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Whether you are an institutional trader managing a large portfolio, or an individual trader, you might have had the need to hedge your currency exposure in one way or another. Opening an account with a reputable forex broker and placing some trades is one, but there are many other alternatives as well.

Most instruments and types of instruments (like CFDs, futures, options etc) came about in order to hedge some form of exposure, to negate risk. As the markets and trading evolved, many instruments became favorites of speculators and traders apart from being effective tools to hedge.

The first and simplest way is to open an account, and place a trade in the desired currency pair. This is usually a “spot” trade. In the case of an EUR/USD long for example the trader sells USD in order to buy EUR. A favorable setup for someone who needs to “lock in” a rate. As long as the position is open the trader does not have to worry about the market moving in any direction, since his exposure is limited.

In the meanwhile he has to pay financing. This is due to the fact, that most brokers offer leverage when trading, and only a certain amount of margin is required to place the trade. A 100:1 leverage is very common, meaning that for every $1000 account balance it is possible to buy or sell $100,000 worth of currencies. $99,000 of that is borrowed, for which the trader has to pay interest if the position is held overnight.

The last factor to take into consideration is the difference in base interest rates of the two currencies. If the bought currency has a higher interest rate than the sold currency, then it is even possible to actually receive income from keeping positions open overnight, regardless of the financing charge. Keeping a position open for the sole purpose of receiving interest is known as “carry trading” and is a widely used tactic for investors large and small.
A famous example for that was the EUR/CHF pair up until January 2015. The Swiss National bank pegged the exchange rate to 1.20. This made traders to believe that there is no/little downside risk with all the benefits of collecting the difference in interest rates every single day. We all saw where that led to, so a trader ought to be very careful when placing a position like this.

Another possibility for hedging currency exposure is to buy FX options. Most forex brokers have them available on their trading platforms. Options have two basic types: calls and puts. Buying a call option gives the trader the right, but no obligation, to buy the underlying currency pair for the strike price before expiration. Being long, or buying a put, gives the trader the right, but no obligation, to sell the underlying currency pair for the strike price before expiration.

The price of the underlying instrument compared to the strike price leaves us with further categorization: In the money, at the money, or out of the money options. In the money options have intrinsic value and time value. A call with a strike price of 0.90 for the EUR/USD is currently well in-the-money as the spot is at 1.12. An at the money option would be a strike price of 1.12, and an out of the money option means a strike price above (or below for puts) current market price. At-the-money and out of the money options only have time value.

A very important fact to remember is that options have an expiry. Even in the money options have some part of time value in their price apart from the intrinsic value, but the most dramatic change can be observed with at the money options. Time value decays every single day more and more as the expiry date approaches. This is why options are called “wasting assets”.

In order to create the same hedge as we discussed before (going long the EUR/USD) a trader needs to simply buy a call option with the desirable strike price and expiration date. Time decay does not play too much of a role in this case, since the resale of a hedge is usually not a concern. The premium of an option does matter however, as this is the “cost” of hedging, and a too large premium will make the hedge too expensive, rendering it useless. Like an insurance premium, the cost has to be reasonable enough to warrant the purchase.

Whether buying options or trading the spot markets it is very important to choose a dependable forex broker which lets the trader execute the trades flawlessly and with the best possible conditions. Hedging is an interesting aspect of trading, and with the proper setup it can easily remove the uncertainty of the wildly fluctuating foreign exchange markets and exchange rates. Sometimes that is all that is required.

 

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invoicingInvoicing is a critical process for new businesses and particularly for new small businesses. Invoices may be the primary cash and income stream for a new or small business. Growth depends upon accurate and responsive invoicing processes. For the new business, it is often vital that they issue invoices when payments are due, and that customers respond and pay promptly. Business accounting software can reduce the commitment of time and resources needed to carry out the invoicing process. Business can automate many parts of account management and the reports that owners and managers need to oversee the company budget.

When considering how to invoice clients, many new companies use manual invoices. This time-consuming process relies upon paper records and standard mail processing. It consumes valuable company time and resources. When considering automated invoicing software, many new companies first turn to free personal finance software. These tools can work well for small scale applications but typically lack features that small businesses need.
Some free personal finance software have cash based processes payments and use cash basis accounting. These may not provide tools for accrual based accounting and many general ledger accounting functions. When using free personal finance software, new companies can realize savings of time and effort; however, the results are often unsatisfactory. Invoices are a critical part of customer relations.

Subscription invoicing is an important feature of advanced accounting software. Many online services rely upon repeat business and ongoing contracts. Some businesses have grown into large and successful enterprises with substantial income streams from recurring monthly or annual contracts. There are unique requirements for subscription invoicing such as service credits, partial periods of service, and adjustments for various events. Among the types of invoicing, subscription invoicing is particularly well-suited for electronic invoices. Corrections are an important feature of electronic invoicing and customer relations software. Paper invoicing requires many steps to issue an accurate or corrected invoice. Businesses can process electronic corrections in a matter of minutes. This feature boosts customer confidence and reduces confusion and errors in account management.

Electronic invoicing can use credit card options; customers will pay promptly more often and with greater ease when presented with familiar and trustworthy payment procedures. Customer relations management is a critical tool for growth. The invoice is an opportunity to reinforce the brand, put forward an impressive business image, and strengthen communications. The comprehensive approach contained in advanced small business accounting software goes far beyond the options offered by free personal finance software. Advanced Small business software like Sage.com accounting software uses electronic invoicing, prompt payment incentives, and constant access to cloud-based software and data. On page, payment is a valuable feature. Customers can respond instantly to E-mail invoices payable through links to familiar payment methods.

Invoicing is also important for financing business operations. Pending invoices and accounts receivable are assets for financing. Cash flow management is critical to nearly every business, and receivables financing is a useful method for maintaining financial balance and promoting growth. Accounts receivable and accounts receivable aging reports are functions that businesses can perform using advanced business accounting software.

Invoicing is an important tool for new businesses. Advanced software incorporates customer relations tools and takes advantage of the opportunity to improve customer relations and reinforce the company image. Customized invoices that include the business logo and a clear presentation of account information make a positive impression. Advanced small business software uses online methods for fast, accurate and convenient invoice processing. Using online, cloud-based systems like sage.com accounting software, business owners and managers can stay on top of accounts receivables and open invoices by accessing the system from any Internet connection.

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car title loansPeople who need to borrow money very quickly often turn to car title loans to help them out. These are very flexible loans and are not just very quick, but also available for people with bad credit, which makes them very interesting. However, before you go ahead and apply for car title loans in Gardena, you should make sure you fully understand these types of financial products. Hopefully, this FAQ will help you with that.

Q – What Is a Title Loan?

Basically, they are loans that are secured against your vehicle. It can be any vehicle, from a regular car to a personal airplane or even a boat. What matters is that you are the title owner of this vehicle and that the title is free from any liens. This includes finance. If you do still have finance on your vehicle, an auto equity loan may be more suitable.

Q – Will I Qualify?

It is impossible to guarantee that you will be qualified unless you actually put in an application. However, the requirements for these loans are really easy to meet. Besides be a clear vehicle title holder, most lenders look for someone who:

  • Is at least 18 years old (21 in some cases).
  • Is a permanent and legal resident in this country.
  • Has an active bank account with direct deposit facility.

Credit status is not important and many lenders don’t even require you to be employed, although it is often preferred.

Q – What Kind of Car Is Accepted?

Generally speaking, any type of vehicle and any make and model will be accepted for a title loan. However, the minimum a lender will usually borrow you is $601 (from which point higher interest rates are allowed to be charged by law), and they will usually not borrow you more than 50% of the value of your vehicle. Hence, your car should be worth at least $1,300 in order for you to be able to get a loan against it.

Q – How Much Can I Borrow?

Again, this depends. The minimum tends to be $601 and most lenders have a maximum of $5,000, even if your car is worth more than that. If this is the first time you have applied for a loan through a certain company, you are likely to be offered less than if you have gone through several successful applications.

Q – How Long before I Get my Money?

The application for car title loans in Gardena is very quick. A decision will usually be made almost instantly. Most lenders also guarantee that you will have the money in your account within 48 hours. Some even guarantee the same day, so long as it is within banking business hours.

Q – Can I Keep my Car?

Yes. Some lenders will want you to hand over your spare keys, or they will put a remote locking device on the ignition. Usually, however, all they will want is to hold on to your title deed.

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As a parent or caregiver to a child, it is important to arm them with enough skills and information to be able to battle through life in a financially savvy manner. Gone are the days when you can bumble through, expecting a combination of fate and overdraft facilities to keep you afloat. In order to play the game successfully, it is important to have some knowledge of how to run your finances safely and how to protect your loved ones from financial disaster.

Pass on these important life lessons to your children and give them the means to have a financially stable future.

Budgeting

Budgeting is a skill that is imperative for children to understand. Whether it is budgeting a weekly amount of pocket money or budgeting their income from their first job, there is no excuse not to start teaching this vital skill at an early age. It is simple when the kids are young.

Start by playing shopping with them. Set up a supermarket in your living room and give them a budget to spend in your make-believe shop. As the children become older, their disposable income naturally increases and, as a financially wise parent, one of the financial facts of life (e.g. budgeting) becomes one of the best things you would have taught your offspring.

Prepare for the Future

Once the whole budgeting life lesson is underway, then another grown-up responsibility toward your children becomes apparent. Finding a life insurance policy that works for your your family is a part of looking after your family, especially if you want to offer them some protection against any possible future financial calamity.

Start by comparing different policies and thinking about what type of life insurance is the right one for you and your family. Be aware that any debts you have could be passed on to your nearest and dearest in the case of your unexpected demise. This might make you think about having a lump sum available in those circumstances, or, perhaps you want to focus on your mortgage being paid off in order to give your family some security. Not only is life insurance important for your family but teaching your kids about life insurance will be a very important lesson for them to learn. Teach them about the responsibility of having a family and how to protect them for the future. It’s a sobering thought, but if your children grow up with savvy financial knowledge, then they will minimise the chances of experiencing financial catastrophes as they make their way through life.

Money Management

Another great way to get your kids thinking about money matters is to start them off with a system for saving. There are many options, depending on the age of the child and the amount that they would like to save. For instance, a very young child could be taught the positive aspects of savings by using a physical cue. Try a piggy bank or a clear jam jar, and when they have enough pennies in there, perhaps you can take your child to the ice cream parlour to take advantage of some of those savings.

The other thing to do is to break down finances into different outgoing compartments. This is a particularly useful lesson for the teenager who suddenly has a weekend job and gets their first taste of cash in the bank. By pointing out the need to split money into different directions to cover costs could save your angst-ridden teen from financial breakdown. By encouraging them to open several accounts, each one representing a different product, savings goal or direct debit, then the lesson of managing money becomes a little easier for the teenager who has just stepped into the world of the money.

Saving Grace

Teaching children to save is not a big problem. They can see the pounds piling up in the piggy bank, and that is a great thing for motivation. But, how will that translate for the gap year student, hoping to see the world on a shoestring? Or, how will that help the teenager who is desperate to own her first car? This is where good parent points can be earned by agreeing to match the amount saved by them, thus decreasing the saving time by 50% and painting the parent as an all-around “good egg”.

So, by teaching children the benefits of saving money whilst they are still young, they will be able to use the lessons learned when they are older and have more revenue to manage.

By planting these financial seeds in their heads at a young age, you are certainly helping your child cope with the financial demands in life. It really all points to their future as a responsible adult—how to create finances to be used in the future and how to protect their own eventual family in the future.

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0d6824effc0d4a7eaa7f09913c3450c5The car loan process can seem daunting if you’ve never been through it before. Applying for a car loan may represent one of the biggest purchases you’ll ever make (besides a home) so it pays to understand the process. Below you’ll find the car loan process explained in five easy steps. And if you have any further queries about how to apply for a car loan, there is plenty of free information available online and from finance organisations that handle car loans, such as DreamLoans.

1. Apply for Your Loan

This part of the process is usually quite quick. Simply contact the car loan company with whom you would like to do business and apply for your loan. There are a variety of car loan companies to choose from, so don’t be afraid to shop around and find the best deal for yourself. Consider the length of the loan term as well as the interest rate, because you’ll want your repayments to be as manageable as possible.

2. Your Loan’s Pre-Approval

Pre-approval of your car loan happens during the application process. It’s the part of the process where you will need to provide proof of your ability to service the loan (that means demonstrating your ability to make the repayments on time). You will need to provide payslips and/or financial statements for this.

3. Your Loan’s Approval

Once the car loan company has checked you out, you will receive your loan approval – and then you can get serious about getting your hands on your new car. Be aware that before the car loan company approves your loan application, they will check your credit history and may contact your employer.

4. Signing You Up

Once your loan has been approved, you will receive the documentation to sign. This is a very important part of the car loan process, and if you’ve never signed a loan contract before, be sure to take the time to go through the paperwork carefully. Get a thorough understanding of your rights and obligations under the terms of the contract before you sign anything. Ensure all your questions are asked and answered to your satisfaction. Get as clear an idea as possible about what you are signing, and don’t be afraid to ask for a legal opinion if you feel you need it.

5. Settlement

Most people forget about this part of the car loan process because it doesn’t happen until some months or years after you get your loan and your new car. Settlement is the part of the car loan process where you complete the borrowing. That is, you own your car outright once you settle your loan. This usually happens at the end of your loan contract term (most car loan periods are for around five years), but you can sometimes settle your loan earlier if you wish.

The process of getting a car loan is not difficult or lengthy, but it can be daunting. Make sure you understand each and every step. Remember: once you’ve signed the contract, you are legally responsible for the debt.

Have you or anyone you know recently applied for a car loan? What advice would you give someone about the car loan process if they asked you today? Share your insights in the comments below.

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9e344e349634408da3b4707eefdd5480Budgeting for regular, ongoing expenses is one thing but saving up for a large expense is a different challenge altogether. On top of managing your weekly spending and saving, you also have to put extra cash aside for upcoming purchases or repayments. Massive expenses may only come up occasionally for most people, but they tend to arise more often than our wallets might like. Your big expense could be something you need, like a deposit for a new home or new car, or just something you want, like an entertainment system or the latest smartphone. Either way, achieving the purchase you’re planning for or dreaming about isn’t beyond reach; you just need to be patient, persistent and follow the tips below.

Visualise Your Goal

It can be hard to rein in spending or live a less-thrills lifestyle. To make it easier to do this, it helps to have a clear picture of what you’re working towards. This might even involve literally having a picture of your goal, such as a photo of your dream car on the garage wall or a Pinterest board displaying the range of designer clothes you’re saving up for. Whether your picture is tangible or purely in your mind, regularly visualising your goal will make it easier to walk past tempting stores and say no to that superfluous plate of sushi. This will also help you to achieve the following step.

Crack Down on Impulse Buying

If unexpected and unnecessary spending is blowing holes in your budget, your big expense is further away from reach than it should be. Once you’ve recognised that buying attractive things without putting much thought into them is an issue for you and your savings, take steps towards cracking down on this problem. For example, this might mean buying your groceries only at supermarkets that aren’t located in shopping centres or deleting your eBay account temporarily until your big expense has been taken care of.

Budgeting

Even with precautionary steps taken, impulse purchases can continue to create havoc in your finances if you don’t have a clear plan for where your income is directed. Analyse your weekly or fortnightly earnings and allocate set amounts to be distributed between unavoidable expenses, allowable spending, regular savings, and specific savings for your big expense. If you earn a predetermined salary each week, this will be easier; you can decide on fixed values to assign to different categories. If your income fluctuates, it’ll be a little trickier, but consider allocating percentages of your income to different areas with a fixed minimum going towards your large expense.

Eliminate or Reduce Existing Debts

If any significant debts are eating away at your saving attempts, these should be given a high priority while you’re allocating where your income goes. By consolidating and reducing your debts faster, you’ll be able to save more efficiently in the long term with less of your earnings being drained by interest fees. Managing debt is something many people are unskilled at though, so don’t be embarrassed to seek professional assistance from an agency such as Debt Rescue. This may not be a short-term solution in terms of saving for a large purchase, but the big expense in your near future will be far more manageable if you have less troublesome debts already hanging over your head.

The more you think about how expensive a significant purchase will be, the more overwhelming things can become in your mind. Remember to keep your goal in mind and take logical steps towards incorporating this large expense into your existing budget. Some clever decisions and strong willpower could very well make the difference between purchasing that item sooner rather than later… or never.

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If you are looking for a long term financial solution, you may want to stay away from so-called alternative lending forms. However, the reality is also that title loans are becoming increasing popular. This is because they can instantly solve a potential financial emergency. This has great surface value, as there are also very few requirements to apply for such a loan.

Application Requirements for Title Loans

There are a few requirements for those who want to apply for title loans. These include:

  • You must own the vehicle in full, without liens.
  • You must have a regular monthly income.
  • You must have valid ID.
  • You must prove your residency.
  • You must be willing to have your vehicle inspected.

This makes car title loans slightly different from payday loans. This is because for a payday loan, you only have to prove that you are receiving an income. A title loan has slightly more stringent requirements.

What Will You Get?

Very simply put, when you own a vehicle title, you can always access a quick source of money, regardless of your credit history. You will generally find auto title loans online, and they are targeted at the sub-prime market. They are a short term solution that usually has to be paid back within 30 days.

Very simply put, these loans are a solution for those people who still have past financial decisions looming over their heads. If you have a poor credit score, it may take as much as seven years before you are able to apply for regular financial products again. Unfortunately, this means that you will have to pay for higher interest rates as well. On the other hand, although the interest rate is high, the loan is usually only in place for a month, so you don’t actually pay that much more.

You do, however, have to understand that these loans are a type of secured loan. Your vehicle is the collateral. If you do not pay your loan back on time, the lender will think nothing of repossessing your vehicle. Another thing to understand is that you will usually only be able to borrow 50% of the value of your vehicle, but if your car is repossessed and sold, you will not see any of the money above and beyond your loan principal. This is because the rest will be used to cover the interest rate, the repossession feeds and the court fees. Furthermore, the note that will be on your credit score after this will be even worse and will make it far more difficult for you to apply for any kind of credit for at least seven year.

Whenever you apply for a loan, regardless of your current credit status, you have to be sure that you will be able to pay it back. If you have any worries about this, you may want to search for an alternative solution. Perhaps it would be better to simply sell your vehicle, for instance.

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control your debtsAccording to Lanemegleren, the average American household that has one or more credit cards carries around $16,000 in credit card debt. At any given time the average interest rate runs anywhere from 16 to 19%. Borrowing is not always bad; there are some debts that are considered to be good and necessary.

Borrowing for your college education or to buy a home is considered a sensible option. Just make sure to go only for the best rates and do not borrow more than what you can pay. On the other hand, a bad debt is incurring a debt for something that isn’t really necessary or is beyond your means like using your credit card for expensive meals or luxury vacations. These are expenses that you can instead save for.

Following are some tips to control and manage your personal debt:

  • Get a grip on your spending habits.
    A lot of people spend a lot of money buying on impulse. List down and analyze your regular monthly expenditures. Cut down on items that are not really necessary and set aside the money you save to pay off your existing debts.
  • Settle first the debts that bear higher interest rates.
    You can get out of debt more quickly if you prioritize reducing the balance of the credit card or loan that charges the highest interest rate. Just make sure to make at least the minimum payments for the rest of your debts. Once the priority debt is fully settled, focus on the one that has the second highest interest rate, and so on.
  • Mind where you obtain credit.
    Although it is very tempting to dip into your 401k or borrow against your home, it is a very risky proposition. For one, you could possibly lose your home or you may fall short of your investment target once your time to retire comes.
  • Prepare for emergencies.
    Make sure you save at least an equivalent of 3 to 6 months’ worth of living expenses to be used for emergency purposes. If you have nothing stowed for emergencies like a damaged car or broken heating system, your finances may be seriously upset.
  • Don’t be over eager in paying off your mortgage.
    If you have other debts to pay, do not put all your available funds to pay your mortgage off. For one, mortgages usually charge lower interest rates than most other debts. You can opt for refinancing if you wish to lower your monthly payments.
  • Never fall for the minimum payment trap.
    Paying just the minimum due on all your credit cards will only cover the interest and very little of the principal. Thus, it will take you many years to fully pay all your debts. In essence, you will end up paying a lot more in finance charges than the original amount you borrowed or charged to your card.
  • Don’t hesitate to ask for help if you need it.
    If you feel your debt is getting out of hand, seek help before it’s too late. You can consult a debt counselor to find ways on how to better manage your finances. Just be wary of unscrupulous debt counseling agencies out there that are only after a quick buck.

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