Cashflow Blog

If you need a reason to set up a plan to teach personal finances to your children, a new survey from Charles Schwab Financial Services should give you the motivation. They recently gave a survey to 1000 teenagers between the ages of 13 and 18 and came away with some findings that show that teenagers today have high expectations on what they believe they will be earning in the future:

Teenagers today think that they are going to make quite a bit of money. The average teenager believes that they will be earning an salary of $145,000 a year. Boys believe that they will be earning a salary of $173,000 per year while girls believe they will be earning $114,000 per year. This despite the fact that the average annual salary for a worker in the US is about $40,000 today.

According to the survey, teenagers in the US get most of their money from gifts given to them (54%) while over half (52%) say that they get their money by simply asking their parents for it when they need something. Close to one-third (29%) of teenagers already have some type of debt with the average amount being $300. This is a 23% increase from 2006 when the average debt owed by teenagers was $230.

Another findings from the survey was that teenagers say that they do want to learn more about personal finances so that they can make better decisions when they are living on their own. Obviously, the schools are not teaching these fundamental lessons to the children and so it is up to the parents to help educate their children about finances.

 

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Your Kid Thinks He’ll Make $173,000 A Year

I know its been a ling time coming but my switch to WordPress is almost complete. I will pretty up the look of the blog soon. Come see me at In Cash Flow We Trust.

In Cash Flow We Trust

Economics is about how you realise your dreams and achieve financial freedom. Can you get up in the morning, decide not to go for work and yet generate income? One of my friends in his thirties has already retired from active employment. He travels around Canada, educates teenagers on how to live life, enjoys his time on the beaches and leads a rich life-style. You can do so too, if you can generate what economists call “passive income”. What is it?

Passive income is income generated without you sweating for it! If you invest wisely in stocks or mutual funds, you can expect to generate income periodically. Income from Internet-related businesses is passive. Writing books and receiving royalty is another example of such income.

Why should you generate passive income? If you want to improve your life-style, you need to generate more income. This would mean asking your boss for a raise, which you are unlikely to get.

The alternative is to look for other ways of generating income. With a full-time job, you will have to generate such income without spending much time on it. Setting up streams of passive income is the most effective way to improve life-style.

Robert Kiyosaki, author of the best-selling book Rich Dad Poor Dad advocates buying house properties and generating positive cash flows. That is, the rent that you earn from the property should be more than the mortgage and other expenses that incur on the property every year.

You should have three-four different streams of income other than your salary. That way, you can achieve your financial freedom faster — just as my friend did at a young age of 35.

B. Venkatesh

(The author is a Chennai-based financial analyst.)

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Generating passive income

I was having coffee with my business partner Mun Hoe today. We were talking about property investments and went onto the subject of leverage.

I was talking about leveraging the bank’s money in property when Mun Hoe shared with me that he read an alternative definition by Bradley Sugars, in his book Instant Success: The Real Estate Coach.

Brad Sugars defines Leverage as

“Do the work once and get paid forever“

I was blown away. I was stunned at how true this definition was!

Mun Hoe went on to share that Brad Sugars gave a few examples of Leverage:-

• You write a book once and get paid royalty forever …
• You write an advertisement for your business once and test it to see that it works and then, you can run it for as long as it keeps working.
• You train someone once and then they do it for you long term …
• You buy an investment property once and collect rent and capital gain forever …
• You get a new customer for your business and keep them coming back for a long period of time
• You build a network of distributors and they keep distributing for you forever …

Brad’s perspective changed my view of leverage forever, even though I have used the concept of leverage to achieve my own financial freedom.

~ Willy Lim ~

 

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Leverage - Do the work once and get paid forever

By Cherry Lynn Bonachita

When you are applying for commercial development finance, the deal will be individually priced so there are basically no set rates. The lenders from various development finance UK will look at what you propose to do, assess the property and the appropriate works to be done, and suggest a bespoke price accordingly.

Rates for commercial development finance from various lenders differ depending on the applicant’s experience. It depends on the type of property and the nature of the proposal too. But a good benchmark would be Bank Base Rate ranging from 1.5% to 2.5%.

Commercial financing is usually arranged on an interest only basis and loan term can be more than a year depending on the size and nature of the underlying project. Finance to project costs will be greatly influenced by projected gross development values but commercial development finance would typically be at seventy to seventy five percent of the property purchase price and build costs.

It is possible to get a loan for 100% development finance where the borrower already owns the land on an unencumbered basis or for experienced developers with a strong track record. With such experience, they would be able to detect and support the value of developed property. In short you will be borrowing against the end value of the property rather than its current value. There are also other arrangements in getting 100% development finance but what is needed is a strong potential of returns. The said high geared finance can be supported by mezzanine funding, equity or senior debt and each funding has certain appropriation on the project and capability of the developer.

Cherry Bo is providing financial solutions to development projects or owning property by the services of Dial Financial Service LTD. With Dial Financial under [http://www.development-finance-uk.co.uk]development finance UK, you have various options to get the needed funds.

Continued here:
Rates and Terms of Commercial Development Finance