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Education Articles

Choosing An Accountant for Your Business

March 23, 2014 | Education | No Comments

Whether you’re a fledgling start-up or an established company, nothing is more important than your books. It’s for this reason that so many small business owners seek professional accountants to help them manage their budgets and navigate their finances. But how do you know which “number people” you can trust? Here are three tips for finding a reputable expert.

1: Know Their Specialty

Most accountants have some kind of specialty in the world of finance, like tax preparation or small business expansion. If you have a particular need that’s driving you to seek out an accountant, look for a pro in that area.

2: Ask For Referrals

You can’t rely on just anyone when the future of your business is at stake. Pump your friends and fellow business owners for information on their bookkeepers. You might also contact the local charter of the National Society of Accountants (NSA) and request phone numbers.

3: Dig Through Their History

Once you have a pool of likely candidates, check their backgrounds and references for things like complaints, scam reports and criminal records. If you can’t find this information by yourself, ask them for it directly. Those with nothing to hide should have no problem handing over the paperwork.

These are just three ways to vet potential accountants. Remember, they’re going to have an all-access pass to sensitive information about you and your finances, so a high level of scrutiny is encouraged. Don’t allow them to shape your future if you think they’ll mishandle it. Find an account in the UK at http://www.wisteria.co.uk/

Navigating the Financial Aid Process

April 20, 2012 | Education | Financial Tips | 2 Comments

If you are seeking financial aid for college, below is a helpful guide to help you understand the complicated financial assistance maze.

Navigating the financial aid system infographic by Southern New Hampshire University, SNHU.EDU
Brought to You by SNHU.EDU Online College Programs

What is a Penny Stock?

February 3, 2012 | Education | No Comments

A penny stock, also known as a micro-cap stock, according to the U.S. Securities and Exchange Commission is a stock with a share price below $5.  However, many investors believe a penny stock sells for less than $1.  

Investing in penny stocks is extremely risky because the share price can be extremely erratic.  A very small change in price is large percentage wise.  For example, if you purchase a penny stock fro $1.00 and it drops only 25 cents to $0.75, that stock has lost 25% of its value which is significant.   

Penny stocks are mostly from very small companies and are traded on the Over-The-Counter-Bulletin-Board (OTCBB) and the Pink Sheets.  These exchanges do not have the same minimum requirements like the large exchanges such as NASDAQ or the NYSE that are set by the Securities and Exchange Commission.

The following are disadvantages with investing in penny stocks:  

Poor Investments

Penny stocks are poor investments because some companies will issue penny stock because they are close to bankruptcy or they are new companies with no proven track record.

Company Information is Limited

Companies listed on the OTCBB or Pink Sheets are not required to release financial information.  Many companies also have little to no history for you to review or are brand names that you hear or read about in the media.

Low Liquidity

If you own a penny stock, you may have a hard time selling it when you are ready.  If the stock price starts to fall, it may be difficult to sell it immediately as you would with a large cap stock.  There simply isn’t enough demand for most penny stocks.

Fraud

Because penny stocks are unregulated, they are commonly used by con artists to rip off people.  They usually try and sell them via newsletters, spam emails or off-shore brokerages that do not have to adhere to U.S. laws.

So why do people invest in penny stocks?  Well not all penny stocks are frauds or from companies nearing bankruptcy.  There are some legitimate companies who struggle to meet the requirements to get listed on the NYSE or NASDAQ.  Investing in these companies may offer a huge growth opportunity should they become successful in the future.  However, finding and researching these companies is extremely difficult because there isn’t enough information available.   

Some people frequently trade penny stocks, known as day traders, which are basically gamblers.  They will sit at their computers and watch for movements in various stocks and will try to quickly buy and sell at a higher price to make a profit.  This is just like going to Las Vegas and gambling.

Should You Save or Pay Off Debt?

February 3, 2012 | Debt | Education | No Comments

So you have a little extra cash and you are wondering if you should save it or pay off debt.  Paying off debt should be your priority; however, if you have absolutely no savings, you should first try to save at least 3 month, preferable 6 months, of your salary in the bank.  This cash is needed for any emergencies that may come up unexpectedly such as not being able to work due to illness / injury or losing your job.

It’s unfortunate, that over the past 2 decades U.S. citizens have accumulated more debt while saving less. (See chart above). It’s imperative that as soon as you have some cash reserves that you pay off your debt.  For most people this will be credit card debt.  It makes absolutely no sense having your money in the bank making 0.5% in interest while you are paying 15%+ on your credit card balance.  Paying that much in interest is like a leaking facet just wasting water.

If you are contributing money to your 401K or IRA, it’s a good idea to temporarily stop contributing and use that money to pay off your debt.  The interest you will earn in your retirement account will be offset with the high interest you are paying off with your credit card.

If you have multiple credit card, pay off the card with the highest interest first.  Be aggressive by cutting as much expense you can to pay off high interest debt.  If it means cancelling or reducing your cable TV, cell phone, gym membership, eating out, etc., do it.  It will be temporary until you get your debt paid off.  In the long run, you’ll benefit from the temporary sacrifices.

When your financial situation improves, you can then start to contribute to your savings and retirement accounts.  If you pay the minimum due on your credit card debts, it will take you months or years to pay off those debts and you will pay hundreds or thousands of dollars in interest.  

Other techniques you can use to get out debt are:

  • Negotiate with your creditors:  Creditors don’t want you to stop making payments.  If you explain to them that you can no longer afford to pay, they may be willing to lower your monthly payments and/or interest rate.
  • Increase your income:  You may get a second or part-time job or start a side business.  You may also try to gain work extra hours (overtime) at your job.  If your spouse doesn’t work, it maybe a good idea for her/him to find a job.
  • Consolidate your debts:  Debt consolidation is borrowing money at a lower interest rate to pay off higher interest debt to ultimately pay off your debt faster and to save money.
  • Getting help:  There are many nonprofit credit counseling agencies that can help you to develop and maintain your budget.  They may help you set up a debt management plan.
  • File for bankruptcy:  This should be your absolute last option.  However, bankruptcy maybe your best option if your monthly expense are extremely higher than your expenses that it will take decades living on a bare-bones budget to pay off your debt.  You must consult with a bankruptcy attorney to determine if you should file for bankruptcy and which type you should file for (Chapter 13 reorganization which gives you 3-5 years to pay your debts or Chapter 7 liquadation which eliminates most of your debts.

 

If you are looking for a good bank savings account, consider Aurora Bank.   Visit Mymoney.gov for more information to improve your financial literacy and education.

Why Americans Pay So Much for Brand-Name Drugs (And Canadians Don’t) Infographic

January 26, 2012 | Education | No Comments

Very interesting infographic below.

High Cost of Rx
Created by: Medical Billing and Coding

Like Fixing Stuff? Then Consider a Career in Maintenance

January 26, 2012 | Education | No Comments

If you like to fix and build things, work with your hands, don’t mind getting dirty, like technology and don’t want to sit at a desk, you should  seriously consider a career in maintenance.

There are many different types of maintenance workers, which include electrical, mechanical, aircraft, avionics, helicopter and building maintenance.

Many maintenance technicians work in manufacturing plants, such as automotive, aviation, food and medical plants to repair, install and maintain equipment. The majority of their time is spent on working to keep equipment up and running because it’s very expensive for plants to have extended amounts of downtime.

Due to rapid improvements in technology, machines are becoming more complicated so it’s important that maintenance workers are computer and electronic savvy.

If you are considering a career in maintenance there are basically two ways to obtain maintenance training. The first is to attend a community college offering  maintenance training that consist of hands on training, classroom instructions and text book exercises.

The second is to enter an apprenticeship program where you work with an experienced maintenance technician who will train you to complete specific tasks while you take classes at nights or weekends to obtain your certificate or license. Apprenticeship programs are usually offered by companies who will have a  joint program with local unions or community colleges.

Requirements to enter an apprenticeship program are less stringent than community colleges, however, more companies are only accepting individuals who have a  high school degree. They also prefer high school students who have taken some vocational classes like blue print reading, mechanical drawing, computer  programming, wood working, auto repair, etc.

Training in aircraft maintenance is the most stringent because you will have to pass exams to become certified by the Federal Aviation Administration (FAA), you must be at least 18 years old, have a high school diploma or equivalent, be fluent in reading and speaking English and have the required basic technical  skills. To become a certified aircraft mechanic the FAA requires students to complete a minimum of 1, 900 class hours.

To become a maintenance electricians most states and local governments require a license, however, requirements vary by state/local area. Electricians are required to pass an exam testing their knowledge of electrical theory, local/state electric and building codes and the National Electrical Code.

Salaries for maintenance technicians depend on industry, geography and job classification. Entry level maintenance workers can expect make from $14 to over $20 per hour plus benefits. Workers with over 5 years experience can earn over $30 per hour.

Maintenance workers tend to be older men who will start to retire in abundance over the next few years which will result in a shortage of workers to fill these  positions. Younger workers want to work in cleaner environments and jobs that are less physically demanding. Additionally, younger individuals tend to shy  away from technical careers which involves math and science.

How to Protect Yourself Against Identity Theft

December 30, 2011 | Education | No Comments

Identity theft can be frightening and cause numerous problems.  It can ruin your credit; where it’s up to you to prove there is a problem and to fix the problem.   After discovering there is problem, you have to contact the credit companies and prove to them that you didn’t create the charges.  

Prevention of identity theft is the best way to prevent identity theft.  To do this you must protect yourself so your sensitive information isn’t easily accessible.  Do not leave credit card statements, bank account number or other types of sensitive information laying around for people to see.  Make it a habit to shred document before throwing them away.  Sensitive information that you need to keep needs to be locked away.

Important documents with personal and sensitive information are often sent via the mail which is vulnerable to theft.  To reduce using mail, have your statements only accessible online via secured websites and pay your bills online. You can also use services such as IdentityHawk for identity theft protection.

Below is a list of additional things you can do to prevent identity theft protection.

  • Pay your bills online.  This decreases the chance that paper bills or statements end up where others can easily find them.
  • Look over all your statements carefully.
  • Create secure passwords and guard them well.
  • Protect your social security number.
  • Check through all mail – even mail that seems like junk mail.  It could be from an account opened by someone else.
  • Decrease the amount of unsolicited credit card offers that come in the mail by visiting optoutprescreen.com and contacting the Direct Marketing Association to remove your name from mailing lists.  Shred the solicitations you do receive before throwing them out.
  • If possible, use a post office box, and do not put bill payments and checks in an unlocked mailbox.  
  • Have someone you trust pick up your mail when you are away.
  • Do not give out your credit card number.
  • Shred important documents containing your personal information.

 

If you are a victim of identity theft, here are several ways to deal with it:

  • Cancel any accounts that you think have been compromised.  This includes checking accounts.
  • Notify the credit reporting bureaus.  You only have to contact one, and they will contact the rest.
  • Make a report to the police.
  • Notify the post office.
  • Contact the Federal Trade Commission.
  • Contact the Social Security Administration.
  • Make sure all of your accounts have passwords.
  • Place an alert on your credit report – an extended one is best, as it last for 7 years.
  • Keep good records.