October 31, 2011

3 Tips to Investing in Commercial Property

Many investors today are choosing to expand their property portfolios by incorporating an investment property that is zoned for commercial purposes. This is because investing in commercial property has become a viable method of generating large sums of money.

Investing in Commercial Property
There are a variety of ways in which you can invest in commercial property. One way is to purchase a property (i.e. an office block) and then rent it out to one or more businesses. You can also choose to buy a commercial property (as an investment) and own the business as well. Both these forms of investment differ in complexity, as owning a business requires a lot more involvement than merely renting the space out. Both investment methods, however, can be hugely lucrative ways of growing your wealth.

Investing in commercial property, however, is not advised for everyone. Because there is the potential for large profits there is also the risk for huge losses. It’s always useful to think of property investment as a form of gambling— the more you choose to bet the more you risk to lose. So, to even consider in investing in commercial property you have to be financially well off.

To help you making a wise commercial property investment, three essential tips shall be explored below.

1. Research the Commercial Property Market

It is important that you do some serious research into the commercial property market. You need to make sure that you are investing in a high growth area, as you want to invest in an area that is attractive to a lot of businesses looking to rent out a space.

Also, if you are thinking of investing in a business, see how businesses of that kind are performing in the market. For example, if tourism is in a real slump it might not be a great idea to invest in a hotel.

You should contact the right real estate professionals, like a property market analyst. It’s important that you have a thorough knowledge of commercial property trends and what is involved in investing in commercial property. These professionals can also give you advice on what is currently profitable to invest in.

2. Develop a Business Plan

It’s important for you to organise a business plan and decide what role you want to play in your commercial property investment. Do you want to let out your commercial space to a host of other companies? Or do you want to own your own business and treat it as an investment?

Getting in touch with a property developer group (that specialises in commercial realty) is a good idea. You can benefit from their experience and real estate development software to develop the most efficient business plan. They can help you work out and design the most profitable form of commercial property and business.

3. Seek Out Professional Financial Advice

Investing in commercial property is different from investing in residential property. Firstly, you can’t borrow as much money to put towards the purchase of a commercial property as you can with a residential home. This is because, with commercial property, there is always the high risk of bankruptcy.

Because you have to use more of your own finances for the initial purchase, you need to ensure that your are financially secure.

Discuss your plans and options with a variety of financial advisers, like your bank, home lenders and accountants, who can help you devise a budget and financial plan. They can also help explain the most effective ways of paying off your loan, the upkeep and maintenance costs of your property and how your can reinvest your projected profits back into your investment and any tax benefits.
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October 24, 2011

Protecting Yourself in a Personal Economic Downturn

Most of us think of 'Economic Downturns' as a national or international problem but what if a household experiences one? While many of us think of getting home insurance or contents insurance many of us forget about other types. Many factors can cause a downturn in a household’s income and these usually revolve around the main breadwinners. That is why many families take out life insurance but there are other types of insurance that will provide financial protection in other scenarios.

Personal Economic Downturn

A Family Member Falls Ill

When someone in your family falls ill or is diagnosed with a serious medical condition the last thing on your mind is finances. Unfortunately, it is an important factor to consider particularly if you have to pay for any treatment. If they are the main worker in the household and their income is relied upon then you should consider trauma insurance.

How can you protect your family from illness?

  • Have proper health insurance to help pay for any treatments.
  • Maintain healthy and active lifestyles as well as diet.
  • Insure the workers in your household against illness.
Another unthinkable situation any of us could find ourselves in is a family member who has been in a serious accident.

Your Main Breadwinner Has an Accident

All businesses must now have Workers Compensation insurance in order to protect against accidents on the job. But what happens if you are seriously injured outside of work and you can no longer do your job? This is not always likely to occur but if it does then there are ways you can be prepared for it.

Having income protection insurance is the best way to protect against cases of a serious injury or illness. Usually, this type of insurance will provide approximately 75% of your previous income if you cannot work due to accidents or health problems. While this may not be all of your pay, think of the difference between that and having no income at all!
  • How many wage earners do you have in your home?
  • Can you survive if you lose one income?
  • Do you have other sources of income? e.g. investments.
  • Can your household afford any large and sudden bills combined with a loss of income?

Those are just a few of the considerations that you have to take when thinking about a possible decline in your financial fortunes. There are also some very happy occurrences that can cause your household to struggle financially.

Extra Children in the House

If you have had a child or are expecting you will probably realise that there will be a financial cost involved. Healthcare isn't always free and there are a number of other things to consider:
  • Clothing for your new child.
  • Furniture for their room.
  • Time spent looking after the child.
This last point is critical in your household planning as one or both breadwinners in the house may have to cut back on work in order to look after a new child. In this way you have to think of your household as a mini-economy and any loss of income should be planned for. Insurance must be combined with sound financial planning and practices in order to have your household budget running like a well oiled machine.
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October 23, 2011

Income Protection Insurance - Why You Need It

Income protection insurance is a means whereby you can still receive up to 75 percent of your usual income, despite the fact that you have become injured or ill to such a degree that you can not carry out your work anymore. Without having such protection you would have no other choice than to eat up your savings and even finish up on a government disability pension in order to survive. What's more, if you are the owner of a small business you might have to employ somebody else to do your work for you so that your business can carry on without you. Income protection insurance is therefore just as important an item in your insurance portfolio as is life insurance.

income protection insurance plans
Like most personal, or life insurance policies, you, or your dependents, never fully realize their full value until you have to make a claim. If you have nothing to claim against you can find yourself in a seriously adverse financial position very quickly. Therefore your need for income protection will depend on how much you stand to lose, should you become ill or injured to the extent you can no longer contribute to your own welfare.
Income Protection Should Not be Confused With Workers Compensation.

Workers compensation will cover all your medical costs and out of pocket expenses but if you are to be out of work for any extended period of time you could still find yourself in need of income protection insurance. Of course if you work for yourself you will not even have any workers compensation to help you out, plus even if you are covered by your employer's compensation, if you are injured outside of work Workers Compensation doesn't have to pay.

The risk of not having adequate income protection insurance could mean the eventual loss of your family home, or being unable to pay your rent, even your day to day expenses like buying food for your table would be affected.
Compare Quotes and Terms From Several Companies Before Deciding

In order to find the best deal as far as income protection insurance in concerned you will have to compare quotes from several life insurance companies. Premiums and terms can differ greatly between companies and the cost of the cover can depend a lot on how long you are willing to wait before your income protection payments start being applied.

Another factor to compare will be the length of time you wish the payments to continue for. It is possible to have the benefit continue until you reach retirement age. The amount of monthly payments you wish to receive will also affect the cost of the cover.

All these factors will need serious thought before you go ahead and sign up for protection only to find that the policy you chose doesn't give you all you need to cover things like your rent or mortgage, car payments, credit cards and general living expenses. The payment benefits are normally capped at 75 percent of your average income before you became sick or injured, because it has been determined that anything more than that would be an incentive to not return to work when you recover.

There are two major issues to keep in mind when finalising your income protection policy with a life insurance company these are:

Be certain that the policy you are signing up to is index linked so that it will automatically keep up with any inflationary increases.
Make sure that it is a non-cancellable policy. This means you will always be assured that your policy will keep being renewed every time it comes due for renewal. If you don't make sure of this right from the start you will find yourself having to undergo a health check every time you want to extend it further.

If you leave yourself open to re-assessment you could face an increase in premium costs. You should also examine the terms and conditions for a clause that could see your benefits lessened if you had another income stream to fall back on. Some income protection insurance policies will only pay you if you cannot work in the field you are trained to work in. This means that if any other work is around you may have to take it on.

Other policies will pay you regardless of whether other work is available or not, as long as you can't work in an area of your own expertise. This is particularly important for a professional such as a doctor who probably could not practice as a GP anymore because of his or her injury or illness but could work as a watchman at an industrial site where all he would be called on to do would be to monitor on site cameras.

As with life insurance, income protection insurance is best taken out with a solid reliable insurance company that has been around for a long time. The longer such companies have been in operation the more policy holders they obtain and the stronger they become. Longevity is also a good sign that people trust them and stay with them.
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October 21, 2011

Free and cheap tools to expand your small business

If you’re running a small business and are striving to keep your overheads down, one of the best means of doing so is with the myriad of free business software that’s now available on the web, such as free conferencing or phone conference services and office app downloads, for example.

Free Dynacom Accounting Edition

Like you’d expect if you went by the name here, it’s free and it manages your accounts – you can use to do your accounts, anyway. But still – while you will have to do some work, it’s fantastic for organisations with relatively simple needs. Dynacom’s free startup Accounting Edition provides a basic business accounting package and includes software functions for purchasing, payroll, sales, bank, and general ledger. And not only this, but it also offers users a really neat-looking interface in a format that’s both highly user-friendly and efficient.

Open Office

As with the much loved Microsoft Office, users have the ability to create word, spreadsheet, and publication-style docs. And not only this, but it also enables users to analyse data and produce stand-out presentations and effective illustrations, and your work can also be published in .pdf format without requiring any additional software – rather handy, we think.


A fantastic piece of free software, Citrusware offers two incredibly useful features:
  1. Invoicer – as you might expect, this creates and even prints off invoices. Users can also add and save sales items to Invoicer for to use as a template for future invoices, and are also able to apply credits or debits and charges for things e.g. postage and packaging, admin fees etc.
  2. Proposal Writer – you can create and print off your business proposals, making them look super slick, helping to make you and your business rather professional indeed.
Unforgiven organiser

Much like Microsoft’s Outlook Calendar, the only huge difference is that this one’s completely free. Unforgiven Organiser allows you to oversee yearly, monthly, weekly and daily tasks based on how often (or not) they occur. This software’s Contacts Manager feature is great because it links with your Internet browser, e-mail client, and Windows telephony, which enables you to sync more and more aspects of your business management systems – great stuff.

So there you have it – just a few of the myriad of free software that ready and waiting for you and your business to take advantage of – go get ‘em!
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October 19, 2011

Is college even a viable option in 2011?

The economy is still at one of its weakest points in years. Job growth remains scant at best, yet tuition rates at conventional and online colleges continue to soar. The National Center for Public Policy and Higher Education reported a 439-percent increase in tuition and fees from 1982 to 2007. Between dwindling opportunities for recent graduates and increasing financial burdens placed on inbound freshmen, it’s natural to wonder if college is even worth attending.

                                                college and personal finance 
The amount of debt accumulated during college will have a direct impact on graduates’ finances. Sound financial preparation early on can help to alleviate some of the impact that student loans will have after college. Perhaps the best way for students to manage their finances and the expense of college is to begin well in advance, early in high school. Obviously it helps to get every grant and scholarship possible when preparing for college, but scholarships are typically easier to get for high academic performers. That means doing well and earning high marks throughout high school will literally save students money down the road.

For those relying on student loans, making sure to exhaust federal borrowing before considering private student loans is another way to keep the cost of college down. Federal student loans backed by the government typically come with interest rates around 4 to 5 percent lower than private loans issued by commercial lenders. This difference in interest means considerably less money will be owed over the life of the loan. Federal student loans also have more flexible terms than most private loans, so if students experience hardship after graduation it will be easier to defer or negotiate payments.

Some students may understandably prefer to avoid large amounts of borrowing during college. Nobody wants to graduate tens of thousands of dollars in debt. One basic yet commonly overlooked option to taking the edge off tuition and college expenses is to work during school. Even working just part-time or on weekends will make it possible for students to borrow less money.

If a student manages to earn just $2,000 per semester working through a four-year degree, that amounts to a $16,000 reduction of the amount he'll need to borrow. It’s not an option for everyone, especially those with sights set on graduate programs that require high GPAs. However, if working is an option, then every student should consider it as a path to leave college with less debt. In the end, a conversation that might have been unthinkable twenty years ago is now worthy of legitimate discussion: does college even make good financial sense? A recent report from Rutgers University showed that the median starting salary for graduates in 2009 and 2010 was $27,000. With many graduates being forced to take jobs that aren’t even in their fields, the outlook is certainly bleak.

Whether college is a financially sound option is going to depend upon the individual. It comes down to whether funding is available, what students can reasonably expect to earn after graduation, and whether they have other options available that might pay a decent salary without a degree.

One thing all students considering college should consider is that unemployment among college graduates is still significantly lower than high school graduates and dropouts. Regardless of cost, a college education still does make some difference in terms of finding work later on. Even though the economy is weak now, and a degree may no longer act as a total safeguard against unemployment, it will be a valuable asset to have once job growth picks up.
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