The Global Neighbor Project | Finance Ideas

Archive for May, 2011

Budgeting involves the planned allocation of funds to various departments in a business organization. Budgeting is often done by enterprises on a periodic basis. In simpler terms, it means planning for and estimating the financial position of an organization in a given time period.The process of budgeting is very basic. Budgeting helps keep track of the health of a business, be it big or small. An individual with a basic income can also plan his budget. A simple rule for making a financial statement is keeping the accounts very simple.

The expenses can be noted on a day-to-day basis; these expenses can be clubbed under one subcategory. The usefulness of a budget depends on the reliability of the information used to create it. Unrealistic estimates of prices, yields, or input quantities would lessen the accuracy of the budget and could possibly lead to a faulty financial decision.The process of budgeting can help make sound management decisions in any organization, if the information used for making the statement is reliable. If the process is undertaken on a one-year cycle, one should plan the next budget at least three months prior to the end of the current one. If the budgeting is for much shorter periods, for instance one month, one should begin preparing next month’s budget within one to two weeks prior to the start date.

As per business terminologies there are six broad types of budgets made by enterprises, namely, sales budget, production budget, material purchase budget, staff budget, overheads budget, and capital expenditure budget.Most organizations use structured planning to yield maximum results in key areas, including return-on sales, revenue growth, asset management and equity. Many businesses carry out the process almost on a daily basis, and include the majority of the activities associated with business planning, such as growth areas, competitors, cash flow and profit.One of the prime benefits of carrying out annual business planning is that it gives organizations the opportunity to understand the performance, and also helps in realizing the factors affecting it. It also helps to make continuous improvements and anticipate problems, and offers sound financial information on which to base decisions, improved clarity and focus.

Property taxes are decided collectively by school boards, town boards, legislators, and councils. The tax rate is set by collating the amount of funds an area needs. This is then divided that by the “total taxable” assessed value of the area. The tax an individual pays is computed by multiplying the tax rate by the assessed value of your property and then deducting any applicable exceptions. Property taxes are at an all time high. Studies indicate that they have increased more than 35% in five years.

Property is assessed by determining property costs in any given area. Property is valued by studying: the current sale price of properties in the area, costs to be incurred to replace the property, potential realization of property if it is rented, sold, or gifted, and the historical value of a property.

There are a few ways in which you could save on taxes:

1.    Check if the state you reside in is offering any rebates. For example, a money back rebate, energy rebate, capping of taxes, or home owners rebate where under certain conditions you may be eligible to claim a rebate.

2.    Ensure that the property is assessed right. This will ensure that you do not have to pay excess taxes. Assert your right to check you assessment report ensure that there are no miscalculations, mistakes, or assumptions. If in any doubt, do put in an appeal. According to statistics almost 50% of the cases win some relief.

3.    Check all exemptions allowed according to the law.

4.    Buy property jointly with a partner or family member. This way both owners become eligible for tax rebates.

5.    Check if your assessment is in according to other properties in your neighborhood. Check with the assessment office or with your neighbors themselves. It helps to know applicable laws. Use the help of a real estate professional to put together a file of properties similar to yours that have a lower assessment. Or, use the bank’s appraisal to support your case. Be sure that the case you gather together is water tight.

6.    Use a property consultant to help you save taxes. Some charge a flat fee while others just a percentage of what you save. A professional will check how assessment is done and also if there are any loop holes you can use.

7.    There is strength in numbers. Get together with other owners who are also checking or fighting assessments. Check on the National Taxpayers Union Web site http://www.ntu.org   for your rights.

8.    Ask you home loan provider whether you are eligible for refund of property taxes paid. Some agreements have a provision for this. Many mortgages have automatic escrow of taxes.

9.    Even before you buy a home find out what the property taxes are in the area and what have been the increases in tax rates.

10.    Be sure to read through assessment and tax manuals published by your local authorities. These will give a clear idea of what are the parameters used and what you must do to reduce or pay the correct property taxes.

In order to be money smart you need to get the help of an efficient and dedicated accountant, plan your tax liabilities well, known thoroughly all aspects of Property Tax. If you are prudent, you can benefit by using ways and means to cut your tax burden and liabilities.

Investors who bought during the top of the frothy commodities rally are now panicking or kicking themselves. Neither activity helps an investor or trader think straight. Below are a few tips in dealing with the current market shakeout.

1.    If you believe you invested in the right stock(s), then turn off your computer and do something enjoyable. Exercise is a great stress reliever. The market has already begun its shakeout. If you didn’t get stopped out, or failed to place earlier stops, your best opportunity lays ahead in picking up additional shares at a much lower price. Most of the experts we’ve interviewed tell us the next rally should start sometime between late July and Labor Day. In an attempt to interview the uranium guru James Dines in late May, we were told, “Call back in a couple of months.” That was a helpful clue that the markets were less than exciting. Mr. Dines is often eager to be interviewed, but recently he was not.

2.    Do you believe the fundamentals which engendered the commodities boom have changed? If they haven’t, then the bullishness is only taking a breather. We don’t see any fundamental change in the markets. Russia still wants nuclear power, and its oil production may be peaking. China hasn’t announced the end of its nuclear expansion program. India wants to spend $40 billion on new nuclear reactors. If you are invested in uranium stocks, spot uranium jumped another dollar to $45/pound this past week. Hardly the end of the bull market.

3.    If you worry about your investment in one stock or another, then stop watching the ticker and focus on the company fundamentals. Is the story still true or has it changed? See #7 A, B and C below.

4.    There’s an old cliché that the time to buy is when you feel like dumping everything you own in the category. At the exact moment you want to sell your entire portfolio of uranium stocks, it may be wiser to add to your holdings. This applies mainly to the retail investor. Most of the professionals did dump at the top and are now slowly accumulating the shares of the naïve who waited until the washout to start selling off.

5.    Has a major, earth-shattering event occurred? The last bull cycle in uranium ended with Three Mile Island (TMI). The last decent rally in the precious metals markets fell off a cliff after it was discovered Bre-X Minerals had perpetrated a fraud about its gold ‘discovery’ in Indonesia. Something significant and newsworthy always transpires, and it is also far-reaching. That is the trigger. As with TMI and Bre-X, those were the first shots which launched a later chain reaction to end those bull markets.

6.    Before pulling the sell trigger, ask yourself: Do I really want to give up these shares to a bargain basement hunter, who will make a killing on my losses?

7.    Since most of you will still panic, please review the following basics for any of the uranium companies you’ve read about:

A)    How much cash does the company have in the bank? During shakeouts, cash is king. Prescient companies, which completed their financings during the recent and robust rally, are sitting pretty. They can weather the short-term storm and are well-oiled to move forward when this correction bottoms and reverses. Those companies are the strongest ones to check out when this correction looks gloomiest.

B)    Has the management remained the same? Unless the top financial and/or technical people blew out the door, in recent weeks, the story probably hasn’t changed much. Companies which built a strong technical team are resilient and powerful. They will move forward.

C)    Have the properties come up dry? One of the reasons you invested in a uranium company was because it announced it had “pounds in the ground.” Some companies have more than others. Some went to the expense and trouble of completing a National Instrument 43-101, which independently confirmed the quantity and quality of the uranium resource. If that changed – and the company announced, “Sorry, nothing there after all,” or announced, “Hey, we were kidding,” that’s one thing. If you haven’t heard that, or read a news release announcing that, then the uranium didn’t walk away or move onto a competitor’s property. It’s still there.

Next time, when the markets are racing higher, and you feel like you won the lottery, consider this bit of biblical advice. The old joke goes, “When did Noah build his ark?” The answer of course is: Before it began to rain.