Monthly Archives: April 2018

Who is Your Best Personal Finance

Managing personal finance is a skill, actually a very important skill, and hence can be learned like any other skill in this life. No body is born with this skill. Even the best financial managers who control the budgets of the biggest companies in the world can be bad at managing their personal finance if they have not been trained on. Did you know, for instance, that most of those who consider themselves experts in managing personal finance, including the humble author, have suffered a lot from financial crises in their life that you might not even be able to imagine??!! The good news though is that if those great managers have made their way through those crises and survived their impacts, then you stand a very good chance of improving your management skills and becoming more successful in your life.

How do people learn personal finance management skills??!! Well, people can learn these skills from different resources and in different ways. They can learn them from their parents, friends, colleagues, spouses, or most commonly from their experiments and experiences. However, there are people who can repeat the same mistake for many times without realising that. This type of people need guidance and someone to tell them that they are wrong or that there is something they are not doing the right way. Also, there are people who find it difficult to master something without having a manual, a guide, or a mentor. This article can act as that voice that tells you ‘Go Ahead’ when you do something right and ‘Don’t Even Think of Going Near That’ when you do something wrong. This book can be your guide on how to make the most from your tight budget and limited resources. The author has tried his best to make it the only One-Stop Guide you will ever need to best Manage your Personal Finance.

But first and before we go deep into details, let us define ‘Managing Personal finance’. This phrase dear reader has many definitions, but in a simple way it means the ways and methods that can help you make the most from your income or budget in a way that it best covers your expenses and in some cases leaves you with some money to save.

Now being aware of what Managing Personal Finance means, who or what do you think should you consult to get the best advice about managing your personal finance?? Should you consult books like this one?? Should you consult experts in this area or attend courses about this issue?? Should you consult your parents, friends, or those people that you trust the most?? Should you consult those people whom you consider successful in that issue and good at managing their financial matters?

No, actually none of those will be good enough to give you the best advice about managing your financial matters. Dear reader, your best consultant about managing your personal finance is ‘YOU’

Yes, it is you. You only can help yourself manage your personal finance the best way. You only can help yourself to get out of that ditch and be something special. All those mentioned above can be very helpful as tools you can use to show you the way or give you the tips about best strategies in doing things. They can even be very helpful in putting you on the right tracks towards becoming a better manager of your personal finance. But that is all. They can do nothing more than that. The rest depends on you. You only can make the choices that will make you the best personal manager of your finance like you are now making the killing choices that make you the worst manager. If you think that you cannot do this alone, then don’t waste your time with experts and courses for they will not be able to change anything in your life.

Your participation in this matter my friend is very important. It is actually a top requirement for you to be a better manager of your personal finance. So, if you currently are consulting a book, a course, an expert, a friend, or whatever… put in mind that they will not be able to help you much without your sincere participation and serious commitment. Don’t be surprised or disappointed of what you have just read because simply… you are capable of changing your life upside down and becoming the best financial expert in just a few years. Yes, you can. If you think that because of some minor financial problems and because of little shortage of money you are a bad manager of your finance or that you can never have control over your budget, I would tell you with assurance that you are wrong. You are an excellent manager of your finance and all that you need are some tips from this book and that course and some hard work from your side. In other words, this book is meant to give you some tips and enrich you with the author’s experiences and the positive expertise of some professionals that can put you on the right tracks towards controlling your expenditure. The rest is on ‘YOU’.

Business Finance Consulting

Various strategies for cost control will be helpful for most small businesses trying to cope with reduced sales volume. Business planning and consulting are likely to be among the most effective alternatives to help small business owners deal with recent distressed financial conditions.

The need for new business planning tools is rarely a high priority for a company that is not experiencing one or more substantial problems. However even for the most healthy business, contingency plans are advisable. The value of contingency planning for business financing is sharply illustrated by recent examples of banks suddenly eliminating commercial loan programs with little or no advance notice. The level of chaos that currently prevails throughout commercial banking unfortunately means that changes can continue to occur with little warning.

Business consulting will often not be thoroughly considered by small businesses because of the potential cost. As with any any other corporate service, costs cannot be ignored. This is particularly true in the current economic environment because very few businesses have substantial discretionary funds to cover new business expenses. Nevertheless it will sometimes be necessary to spend some money in order to either make money or reduce costs.

The growing need for business consulting and management tools is supported by the disturbing number of changes which have occurred throughout the business world recently. To adequately address many of the complicated changes impacting small business loans and working capital financing, most business owners will not have enough technical skills or information. Many banks have imposed significant fee increases for their commercial finance services, and finding effective (and less costly) alternative business funding services will prove difficult for even the most skilled borrower. While there are some viable business finance options to replace traditional bank financing, these alternatives can seem confusing simply because they are new and different approaches.

Whenever there are complex problems, there are rarely simple solutions. The current difficulties for small business owners are a growing challenge. Similar circumstances have not been seen during the past fifty or more years for most businesses. As a result, even a highly experienced business owner is likely to be missing enough direct experience to make it through the maze of current changes and problems without at least some outside help.

It is likely that the most effective (and realistic) business planning tools will actually be a combination of several approaches undertaken with a coordinated effort. As noted above, complicated problems will usually require complex solutions. This will often translate to a series of business management and planning maneuvers that can take a number of months or even several years to complete. Small business owners should generally avoid any business consulting expert that portrays the problem-solving process as quick and easy.

Commercial Finance Consulting

Without adequate information about what should be done to obtain small business loans in the current extreme circumstances, most business borrowers are increasingly confused. Business finance consulting that provides practical advice about overcoming current lending difficulties will be helpful to business owners. Nevertheless, because of a chaotic commercial financing climate, effective working capital management advice has become a valuable and rare commodity. Even though they are clearly in demand, business financing experts are simply not easy to locate.

Some very helpful and effective business finance advice is available at no cost, and business owners should usually start any search for help by reviewing such free advice first. Two notable examples of sources available for free online are The Working Capital Journal and The Commercial Mortgages Guide. However, the normal complexity of small business loans combined with a chaotic commercial lending climate is likely to increase the necessity of individualized commercial finance consulting assistance from a commercial financing expert.

Such personalized business finance consulting help will not be as easy to find as might be expected. In many cases, commercial financing advisors are not willing to charge a fixed commercial finance consulting fee that requires them to spend more time and frequently offers them much less compensation than provided by lucrative loan fees that are often well over $5000. If small business owners can find a commercial loan expert willing to provide these professional consulting services for a reasonable fixed fee, a likely cost range will be $1500 to $3000 for a basic but thorough consulting effort.

One of the most important efforts that commercial borrowers should undertake with a qualified business finance consultant is to explore contingency financing options which might be necessary due to the current upheaval in financial markets. For many years I have advocated the importance of “always having a Plan B” for working capital financing and other business financing.

Now that many banks have routinely reduced or eliminated business lines of credit or recalled commercial loans, the true value of formulating contingency plans for small business loans and commercial real estate financing has become very apparent. When they are unprepared to do so, business owners will find it much more difficult to find alternative sources for financing. With a practical contingency financing plan, business owners will not be caught by surprise and will be ready to take quick action if their current commercial lender suddenly changes course and revokes existing commercial finance agreements.

Most small business owners have their own areas of special interest in addition to a “Plan B” scenario to investigate with the help of a candid business finance consulting effort. Regardless of the specific topic, it will usually be beneficial for a business borrower to have a straightforward discussion with a small business loan expert.

In some cases, these discussions can be thought of as “getting a second opinion” for new commercial financing or refinancing of existing debt. Business owners might not have previously seen the point in paying even a modest consulting fee to get such a second opinion, but recent events have changed that perspective in most cases. Now that many banks have made it so painfully clear that they can make really big mistakes when the right questions are not asked beforehand, more and more commercial borrowers readily understand that they might need someone else looking out for their best interests.

For tasks like those described above, how should small business owners find a business finance consultant to help? One suggestion is to include the power of the internet and conduct a search for “working capital finance expert” or “commercial financing and consulting”. Hopefully you will have a Plan B to help guide you if that approach is not sufficiently effective.

Business Finance Consulting

For small business owners, one of the most perplexing situations is a realization that there are now essentially “good banks” and “bad banks”. To make matters worse, it is rarely easy to distinguish between the good and bad ones. For many commercial borrowers, business finance consulting has emerged as a helpful tool to determine which banks are still effective. But overall, the world of banking has changed dramatically for almost everyone, and many business borrowers are angry and confused by a new commercial banking landscape that does not seem to be working very well.

One of the more difficult aspects associated with the “good bank and bad bank” analogy is that there are so many competing explanations as to what constitutes a “good bank”. One popular analysis has focused on how much banks are really worth in view of the toxic assets that are so complicated to evaluate. With this analysis, “bad banks” are typically those with assets worth less than their liabilities and as a result such banks have been referred to as “dead banks walking” or “zombie banks”.

It is fair to say that we have not yet encountered a bank which has openly agreed that they deserve to be looked at as a zombie bank because their liabilities exceed their assets. This would be tantamount to describing themselves as a bankrupt bank. If a bank is truly deserving of the bankrupt status (and there are a number which certainly appear to be in this category), the current banking laws do not permit such a bank to go through the kind of bankruptcy process being considered by General Motors and Chrysler.

Instead the Federal Deposit Insurance Corporation (FDIC) is supposedly required by law to assume the operation of the bankrupt bank until a new management and ownership arrangement can be established. For a number of smaller banks, this has in fact occurred during the past few months. What has been missing so far from this legal bank takeover approach by the FDIC has been the inclusion of larger banks which appear to have problems that are much more serious than the smaller banks which have already been liquidated and transferred to new owners by the FDIC.

The FDIC and other public officials have not made public why large problem banks have not been liquidated. One obvious possibility is the belief that the public failure of a major bank would create a crisis of confidence for virtually every other bank whether they are financially healthy or not. An equally strong likelihood is that the FDIC simply does not currently have sufficient assets to cover the failure of a big bank. This viewpoint is supported by the recent announcement that the FDIC is in the process of raising fees paid by banks in order to replenish the FDIC insurance funds.

Small business owners need their own evaluation standards to determine what constitutes either a “bad bank” or “good bank” as it relates to the future financial health of their own business. Business owners should include an assessment that focuses on results as to which banks can provide the needed help for their specific business circumstances involving working capital financing and commercial loan needs. While such information would go a long way toward establishing a good bank-bad bank distinction, the banks themselves are not likely to be helpful in providing the needed data to produce this candid evaluation.

There are possibly several large bankrupt banks that have not rushed to advise the public that they are in serious trouble and are still functioning normally. Similarly we are already seeing that while most banks proclaim that they are making small business loans and SBA loans in a normal fashion, in reality virtually all banks have reduced commercial lending dramatically during the past few months. Some specialized business lending such as commercial construction financing has been frozen altogether in many areas.

In addition to the critical importance of identifying “good banks”, we have published a related report which describes the delicate issue confronting many business owners who might need to fire their banker. Just as there are “good banks” and “bad banks”, there are also “good bankers” and “bad bankers”.

Business finance consulting has emerged as an important tool to help small business owners work their way through a complicated commercial banking maze. In the Bernie Madoff fiasco, one of the common questions asked repeatedly is why investment advisors did not evaluate the Madoff internal operations prior to placing investor funds with Madoff and his Ponzi scheme.