Ways to Invest Money – What Level of Risk Are You Willing to Take?

Investing money is a great idea for individuals who are looking to earn extra money, start a financial portfolio, and save for huge milestones throughout their lives such as retirement. There are several ways to invest money, doing you research and finding out which investment is right for your situation is imperative.

You can invest your money in various ways. You must first determine how much you have to invest, the time length you can invest, and what risk you are willing to take with this money.

Certificates of Deposit, or CD’s, are a great, safe way to invest money. CD’s can be purchased through your bank; you are essentially lending money to your bank. The bank will sell you a CD, use the money for a set period of time from as little as six months to several years and then pay you interest which will compound on the money you have loaned them. This is a safe investment because the bank and you are agreeing on a contract in which your money, with interest will be there in a certain period of time. Just be sure you know how long you are willing to invest because if you remove the money early you will receive penalties for early withdrawal, with will cost you money on your investment.

Bonds are also a safer type of investment; they work much like CD’s. The difference is that bonds are issued by corporations to you for a certain amount of time but these bonds are issued in order for the borrower to making long term investments into their corporations. Bonds are not money market tools such as CD’s. These are safer investments because the corporations are beholden to return your initial investment plus interest back to you.

You can also choose to invest in stocks. Stocks are shares of companies which your purchase. The price of these stocks will fluctuate in the stock market based on how well the business is doing, the economy, and other factors. This can earn you money faster but also has a substantial amount of risk. You are not guaranteed at any point to make money or to even receive the amount of your initial investment back.

These are three popular ways to invest money and are not the only options one has available. However, when deciding between these three, while other factors play a key, the major decision you must make is how much risk you are willing to take with your investment.

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Insurance For Contractors – When Cash Flow is Tight, What Traps NOT to Fall Into

When is money not tight or not of concern? It seems that money is always an issue among contractors no matter how big or how small the firm, it all comes down to cash flow. Now that the economy is slowing a bit, especially in the residential arena, many contractors will be focused on their insurance premiums and how can they reduce their costs when their policies renew.

It is very easy for all of us to focus on the bottom line premium when it comes to our insurance coverage but by doing so can lead to potentially disastrous coverage deficiencies especially for contractors.

Today, the purchase of insurance has become extremely complex. Insurance company forms vary from one to the next. The level of coverage offered by each carrier also will differ. Below we will discuss some areas of coverage to pay particular attention to so you won’t get burned:

* Make sure that your agent or broker has an industry focus on construction. Many times clients are with the wrong broker. The reason for this can be many things but the one thing for certain is that the broker does not have a real focus on this class of business. The problem with being represented by a broker that does not focus on the industry should be obvious. For one thing they do not know what your real concerns are on a daily basis and how to address your most pressing insurance related issues or what your real exposures are and how best to address them. In addition to that, they are not up on which insurers may be best for you in terms of coverage and price. Ask the following questions – Is your agent/broker a specialist in construction insurance? What is the real reason you are working with your current agent? Is your agent proactive in suggesting additional coverage improvements or ways to reduce costs over the long haul?

* Focus on coverage and not premium. You are probably shaking your head at this suggestion, but what if your insurance program cost you only $10? You might think that that is a great deal. But what if your $10 insurance policy did not cover you for a claim that you think you should have been covered for and that claim could potentially bankrupt your company and end your livelihood? How good was that purchase? You might feel at that point that even the $10 dollars was wasted since the policy did not cover you for your claim. You might be right! The point is to make sure that you are covered for the exposures and risks that you face and make certain they are addressed in your insurance program.

The construction insurance market is in turmoil today. Insurance companies are providing coverage options that include exclusions, warranties and other types of coverage limitations. Unfortunately, many of these exclusions pertain to exposures that you expect your insurance policy to protect you against. Instead it excludes them from coverage. Some of the exclusions you may see are such things like “designated work exclusion”; “independent contractors exclusion”; “professional liability exclusion”; “multi unit residential exclusion”; “foundation work”; “EFIS exclusion”; and “microbial matter exclusion”. Each one of these needs to be reviewed and addressed to see if it may have a potential impact relative to your business should a claim arise. Remember the old saying, “You get what you pay for.”

* Make sure that the contracts you enter into are reviewed by your attorney and that insurance related responsibilities are addressed by your insurance adviser. Over and over again contractors enter into agreements that they can not possibly live up to, they are in breach of contract the minute they sign on the dotted line. Today in the construction industry every owner is holding the GC accountable, every CG is holding their subcontractors accountable and everyone is named as an additional insured on someone else’s policy and everyone is holding everyone else harmless. It’s beyond crazy. It takes some expertise to figure out how best to structure and insurance program to address these issues.

* Take a long term view rather than a short term view on your insurance program. We all get stuck on the short term “how much is my premium this year?” and it’s a very easy thing to do. With everything there are cycles. When there is a hard insurance market, capacity is low, coverage is difficult to obtain and premiums are high. During a soft insurance market just the opposite takes place, capacity among insurance carriers seems endless, broad coverage is bountiful and premiums are low. The problem with this scenario is that when premiums are low and your losses stay the same as in the hard market, your loss ratio increases which will make your account unattractive in a moderate to hard market, thus potentially increasing your costs substantially. The approach should be to manage your entire insurance program for the long haul which will steady your costs year to year. This means implementing sound safety practices and risk management techniques designed to address both short and long term risks.

Throughout this article you may have been asking yourself how do I really know if I am well protected? What if you are not sure? Then the answer is to have a thorough analysis done of your operations and exposures to risk along with a review of your current insurance policies. The objective of the assessment is to make certain that you have the correct combination of coverage, risk management and cost based on your exposures. The sooner you have a review performed the quicker you can begin to lower your insurance costs over the long haul and reduce your exposure to potentially uncovered claims.

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5 Top Franchise Financing Options Discussed

A perceived obstacle that sometimes is mentioned from candidates I work with as a franchise consultant is this: “What is the best way to finance this franchise business venture?” This is a very legitimate question that needs to be addressed. A few, less-than-serious franchisee wannabes have absolutely zero clue of where they’ll get the money or even how much of an investment is involved. The vast majority, however, have at least some idea of how they will finance their business. They simply need some clear, concise information about what each option entails.

Here are 5 franchise financing possibilities and what they entail:

SBA (Small Business Association) Loan. This is a great place to check out because the SBA offers favorable terms and recognizes the importance of our nation’s small businesses. They provide competitive rates, no points, and no penalties for pre-payment. As a potential franchisee, you may qualify for an SBA loan, based on criteria such as number of employees, business size, and annual sales. Theirs is a simple and straightforward process as compared to other options.

The Franchisor. This should be one of the first questions you ask your franchisor during your due diligence process. Their may already be pre-approved lending relationships established with banks or other third party institutions that you, as a franchisee, can utilize. Also, keep in mind that the franchisor has a vested interest in your success, so you should ask if there is a franchise funding program in place for franchisees to take advantage of.

401k Or Retirement Fund. Initially this may appear as an unlikely or scary source to tap into. I would not recommend considering this option for an independent business start-up. However, because of the overall high success rate of franchising, this source can actually be a wise business move, as you are re-investing the funds, not withdrawing them, which, of course, would involve stiff tax penalties.

Other Investors. This could be a viable way to go, especially if the franchise you’re buying comes with a very popular brand, as the likelihood of success increases substantially. Be sure that your proposal is detailed and includes your business plan and specific goals, along with your past accomplishments and achievements, via other business ventures or employment.

Family And Friends. Maybe you are especially close with a certain relative who is well-capitalized and would be willing to loan you the money for your franchise business. Or perhaps you have financially assisted a friend in the past and he or she has been waiting for an opportunity to return the favor. Be careful here, though. If you do choose this option, make sure that the agreement is in writing, and is clear and concise. It’s not worth losing a friend or a close relationship over money.

Whatever you choose, do your homework. Shop around. Consult with your accountant. Discover what programs are available that best fits your specific situation. As you can see, there are plenty of solid options to choose from.

Register for your Free Franchise Consultation  The Franchising Authority will help you find your perfect franchise!

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Where Did the Family Owned Business Go?

Just imagine you run a family owned business. You work hard to give a great product at a reasonable price. You offer exceptional customer service, and you do everything you can to give back to your community. When another small business opens up as your competition, you find a way to diversify your products. You change your services to suit the needs of more customers in the community. Soon the two companies are doing well, and you realize there is nothing wrong with a little competition.

But when Walmart opens up in town, it’s a completely different story. Your products are made in America, good quality, but can’t compete with the prices of the goods Walmart imports from China. There are many loyal costumers that continue to come to your store, but the majority of profit is lost to the retail giant. You struggle to keep the business running, throwing special events and offering discounts, but nothing seems to be enough. You aren’t the only business that is struggling. You notice that several businesses in town start closing down, and realize you very well may be next.

This is a story occurring all over America. Small businesses are being crushed by the giant franchises that they have no hope of competing with. As thousands of stores close their doors across America, it seems that the family owned business has become an endangered species.

And for all of you city dwellers, don’t think this destruction is limited to small towns. In 2006 a Walmart opened up in the West Side of Chicago. Within two years, 82 local stores went out of business.

So what are we losing with these small business?

More than you might think. Many local businesses competing against each other is the best way to ensure creativity, innovation, quality and low prices over the long-term. Locally owned businesses select products based on local customers and community interests, unlike their massive competitors that choose based on a national sales plan.

Plus the small and locally owned business could be the solution to our countries job problems. An article on http://www.whitehouse.gov discussing this very issue states that, “Small businesses are the engine of job growth in our economy.” Stacy Mitchell from www.ilsr.org explains, “Locally owned businesses create more jobs locally and, in some sectors, provide better wages and benefits than chains do.”

Small Businesses across America need our support. Don’t let the family owned business go extinct. Please support your local businesses today.

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