What is Financial Innovation
any amount of income, if the expenditure is greater than the income, financial position will be a deficit. That means that some needs will be financed by debt. Thus, there is no source of funds that can be used to improve the asset. That there is a gradual decrease in wealth due to asset will be used for debt payments.
Therefore, the level of a person’s true wealth is not measured by the amount of income, but rather depends on the character of earnings management. In short, whatever his little income, it is possible to get rich if you are willing and able to innovate in financial management.
What is financial innovation? Simple it is to do different things in financial management. For example, if most people use credit cards to get into debt, in the corridors of financial innovation, the use of credit cards is to take advantage of grace payments so you can use the funds of others, within a certain time without any cost.
So, if you shop today and then pay it off before maturity, means you can get extra cash flow in this period, which can be used for various things.
Imagine, if you can buy goods at a price of “X”, for example, and then sell it back at a price of “X” plus a profit, you have to do business without capital, and even earn a profit. In other words, debt is used for productive activities is one of financial innovation. Moreover, if the debt itself is obtained without any costs, such as the use of credit cards on top.
What if the debt interest costs rise? It does not matter. Along the interest cost is still lower than the benefits, you still belong to the innovative. So, in sum, develop an asset could be done without capital. Was obtained from the debt capital. Then used to conduct business. And business results are able to provide higher returns than the cost of debt itself.
Mature Consideration Before Deciding to Debt
good debt or bad debt, they remain a burden to be paid, then any person should not be too easy for the debt. Well within the framework of Mother “brake” husband owes habit, Mother can help by inviting him to a mature consideration before deciding to debt. Some tips include:
1. Review the purpose of debt. think again 3-4 times, do not let emotion overcome common sense.
2. Calculate the first total family income and cash flow you both. Ideally, the amount of funds allocated to pay the mortgage debt not exceeding 30% of your total family income. Before you owe, check once again if there were any allocation of funds to pay for it?
3. Know your financing scheme-2, for example, of a loan or mortgage? Note the procedures and fees / interest charged.
4. Where the source of financing, whether individuals or institutions (banks, cooperatives, etc.).
5. Something that you financed with debt should be something that brings income to repay the mortgage debt. Do not let your debt burden the family income.
6. Consider the risks you face in debt, namely default risk because you lose your income or decrease the risk of collateral value, so no longer able to “cover up” the amount of debt remaining in default when
Know the Reason for Rejection of Credit Application
At the time of submission of personal loan, the most annoying is when we again need and more – awaited the results, it turns out that comes even SMS or rejection letters ….. wah …!! plan would be used to pay for it so it paid off ….
For that perhaps this post can reduce disappointment ..!
To apply for a personal loan, in general terms, namely:
- With reference Slip salary.
- Reference credit card.
For submission with reference paycheck will take much longer process than credit card references.
Connecting from the previous topic about the rejected application or credit agreement which does not comply with the submission.
Class of the consolidation-one of the debt of loan
The debt consolidation implies the withdrawal of a loan in order to pay other lenders off. This is generally done to ensure rate of below average, for the ease of maintenance or to ensure the fixed interest rate.
The debt consolidation usually involves a loan to ensure against assets that serve primarily as collateral; in most cases the houses are involved. In this case, a mortgage is carried out against the house. With the collateralization of the loan, the interest rate lowest is allowed in regard to them box when there is no collateralization of loans. The fact is that with collateralizing, owner of the asset agrees to allow the execution of a mortgage to restore the amount of loan. Therefore, the risks involved with the lender get reduced as eh interest is offering a lowest rate.
In many cases, companies that are based on the concept of debt consolidation can deduct the amount of loan. When the debtor is likely to be achieved ruined the consolidator of debt buy the loan in the discount. The debtors who are prudent in nature can even search for the consolidators that can pass along a proportion of savings. The consolidation can affect the debtor’s ability to download debts to the time of bankruptcy, so the decisions should be taken very carefully take things this. Continue reading