Tax Rate Vs Tax Revenue

Posted on March 31, 2023 by schatzi

Does increasing tax rates increase tax revenue? Well yes and no. On one hand of course increasing tax rate increases revenue but only for a very short period. The history of tax in USA has shown a very distinct pattern. When tax rates are increased tax revenue climbs and then goes down. On the other hand when tax rate is reduced the economy takes leaps forward. If you need evidence then here are some of the more famous tax reductions in the history of the US.

In 1920 the Secretary of Treasury a man called Andrew Mellon told America that the history of tax’s shows that high taxes are not paid. If you put high taxes on someone this will encourage him to withdraw his money from investing in business. For if you are investing a business you are in a way essentially taking a bet. If you win the bet and the business is successful then you get money however because of taxes you get less money then you would have gotten if there were lower taxes. But if you lose the bet and the business is not successful then the full risk has not been reduced. So on average it becomes unprofitable to invest in business.

As they draw their money out of business they begin putting into tax-free securities or try to find other law-abiding ways of avoiding tax. Since this happens the sources of money that the government puts taxes on begin to fade away and the people to as a whole also begin to lose sources of income.

So the secretary of treasury was able to reduce taxes substantially. Where before tax rates were over 70% he now reduced it to under 25%. But unlike you would expect with the revenue decreasing as well. Revenue increased amazing 61%. With before revenue being $719 and then after 1920 being $1164.

This happened again when John, F, Kennedy was the president. He saw the same thing that Andrew Mellon saw and reduced the high taxes that were put under the presidency of Roosevelt and Hoover. He decreased tax rates from 90% to 70% and right after that tax revenue increased over 33%.

So why does the history of taxes are stilling having these ridiculous tops and bottoms? Simple when a politician reduces the tax rate and tax revenue climbs the government begins to spend more money (obviously when you have more money you spend more money) but then the government over stretches itself and decides to increase taxes as they need more money temporarily. But then of course we all knows what happens in the long run this hurts the economy.

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Do You Look for Real Estate Owned Properties

Posted on March 30, 2023 by schatzi

Most young people can spare only weekends or cram in free time from their work to search for their dream homes. One of the most frustrating criteria is of staying within the financial budget. As such, the term known as Real Estate Owned or REO in short, will be new to you. This is probably the key to searching that wee bit elusive something which you cannot find while looking at most foreclosure properties.

Let us first get to know what Real Estate Owned Property would mean to you. This tag given to a property shows the status when a bank tries to sell it off through auction but is unsuccessful and has still retained it as a foreclosed property. Such a listed property becomes a dead or non-performing asset to the bank. The bank therefore would be more than willing to accommodate interested parties in order to sell off the real estate owned properties.

Well, since these properties are really owned by the banks themselves, you would think that all the banks would simply try to sell them as soon as you inquire about properties for sale. In fact, banks usually have a separate department to handle categories such as real estate owned and Rental Property. However, going via this route often proves to be time consuming. Lists upon lists are provided upon your request. What’s more different banks will have different lists. Searching through these lists and short listing the properties that catch your eye would be both exhausting and confusing.

There are a number of commercial services today that specialize in selling foreclosed property lists. But again, many of these do not offer the Real Estate Owned properties on first request. Your search of the ideal property might then lead you back to finding Real Estate Owned properties from the bank. As already mentioned this is really wasteful process.

What you really need is a real estate service that can shortlist the Real Estate Owned properties in addition to the foreclosures. When you find a Real Estate Owned property in the area of your choice, you can contact the owner bank for New Home Financing. You will see that the owner banks are much more welcoming to home buyers to sell off these. You can more easily create a contract with the bank on the property that is returned from the listing.

The fact that you are now aware of what real estate owned property means shows how it can help you get better deals from a bank. You can use what you know now to your advantage. People focus on foreclosed properties completely unaware of this special type of property status.

Another benefit you can look forward to from the bank is that the property will not have too much up front payment. Banks generally ask potential home buyers for an amount as an earnest money deposit. The closing date, the value of the property and a few more points, could work in your favor to make it as low as $5000.

Home buyers need to be aware of a couple of things when they begin their search for their lovely Real Estate Owned properties.

One, the banks may take the opportunity to generate their business profits through the home loan for the property. Under the circumstances, you are the best judge of what you consider as a good deal considering how badly you want to own the house or condo.

Second, sometimes banks require the new owners to occupy the property as their prime residence and not use it merely for investment purposes. When dealing with real estate owned properties, you should proceed cautiously by asking all relevant questions for the terms of the deal before signing any documents.

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Fundamental Analysis of Stock Markets

Posted on March 29, 2023 by schatzi

What are stock markets? What is getting traded there? Stock markets are nothing but selling the ownership of the company. What is valued here? Here it all depends on how you evaluate a company. If you go to a grocery shop you will buy fruits. How do you decide the value of the fruit? It all depends on your needs, also relation between demand and supply. If you get more fruits in the market and if there is a less demand obviously the rate would be lesser. It is same here in stock markets too. More the buyers for a stock in company, more price of the scrip. Why there will be more buyers for a company in the stock market? It all depends on how the buyers give valuations to the company. If they think the company will get more valued in the coming years then the current prince of the company is cheaper and they want to buy.

Still a question hangs, what is the value of a company? A company is of higher value if the net assets of the company are higher. How to value the net assets of a company? Assets of a company means everything that’s owned by the company, includes land, building, infrastructure to even a smaller thing like a pen owned by the company too. So valuations of a company depends upon valuations of many other things that’s owned by the company. valuations of other things depends on the market that those goods are traded. So essentially giving value to a company needs identifying,giving valuations to each of the products that’s traded in the market. How the net assets of a company going to increase? The net assets of a company can increase if the company makes profit. What is the way of making profit? It could be by gains on the capital owned by the company or it could be operating profit. Sometimes value of the land owned by the company increases, that’s a capital gain. They gained profit just because they own that property.

What about operating profit? Each company has its own set of clients, customers. If the company serves its clients or sells its products to lots of customers very well, then the company will make more profit. That’s an operating profit. That’s highly valued in calculating valuations of a company. Higher the operating profit higher the chances of company adding more net assets. How the operating profits can be increased? As it was discussed operating profit of a company depends upon how they serve their clients or how they sell their products to their customers. How a company serve their clients? A company will serve its clients by its employees. How it can be optimized? The way a company serve its clients depends on the process or business model of the company. How those processes are built? How those business model is created? That is created by the leaders in the company.

Who are those leaders in the company? Those are the persons who are chosen to lead the company. There will be CEO, and CFO, HR and many more departments to support him. Who will choose the CEO? It is the directors of the company. Now the final question is who’ll choose the directors? It is chosen by the shareholders of the company. If the shareholders of a company are wise then they’ll choose better directors, better directors will choose better leaders in company like CEO, CFO etc. The team of CEO will make better decisions in serving clients of selling its products to customers, which results in better operating profit. and better operating profit results in adding more to net assets of a company. More the net assets of a company means more the value of scrip of that company in stock markets. It boils down to the fact that it is the persons who owns the shares of the company will decide the share value of that company in the future. It is the shareholders who decide the value of the share in the stock market. Here is another thing to note. Whoever owns more shares int the company has more rights in making decisions in the company.

Now what’s more important is share holding patterns in the company. It is very important to look at the factor who owns most in a company. The future of the company will be decided by those shareholders. What are the important qualities for those shareholders that we should look for? One of the most important thing is how much we can trust them. The trust matters everywhere. Also the person’s ability to perceive business, ability to choose right persons. Finally a fundamental analysis on stock markets needs a better analysis on the person who owns the most shares in a company. It will be more personality analysis, more about the amount of trust he generates, amount of wise decisions he makes for the company. What are stock markets? Stock markets are deciding the shareholders of the company. Essentially stock markets decide the fate of the company.

To put everything together Shareholders -> directors-> CEO and his team -> Way of serving clients and selling products -> Employees -> Operating profit -> Net asset gain -> Value of the stock in stock markets What’s most important in deciding the price of a company? It is the shareholders itself. Better the shareholders, better the prospects of the company. If you think you are better, you deserve to own more in the company Still what happens most of the time is that the most of the time the is that values of each stock deviates from its original price. Then why the fundamental analysis fails? To answer these question we have to examine the new financial instruments that are traded in the stock markets these days. These days stock markets are traded mostly on technical charts rather than the fundamental value of the stock. Let us examine few of those instruments that disturbs the value of a stock artificially. Let me explore these in short here.

  • Day Trading. Day traders just trade on daily basis. The basis of the trade is to either book profit or loss for the day only. Normally brokers give clients large amount of margin money up to 10 times the money they had for the day traders. How the day traders trade normally? They just buy on dips. If they cannot make profit on that day, they just convert into cash and wait for the day they are making profit. If the person has holdings in cash and if he wants to sell, he just sell it as day trade. If his day trade doesn’t make him profit he’ll just convert into cash. Thus it gives him the profit
  • Buy Today Sell Tomorrow( BTST) BTST products are like day trade but with the option of holding the stocks for margin for few days to week. Thus they can take advantage of the fluctuation in the stock markets more efficiently. In these instruments also traders get margin money from brokers
  • Futures and options. In these days futures and options play a very important role in deciding the value of stock markets. These are the instruments that used to hedge the stock market as much as possible. Using these instruments traders make huge amount of money either if the market goes upwords or goes downwords. Thus making them unexpected trade in cash market resulting in stock prices deviating away from their fundamental prices.

Every movement of stock price depends on fundamental factors as well factors that are mentioned here, These technical factors that make traders huge amount of money. So how should the investor look about it? How can he decide the right stock to invest? In these days to make money in stock markets an investor has to take positions in futures and options,even if he is a long term investor.

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Secured Loans Uk Are An Affordable Financial Solution

Posted on March 28, 2023 by schatzi

As the money market is flourishing day by day, every section of society is getting the finest financial benefits. Now things in financial industry have entirely changed hence, numerous financial organizations are getting ready walk shoulder to shoulder with these changes. In order to adopt these modifications such organizations are offering people highly beneficial financial services to smoothen their life. In fact, these schemes are helping people in dealing with various emergency and routine financial requirements. Since the present marketplace is crowded with alluring loan schemes, every borrower gets confused while selecting a suitable loan scheme for him or her. Basically loan providers keep all these loan schemes in two different categories i.e. secured and unsecured loans. As far as the affordability and compatibility of a loan scheme is concerned, secured loans in UK are the best loans one can ever have.

Secured loans in UK can be availed by presenting security against the loan amount. Basically, most of the lenders offer these loans for homeowners, as home is considered as the most feasible collateral in the money market. However, if you do not possess any home then you can apply for these loans on the basis of your automobile equity. Since home is a non-depreciating asset and the value of home property keeps on rising with time, lenders consider it safe to provide the loan against home property. If you are looking for a loan service provider, then there are n numbers of secured loan provider firms in UK, who gather and offer finest loan deals. With such service providers, you can get the most competitive loan deal as they have tie-ups with a wide rage of competent and renowned lenders. In fact, these loan service providers can provide you with competitive rates and conditions.

With secured loans in UK, you may avail a big loan amount with enjoyable long repayment term; moreover, you also get an opportunity to make your installment as small as you want. With these loans you get affordable interest rates and convenient installment term; basically, the interest rate for such loans starts from 6.5% and remains same for the specified loan limits. Since you keep your home or automobile property as collateral, the lender approve your loan request without demanding any credit statement. For people, who are self employed, these lenders are more lenient, as they provide such people with desired loan without checking their income statement.

These loans can be used for any purpose, provided the usage is within the boundaries of law. Secured loans UK can be used for buying a new home or renovating the old one, purchasing a car, financing education or a holiday vacation. You can also consolidate your due debts with these loans therefore, if you possess any high valued property to keep against the loan amount then check out available loan options and choose the most suitable scheme for you. These loans offer multiple choices in repayment and interest plans so that the borrower may get maximum benefits form his or her loan deal.

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