Joy Olivia Miller

Archive for February, 2011

When you mention press releases to many people they think more about news related to businesses announcing products or services or making some sort of announcements, some consider press release as just another form of news article.

Although on one side they can be described as news articles, they mostly feature business news. These are used by businesses to announce the launch of certain products or services in the market. This is one of the methods that have not been fully utilized by internet marketers to promote their products online, the reason being that many do not have the necessary knowledge on how to use them to advertise their online businesses.

One of the most important points to note is that since Google loves new content, press releases can get your site at the top pages of search engines because they are news content and they are quickly indexed by Google. This means many people who are looking for information on your site will be directed there by search engines through these press releases. Before using a release, it should be noted that it needs to be well written to make sure that not only announce an upcoming event or a new product, but also helps you achieve increased increase traffic.

The first thing to do is to use a title that is attractive for your press release. This means that those who first see the title can be tempted to read more about your products or services. The title should also be relevant to the information contained in that press release. Remember before people read about anything, they will first look at the title and if they find that the title is not about whatever they are looking for they will not find any reason to read the rest of the content.

You should also make sure that the keywords you are using are thoroughly researched for them to correspond with what you want to announce to your readers. Do not use keywords that are not relevant to your topic because this will increase the bounce rate in your site.

The keywords should as well make part of the press release title. These keywords are also important because they will be used by search engines to direct web traffic to your website.

The other important point is the body article. It should be equally appealing as the title. Do not write an attractive article and follow the same with meaningless information that will not help in promoting your business. People need to find enough information about the launch of your product or your business and why they should come to buy from you and not from others. Include any important information about the actual launch and put the date of the launch and the place where it will take place. Make sure you make proper use of the resource box because this is where you link your press release to your site.

The last thing to do is to post your release to relevant sites. You can use those sites that are free or if you want to pay for your press release you can opt to paid release distribution. All these sites are accessed by millions of people on daily basis and more web traffic will come to your sites as a result of these press releases.

Would it not be great if you had some extra money to purchase a new house or repair the old one?

Making a down payment for a new house or repairing an existing house can be quite costly. The government is aware of this, and it has set up grant programs to assist Americans with this. These grant programs offer you free money that does not need to be paid back ever. This money is meant for making down payments for a new home, or fixing up the old one.

If you’re a legal US citizen and are at least 18 years of age, your citizenship entitles you to these grants. All you need to do is fill in the application and send it in. You can also apply more multiple grants. It’s more than possible that you receive 2 or more grants simultaneously such as a grant to make down payment for a house and a grant to pay off your financial liabilities.

There are different grant programs to choose from. Some of the available grants are as follows:

$2,000 for debt relief $5,000 for seniors who want to have their houses repaired $10,000 for a new roof on the house $15,000 for making a down payment

The government plans to give away about a trillion dollars in the form of grants money to the US citizens each year. Recession has no effect on this money. In the ongoing economic crisis, the government is giving away free money to help the Americans improve their financial condition.

Do some online research and apply today. Every American must take advantage of this free grant money.

I’ve found a great online resource for grants and I’d like to share it with you just see below.

Did you know that the month of April is Financial Literacy Month? What is financial literacy? Are you financially literate? A short definition is the ability to understand finance. In the real world, it consists of having the knowledge and skills required to make good decisions where your finances are concerned.

I find it interesting that the United States government created the Office of Financial Education in 2002, the Financial Literacy and Education Commission in 2003, and that President Obama officially declared April Financial Literacy month, yet our government is expected to reach its debt ceiling of $14.29 trillion by May 16 – not even halfway through the year!

You’ll find a lot of resources on government and private websites on getting your finances into shape. Here are 8 tips for financial literacy in 2011.

Tip #1 – Where Does Your Money Go?
It seems a simple thing. But you’d be amazed how many people don’t know where their money goes every month. I can remember times in my life when I would deposit my paycheck and get cash back, and then Monday morning wonder where the cash had gone and it was two weeks before the next payday! The best thing you can do for yourself is to determine where your money goes. Start tracking your purchases. One of the easiest ways to do this is to get a receipt for every purchase. In the evening, or at least once a week, go through your receipts and see where your money went. After you’ve done this for a while, you’ll be ready for tip number two.

Tip #2 – Take Charge of Your Money
The best way to do this is to develop a budget, or a spending allocation plan. If you don’t tell your money where to go, you will run yourself ragged trying to make enough to make ends meet. First determine what your income is. Then determine what your fixed expenses are. These are the ones that really aren’t optional, and they come like clockwork every month. You don’t have a lot of control over these – at least in the short-term. Things like your rent or mortgage, and your car payment fall into this category. Finally, add in your variable expenses. You have to eat, but the amount you spend on food can vary widely. For now, just average what you’ve been spending. Now comes the moment of truth: does your income exceed your expenses? If so, congratulations! You are actually in the minority in America. Sad, isn’t it?

Tip #3 – Pay Yourself First
I’m sure you’ve probably heard this before, but it can’t be said too much or too often. If you don’t pay yourself first, it’s unlikely you will pay yourself at all. Those who are truly financially literate are saving money. When you are young, this is incredibly important even though it may not seem so important. After all, you have your whole life ahead of you, right? Don’t underestimate the power of compound interest. There are many people in their later years who wish they had invested young and invested a lot. The things that you think are so important to buy today won’t seem so important 40 years from now when you are approaching retirement with a too-small nest egg and the things you spent your money on when you had so much time to save vanished long ago.

Tip #4 – Save for a Rainy Day
You heard your grandma say it – at least mine did! The thing with rain is it falls on everyone alike. It doesn’t matter how nice a person you are or how good your intentions are. The one thing I can guarantee you is that things will wear out, stuff will break, expensive items will have to be replaced and people will lose their jobs. The question is, are you prepared for those rainy days? The basic rule of thumb is that you want to save between three and six months of expenses. That way, if anything happens you should be covered. How much is enough? That depends on your expenses. But, lucky for you, you have already done Tip #2 so you know what your expenses are every month, right?

Tip #5 – Dump Your Debt
You just don’t have much chance being financially fit if you are carrying around a heavy load of debt. With high interest rates, it could very well take you 30 years or more to pay off your credit care debt if you are only paying the minimum amount each month. That’s the credit card company’s plan. You’ll end up paying for whatever you bought on credit three times once you add in the interest. Do yourself and your future finances a favor, and pay off your credit cards as soon as you possibly can. Have a yard sale. Do some extra jobs on the side. Tighten your belt and pack a lunch. Then, once you get the bills paid off, chop up those cards and vow never to get into credit card debt again!

Tip #6 – Where Are You Keeping Your Money?
Some people get the message that they need to save money. They put themselves on a budget and cut their expenses and save every penny they can. But, where are you saving your savings? If you are just keeping it in your checking account or in a regular savings account your savings aren’t even keeping up with inflation. Your best bet is to invest that money so that it can start working for you, instead of you just working for money. In addition to your rainy day savings, you should be saving for retirement, and you should also be saving for larger purchases so that you don’t resort to credit when you decide its time to replace your old furniture or your car.

Tip #7 – Know Your Investment Threshold
There are some standard rules of thumb when investing. In general, the younger you are, the more risk you should be able to handle in your investments. The older you are and the closer to retirement you are, the more you should start shifting your money into investments with less risk. Of course, you also have to take your personal temperament into account. If you are terrified of losing everything you have saved each time the stock market dips, then you may want to invest in lower risk accounts.

Tip #8 – Get Your Affairs in Order
You probably think this only applies if you are staring death in the face and your doctor has told you to go home and get everything in order. But, there is no time like the present to make sure your future and that of your family is insured against disaster. Review your insurance policies. Make sure you have enough coverage for your house and car. If you don’t have life insurance, and your family depends on your income for survival, then you need to get some. If you are in good health and middle-aged or younger, you can get a policy that will cover your family and not drain your budget. Have a written will. More than half of Americans don’t. It’s devastating enough for your family to deal with your death, don’t make them wonder what your final wishes were. In addition to your will, have a file drawer with a list of all important documents, insurance policies, investment and bank accounts, etc. so that your survivors can easily find this information.

The following are some examples of modern financial management theories formulated on principles considered as ‘a set of fundamental tenets that form the basis for financial theory and decision-making in finance’ (Emery et al.1991). An attempt would be made to relate the principles behind these concepts to small businesses’ financial management.

Agency Theory
Agency theory deals with the people who own a business enterprise and all others who have interests in it, for example managers, banks, creditors, family members, and employees. The agency theory postulates that the day to day running of a business enterprise is carried out by managers as agents who have been engaged by the owners of the business as principals who are also known as shareholders. The theory is on the notion of the principle of ‘two-sided transactions’ which holds that any financial transactions involve two parties, both acting in their own best interests, but with different expectations.

Problems usually identified with agency theory may include:

i. Information asymmetry- a situation in which agents have information on the financial circumstances and prospects of the enterprise that is not known to principals (Emery et al.1991). For example ‘The Business Roundtable’ emphasised that in planning communications with shareholders and investors, companies should consider never misleading or misinforming stockholders about the corporation’s operations or financial condition. In spite of this principle, there was lack of transparency from Enron’s management leading to its collapse;

ii. Moral hazard-a situation in which agents deliberately take advantage of information asymmetry to redistribute wealth to themselves in an unseen manner which is ultimately to the detriment of principals. A case in point is the failure of the Board of directors of Enron’s compensation committee to ask any question about the award of salaries, perks, annuities, life insurance and rewards to the executive members at a critical point in the life of Enron; with one executive on record to have received a share of ownership of a corporate jet as a reward and also a loan of $77m to the CEO even though the Sarbanes-Oxley Act in the US bans loans by companies to their executives; and

iii. Adverse selection-this concerns a situation in which agents misrepresent the skills or abilities they bring to an enterprise. As a result of that the principal’s wealth is not maximised (Emery et al.1991).

In response to the inherent risk posed by agents’ quest to make the most of their interests to the disadvantage of principals (i.e. all stakeholders), each stakeholder tries to increase the reward expected in return for participation in the enterprise. Creditors may increase the interest rates they get from the enterprise. Other responses are monitoring and bonding to improve principal’s access to reliable information and devising means to find a common ground for agents and principals respectively.

Emanating from the risks faced in agency theory, researchers on small business financial management contend that in many small enterprises the agency relationship between owners and managers may be absent because the owners are also managers; and that the predominantly nature of SMEs make the usual solutions to agency problems such as monitoring and bonding costly thereby increasing the cost of transactions between various stakeholders (Emery et al.1991).

Nevertheless, the theory provides useful knowledge into many matters in SMEs financial management and shows considerable avenues as to how SMEs financial management should be practiced and perceived. It also enables academic and practitioners to pursue strategies that could help sustain the growth of SMEs.

Signaling Theory
Signaling theory rests on the transfer and interpretation of information at hand about a business enterprise to the capital market, and the impounding of the resulting perceptions into the terms on which finance is made available to the enterprise. In other words, flows of funds between an enterprise and the capital market are dependent on the flow of information between them. (Emery et al, 1991). For example management’s decision to make an acquisition or divest; repurchase outstanding shares; as well as decisions by outsiders like for example an institutional investor deciding to withhold a certain amount of equity or debt finance. The emerging evidence on the relevance of signaling theory to small enterprise financial management is mixed. Until recently, there has been no substantial and reliable empirical evidence that signaling theory accurately represents particular situations in SME financial management, or that it adds insights that are not provided by modern theory (Emery et al.1991).

Keasey et al(1992) writes that of the ability of small enterprises to signal their value to potential investors, only the signal of the disclosure of an earnings forecast were found to be positively and significantly related to enterprise value amongst the following: percentage of equity retained by owners, the net proceeds raised by an equity issue, the choice of financial advisor to an issue (presuming that a more reputable accountant, banker or auditor may cause greater faith to be placed in the prospectus for the float), and the level of under pricing of an issue. Signaling theory is now considered to be more insightful for some aspects of small enterprise financial management than others (Emery et al 1991).

The Pecking-Order Theory or Framework (POF)
This is another financial theory, which is to be considered in relation to SMEs financial management. It is a finance theory which suggests that management prefers to finance first from retained earnings, then with debt, followed by hybrid forms of finance such as convertible loans, and last of all by using externally issued equity; with bankruptcy costs, agency costs, and information asymmetries playing little role in affecting the capital structure policy. A research study carried out by Norton (1991b) found out that 75% of the small enterprises used seemed to make financial structure decisions within a hierarchical or pecking order framework .Holmes et al. (1991) admitted that POF is consistent with small business sectors because they are owner-managed and do not want to dilute their ownership. Owner-managed businesses usually prefer retained profits because they want to maintain the control of assets and business operations.

This is not strange considering the fact that in Ghana, according to empirical evidence, SMEs funding is made up of about 86% of own equity as well as loans from family and friends(See Table 1). Losing this money is like losing one’s own reputation which is considered very serious customarily in Ghana.

Access to capital
The 1971 Bolton report on small firms outlined issues underlying the concept of ‘finance gap’ (this has two components-knowledge gap-debt is restricted due to lack of awareness of appropriate sources, advantages and disadvantages of finance; and supply gap-unavailability of funds or cost of debt to small enterprises exceeds the cost of debt for larger enterprises.) that: there are a set of difficulties which face a small company. Small companies are hit harder by taxation, face higher investigation costs for loans, are generally less well informed of sources of finance and are less able to satisfy loan requirements. Small firms have limited access to the capital and money markets and therefore suffer from chronic undercapitalization. As a result; they are likely to have excessive recourse to expensive funds which act as a brake on their economic development.

Leverage
This is the term used to describe the converse of gearing which is the proportion of total assets financed by equity and may be called equity to assets ratio. The studies under review in this section on leverage are focused on total debt as a percentage of equity or total assets. There are however, some studies on the relative proportions of different types of debt held by small and large enterprises.

Equity Funds
Equity is also known as owners’ equity, capital, or net worth.
Costand et al (1990) suggests that ‘larger firms will use greater levels of debt financing than small firms. This implies that larger firms will rely relatively less on equity financing than do smaller firms.’ According to the pecking order framework, the small enterprises have two problems when it comes to equity funding [McMahon et al. (1993, pp153)]:

1) Small enterprises usually do not have the option of issuing additional equity to the public.
2) Owner-managers are strongly averse to any dilution of their ownership interest and control. This way they are unlike the managers of large concerns who usually have only a limited degree of control and limited, if any, ownership interest, and are therefore prepared to recognise a broader range of funding options.

Financial Management in SME
With high spate of financial problems contributing to the high rate of failures in small medium enterprises, what do the literature on small business say on financial management in small businesses to combat such failures?
Osteryoung et al (1997) writes that “while financial management is a critical element of the management of a business as a whole, within this function the management of its assets is perhaps the most important. In the long term, the purchase of assets directs the course that the business will take during the life of these assets, but the business will never see the long term if it cannot plan an appropriate policy to effectively manage its working capital.” In effect the poor financial management of owner-managers or lack of financial management altogether is the main cause underlying the problems in SME financial management.

Hall and Young(1991) in a study in the UK of 3 samples of 100 small enterprises that were subject to involuntary liquidation in 1973,1978,and 1983 found out that the reasons given for failure,49.8% were of financial nature. On the perceptions of official receivers interviewed for the same small enterprises, 86.6% of the 247 reasons given were of a financial nature. The positive correlation between poor or nil financial management (including basic accounting) and business failure has well been documented in western countries according to Peacock (1985a).

It is gainsaying the fact that despite the need to manage every aspect of their small enterprises with very little internal and external support, it is often the case that owner-managers only have experience or training in some functional areas.

There is a school of thought that believes “a well-run business enterprise should be as unconscious of its finances as healthy a fit person is of his or her breathing”. It must be possible to undertake production, marketing, distribution and the like, without repeatedly causing, or being hindered by, financial pressures and strains. It does not mean, however, that financial management can be ignored by a small enterprise owner-manager; or as is often done, given to an accountant to take care of. Whether it is obvious or not to the casual observer, in prosperous small enterprises the owner-managers themselves have a firm grasp of the principles of financial management and are actively involved in applying them to their own situation.” McMahon et al. (1993).

Some researchers tried to predict small enterprise failure to mitigate the collapse of small businesses. McNamara et al (1988) developed a model to predict small enterprise failures giving the following four reasons:

- To enable management to respond quickly to changing conditions
- To train lenders in recognising the important factors involved in determining an enterprise’s likelihood of failing
- To assist lending organisations in their marketing by identifying their customer’s financial needs more effectively
- To act as a filter in the credit evaluation process.

They went on to argue that small enterprises are very different from large ones in the area of borrowing by small enterprises, lack of long-term debt finance and different taxation provisions.

For small private companies, these measures are unreliable and textbook methods for judging investment opportunities are not always useful in organisations that are privately owned to give a true and fair view of events taking place in the company.

Thus,modern financial management is not the ultimate answer to every business problem including both large and small businesses.However,it could be argued that there is some food for thought for SMEs concerning every concept considered in this study. For example it could be seen (from the literature reviewed )that, financial records are meant to examine and analyse corporate operations. Return on equity, return on assets, return on investment, and debt to equity ratios are useful yardsticks for measuring the performance of big business and SMEs as well.

When tax time comes around people are filled with all types of questions. The one question that keeps coming up is how much money do you have to make to file taxes. It never fells to be a top questions. If you are an employee or you are self employed the rules for filing taxes are different.

For a typical employee you have to file taxes when you earn $3400 or more in a given fiscal year. If you earn less that that you do not have to file taxes. You should file a tax return anyway because you can still get a tax return. No since letting the government money that you have coming to you, right?

If you are self employed on the other hand then you have to file taxes when your income is at least $400. That is minus your cost of expenses you accumulated over the year. Plus being self employed you are going to end up paying the full amount for taxes as employees will pay half and the employer pays the other half.

Now don’t get me wrong, it’s not quite that simple. See there are other factors involved when you answer the question of how much do you have to make to file taxes. There are 3 more factors like your age, filing status, and the type of income you receive.

If you are a minor who makes more than $5,350 then you have to file taxes. Make less and you will not have to. If you file as single you will pay more but if you file head of household then you will pay less. If you are 65 years of age and you collect social security then you don’t have to file. Believe me when I tell you that with all the tax laws out there I could go on and on for ever. But I think you get the general idea.

Regardless of if you need to file taxes or not you should file anyway. The government is not going let you know you could have a refund waiting for you. If you don’t then the government will just keep your money and make big interest off of it. You work are for your money so make sure you get back every dime you are owed.

So I hope the question of how much money do you have to make to file taxes was answered. Remember, the date to file by is April 15th. So start early and don’t put it off until the last minute and end up missing out on your refund.

When attempting to receive information from a lender or servicing company, owners can take advantage of their legal opportunities under the Real Estate Settlement Procedures Act to send a Qualified Written Request (QWR). A QWR is meant to help borrowers raise disputes with their mortgage servicer and have those issues resolved in a timely manner.

Homeowners, however, may not know what things to ask of the lender, or why they are requesting certain documents or records relating to the loan and its servicing. Most questions revolve around various disputes that borrowers may have with a creditor, including payments owed, dates when payments were made, and the nature of the relationship between the company getting
receiving collecting payments and the true owner of the loan.

For instance, owners may wish to request a complete payment history including the dates that payments were made, as well as the amount the lender claims it received. Also requested could be a breakdown of how the payment was disbursed, whether to principal, interest, taxes, property insurance, late fees, suspense accounts, or any other charges.

For homeowners facing foreclosure, a list of all charges and fees on the account could be disputed, for which a QWR may be necessary. Borrowers could request that all of the arrears and fees relating to the foreclosure be itemized and justified by the servicing company. This can be an especially difficult request for the bank to fulfill, as many often just make numbers up for past due accounts.

Any change in the monthly payment should also be carefully examined and disputed if the homeowners did not specifically agree to it. Even if they did, if the amount does not look right, it may be worth disputing and having the servicer check into the loan. Homeowners can request the financial institution to explain how the new amount due was calculated and why it was increased.

As with any foreclosure scenario, there will be a whole range of issues that are specific just to that particular case. Thus, the issues described above should not be taken as an exhaustive list of QWR questions at all. Homeowners will inevitably run into their own issues when attempting to stop foreclosure, and they will be able to create their own Qualified Written Request letter to the servicing company in order to attempt to resolve any issues.