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Debt - Articles - Zimbio
“Belfrey International” – Euro Debt Crisis Returns
19 Mar 2013
Just when investors thought it was safe to get back into the water, the European debt crisis has returned with a cautionary reminder that all is not well with the EU trading bloc that has been the epicenter of much of the uncertainty surrounding prospects for a sustainable global economic recovery.
Last weekend, the Cypriot government, the IMF, the EU and the European Central Bank emerged from a febrile summit at which the future of the tiny island state was being decided. The Cypriot banking system, which has lost billions of euros through exposure to Greek sovereign debt, has become unsustainable. For an island with marginally fewer than 1 million inhabitants, a banking sector with some €170bn in assets represents a distortion of epic proportions.
Perhaps in a bid to introduce a new policy of ensuring that investors in dysfunctional banks bear some of the cost of bailing out financial institutions, the EU delegation decreed that depositors with the island’s largest banks must take a so-called “haircut” in the form of a levy on their savings in order to raise some €5.8bn in order to qualify for €10bn of EU/IMF emergency funding. For those with less than €100,000 on deposit, 6.75% of their capital would simply be lost while those with more than this amount in the banks would lose 9.9%. The news sparked an outcry among ordinary Cypriots and outrage from Russian investors who own the lion’s share of capital in Cyprus’s banks.
“Belfrey International” believes that the decision sets a dangerous precedent in the ongoing EU debt crisis saga. When are depositors protected and when are they not? It is our view that capital controls, restrictions on ATM withdrawals and levies which fly in the face of depositor protection schemes launched in the aftermath of the financial crisis 5 years ago can only exacerbate the situation in the event that Spain or Italy – both of which have already flirted with the prospect of bankruptcy – find themselves in the ignominious position of having to turn to the EU’s bailout mechanism for assistance.
Needless to say, the Cypriot government voted with near-unanimity against the measures and, in doing so, plunged the EU back into uncertainty. We believe that, ultimately, a solution will be found but there will be no easy choices for Cypriot savers. This serves as a stark reminder that the European debt crisis will continue to be a thorn in the side of the global economic recovery and that monetary union in Europe is a seriously flawed concept. Investors should be thankful that Cyprus’s GDP is only 0.5% of Europe’s. In the event of a similar situation developing in the larger peripheral EU nations, the outcome could be catastrophic.
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Does This Credit Card Make Me Look Fat?
1 Feb 2013
“There is more to sex appeal than just measurements. I don’t need a bedroom to prove my womanliness. I can convey just as much sex appeal, picking apples off a tree or standing in the rain.”
–Audrey Hepburn
We were having “the talk.” It was the one that was necessary where both of us bared our souls and revealed the skeletons hidden in the closet and the inmost, deepest, darkest secrets that lay within. I figured if I was going to get engaged, she’d better know what she was getting into, warts and all. I had lived a pretty exciting life when I was stationed in Germany, but there wasn’t anything I was particularly petrified about sharing with her.
Except one thing.
I had a lot of credit card debt.
Fortunately, it all worked out and she didn’t go running off into the hills screaming. You can read more about how nerve-wracking the experience was in the article “My Most Mortifying Money Moment.” By some stroke of luck, I had managed to dodge what I perceived to be the biggest bullet which could come flying at me – her revulsion at my debt. Heck, I was scared of it, and it was my debt. I couldn’t imagine someone else willingly taking on the burden I’d put on my back through rounds and rounds of stupidity.
It turns out that my intuition about debt being a massive turn-off for a potential spouse was dead on. According to a recent survey by creditcards.com, debt is one of the biggest turn-offs for either sex, but particularly for women.
You can forget to shower for a few days or dress like Marty McFly, but woe be unto the person who keeps a credit card bill a secret or has a big anchor of debt dragging down his personal finances. No amount of cologne in the planet can, apparently, cover up the stench of a skewed personal balance sheet.
57% of women and 48% of men state that “a partner with debt is a turnoff.” So much for that romantic, candlelit dinner and the Barry White music if you had to buy it with Visa. No lovin’ for you!
Let’s compare some of the other sins to see where debt stands in relation to them.
To continue reading this article, please click on the link below:
http://www.hullfinancialplanning.com/does-this-credit-card-make-me-look-fat/
Related posts:
- Credit Card Debt and Drug Addiction: Are They Related?
- Personal Finance FAQ Series: Why Should I Pay My Credit Card Off Each Month When I Can Just Pay the Minimum Balance?
- Credit Cards Stopped Me From Working for the WWE
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Small Business Debt is Debt Too
30 Jan 2013
This is a second post in honor of the Debt Movement, the brainchild of Jeff Rose, a movement with the goal of getting people to pay off $10 million in debt in the first four months of 2013. If you have debt and want to commit to the movement, there are scholarships available and a forum for discussing what you’re doing. You can read my contribution about the psychology of debt by clicking on the link.
If you sign up, tell me in the comments, and I pledge to be your personal finance accountabilibuddy in your journey.
“It’s one of those things; you just get a very nice stroke from being included in the next thing.”
–Andreas Katsulas
In my previous startup, when we started it took many months before we got our first big break. Then, we got a job with a major defense contractor working on one of their prime intelligence programs. At first, we were asked to provide two people, but within two months, we’d been requested to provide ten people onto the program.
That was the type of request that we’d been hoping for. We actually knew enough good programmers in the area to be able to fulfill the request. Whoopie! It was like Santa Claus had come and delivered a huge work order in the stocking.
There was one little problem with that work order, though. It was net 45, meaning that we’d get paid 45 days after we submitted the invoices, which were submitted at the beginning of the month. Therefore, it was possible to have a stretch of two and a half months between starting work and getting paid. We had our contractors on a net 30 agreement, meaning that we’d pay them 30 days after getting the invoice, and a couple of them were invoicing us weekly.
What did we do? “No problem!” I thought to myself, and tromped down to the local Bank of America with contract in hand to open up a business line of credit.
I figured that with the contract and our accounts receivable, we could get a business loan. After all, large companies like Microsoft and WalMart have business debt, and I doubt that the bankers are going after Bill Gates and the Walton family to personally sign for those loans.
Boy, was I wrong. First off, Bank of America socked me with a $100 initiation fee for opening up the line of credit (which was an annual fee for the “privilege” of borrowing money from them), and then they ran my credit and made me sign for the loan as the co-signer with the company.
“Well, what the heck,” I thought to myself, “it’s $100 on a huge contract and we’ll pay off this line of credit as soon as we get paid.”
Oops.
One would think that since I’d just recently paid off my student loans, I would be averse to debt and not want to go down that path again. No, not I. I used mental accounting and conveniently put the business debt in an entirely different category than all of the other debt. Somehow, I convinced myself that this was good debt because it was helping fund our company’s growth and our ability to perform the contract.
Let me step back and explain the concept of mental accounting. Nobel Prize winning economist Richard Thaler coined the term to describe how Monkey Brain allocates categories for all of the money that you spend.
To continue reading this article, please click on the link below:
http://www.hullfinancialplanning.com/small-business-debt-is-debt-too/
Related posts:
- ReadyForZero…Debt? My Interview with Ben Feldman
- There is No Such Thing As “Good Debt”
- Personal Finance FAQ Series: How Can I Get My Debt Under Control?
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Get Good Budgeting Advice and Learn How to Live Sustainably For Good
2 Jan 2013
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The Advantages of Acquiring a Debt Collection Agency in Perth
16 Dec 2012
Finding an effective debt collection agency Perth is usually the last word option that the organization is actually expecting all alongside. Horrible debt collection strategies have actually been the something that lots of business enterprises have already been grappling with and that has resulted in the collapse fine quantity of them. In almost any organization enterprise, somebody will need to keep in mind that there are collectors and debtors who'll be handled on credit score conditions. Developing regarded this, anyone or perhaps a small business company may want to that is why place set up ways and methods that'll see to it that every one the debts are gathered by the due date and many of the monies payables are paid out inside a way much more probable to profit the business enterprise. There are many amazing benefits that can appear alongside the instant a company decides to utilize a debt agency to manage the personal debt dilemmas.
Countless small businesses never provide the functionality of managing debt collection but this isn't considering that which they are incapable but relatively as they fundamental agenda may be to develop their very own small business and never take care of other people’s enterprises which may have debts with them. This implies that numerous organization entities isn't going to hold the sources to go along with up the debts into the extremely doorway within the debtor considering that their mutual association dictated that each one honours their section of the good deal. Debt collection agency Perth comes along with an answer of cutting down these occurrences introduced about by debtors not honouring their section of the offer.
A considerable amount of down and up jogging is typically included every time an individual is aiming to accumulating one’s debts that can be with some others. The practical knowledge for several organisations is always that which often can only be defined as traumatic. The advantage of a debt agency is to always greatly reduce all of this tension and provides your organization that chance to focus on what greatest you are aware of. The workers who may have been utilized for debt collection might be deployed to other sections which tense debt collection be still left into the many people who know ideal learn how to cope with it.
As a result of handing above the greater stressing employment to your debt collection agency Perth, the efficiency from the company unquestionably rises. This really is an apparent end result supplied the there'll be much more guaranteed dollars flows and at that incredibly time the selections which the entrepreneur planned to apply won't be using any obstructions. There'll be no planning for the financial institutions for overdrafts so that you can shell out the salaries and other critically crucial jobs since the company could possess a decent funds circulation. Section will develop together with the all round productiveness of the two the products as well as staff members will go up.
A result of the accelerated efficiency on account of using the services of a debt agency, your small business can get significantly more gross sales. Far more revenue definitely signifies way more income and since a solid agency is relating to the facet of debt collection, your fruits bear fruits swiftly. This may ensure the expansion within your business enterprise. It is usually for that reason an effective plan to rent debt collection agency Perth if you would like effectivity and terrific benefits for the online business.