Cash & Loans Advice Blog

Taking a credit should be an intentional activity

The accountability factor in building trust relates to your own actions. You can’t control what someone else does, but you can control what you do. If you’re sensing uneasiness or an awkward feeling with a partner, ask yourself: “What can I do?”You can move along the Partnership Continuum by attending to your own accountability. The law of reciprocity—others tend to give back what they have been given—works in building trusting relationships. One of my friends signs his e-mail with this slogan: “No act of kindness is ever wasted.” In everything we do, intention is important—especially if that intention is “other directed.” Trust is an outcome of our inputs. Even the smallest gesture intended to be giving, respectful, supportive, encouraging, or sympathetic adds value to a relationship.

Building trust should be an intentional activity. And since the development of trust is such an essential aspect of successful partnerships, organizations should support its development. This takes planning. When we are intending to enter a partnership, we must engineer our performance so that we’ll do what it takes to increase trust.When we care enough to plan, follow through, evaluate, and redirect our energies if necessary, we’re using our Partnering Intelligence.

How to pick the right credit option

Directional trades: This refers to a situation where the CDS market can be used to take a low-cost bearish view because of a negative basis. If the basis is positive and has widenend for “technical” reasons, it possibly represents an opportunity from a hedging-driven market dislocation. Next post provides an example for Siemens.

Spread trades: Investors who are positive about France Telecom relative to Vodafone can express this outperformance view via selling protection in France Telecom versus buying protection in Vodafone. Depending on the chosen credits this could result in high positive carry trades.

Curve trades/Forward trades: As an issuer’s credit quality deteriorates, the spread curve of the issuer moves from being upward-sloping to inverted. Default curve inversion may present an opportunity to shorten maturity and enhance yield. Curve inversion in the default market also allows investors to purchase forward protection at lower levels. This can be achieved by buying longer dated protection and selling shorter dated protection.

Techniques to boost internet credit options

Seven decisions can help to drive sales online:

Generate participation, ownership and commitment within the whole company and among senior managers in particular, so that a co-ordinated, cross-functional approach is taken that increases value for the customer and reduces costs for the business.

Ensure that the online sales strategy is all-embracing, enhancing existing activities and learning from past experience.

Simplify the customer’s experience so that the sales process is streamlined, with barriers to purchasing removed.

Ensure that the website is sticky and compelling. You want customers to remain at the site when they arrive, and to return frequently.

Focus on flexibility and efficient personalisation so customers are able to buy exactly what they want, how they want it. Avoid duplication and past mistakes; for example, avoid a complicated, high-cost solution when an effective, low-cost alternative is available.

Prepare internally for the changes that an internet sales strategy will deliver so that the company avoids investing too much, too little, too late or too soon.

The Grandosity Issue

Successful real estate speculation leads to grandiosity. Small real estate investors, who missed the stock bear market of 2000-2001, are prone to grandiosity.

Grandiosity, when returns are positive, manifests as extreme good humor and excitement. Grandiosity can be intoxicating. Once experienced, gamblers seek to recreate the high. Day traders continually believe they will have another streak. Tech investors search for the next Microsoft. Real estate developers crave breaking ground on the next mega project.

Yet, even on a winning streak, grandiosity has a down side. A sense of isolation is common. Sudden wealth stands out in a society where savings are accumulated slowly. Grandiosity can lead to a loss of connection with family, friends, colleagues, social norms, and even one’s self.

Grandiosity is often followed by both poor investment results and personal unhappiness. Crashing from grandiosity can be very painful. The detox process leads to grief, sadness, plummeting self-esteem, self-loathing, or depression. Thoughts of suicide are common. Actual suicide is the extreme manifestation of fallen grandiosity.

Although some people are not prone to grandiosity, you should consider any experience you might have with it.

Decreasing fixed expenses

Decreasing your fixed expenses can result in a huge jump in your discretionary income. Oftentimes, though, getting rid of or lowering a fixed expense can take a major lifestyle adjustment. But when you are battling to eliminate debt, the thousands of dollars you may save might well be worth it. Here are some ideas:

1. Ditch the ride. Over my years as a financial planner, I’ve seen few things that suck up as much discretionary income as a car payment. Add in the other costs such as gas, insurance, and maintenance, and you can easily spend $5,000 to
$10,000 per year for the privilege of sitting in traffic. One to two years of riding the bus or subway, or even carpooling with your accountability partner, may get you completely out of debt!

2. Put a smaller roof over your head. There are a lot of reasons why you may have needed a bigger house or apartment in the past. But since the kids moved out, the dog ran away, and you’ve sold a bunch of your stuff at a garage sale, you could make do with less space. A few hundred dollars less per month in rent will go a long way toward getting you out of debt.

3. Cancel your PMI. Mortgage insurance is required by most lenders when they loan you more than 80% of a home’s value. However, when your mortgage balance drops below 80% you are no longer required to pay PMI. Oftentimes, companies will continue to charge it until you ask them to stop. Canceling your PMI as soon as you’re eligible can save hundreds each month.

4. Cancel unused subscriptions/memberships. Whether it’s the gym or the newspaper, there are a lot of things that slowly nickel-and-dime us to death every month. A couple of canceled memberships or subscriptions could easily save $50 per month, or $600 per year!

5. Shop your insurance. If you haven’t updated your life, health, auto, or home insurance in the last few years, now may be a great time. Besides making sure you don’t have too much insurance, you may also find significant savings as you shop.

How to increase income

1. Rent out a room. If you own a house or are renting an apartment by yourself, you might be able to seriously knock down your debt by renting out a room to someone else. An extra $300 to $500 per month goes a long way!

2. Start blogging. You can start an online diary of your own, with ads built right into them, or you can sign on to blog for someone else. Blogging for someone else can pay anywhere from $3 to $20 per post, especially if you have a unique perspective or skill.

3. Freelance. If you have certain job skills or talent, ranging from bookkeeping to website design, you can make significant money working from home. Go to Google and search for “freelance websites” where you can bid on projects people need completed.

4. Tutor. Were you that kid who always got 102% on the math tests? Do you love American History or Spanish verbs? There are a lot of kids who don’t, with parents who are happy to pay $20 per hour for good tutoring. You can tutor on the weekends at your local coffee shop.

5. Turn your hobby into a home business. When we were really poor, my wife learned how to make beaded jewelry at her preschool mom’s group. We started using her creations in place of store-bought gifts, and it wasn’t long before people were asking how to buy them. She works when she wants and makes an extra $2,000 to $3,000 per year.

6. Open a home day care. If you are already a stay-at-home parent, taking care of a few extra kids besides your own can bring in significant money. After a few required classes and a safety inspection, you can start providing day care for other children at $8 to $15 per hour, per child!

7. Recycle. For years, I was that parent scooping up all the cans and bottles after my kid’s baseball games and at my office. The $10 to $20 per week I’d earn on Saturday mornings helped me overcome the weird looks I’d get from my coworkers.