Car financing has constantly evolved and come up with new and innovative ways to allow people to benefit. The latest in car financing is Novated car leasing, popular in countries like Australia and the UK, Novated car leasing allows an employee to lease a car while the employer agrees to pay the instalments. The employee in return agrees to receive lesser pay till the lease finishes. Novated car leasing allows both the employee and the employer the opportunity to access a wider variety of cars at lower costs.
Novated car leases are basically of two types, the first is a regular Novated car lease, and in this case the employee does not receive any finances for operating costs like petrol or any maintenance expenses. The second type of Novated car leasing is a fully maintained Novated lease, in this case the employer pays for operating and maintenance costs of the vehicle too. Depending on the requirement an employer can offer an employee basic leasing or fully maintained Novated car leasing.
For the employee Novated car leasing is useful as it allows him to access cars at lower rates, especially if the employer has purchased or leased cars in a bulk amount. In addition Novated car leasing allows an employee to apply for tax discounts. In addition to tax savings and lower rates, another advantage is that an employee has a wider selection of cars, since employers that offer Novated leasing usually have a large number of cars at their disposal and have tie ups with various car leasing firms.
However there is a downside to Novated car leasing, if an employee leaves his employer, the onus of the payments is completely on the employee and unless the new employer agrees to continue paying for the Novated car finance, the employee has to manage all the payments.
The employer too benefits from Novated car leasing, the biggest advantage is that an employer can actually operate a fleet of vehicles without having to worry about operating costs and maintenance costs, usually employers prefer paying for a regular Novated leasing, thereby ensuring that there are no transportation issues, and maintenance and operating expenses are maintained by the employee. In fact since the employer is actually paying for the leasing for an employee, the employer can actually maintain vehicles off the records, thereby saving on tax while having an effective transportation system in place.
At the end of the day Novated car leasing is a win-win situation for both the employer and employee, in addition to the employer and employee, finance companies too benefit from Novated car financing, by actually having the employer pay for car leasing, the financing company can offer employees with poor credit history cars on lease, as there is a higher probability of receiving payments on time.
In essence Novated car leasing is a tripartite agreement; where there are three parties involved the financing company, the employee and the employer. In fact it is one of the few tripartite agreements where all three parties benefit in different ways.
Saturday, June 9, 2012
Friday, June 8, 2012
Help! My Fsbo Appraisal Came In Too Low!
First off, DON'T PANIC. An appraisal is an opinion of market value given by a licensed appraiser on a particular property at a specific point in time. The key word here is opinion. Appraising is not an exact science otherwise there would be no need for appraisers and all anyone need do is get a value from online services like Zillow.
Even though licensed appraisers all have to adhere to the same set of guidelines approved by the Appraisal Foundation, there are so many variables involved that the end result can only be described as an opinion of value. This does NOT mean that the appraiser's opinion is not a correct valuation; it just means that there can be more than one opinion that is correct. These differing values are supported by the appraiser's choice of considerations, and the weight given to each of them, which affect the house being appraised. The differences in appraised value can be even more marked if one of the appraisers is from outside the area where the property is located as opposed to the value given by a local appraiser.
What to do. If you had an appraisal done when you priced your home for sale, get in touch with that original appraiser and ask them to do an updated appraisal for you. Tell them that the value is coming in lower than the amount they appraised it for and you need documentation to support your price. You will probably have to pay for this, but the cost should be lower if the original appraisal was completed not too long ago. If the re-appraisal supports your sale price, get in touch with the buyer's lender immediately and present your case for this value to be accepted. If the difference in value is considerable, the lender might insist on a third appraisal and/or an appraisal review.
What if you didn't get an appraisal before you priced your house? Well then, you have a couple of options. Obviously, the first is to get your own appraisal done and hope that it comes back at the price you need and, if it does, then proceed as above. If this second appraisal also comes in lower, then it would appear you have overpriced your house to begin with. You can then either lower your price to the appraised value or ask that the buyer to come up with the difference in cash if they still want the house, or you could carry a second for the difference. Most buyers won't do this unless there was a burning desire for them to have that particular home. If you then decide that you still want to sell, you can put the house back on the market at the appraised price.
The other option is to challenge the appraiser's findings. This can be very difficult and time consuming. To do this, you will need a copy of the appraisal, not just the summary. The best thing to challenge is the comparable sales the appraiser used. Remember, these are homes that have sold and closed, not those still on the market. Look at these very carefully and then go visit them to see if they are truly comparable to your house. You need to make sure that the appraiser is comparing apples to apples. If there are comps used that are not similar to yours, maybe in a different tract, different and lower quality builder, a builders value priced model, different school district, in the county instead of the city etc. then you have a strong case for an appraisal review. Rather than just going to the lender and saying that the wrong comps were used, you have to go armed with comps that will support your claim of a higher value. To do this, you will need to go to the County Recorder's office and search for homes that are similar to yours which have recorded as sold within the past six months. The more recent solds are the best and most accurate ones to use. When you look at the appraisal report, look carefully to see what adjustments the appraiser made to the comps to compensate for amenities that you do or don't have in your house. Sometimes you might find incorrect allowances made for a/c, pools, spas, new roof, landscaping etc. These all have value but not the same value as the price you paid for them.
After reviewing everything carefully and you can't find any glaring discrepancies in the report, then the best thing to do is accept the findings and move on. If you sold your house using a real estate agent, then there are things that they can help you with, but that's another topic.
Even though licensed appraisers all have to adhere to the same set of guidelines approved by the Appraisal Foundation, there are so many variables involved that the end result can only be described as an opinion of value. This does NOT mean that the appraiser's opinion is not a correct valuation; it just means that there can be more than one opinion that is correct. These differing values are supported by the appraiser's choice of considerations, and the weight given to each of them, which affect the house being appraised. The differences in appraised value can be even more marked if one of the appraisers is from outside the area where the property is located as opposed to the value given by a local appraiser.
What to do. If you had an appraisal done when you priced your home for sale, get in touch with that original appraiser and ask them to do an updated appraisal for you. Tell them that the value is coming in lower than the amount they appraised it for and you need documentation to support your price. You will probably have to pay for this, but the cost should be lower if the original appraisal was completed not too long ago. If the re-appraisal supports your sale price, get in touch with the buyer's lender immediately and present your case for this value to be accepted. If the difference in value is considerable, the lender might insist on a third appraisal and/or an appraisal review.
What if you didn't get an appraisal before you priced your house? Well then, you have a couple of options. Obviously, the first is to get your own appraisal done and hope that it comes back at the price you need and, if it does, then proceed as above. If this second appraisal also comes in lower, then it would appear you have overpriced your house to begin with. You can then either lower your price to the appraised value or ask that the buyer to come up with the difference in cash if they still want the house, or you could carry a second for the difference. Most buyers won't do this unless there was a burning desire for them to have that particular home. If you then decide that you still want to sell, you can put the house back on the market at the appraised price.
The other option is to challenge the appraiser's findings. This can be very difficult and time consuming. To do this, you will need a copy of the appraisal, not just the summary. The best thing to challenge is the comparable sales the appraiser used. Remember, these are homes that have sold and closed, not those still on the market. Look at these very carefully and then go visit them to see if they are truly comparable to your house. You need to make sure that the appraiser is comparing apples to apples. If there are comps used that are not similar to yours, maybe in a different tract, different and lower quality builder, a builders value priced model, different school district, in the county instead of the city etc. then you have a strong case for an appraisal review. Rather than just going to the lender and saying that the wrong comps were used, you have to go armed with comps that will support your claim of a higher value. To do this, you will need to go to the County Recorder's office and search for homes that are similar to yours which have recorded as sold within the past six months. The more recent solds are the best and most accurate ones to use. When you look at the appraisal report, look carefully to see what adjustments the appraiser made to the comps to compensate for amenities that you do or don't have in your house. Sometimes you might find incorrect allowances made for a/c, pools, spas, new roof, landscaping etc. These all have value but not the same value as the price you paid for them.
After reviewing everything carefully and you can't find any glaring discrepancies in the report, then the best thing to do is accept the findings and move on. If you sold your house using a real estate agent, then there are things that they can help you with, but that's another topic.
Thursday, June 7, 2012
Use The Expertise Of Real Estate Agents To Purchase Owner Financed Homes
If you are planning to buy a home in Austin Texas, you do not have to go through the trouble of getting an approved bank loan. You can follow some basic criteria to purchase owner financed homes and purchase your dream home. Look for any area in or around Austin. Austin boasts of great scenery, beautiful homes, recreational parks and museums. People who visit Austin enjoy the admirable climate and may decide to settle in one of the homes there.
What is Owner Financing? Look online for a real estate agency that can fill you in on the details of owner financed homes. They will offer these homes on their website by city or area. They offer listings by price, school district and also different types of waterfront homes, pool homes, condos & Townhouses, Gated Communities or Farm & Ranch Properties. If you prefer to live in a county, you can get the real estate agent to shortlist some homes for you and talk to you about what is owner financing to help you avail of this excellent opportunity to buy properties without getting bank approved loans.
You may be planning to buy a home in Austin. Your trained real estate agent will be able to help you close the deal with owner financing. Licensed realtors have extensive knowledge of how this works and will explain all about owner financing. You will have access to real estate market reports that will help when you are planning a home purchase. They will communicate regularly with you online or on the phone and update you on the latest listings that fit your search criteria.
You will have to sit through extensive negotiations but with your real estate agent beside you, you can confidently strike the deal with the seller, who will offer owner financing at the right rate of interest to help you clinch the deal in your favor. They will handle the paper work that is part of the sale process and help set up finance for the investment. It is therefore important to select a dedicated agent when you purchase properties or a home. Once you finalize on the right agent, you can give them a call and get them to give you expert guidance coupled with quality service.
To qualify for owner financing, you should be able to put down 8% to 10% of the purchase price, Make sure you have the documents of proof to show you have income to support monthly payment that includes all insurance and taxes.
If you are the seller, you should be able to list your requirements in many places to ensure that it stands out. Contact the right real estate agent who can offer you full market value by getting the right client and giving you the payoff that you were waiting to receive. Try to list your home on Austin MLS with Owner Financing to sell your home fast. Your real estate agent with sit with you and go over the entire process and help you come up with the best sale deed.
What is Owner Financing? Look online for a real estate agency that can fill you in on the details of owner financed homes. They will offer these homes on their website by city or area. They offer listings by price, school district and also different types of waterfront homes, pool homes, condos & Townhouses, Gated Communities or Farm & Ranch Properties. If you prefer to live in a county, you can get the real estate agent to shortlist some homes for you and talk to you about what is owner financing to help you avail of this excellent opportunity to buy properties without getting bank approved loans.
You may be planning to buy a home in Austin. Your trained real estate agent will be able to help you close the deal with owner financing. Licensed realtors have extensive knowledge of how this works and will explain all about owner financing. You will have access to real estate market reports that will help when you are planning a home purchase. They will communicate regularly with you online or on the phone and update you on the latest listings that fit your search criteria.
You will have to sit through extensive negotiations but with your real estate agent beside you, you can confidently strike the deal with the seller, who will offer owner financing at the right rate of interest to help you clinch the deal in your favor. They will handle the paper work that is part of the sale process and help set up finance for the investment. It is therefore important to select a dedicated agent when you purchase properties or a home. Once you finalize on the right agent, you can give them a call and get them to give you expert guidance coupled with quality service.
To qualify for owner financing, you should be able to put down 8% to 10% of the purchase price, Make sure you have the documents of proof to show you have income to support monthly payment that includes all insurance and taxes.
If you are the seller, you should be able to list your requirements in many places to ensure that it stands out. Contact the right real estate agent who can offer you full market value by getting the right client and giving you the payoff that you were waiting to receive. Try to list your home on Austin MLS with Owner Financing to sell your home fast. Your real estate agent with sit with you and go over the entire process and help you come up with the best sale deed.
Tuesday, June 5, 2012
What Do Vimax Results Tell? - Vimax Pill Reviews
As you know Vimax is among the most effective male enhancement pills for men to enhance their sexual performance on bed. Vimax results tell that customers gained up to 4 inches in length and 24% in girth, which result in greater self confidence because of better performance. You can buy Vimax pills online via their official website. PillsExpert is the company that developed this product since 2000 and its population has been increasing every day due to the best results and high-end and quality product. The manufacturer of this product claimed that your overall sex drive will improve by taking Vimax pills for 6 months. You will notice the change during the first few weeks but the full effect takes place in sex months.
You can only buy Vimax pills via their official website or by phone. You cannot find the product at stores like Wal-Mark, CVS, etc. If you find the Vimax pills somewhere else, you may end up buying the scam products. There are some male enhancement reviews sites that tell about this product. When you enter your credit card information online, the URL must contains VimaxPills. There are some Vimax scams online but will disappear very soon. If you receive spam e-mails advertising about Vimax male enlargement pills, you know for sure they are fake Vimax pills. Vimax will never advertise their product via such spam e-mails. The company thinks that if the customers like them, they will come back without sending an email.
Vimax results are the increase in the penis size both length and girth, stronger and harder erections as the more blood flow to the penis area, longer lasting in bed, and no more premature ejaculation. It is the solution for men who are quietly suffering about small penis which lead to unsatisfactory performance. In other words, your woman will not attain an orgasm with your too small, soft, or short penis. Your little cannot touch most of the sensitive area of her vaginal, she cannot reach an orgasm. She is not satisfied and as a result, she will be seeing someone else. Thousands of relationships are broken up because of this. So, you need to save your relationship when you still have a chance.
Vimax pills are the best penile enlargement pills that really work. Vimax is all-natural since it is made of 100% herbal ingredients. Each Vimax pill is formulated by the correct blend of herbs to make sure it delivers the maximum results. Studies have shown that many positive testimonials from users who have gained up to 3-4 inches in length and 25% in girth.
It is no doubt that Vimax is the only solution to help you get bigger and stronger erections that will result in better sexual performance and greater self-esteem and self-confidence in bed. It is not only for you but also for your woman. Since its ingredients are all-natural, Vimax side effects are none. With 60 day money back guarantee, you have everything to gain.
You can only buy Vimax pills via their official website or by phone. You cannot find the product at stores like Wal-Mark, CVS, etc. If you find the Vimax pills somewhere else, you may end up buying the scam products. There are some male enhancement reviews sites that tell about this product. When you enter your credit card information online, the URL must contains VimaxPills. There are some Vimax scams online but will disappear very soon. If you receive spam e-mails advertising about Vimax male enlargement pills, you know for sure they are fake Vimax pills. Vimax will never advertise their product via such spam e-mails. The company thinks that if the customers like them, they will come back without sending an email.
Vimax results are the increase in the penis size both length and girth, stronger and harder erections as the more blood flow to the penis area, longer lasting in bed, and no more premature ejaculation. It is the solution for men who are quietly suffering about small penis which lead to unsatisfactory performance. In other words, your woman will not attain an orgasm with your too small, soft, or short penis. Your little cannot touch most of the sensitive area of her vaginal, she cannot reach an orgasm. She is not satisfied and as a result, she will be seeing someone else. Thousands of relationships are broken up because of this. So, you need to save your relationship when you still have a chance.
Vimax pills are the best penile enlargement pills that really work. Vimax is all-natural since it is made of 100% herbal ingredients. Each Vimax pill is formulated by the correct blend of herbs to make sure it delivers the maximum results. Studies have shown that many positive testimonials from users who have gained up to 3-4 inches in length and 25% in girth.
It is no doubt that Vimax is the only solution to help you get bigger and stronger erections that will result in better sexual performance and greater self-esteem and self-confidence in bed. It is not only for you but also for your woman. Since its ingredients are all-natural, Vimax side effects are none. With 60 day money back guarantee, you have everything to gain.
Monday, June 4, 2012
Twitter Will Shut You Down And Put You In Twitter Jail
I think that at one time or another, we have all asked our selves "How do I get more sales volume from my downline?"
After some contemplation on that problem, many marketers realize that if they train their recruits in proper knowledge of the products and services it will motivate previously unmotivated members that will result in more sales. A process sometimes called duplication. ie: Duplicate yourself and you will have more sales and more recruits.
Kinda like milking a cow. You have to squeeze hard enough to get the milk out of the cow, and you have to squeeze enough times to make sure you get all the milk.
So you milk a cow the right way, you teach your members to milk a cow the right way, and the cow still only gives the same amount of milk each day.
So back to our question: "How do I get more Milk?"
The answer is easy, do the difficult tasks. Training, teaching, and duplication is the easy part. You are working with people who are already your members so there is no rejection. They joined you and want you to help them succeed, so they are willing to listen to you.
To get more "Milk"--GET MORE COWS!
That's it, get more members, recruit, take that risk of rejection and grow your organization. New recruits bring in new enthusiasm, new excitement, and start a recruitment snowball effect with your downline.
In short, your time spent with your downline in training and duplication is valuable but too much time in that area is not the best way to grow your organization.
To get more milk, get more cows.
This is not to be confused with:
"THE WATERMELON SYNDROME"
The watermelon syndrome goes like this:
Two guys wanted to make some extra cash so they got this idea. They went down to the local farmers market and bought a truckload of watermelons at each. They found a spot beside the road to set up shop and opened up the tailgate with a sign,
WATERMELONS ONE DOLLAR
Well guess what, they sold every melon in a very short time so they went back to the farmers market and bought another truckload for each. Back to the roadside stop, out with a bigger sign,
ORGANIC WATERMELONS ONE DOLLAR
Again they sold out. Well one of the two says "Wait a minute here, we aren't making much money. We have to change something, we are selling all our melons every time and we should be making more money." The 2nd guy agrees. Then a light goes on over both these guys and they realize what they need to do.
They both jump up and yell in unison
"WE NEED A BIGGER TRUCK!"
OK, OK, I know, I just wanted to give you all something to think about.
Have a great and profitable week!
Do you tweet?
If not you should. Twitter is without a doubt the one of the best social media today for marketing online. Twitter is also brutal about shutting down accounts that abuse the system.
Twitter will allow you to have as many people follow you as you would like, which means you can have your own targeted private market. Of course Twitter has rules about followers, rules about sending messages, and rules about your tweets. If you were unaware of some of these rules, you should review them on Twitter to be sure you are in compliance or you may get your account suspended or even closed.
If you think you would like to use Twitter as a marketing source you should do it, but you should do it the right way. That is to follow all the rules. Seem like a lot of rules to follow? Well it is. But I there is a way you can be sure to follow all the rules and stay in compliance at all times.
What will do this? A Robot, or an App. Robots and Apps are allowed by Twitter so you can make your tweets outside of Twitter itself, they then send the tweet to Twitter through their own server. They are aware of all the rules to be followed and they will tell you in advance if your Tweet is going to violate Twitters rules. That way you make the adjustment before you send the tweet and no harm no foul.
So if you are going to use Twitter to do your promotions, I urge you to make the tweets through a third party that has been approved by Twitter already and stay out of Twitter Jail
So be smart, play by the rules,Tweet Later will keep you on track, and my experience with TweetLater Professional is that it put marketing on AutoPilot. (And kept me out of Jail)
Of course the marketing has to reach a large following so make sure you keep increasing you Followers.
Here are two programs that will help you with making your followers viral:
This one builds followers and also your downlines in 3 other programs at the same time Twitter Secrets
This one is easy just publish one viral tweet! TweeterGetter
Happy Tweeting!
After some contemplation on that problem, many marketers realize that if they train their recruits in proper knowledge of the products and services it will motivate previously unmotivated members that will result in more sales. A process sometimes called duplication. ie: Duplicate yourself and you will have more sales and more recruits.
Kinda like milking a cow. You have to squeeze hard enough to get the milk out of the cow, and you have to squeeze enough times to make sure you get all the milk.
So you milk a cow the right way, you teach your members to milk a cow the right way, and the cow still only gives the same amount of milk each day.
So back to our question: "How do I get more Milk?"
The answer is easy, do the difficult tasks. Training, teaching, and duplication is the easy part. You are working with people who are already your members so there is no rejection. They joined you and want you to help them succeed, so they are willing to listen to you.
To get more "Milk"--GET MORE COWS!
That's it, get more members, recruit, take that risk of rejection and grow your organization. New recruits bring in new enthusiasm, new excitement, and start a recruitment snowball effect with your downline.
In short, your time spent with your downline in training and duplication is valuable but too much time in that area is not the best way to grow your organization.
To get more milk, get more cows.
This is not to be confused with:
"THE WATERMELON SYNDROME"
The watermelon syndrome goes like this:
Two guys wanted to make some extra cash so they got this idea. They went down to the local farmers market and bought a truckload of watermelons at each. They found a spot beside the road to set up shop and opened up the tailgate with a sign,
WATERMELONS ONE DOLLAR
Well guess what, they sold every melon in a very short time so they went back to the farmers market and bought another truckload for each. Back to the roadside stop, out with a bigger sign,
ORGANIC WATERMELONS ONE DOLLAR
Again they sold out. Well one of the two says "Wait a minute here, we aren't making much money. We have to change something, we are selling all our melons every time and we should be making more money." The 2nd guy agrees. Then a light goes on over both these guys and they realize what they need to do.
They both jump up and yell in unison
"WE NEED A BIGGER TRUCK!"
OK, OK, I know, I just wanted to give you all something to think about.
Have a great and profitable week!
Do you tweet?
If not you should. Twitter is without a doubt the one of the best social media today for marketing online. Twitter is also brutal about shutting down accounts that abuse the system.
Twitter will allow you to have as many people follow you as you would like, which means you can have your own targeted private market. Of course Twitter has rules about followers, rules about sending messages, and rules about your tweets. If you were unaware of some of these rules, you should review them on Twitter to be sure you are in compliance or you may get your account suspended or even closed.
If you think you would like to use Twitter as a marketing source you should do it, but you should do it the right way. That is to follow all the rules. Seem like a lot of rules to follow? Well it is. But I there is a way you can be sure to follow all the rules and stay in compliance at all times.
What will do this? A Robot, or an App. Robots and Apps are allowed by Twitter so you can make your tweets outside of Twitter itself, they then send the tweet to Twitter through their own server. They are aware of all the rules to be followed and they will tell you in advance if your Tweet is going to violate Twitters rules. That way you make the adjustment before you send the tweet and no harm no foul.
So if you are going to use Twitter to do your promotions, I urge you to make the tweets through a third party that has been approved by Twitter already and stay out of Twitter Jail
So be smart, play by the rules,Tweet Later will keep you on track, and my experience with TweetLater Professional is that it put marketing on AutoPilot. (And kept me out of Jail)
Of course the marketing has to reach a large following so make sure you keep increasing you Followers.
Here are two programs that will help you with making your followers viral:
This one builds followers and also your downlines in 3 other programs at the same time Twitter Secrets
This one is easy just publish one viral tweet! TweeterGetter
Happy Tweeting!
Sunday, June 3, 2012
Time Value Of Money
The time value of money is the most fundamental concept in all of finance. Having a grasp of this concept will make anyone a savvier consumer of financial products. From buying a home to leasing a car to saving for retirement, each of these financial decisions cannot be made effectively without understanding the time value of money and its trade-offs.
Before getting into the time value of money, let's ask the question: What is finance? Finance is the process of moving money to when and where people need it. To illustrate this simple point, let's consider the process of financing a car purchase.
We need a car now, but we don't currently have the ,000 we need to buy it. We have a stable job with adequate income, but simply don't have enough cash in our bank account to buy a car.
Getting Financed
Instead we go to a bank to ask for a loan. The bank evaluates our credit situation: steady job, little to no debt, pays bills on time. The bank decides we are credit worthy and grants us a loan.
We receive the ,000 that we need and are able to buy our car. We then begin to make monthly payments of principal and interest back to the bank until our ,000 is paid off. We have engaged in a financial transaction.
So what happened here is that we were able to move money that we would be earning in the future into the present so that we could use it to pay for a car. But what happened on the other end of the transaction? Who was it who gave us the money?
The bank receives its money from depositors people who have money currently and want to save it for future expenses. In other words, these are people who want to move money from the present into the future.
By taking deposits and issuing car loans (or other types of loans such as mortgages), banks engineer financial transactions that meet the demands of two types of people: those who need money now and those who will need money in the future.
Going to the Movies
But when we pay back our loan, we don't simply repay the ,000 that we borrowed. We have to repay the ,000 plus interest. Why do we have to pay interest and how do you determine how much interest to pay?
Here's where the time value of money comes into play. A dollar today is not worth the same amount of money as a dollar tomorrow. That is the time value of money in a nutshell.
Let's illustrate this with a quick example. Let's say one friend offer's to let you borrow so that you can go with him to the movies tonight, but you will have to pay him back tomorrow because he will need it to make a purchase the next day. Another friend offers to lend you , but he says you don't have to pay him back until the next weekend because he has plenty of cash.
Neither friend says that they're going to charge you any interest. They just need the back. Which friend would you borrow from? One you will need to pay back tomorrow. The other you will need to pay back a week later.
You would obviously choose the friend that will loan you the for a week, because you have plenty of time to earn dollars over the course of the week to pay him back. What this example says is that for every day that we borrow money and don't have to pay it back, there is value. This value is the time value of money.
How to Price Money
The price that people pay for borrowing money is called interest. How much interest is charged to a particular borrower is determined by three major factors: the supply and demand of money, the credit quality of the borrower and the expense of the financial transaction.
If there are a lot of people who need to borrow money (to make purchases or to start businesses) and fewer people who need to save money, then interest rates are going to be higher. In this case, money is in high demand and it will be more expensive to borrow it.
If there are many people looking to save money and fewer people taking out loans to make purchases or grow businesses, then interest rates will be lower. Demand for money is low. The supply and demand of money is a major factor in determining how much interest to charge a borrower.
If a borrower has a long history of repaying loans, paying bills on time and has a steady income, they are more likely to receive a lower interest rate because they are less risky to lend to. On the other hand, if a borrower has defaulted on a loan in the past or has a shorter credit history, they may have a higher interest rate or may not be able to take out a loan at all because they are riskier to lend to.
Finally, if there is a lot of paperwork involved or a lot of analysis that has to be done in order to make a loan, the interest rate may be higher or a bank may decide to charge an origination fee. An origination fee is a fee charged upfront for originating a loan. Proceeds from an origination fee are used to cover the expenses involved with the origination process.
Time-Traveling Money
As you can see, pulling money forward in time comes at a price. If you need money now, then you must be willing to pay interest for it until you can fully repay it. If you are a saver, on the other hand, and need to push money back to a later date in time before you use it, you can expect to earn interest. That is the time value of money.
Before getting into the time value of money, let's ask the question: What is finance? Finance is the process of moving money to when and where people need it. To illustrate this simple point, let's consider the process of financing a car purchase.
We need a car now, but we don't currently have the ,000 we need to buy it. We have a stable job with adequate income, but simply don't have enough cash in our bank account to buy a car.
Getting Financed
Instead we go to a bank to ask for a loan. The bank evaluates our credit situation: steady job, little to no debt, pays bills on time. The bank decides we are credit worthy and grants us a loan.
We receive the ,000 that we need and are able to buy our car. We then begin to make monthly payments of principal and interest back to the bank until our ,000 is paid off. We have engaged in a financial transaction.
So what happened here is that we were able to move money that we would be earning in the future into the present so that we could use it to pay for a car. But what happened on the other end of the transaction? Who was it who gave us the money?
The bank receives its money from depositors people who have money currently and want to save it for future expenses. In other words, these are people who want to move money from the present into the future.
By taking deposits and issuing car loans (or other types of loans such as mortgages), banks engineer financial transactions that meet the demands of two types of people: those who need money now and those who will need money in the future.
Going to the Movies
But when we pay back our loan, we don't simply repay the ,000 that we borrowed. We have to repay the ,000 plus interest. Why do we have to pay interest and how do you determine how much interest to pay?
Here's where the time value of money comes into play. A dollar today is not worth the same amount of money as a dollar tomorrow. That is the time value of money in a nutshell.
Let's illustrate this with a quick example. Let's say one friend offer's to let you borrow so that you can go with him to the movies tonight, but you will have to pay him back tomorrow because he will need it to make a purchase the next day. Another friend offers to lend you , but he says you don't have to pay him back until the next weekend because he has plenty of cash.
Neither friend says that they're going to charge you any interest. They just need the back. Which friend would you borrow from? One you will need to pay back tomorrow. The other you will need to pay back a week later.
You would obviously choose the friend that will loan you the for a week, because you have plenty of time to earn dollars over the course of the week to pay him back. What this example says is that for every day that we borrow money and don't have to pay it back, there is value. This value is the time value of money.
How to Price Money
The price that people pay for borrowing money is called interest. How much interest is charged to a particular borrower is determined by three major factors: the supply and demand of money, the credit quality of the borrower and the expense of the financial transaction.
If there are a lot of people who need to borrow money (to make purchases or to start businesses) and fewer people who need to save money, then interest rates are going to be higher. In this case, money is in high demand and it will be more expensive to borrow it.
If there are many people looking to save money and fewer people taking out loans to make purchases or grow businesses, then interest rates will be lower. Demand for money is low. The supply and demand of money is a major factor in determining how much interest to charge a borrower.
If a borrower has a long history of repaying loans, paying bills on time and has a steady income, they are more likely to receive a lower interest rate because they are less risky to lend to. On the other hand, if a borrower has defaulted on a loan in the past or has a shorter credit history, they may have a higher interest rate or may not be able to take out a loan at all because they are riskier to lend to.
Finally, if there is a lot of paperwork involved or a lot of analysis that has to be done in order to make a loan, the interest rate may be higher or a bank may decide to charge an origination fee. An origination fee is a fee charged upfront for originating a loan. Proceeds from an origination fee are used to cover the expenses involved with the origination process.
Time-Traveling Money
As you can see, pulling money forward in time comes at a price. If you need money now, then you must be willing to pay interest for it until you can fully repay it. If you are a saver, on the other hand, and need to push money back to a later date in time before you use it, you can expect to earn interest. That is the time value of money.
Friday, June 1, 2012
Vacuum Truck Safety and Oil Field Work!
Among other tasks, one of the most common ones for a vacuum truck takes place in an oil field. This equipment is an indispensable tool for collecting the by-products of oil and gas exploration, such as basic sediment and water. Unlike other liquids, waste that is collected from oil and gas exploration is potentially flammable, so even though the equipment is designed to perform this job, there are necessary precautions that must be implemented in order to avoid this type of serious accident.
Risks Involved
While sediment and water collected from gas and oil production wells may seem like just another mix of waste water, they could contain flammable hydrocarbons that can combust at a high rate and therefore carry a great deal of risk and danger. An analysis conducted by the Chemical Safety and Hazard Investigation Board (CSB) on nine wells showed that eight out of the nine tested had flashpoints below 30 F. According to the Occupational Safety and Health Administration (OSHA), any liquids that have a flashpoint of 100 F are considered to be flammable.
The study regarding the potential risk of loading and unloading the sediments and water waste generated by gas and oil wells began when an accident occurred at an oilfield waste disposal complex on January 13, 2003, in Rosharon, Texas, just outside of Houston. A couple of vacuum trucks were in the process of unloading a mixture of sediment and water that had been collected from oil field production wells. The two trucks were parked 16 feet from each other and the drivers were given instructions to unload and rinse out the vehicles. After this was done, the two drivers proceeded to the driver's shed for their papers to be processed. After a few minutes, a huge explosion occurred inside the waste disposal facility killing three people and causing severe burns to three others. The explosion also caused a great deal of damage to the facility.
An investigation conducted by the CSB and OSHA revealed that the condensation inside the tanks caused the explosion and the source of ignition was the truck engines, which were still running. These findings were backed by eye witnesses of the incident, as well as other evidence that was found at the scene.
What Went Wrong
Many factors contributed to this explosion occurring. The shipper failed to identify the flammability of the waste being disposed. The transportation company did not request the Material Safety Data Sheet (MSDS), which could have provided information about the hazards of the material being transported. The waste collection facility also did not have an effective system of determining the hazards of handling and unloading water and sediments from oil and gas wells.
How to Be Safe
Before handling flammable waste liquids including basic sediment and water, an operator must first undergo training for: hazard communication; flammable and combustible liquids; hazardous waste operations and emergency responses; air contaminants; and the proper classification and manifestation of flammable liquids. Below is a list of other precautions the drivers could have taken to save the lives of those affected by the blast.
* Request MSDS - Operators must always request an MSDS, and refer to it to determine the hazards associated with the material before transporting it.
* Be Aware of Hazards - Operators should be aware of any potential source of ignition, including the engine.
* Don't Mix Liquids - Different types of liquids should not be mixed to avoid any possible reaction.
* Test Atmosphere - Atmospheric testing should be done on-site to determine if any hydrocarbon concentration has reached the flammable range.
* Spark Control - Bonding and grounding should be implemented to eliminate any potential source of sparks.
Every vacuum truck is designed to be a safe means of transporting various types of waste material, including those that are hazardous and flammable such as those found in oil field work. Incidents such as the one mentioned above may still occur when operators are negligent in handling their equipment. The information provided above fill hopefully furnish the necessary knowledge about the hazards of handling oil and gas well waste products and how to avoid them be careful!
Risks Involved
While sediment and water collected from gas and oil production wells may seem like just another mix of waste water, they could contain flammable hydrocarbons that can combust at a high rate and therefore carry a great deal of risk and danger. An analysis conducted by the Chemical Safety and Hazard Investigation Board (CSB) on nine wells showed that eight out of the nine tested had flashpoints below 30 F. According to the Occupational Safety and Health Administration (OSHA), any liquids that have a flashpoint of 100 F are considered to be flammable.
The study regarding the potential risk of loading and unloading the sediments and water waste generated by gas and oil wells began when an accident occurred at an oilfield waste disposal complex on January 13, 2003, in Rosharon, Texas, just outside of Houston. A couple of vacuum trucks were in the process of unloading a mixture of sediment and water that had been collected from oil field production wells. The two trucks were parked 16 feet from each other and the drivers were given instructions to unload and rinse out the vehicles. After this was done, the two drivers proceeded to the driver's shed for their papers to be processed. After a few minutes, a huge explosion occurred inside the waste disposal facility killing three people and causing severe burns to three others. The explosion also caused a great deal of damage to the facility.
An investigation conducted by the CSB and OSHA revealed that the condensation inside the tanks caused the explosion and the source of ignition was the truck engines, which were still running. These findings were backed by eye witnesses of the incident, as well as other evidence that was found at the scene.
What Went Wrong
Many factors contributed to this explosion occurring. The shipper failed to identify the flammability of the waste being disposed. The transportation company did not request the Material Safety Data Sheet (MSDS), which could have provided information about the hazards of the material being transported. The waste collection facility also did not have an effective system of determining the hazards of handling and unloading water and sediments from oil and gas wells.
How to Be Safe
Before handling flammable waste liquids including basic sediment and water, an operator must first undergo training for: hazard communication; flammable and combustible liquids; hazardous waste operations and emergency responses; air contaminants; and the proper classification and manifestation of flammable liquids. Below is a list of other precautions the drivers could have taken to save the lives of those affected by the blast.
* Request MSDS - Operators must always request an MSDS, and refer to it to determine the hazards associated with the material before transporting it.
* Be Aware of Hazards - Operators should be aware of any potential source of ignition, including the engine.
* Don't Mix Liquids - Different types of liquids should not be mixed to avoid any possible reaction.
* Test Atmosphere - Atmospheric testing should be done on-site to determine if any hydrocarbon concentration has reached the flammable range.
* Spark Control - Bonding and grounding should be implemented to eliminate any potential source of sparks.
Every vacuum truck is designed to be a safe means of transporting various types of waste material, including those that are hazardous and flammable such as those found in oil field work. Incidents such as the one mentioned above may still occur when operators are negligent in handling their equipment. The information provided above fill hopefully furnish the necessary knowledge about the hazards of handling oil and gas well waste products and how to avoid them be careful!
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