Personal Finance – Tips and Support
In this article we will discuss personal finance and how people manage their money. Personal finance is something that many people still do not feel educated enough about or able to understand. This can cause many problems when people find themselves unable to manage their finances and unaware of just what help is available.
While most people over the years have relied on social help i.e benefits or pensions, this isn’t something which can be relied upon as much today or even in future. This has been the case since the recession began and the cut backs took effect.
It is important when working out your budget each month that the person paid first is you followed by priority creditors (mortgage, secured loans etc). There would be no point in giving creditors the money you need to live and then having to go further into debt just to survive.
This is an important factor when working out your budget and it must be done. If payments are not made to priority creditors, then you could find it harder to get out of debt in the longer run.
It is important to make sure that you are protected against any changes which could cause debts to arise. This may be as a result of sickness which could reduce income or a family incident which could mean an increase in expenditure. One way which people can secure themselves against these factors is by having a savings account. By putting money way each month when times are good it can reduce the impact when you are struggling.
While there are fewer jobs than before due to the recession it may be worthwhile looking for a second job if you are struggling financially. This could offer the extra money needed to solve any money worries you have and may be a short term solution.
While most jobs are not able to pay enough to balance out the cost of living due to the recession, it could still help you put a little extra money in your pocket each month. The income from one job may not be enough to pay for the rising cost of food, gas, electricity etc which is why it is important to consider other options for income. This could be mean a second job which is part-time or even finding out if you are entitled to other benefits. The more options you have financially the better you may be prepared for the future.
Those who have money aside at the moment may have enough to start considering an investment into the property market. With house prices at rock bottom prices, if you have available income you can get a good deal if you are purchasing a house. This could be seen as an asset for the future or even just as extra income through rent. Another good source can be online as new innovative business options are arising all the time. It is advised though that caution is taken when looking online for extra income as people have found themselves the victims of scams.
Finance Jobs in Kuwait
Kuwait, an Arab emirate in Western Asia, is bordered by Saudi Arabia and Iraq on the south and the north. Its name implies the meaning ‘fortress built near water’ as it is located on the shore of the Persian Gulf. The economy of Kuwait is hugely dependent on oil reserves and petroleum exports ranking fifth among the oil and petroleum rich countries of the world.
The economic market of Kuwait has proved resilient after the global downturn made an exit. The financial sector has witnesses a boom in post recession period following the path of recovery. Kuwait is an extremely rich country and is estimated to have 10% of the world oil reserves. Apart from oil and petroleum, other major industries of Kuwait include shipping, real estate, cement, desalination and financial services.
Financial industry includes services offered by both financial institutions and banking sector. This industry is involved in management of money and encompasses a broad range of organizations including banks, insurance companies, credit card companies, stock brokerages, consumer finance companies, investment funds and other government sponsored enterprises. The finance jobs in Kuwait are now growing with billion dollars of investment being made to bring it back to its boom position. As it is a wide industry, finance professionals get plenty of career options when looking for jobs in Middle East.
Finance jobs in Kuwait are available for professionals from all around the world and ask for highly skilled and well qualified candidates. The level of vacancies offered to expatriates covers all managerial, assistant and executive positions. Some of the jobs in finance in Kuwait include positions for auditing, accounting, finance, administration, etc. for directors, managers, executives, senior managers, officers, assistant managers, analysts and other levels.
The finance professionals are paid well in Kuwait that makes it a favorable career destination for many. Jobs in Middle East are especially popular all around the world for being well paying and offering comfortable lifestyles. It is an ideal destination for those looking for saving a fortune in a matter of few years as Kuwaiti employers pay attractive amounts of money that too tax-free. This means that whatever you earn is entirely for you to keep, you can save or spend it the way you want. Thus, high tax-free salaries offered for finance jobs in Kuwait have become a major puller for financial experts from outside the country.
It is always helpful to explore a place before moving and settling down in it. Middle East conspicuously lies in a different part of the world and is therefore, bound to follow different culture and lifestyle. So, you should perform a detailed research on the customs, religion, culture, laws and living standards of the new country. As you are familiar to the new society, you are able to adapt easily to them and their people. You should never wait for a surprise by going to the place uninformed as it may or may not be a pleasant one. You will feel welcomed and comfortable if you are aware of the place as it follows a different set of beliefs. For this, you may join online forums and communities that bring you closer to expatriates living there.
Being a member of expat community will help you get the true picture of the personal and professional environments in Kuwait. Even before taking up a job in Kuwait, you would know what to expect and what not. Make sure you have gone through the contract carefully and understood everything to avoid confusions in later stages. So, go grab your job in Kuwait and create a fortune!
Working Capital Financing
All businesses have some sort of an operating cycle. This is essentially the time it takes from purchasing needed materials or supplies and converting them into a finished product that can be sold. The operating cycle further consists of selling those products and collecting payment for all that effort. Once products are sold and payments collected, the cycle is completed.
For retail businesses (including online businesses) the cycle starts with purchasing products for resale (inventory) then displaying those products on shelves or on web pages, closing the sale and collecting payment.
Even service businesses, while their operating cycle can be much shorter, still see a time lag between providing the service (to include any purchases of material or labor to complete the job) and collecting payments from customers.
It is because of this time lag that working capital financing comes into play.
All these businesses need some form of assets, be it inventory, materials, supplies, labor, etc. (usually termed: current assets) that can quickly flow through the operating cycle and be converted into cash (revenue). This is essentially what business is. Once payment (revenue) is received, the company can then use any operating cycle profits (gross margin) to cover overhead expenses like salaries, marketing, loan payments and interest, capital purchases, or any fixed general, administration or selling expenses.
The problem that arises for most businesses (especially small and growing businesses) is not having the cash on hand to purchase the needed materials to complete their operating cycle. Not only do some businesses not have the cash or capital to purchase needed materials they may also not be able to cover other variable costs related to the operating cycle like paying labor, landlords, utilities, etc.
In a perfect world, all businesses would have the necessary financial wherewithal to cover all expense while waiting for payment. But, the business world is not perfect. Most businesses have to wait anywhere from one day to years to complete their cycles and get paid by their customers (typical operating cycles usually last from a few weeks to a few months but depend on the industry and business).
But, in the mean time, while these businesses transform goods into finished products or services and wait to be paid by their customers (or wait to see if they can even sell the products or services they offer), their suppliers and vendors, landlords, utility companies, employees, IRS, bankers, etc. all want to be paid now and not wait for the business to receive payments; keep in mind that these businesses are also facing their own time lag in their operating cycles. Thus, for businesses that do not have the cash on hand to meet these expenses, they must turn to working capital financing or face going out of business.
Working capital, by definition, is the difference between current assets and current liabilities where current liabilities are used to finance current assets; and the conversion of those current assets into revenue is what is used to pay off those current liabilities.
There are many methods to working capital financing; here are a few of the most common:
Trade Credit: The fastest and most efficient way to finance materials or supply is via trade credit. How it works is simple. You purchase goods from your vendors or suppliers. They tell you that you can delay payment for those goods for 60 days. This 60 day period will give your business time to convert those goods, via your operating cycle, into revenue in which to repay the vendor or supplier. If you are not currently getting trade credit terms from your vendors – you might think about asking for them. If you are, you might look into getting them extended. The longer the payment delay terms, the better for your business as it has more time to convert those goods into revenue.
Business Lines of Credit (BLOC) are short term revolving credit lines (usually with a 12 month or less term) and are specifically designed for working capital needs. These credit lines allow businesses to purchase needed material, supplies, labor etc., convert those into some form of revenue over a very short period and pay back the borrowed funds as soon as possible. BLOCs are usually revolving lines meaning the business can pay them down from one operating cycles and draw on the line again for another operating cycle. Most BLOCs are set for 12 month periods as these lines are meant for short-term financing only and from a banker’s prospective should be paid to zero some time during each of the business’s operating cycles.
Business Cash Advances: These cash advances are not loans but advance against future sales. These advances are great methods of working capital financing as they allow businesses to receive capital up front and pay it back from future sales. Business cash advances are usually based on the total revenue of the business but do require the business to accept credit cards as a form of payment from their customers – as it is these credit cards receipts that are used to pay back the advance. Very good working capital products for retail (online and brink and mortar) as well as service businesses.
Accounts Receivable Factoring: Some businesses may find themselves in (according to baseball terms) as pickle – stuck between waiting for customers to pay on one side and having trade partners (vendors and suppliers) demanding payment on the other side. Let’s say your business purchases materials Net 10 days – meaning that you have 10 days to pay in full for those materials. You convert those goods into finished products in 5 days and ship them to your customer with a NET 30 day invoice – meaning your customer has 30 days to pay you. In these situations, Accounts Receivable Factoring can be used to obtain the working capital needed to pay off the supplier as well as purchase additional materials for another operating cycle. Then, when payment is received by your customer, the business can repay the Accounts Receivable loan or line of credit and use the remaining gross margin profits to cover other costs and overheads. Most factoring company will advance 80% of the invoice amount and base their approval decisions on your customer’s creditworthiness.
Purchase Order Financing: Purchase Order Financing is a great method of securing working capital for a business’s operating cycle. Let’s say that your business has one or more jobs that need to be completed but finds itself without the needed working capital to complete the job(s). A purchase order factor may advance your business the funds (up to 80% of the purchase order amount) – essentially paying your supplier or variable costs on your behalf – so that you can complete the orders, satisfy your customers and earn a profit.
Lastly, and this cannot be emphasized enough, working capital financing is short-term financing and should only be used for short-term needs. Keep in mind that most operating cycles are very short periods – usually less than 90 days. Thus, any financing to be used in the operating cycles should be short-term – matching that 90 day period. Anything else is bad financial management as the business would be paying far more in interest and fees if it uses long-term financing options for short-term, working capital needs.