few months when the original letter of credit falls due.
The problem in Qingdao appears to revolve around one such importer. Last Friday, Qingdao Port International, the biggest port operator in the Chinese city, announced that the authorities had begun investigating a suspected fraud related to the aluminum and copper stored in its warehouses. A day earlier, a report in The 21st Century Business Herald, a respected Chinese-language newspaper, identified the company under investigation as Qingdao Decheng Mining.
The report said Qingdao Decheng was suspected by the authorities of having pledged the same stocks of the metals — about 100,000 tons of aluminum and 2,000 to 3,000 tons of copper — as collateral for multiple loans, amassing bank debt exceeding 1 billion renminbi, or $160 million. Phone calls and emails to Qingdao Decheng’s parent company, Dezheng Resources, went unanswered on Wednesday.
Getting help from a professional financial planner will not assure anyone fiscal security.
“So many people come to us undergoing financial trouble and believe they will be walk out absolutely problem-free,” says Deana Arnett, a certified financial planner and senior planning- expert at Rosenthal Wealth Management Group. “We can help them discover their needs and design the best financial and investment program; but the whole thing will only benefit then if they also become proactive.”
In terms of financial planning, Amanda Gift, a financial consultant working with Signature, advises her clients about the many variables that cannot be manipulated in the investment environment, although they can control their spending. “You cannot be in charge of what the economy will do or which direction the stock market is going to; but you can manage your expenses and what you buy and what you do not buy.”
Here are some guidelines that money experts want their clients to follow to achieve financial stability:
We Can Only Do So Much
The most efficient financial plans will only be effective if they are implemented by the client.
“A lot of people visit a financial adviser, and then after lengthy talks, get a book full of glossy paper with colorful charts that end up on the book stand, not put to practical use,” says Arnett.
Your Beneficiary Entitlements Could Disappear
Mike Piershale, president of Piershale Financial Group, states that many bank mergers during the 2008 financial crisis left numerous once-designated accounts, such as 401(k)s and IRAs, without a beneficiary.
“After these mergers, we have found several instances where the account beneficiary has been lost in the process of transfer; so we inform everyone who designated a beneficiary in the past seven years to look and make certain the beneficiary still exists.”
I Cannot Give Advice on Your Risk Tolerance
Piershale says financial advisors do not have the right to tell clients the level of risk should undergo when investing.
“We can only assist you how you can gage your risk tolerance, and then suggest a portfolio that matches your objectives.”
Once a client’s risk level is determined, Piershale states that the job of the professional advisers is to produce the best tax-friendly investment strategies. “Closing in on the right investment, in the right account, will enhance your tax savings.”
Your Emergency Savings are too High
Financial consultants agree that each person should have a minimum of six months of living expenses saved up and which can be easily accessed; but beyond that figure, you could be missing investment potential.
“Whenever I see so much money funnelled into a savings account which is making very little interest, I ask my clients if they are maximizing their opportunity to enhance their retirement accounts and after that, I suggest that they put their idle surplus cash sleeping in their checking account to a wiser investment alternative.”
You are Living far above Your Means
Gift reveals that many people often underestimate how much they are spending – more so in terms of high-price purchases.
“Usually, when people purchase things on a monthly instalment basis, they fail to see how much it will add up to after one year. They say, ‘Oh, $400 a month is not so much’; but they forget that it amounts to almost $5,000 in a year,” says Gift.
You Must Have an Estate Plan. . . No Matter How Old You Are
So many people look at an estate plan as a thing designed only for the rich, says Piershale; but he says every parent or anyone with whatever amount of assets should produce an estate plan.
“You want to ascertain that your assets are transferred to the people you desire to be benefitted, and more especially, you want to designate a guardian for your children in case the unthinkable does happen.”
Professional Financial Advice is not only for the Rich.
“The individuals who possess bizzillion dollars are not the persons who need me,” declares Arnett. “The stakes are so much greater when you have limited resources; because if you err in handling $50,000, the damage is much more catastrophic than when you do with $150,000.”
Spotify UK drop into the red last year, since subscription revenue fell and the music streaming service invested more in growth here.
When compared to 2011’s profit of £21 million, accounts reveal Spotify’s British arm made a loss of £10.1 million in 2012.
Down from £96.5 million a year earlier in 2012 it fell to £92.6 million, the online music streaming platform saw this revenue fall.
The decrease in revenue was partially down to its decline in subscription, which fell from £72.4 million to £64.7 million because of the alteration in the way subscriptions were booked.
A minimal increase was seen by UK advertising on the platform, rising from £8.1 million to £9.1 million to the year ending December 31. Sources say that subscription numbers have been growing strongly in 2013 thanks in part to partnerships with the likes of Vodafone.
Spotify UK declined to comment on its accounts but earlier in the year parent company Spotify Group said: “In 2012 the business focused on driving user growth, international expansion and product development, resulting in soaring user numbers and increased market penetration.
“Our key priority throughout 2013 and beyond remains bringing our unrivalled music experience to even more people while continuing to build for long-term growth – both for our company and for the music industry as a whole.”
With its operations in the thirty two countries around the world, Spotify lets users stream 10 hours of music a month for free with advertising or pay a subscription fee for unlimited, advertising-free listening. Naming Sony, Universal and EMI, and to date has paid out $500 million in royalties to artists, the company has signed deals with major record labels with the said records.
With 5 million paying subscribers Globally Spotify saw users leap from 11 million to 20 million in the year. UK numbers were not disclosed. From March this year figures demonstrate this has augmented to 24 million users and 6 million subscribers. In the previous year was the first year that digital sales make up for a decline in physical sales in the music industry.
Spotify UK, headquartered in London’s Soho district nearly twofolded staff in 2012, upwarding the company from 64 to 111 people. Spotify UK’s highest paid director took home £95,625.
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Small commercial lending has dropped significantly from the Great Recession. All over the country, small-sized businesses are now discovering working funds, business loans, and expansion capital as difficult to acquire. “Forty-five percent of the 515 business-people who joined the advocacy group’s survey said availability of loans and credit at affordable rates is a hurdle for their companies. Access to funds was most hard in the Northeast, where 53 percent of the owners said it was difficult to obtain. In the West, 49 percent considered it a major obstacle, followed by 44 percent in the South and 37 percent in the Midwest,” reported the Seattle Post Intelligencer.
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Janet Yellen said in prepared remarks to be delivered in a confirmation hearing on Thursday that the Federal Reserve helped restart the economy after the recession, but still there’s more work to be done.
“We have made good progress, but we have farther to go to regain the ground lost in the crisis and the recession,” reads the statement.
Yellen is at present serving as vice-chair on the Federal Reserve Board, she is nominated by President Obama to succeed Ben Bernanke as head of the central bank.
Bernanke’s second term ends January 31, and in spite of the protests from a few Tea Party members, Yellen is mostly anticipated to be long-established for the position before then. Ten in the morning Eastern, Thursday, her hearing before the Senate Banking Committee is scheduled.
Her comments don’t get into particulars about the Fed’s existing bond-buying program, however simply stress her commitment to “supporting the recovery,” toting up more openness and transparency to the Fed’s communications, and endorsing financial stability.
Since December 2008, the Federal Reserve has been trying to encourage the economy. In an attempt to lower long-term rates as well, that’s when it cut short-term interest rates to near zero and launched its first bond-buying spree.
The Fed is occupied in its third round of bond-buying, in which it purchases $85 billion each month in Treasuries and mortgage-backed securities five years later.
Yellen is currently daunting task if she’s established to serve as the next Federal Reserve chair: How to wean the economy off Fed stimulus at the right time.
Liberal economists dispute that if the Fed discontinues its stimulus too soon, job growth may well carry on at a devastatingly slow pace. The economy may still be too breakable to construct momentum on its own.
However, conservatives argue, that the Fed has done enough by now. They say inflation could take off rapidly, much of the Fed’s $3 trillion in stimulus over the last five years is still sitting idle in bank reserves, and if that money ever floods into the broader economy.
Yellen have a propensity to favor with the liberals and in Fed circles, she’s recognized as inflation “dove.” Her main goal, expressed in numerous speeches, is to get Americans back to work, and in her view, the Fed still has tools to improve the unemployment rate from its current level of 7.3%.
“Unemployment is down from a peak of 10%, but at 7.3% in October, it is still too high, reflecting a labor market and economy performing far short of their potential,” she said in her prepared remarks.
Ryanair has followed up its pledge to “not unnecessarily piss people off” by trimming some of its most excessive charges, this consists of baggage fees and penalties for not printing a boarding pass.
The initial actual measures announced from the time when chief executive Michael O’Leary completed a Damascene change to better customer service will also comprise more tolerance of slight booking errors, less irritating announcements onboard and permiting passengers a second small piece of hand luggage with them on the plane.
Ryanair said that, after extensive customer feedback on its website, it would introduce several improvements over the next six months.
Customers will almost immediately be capable to look for for flights online without having to enter security codes, and will have 24 hours’ grace to correct minor errors, like spellings of names and routings, in bookings.
Airline will make only safety announcements on early morning and late evening flights, rather than the current barrage of sales pitches and marketing, and dim the cabin lights.
From December, only for customers who have already checked in online boarding card reissue fees will be cut from €70 or £70 to €15 or £15 while those who forget will still pay the standard fine. Airport bag fees for luggage put in the hold will be halved to €30 or £30 at the bag drop desk in January.
O’Leary, who this week overcame his previous disdain for social media toengage directly with customers on Twitter, said: “As we implement our plans to grow from 80 million to over 110 million customers per annum over the next five years, we are actively listening and responding to our customers.”
He put that philosophy into practice to mixed effect on Friday afternoon in his second foray on to Twitter, where despite his recent pledge to tone down the Irish airline’s “macho” image, he informed customers that he kept fit via “Tantric sex. Works for Sting … n’ me!”, repeatedly plugged the airline’s calendar featuring undressed female cabin crew and eventually signed off saying it was time for “3pm cocktails, dancing girls”.
Ryanair’s customer service director, Caroline Green, said: “As some of these policy changes will require website changes and staff retraining, we will be rolling them out over the next few months as we strive to further improve Europe’s No 1 customer service airline.”
She added that if customers should make had other suggestions and feedback on the changes by going, they should make them online. This corresponded to an important adjustment from preceding attitudes to online customer feedback, when a customer who created a Facebook page to complaint at spending hundreds of euros for her family’s boarding passes to be reissued was derided as “so stupid” by O’Leary for her “fuck-up”. On the other hand, O’Leary’s belief that every publicity was good publicity materialized to be shaken by shareholders at the airline’s yearly meeting in September who told him that the negative image required to be addressed.
Ever since, O’Leary has employed the word “sorry” surprisingly frequently. He told the Guardian this week that there was “a mistaken belief that I’m a tough guy. I’m like a little caramel crisp”.