How to Get a Job in Finance

How to Get a Job in Finance

Sure, the financial world is in disarray. Yes, there is a recession. Of course, loads of banks have failed. But…what else can you do with your finance/business degree?

I’m in the same boat as you. I spent the past 5 years of my life studying finance/math, and now I’m faced with the problem of trying to get a job in this field during one of the worst recessions in the past 20 years. It’s incredibly unlucky, but you have to roll with the punches. What I want to get through to you, dear reader, is that it is still possible to get a great job in finance.

Personal motivation aside, you also need incredible perseverance, organization, and confidence. Got all those? Good, let’s get started.

  1. Figure out what kind of job you want.

Finance is a ridiculously wide field. There’s jobs for all types of personalities, people, and career goals. If you don’t like being in the pressure and spotlight too much, look towards a backoffice job. If you like excitement, try trading. Like being a dealmaker? Corporate banking is the place for you. My point is, there’s something for everyone here.

You should determine what kind of role best fits your personality. Do research into what that job involves, and read about other people’s experiences. Incidentally, you can read about my experience in Corporate Investment Banking here. The key is, if it doesn’t fit your personality, chances are you’re going to hate it, and you’ll have wasted all that effort to get the job for nothing.

  1. Find out what companies offer those types of jobs.

In most cases, the bulge bracket banks will have something for you. These include major companies such as Bank of America, UBS, Deutsche Bank, and Citigroup. Look on these companies’ websites in the Careers section to see if they offer any open positions. Don’t be afraid to look at postings that aren’t exactly what you want, because who knows, they might actually interest you.

The key here is to expand your findings as much as possible. Don’t limit yourself to just the well known companies. As you continue your research, you’ll turn up lots of smaller boutique firms that offer the same positions. Add these to your list. Also helpful are job websites. A search on Google for “finance jobs” will turn up a whole retinue of sites advertising jobs. I also like to read the financial newspapers to see what companies get mentioned so I can do more research on them.

Info sessions and career fairs will also be massively helpful. Dress nicely, have plenty of resumes handy, and chat with the people there. Who knows, you might be the one lucky person they call back.

One caveat is that you must also realize your own limitations. If certain jobs require specific and advanced knowledge/experience, you may not have enough time to acquire it. In that case, look towards another avenue, or start a notch “below” that job.

  1. Prepare for applications.

At this point, you should have a very large list of places to apply for. Most of these companies will have websites or email addresses where you can submit your resume, and most likely, you’ll have to register your profile on their websites. I recommend that you start an Excel sheet to keep track of things. Your (very necessary) Excel skills should come in handy here.

On my sheet, I have the following headings:

Company name    Website: hyperlink to the URL for quick access    Account information: for the companies that require a registration. It’s much easier to keep track of your login info and passwords like this    Application deadline    Application submitted: a Yes/No checkbox    Cover Letter: hyperlink to the cover letter I submitted for that specific job    Resume: hyperlink to the resume I submitted for that specific job    Comments: any special notes I have about that job

It may seem like a lot of work, but keeping organized will help you in the long run as applications begin overflowing. Doing this will also allow you to sort by application deadlines, so you always know which ones to prioritize.

  1. Start applying for jobs.

Obviously, this is the hardest step. I say it’s harder than the interviews and all of the prep, because there’s just so much of it, and most of it leads nowhere. Don’t let this get you down. Prepare for the worst, you may get no responses. Understand that there are thousands of others competing for the same jobs, and no matter how much of a superstar you were in college, there are hundreds of other superstars out there too. However, you have to want this more badly. You have to persevere. You have to wade through the crap, and come out clean on the other side!

Hopefully, you’re now adequately gung-ho. Good.

I won’t get into the specifics of resume writing. There’s thousands of websites outside for that. I will make a few points about finance resumes though:

Do not make your resume longer than 2 pages. 1 page is preferable.    Write things in finance language, try to use keywords you know are applicable in that field. However, don’t overdo it to the point where it’s obvious you’re just keywording    Don’t add in jobs that are irrelevant. A lot of resume websites I’ve been to say to add in any experience you have, but I don’t agree with this. I feel that if you add “Waitress” to your resume for a trading job, it will detract from your chances    If you have no work experience, play up your school knowledge. Talk about financial techniques you know and have applied in classes, talk about personal experience in your trading account, talk about how you frequently analyze companies in your spare time.    Tailor your resume to each job!

  1. Going to an interview.

Wow, great job! You’ve got a response! At this stage, you’ve got your foot in the door, and all you need now is to nudge it open. Again, plenty of specific finance interview advice is out there. For example, for banking interviews, you need to brush up your accounting and valuation knowledge. Google is your friend.

All I can say now is that it’s entirely up to you. How much you prepare, your actual knowledge, and your confidence will be what gets you the job. In finance interviews, your interviewers will have pretty much decided whether they want to give you the job within the first 10 minutes. If you make a bad first impression, it is incredibly difficult to overcome.

Some general tips:

Dress the part: Very neat, professional    Prepare extensively. Study up on your resume, memorize that thing! Study the company (I recommend reading their most recent annual report – doing so will put you above 95% of the applicants), study the industry, read the news (you should have been doing this all along). Also prepare some stock answers for stock questions, like “Tell us about yourself” or “Why have you chosen this field?” I personally think there’s no point going too creative in these answers. Sure it might be sort of interesting, but your time is better spent impressing them with your knowledge.    Be confident. You want to be enthusiastic, but keep cool at the same time. Act as if you belong there already. Be like one of them, match the level of your interviewers but watch out. If they’re serious and subdued, don’t go overboard with the laughing. If they’re laughing a lot, laugh too, but not too much. All in all, you want them to feel comfortable and feel like they’d want to work with you. These interviews are all about “fit”.    Send a short thank you note after the interview. Chances are they’ll have talked about it already and have chosen or rejected you, but being polite never hurts.    Do not hound the people afterwards, nobody likes a stalker.

And that’s it. The steps are simple, but can become incredibly grueling. The process is hard, but can be extremely rewarding. Whatever motivates you, whether it be the fame, respect, or money, keep it in mind and let it drive you to keep going. With enough perseverance, you too can find a job in finance!

Housing Finance Explained

Housing Finance Explained

Don’t we all know that there are costs that come with owning a house! Especially, ongoing costs, that have paramount safety implications as well being able to ensure a reasonable level of comfort.

Let’s start with utilities. Most people in developed countries have never had to to walk miles to fetch buckets of water to bring back home (or should that be buy massive bottles of water, from retail stores like Lidl?). As wonderful a thing as water on tap is, it can only come at a price. When you move home, the first thing you need to do is ascertain the contact of an approved plumber as well as the water company (who are, of course, responsible, for keeping that water uncontaminated etc.!).

In this article’s country of origin, it seems to me that people prefer radiators over open fires with chimneys. Of course, in the modern day and age we are always comforted by the idea that there are alternatives to open combustion indoors; dangerous! Know whether your heating comes from gas or from electricity, keep your gas man or electrician on standby. The only real ones worth considering are registered ones (CIPHE / CORGI / APHC in the UK) who don’t try to fob you off with hidden costs and who do not always disappoint by not having the right equipment.

As far as electricity goes, there are usually additional charges involved if you intend to have a PC with Internet access – but this should be discussed with the individual retailer.

Everyone goes on about mobile phones these days but that does not mean that they have ceased to take their land lines and answering machines for granted. Always allow consideration for calls costs – but would you know whom to turn to if you got a bad reception or something like that? Who’s your phone engineer?

Other than that, homes tend to be the best source of work for DIY contractors – painters / decorators, plasterers, aerial engineers etc. etc.

Another aspect of the broad topic of housing finance is the housing market. Your real estate agent should help to provide you with good suggestions when you are seeking to avail yourself of a new domicile (but consider mortgages issues). Of course, banks are always willing to discuss the housing deals that they have on offer (but you should always read everything – including the small print – before you sign anything).

Should You Refinance Your Mortgage?

You Refinance Your Mortgage?

If you own a home, you have probably been inundated by ads offering you a lower interest rate on your mortgage. Sometimes, these new rates are so low as to be unbelievable. However, before you start negotiating with the lender, keep the following facts in mind:

Closing Costs. Even if you save a bundle on your mortgage interest rate, you’ll never feel as if you did because there are always closing costs associated with a refinance. Various fees are added at closing, such as for recording, title, processing, and underwriting. You will need to have your house appraised, and that also costs money. In summary, you will end up paying at least $1,000-$2,000 for closing costs. If your house is worth at least $200,000, don’t expect your closing costs to be less than $2,000.

Points. Points are defined as a certain percentage of the principal that you pay immediately to the loan agency in order to secure a lower interest loan. Usually, 1 point is equal to 1% of the loaned principal- in other words, one point on a house appraised at $185,000 will be $1,850. Oftentimes, loan agencies advertise mortgages with very low interest rates because there are points involved.

Whether you pay for points is up to you. However, if you do, consider whether the payment will be worth it for the time that you plan to own your home. For example, if you refinance a home assessed at $185,000 and pay 2 points for a 4.5% instead of a 5.5% interest rate mortgage, you will have spent an upfront $3,700 in order to save $113/month. This is a good deal only if you spend the next 2 years and 9 months owning your refinanced home. Otherwise, you will lose money upon the sale or future refinance of your home. Incidentally, LendingTree provides the following refinance points calculator, which is quite useful for calculating points and the time needed to recoup their costs.

Time of home ownership. According to the U.S. Department of Housing and Urban Development, Americans own their homes for an average of 6 years. You may own your home for a much longer (or shorter) period of time. However, it is imperative that you think about how long you plan to stay where you are. If you foresee a future job change, a move across the country, etc., then it may be best to not refinance your mortgage.

Bargaining is OK. Finally, don’t forget that, when playing the refinancing game, you are allowed to haggle for and find the best price on your refinance. After all, you’ve already proven that you can pay off a loan. The loan agency that takes on your current mortgage is not doing you any favors, since it will be gaining thousands of dollars in interest from you over the next 10, 15, or 30 years. If time is on your side, negotiate for a no points or even a no closing costs refinance plan. While some loan agencies will balk at this idea, many others will meet your demands, especially if your credit history is good to excellent. It never hurts to try.

 

$11.5 Million Budget Plan Proposed

Million Budget Plan Proposed

CHESTER – About twenty residents attended a public hearing where Board of Finance and Board of Education officials discussed details of a proposed $11.5 million budget.

Town government expenditures made up $3.61 million or 31.39 percent while capital expenditures cost $118,500, or 1.03 percent.

Town expenditures are $125,557, or 3.36 percent, less than last year while capital expenditures are $30,688, or 20.57 percent, less than last year.

Over half of the 2007/08 budget is allocated for education with Chester Elementary School receiving $3.91 million or 34 percent of the budget while the town’s share of the Region 4 budget is $3.86 million, which is 33.58 percent of the budget.

Chester Elementary School spending increased by $185,930, or 4.99 percent, over last year while Region 4 spending increased by $350,460, or 9.98 percent, over last year.

“The increase in participation in Region 4 hit us 10 percent even though Region 4 spending only increased by five percent. We expected the increase,” Chester First Selectman Tom Marsh said.

Expenses of the Region 4 budget is divided among the three participating towns, which include Chester, Deep River, and Essex, based on average daily enrollment.

Kim Caron, Superintendent of Region 4 Schools, said the biggest increases that occurred in the Region 4 budget came as the result of a new sixth grade teacher, teacher and administration salaries, and a new union contract.

Despite increased spending in education, Board of Finance member Kim Just said Chester benefited from a 1.9 percent increase in the grand list over the past year which generated $215,000 of revenue.

The board allocated $253,837 from the unallocated fund balance; Just said, meaning the mill rate would only need to be increased by 0.75 mills.

Currently, Chester’s mill rate is 22.37 mills and the increase of 0.75 mills would mean a total of 23.12 mills, or $23.12 in taxes for each $1,000 of assessed property value.

For a resident who has a home assessed at $100,000, the mill rate increase would mean an additional $75 in annual taxes.

This would still allow the fund balance to have $1.33 million on June 30, 2008, which is the last day of the 2007-08 fiscal year.

Borrowing money from that fund to offset tax increases is a “practice we are trying to move away from,” Just said.

One year that the town relied heavily on using savings to offset tax increases was the 2004/05 fiscal year when approximately $875,000 was allocated.

Marsh warned residents that proposed state budgets from both Governor Rell and the Connecticut State Legislature call for less state aid to towns like Chester.

The reduction in state aid comes at a time when the state expects to receive additional revenue if specific proposals are approved such as creating a sales tax on all clothing items and items bought by Connecticut residents over the Internet, Marsh said.

 

See What Your Neighbor is Trading with Social Finance

Trading with Social Finance

Not too long ago, the Internet observed the emergence of a new generation of websites – social networking. Those like UK-based Bebo, US home-grown FaceBook and MySpace (acquired by News Corporation for more than US$580 million) have been the pioneers to lead this genre on the Internet. It’s been a hot topic, and it’s hardly impossible to read about news on social networking here and social networking there. More recently, a new league of niche social networking websites have cropped up, tapping into all fields from sports to politics to the world of stocks and finance.

With the robust US economy combined with the strong market performance, many entrepreneurs saw the space of financial social networking untapped. According to Alexa.com, as early as March 2006 financial networking sites like Bullpoo.com, Feelingbullish.com and Stockpickr.com were born. This has not gone unnoticed. On the Wall Street Journal, Mike Gross, a 24-year-old Toronto resident discovered Bullpoo.com in 2006, and says he started actively using the site to get investment ideas about stocks and sectors — such as Asian stocks — from other members.

These websites help like-minded investors interact with each other and share investment ideas, from writing personal blogs to opening up a transparent portfolio. Users are then ranked by other community members based largely on their contributed content and accuracy of stock picks and forecasts.

It’s a large space that has been attracting a lot of media attention in recent months. With an average of a US$1.14 million investment portfolio, and over 70% of a 78 million baby booming market browsing the internet for personal finance and investing sites (according to Kiplinger’s Personal Finance Retirement Report 2005), its no wonder that many major media companies and brokerages are getting interested in entering this space.

Zecco.com, a US-based online brokerage launched in October 2006 offers commission-free trading, saying that it leverages its social community to generate advertising revenue to support its free services. Elsewhere, Reuters announced that it too is also planning to launch its own version of MySpace this year, as published on the Guardian Unlimited. But critics like Charlene Li, an analyst at Forrester Research Inc., say that risk of fraud is high from discussing your financial affairs with online strangers. What’s more is that the usefulness of the sites depends in large part on the size of the communities. And so, while having a large audience, the sheer size and diversity of services of companies like Zecco.com and Reuters might make it difficult to manage the focused communities they want to create. On the other hand, startups like Bullpoo.com and Feelingbullish.com may be nimble enough to stay in touch with their communities, and avoid the risks that larger companies encounter. The question of who will take over this rapidly expanding market is still up in the air. Will the small companies, which lack experience, funding, and exposure, be able to stand up to the media and financial juggernauts? Perhaps a successful middle ground lies in the combination of their strengths: the focus and creative flexibility of the startups with the resources and expertise of the corporations.

The web has been changing the way we exchange information in revolutionary ways, and challenged the traditional mindsets of the media and the way we use it. Who would have thought that the most comprehensive encyclopedia is managed by anybody and everybody who wants to write something? Yet Wikipedia has proven that a self managed community can be successful in administering such a complex information source. Can the same apply for social finance? Is it truly dangerous as some analysts portend?

Finance has always been a conventional field. Perhaps it’s time it explored this new territory. I’ve enjoyed trading actively on my virtual portfolio, so I’ve tried it, and I’ve liked it.

Discussing Finances with Grown Kids Who Live at Home

Discussing Finances

With the economy as it is, it is more and more common for young people to stay at home with the parents longer or to return home after being out on their own for a while. In addition to the negotiations that need to take place over privacy, responsibility, chores, etc. discussing finances can be a huge challenge. Here are some tips for talking about finances and discussing money and work with adult children who are living at home:

Your personal values will dictate whether you want to charge grown children rent, or ask them to contribute to the groceries, utilities or other household expenses while they are living at home. Some parents feel it is important for kids living at home to contribute while others see their role as supporter and do not make any requests. Once you decide how you feel and what your belief system is, it is important to also consider what is best for the grown children. Is it better for them to contribute? Could they be asked to pay for any additional expenses above and beyond the normal household expenses? Whatever you decide, the first step is to become clear in your thinking before sitting down with your child.

Prepare an adjusted budget that you can share as part of the discussion. Many parents would rather just pay for things than to discuss finances with their children (even if they are adults.) If you are going to have the discussion, however, be prepared and have the figures written out so you can stay focused on the finances and not speak in vagaries.

Try to keep the emotions and past out of the discussion. Just because a grown child was financially irresponsible as a youth does not mean that they will be that way forever. In fact, this might be a “second chance” for you to help an adult child develop financial management and responsibility. Stay in the present and try to talk about finances as two adults-not as parent and child. Stay focused on keeping your relationship separate from discussions about money.

Set goals and limits on the financial changes. If the ultimate goal is for the adult child to move back out on his or her own, design your financial arrangement to facilitate that and discuss the steps it is going to take. If the young person needs to save for a housing deposit or pay off debts-make this a priority and develop a plan together for how it can be accomplished. Again, keep emotions out of it and focus on the financial realities. Decide how flexible you can be and set deadlines for when payments will be made and stick to them. If you can be clear and concise from the beginning, it may make the living together run smoothly.

 

Six Radical Ways to Save Money

Six Radical Ways to Save Money

Let’s start with a confession: I have never been cool. I don’t ever think back on my glory days in the club scene. Photos of me from nearly any period of my life reveal me to be hopelessly out-of-touch with all things fashionable. It’s not because I’m not in my twenties anymore. It’s not because I’m a mom. It’s because I’m me.

But every once in a very long while something spectacular happens: fashion comes to me. I stumble upon a style that is, apparently, very “with it.” Such is the case with my radical frugality. I came to it out of necessity, years before this economic downturn. I got looks of pity from friends and family for several years, but now I get more people asking me for advice as they too are forced to find more ways to cut back.

If you’ve experienced a “budget reduction” and are looking for ways to cut back, here are my best ideas. I’ve lived or am currently living every one of them.

  1. Take stock of what’s important to you. Do not skip this step! Take the time to set goals for yourself and imagine what you would like your life to look like. Most of us say that money can’t buy happiness, but we don’t live that way. Looking to fill a void is the fastest way to flush money down the drain. Think of Michael Jackson or Britney Spears – no amount of money can make you a happy person. Find fulfillment in your life outside of status and vacations.
  2. Sell big things. Cars, furniture, boats, ATV’s, whatever you have. Most people can picture doing this when “things get really bad,” but the problem is that their alarm goes off too late. Instead of getting worried when they dip into their emergency fund (or being worried that they don’t have an emergency fund!), they start to worry when their lines of credit dry up. At that point there’s not nearly as much you can do. So get desperate sooner. Do you really need two cars?
  3. Kill your TV. My husband and I stopped all television service to our apartment three years ago and we really haven’t missed it. It’s a huge, ongoing expense, but the worst part is the advertising. We are blissfully ignorant of the latest tech gadgets, the best-looking kitchens in America, and the places people are taking exotic vacations. Lead yourself not into temptation.
  4. Eat in and cook from scratch. It’s insane how much money a person can spend on eating out and/or buying expensive prepared foods. I was not a big cook, but I discovered that making my own food is not as hard and doesn’t take as long as I thought. Meal planning is a crucial component to making this one work. Another great idea in this category would be to make your own cleaning supplies. A simple internet search will yield countless recipes for all kinds of great, nontoxic cleaners and detergents.
  5. Keep track. Of everything. Write down your financial goals. Make a written budget every month and stick to it, make a poster, whatever it takes.
  6. Use cash. Cash helps us all stay out of denial. When we use plastic, in the form of credit or debit cards, we lose touch with the most basic rule of money: money is finite. We only have so much of it. Cash is also the easiest way to stick with your budget — put it in envelopes according to category and when it’s gone, it’s gone. Very simple.

Above all, I’ve learned that saving money is a mindset. There are a thousand methods but all of them start with a genuine desire to change your situation. If you’re still looking for ways to save a lot of money without making a dent in your lifestyle, you won’t get far. But if you stop looking to your finances to find fulfillment, you’re on the right track.

Home Business Ideas for Seniors

Home Business Ideas for Seniors

A small home business can provide extra spending money or finances for living expenses. If you are a senior thinking of starting a business, here are ideas and options to consider.

Internet Home Business Advantages

Selling a product or offering a service online differs in several important ways from operating a local business. One of the biggest advantages of an online home business may be its market potential. With the Internet, you can find needed supplies or merchandise for your business, and sell to customers worldwide.

This is especially valuable if you are interested in marketing a very specialized items or service. Unusual and unique products and services will probably appeal to someone somewhere – via the Internet, but may be impossible to sell locally.

Another big advantage of an online small business is its flexibility. With the Internet, you can pretty much work on building your business according to your own preferences and time schedule. You can even close up “shop” for days, weeks, or even months at a time and not worry about the pool of potential customers drying up.

Possible Internet Home Businesses

Seniors, more than the general population may excel at certain types of online businesses. Some possibilities are:

Past work experience Services

If you’ve spent many years perfecting your skills in a subject or field, consider selling your expertise online. Advertise your extensive background and charge a little higher than the norm for your practical knowledge. Customers appreciate finding someone who really “knows their stuff”, and your business should prosper.

Senior-related Products or Services

Because of your own experiences, you are more likely to know what other seniors might want or need. Products for retired and senior citizens you might consider selling include knowledge (articles and books), items relating to entertainment, travel, lifestyle, nutrition, and health. An Internet business could also provide any services that could be delivered or arranged electronically and would fulfill the needs and desires of seniors.

Local Home Business Advantages

If you would rather spend your time involved in business activities that do not involve the computer, a local home business might be the ticket. One large advantage is an opportunity to socialize. A big part of many home-based small businesses is some or a great deal of interaction and even socializing with clients and customers.

You can also build a local business that is done mostly from home with very little interaction with others. Or even none – through arrangements with other marketers. Possible local home businesses for seniors to consider include:

Antique and collectible Items

If you enjoy shopping at garage and estate sales, thrift stores etc., you might do very well at dealing in used, old, and vintage things. Depending on your preferences, you can sell at flea markets, collectibles shows, on consignment in the shops of others, or even open your own store.

Craft and Holiday Items

Making and selling crafts or holiday items of any kind is a possibility for seniors who love the work. Selling options include craft or holiday fairs and shows, on consignment in various shops, or through you own store.

Outdoors or Indoors Services

Any type of work geared towards the needs of local resident seniors will probably do well. Choose to offer something that your research shows is in short supply in the area, and that you enjoy and do well. Or choose to provide skills to the general population of your area and advertise your considerable background. Providing professional services of all kinds should work well also, if the number of competing providers is limited where you live.

 

Finance Your Mortgage or Pay Off Credit Cards

Pay Off Credit Cards

Are you worried about how you are going to survive financially? Well, you’re not alone. The economy is in bad shape. Incomes have dropped by 10% from what they were last year. With the rising cost of utilities, food, gas and other necessary living expenses, many people are running out of cash long before their next paycheck.

The economic crisis has not bottomed out and is not expected to until sometime in 2010. Financial advisers are suggesting people tighten their belts a little tighter by adopting a budget and sticking to it. Cut out all unnecessary expenses, pay off credit cards and keep one or two credit cards with the lowest rate and start a savings account. It’s easy to say but hard to do.

Paying off huge credit cards balances and keeping the mortgage on the house current is a struggle for most Americans today. But when you’ve done all you can do and bank loans have all but dried up, here are a few sources of cash you might try:

Virgin Money

Virgin Money has two types of loan programs. Social Lending which formalizes loans between family and friends and Traditional Lending, you borrow from Virgin Money.

Social Lending

Let’s say you need extra money to pay off credit cards, to fix the car or for a down payment on a new home and you think mom or dad might help. Relatives or friends would probably feel more comfortable loaning you money if the loan was formalized and handled by a third party. Virgin Money negotiates the terms and repayment schedule. The interest rates can be lower and the terms more flexible than a traditional bank.

Traditional Lending

Maybe you are trying to sell your home and can’t find any bank approved buyers. Virgin Money offers FHA, fixed and adjustable rate mortgages. Get the information you need from Virgin Money.

Lending Club

Reader’s Digest lists lendingclub.com as a possible source of cash. They offer low rates and fixed monthly payments on personal loans, auto, debt consolidation, student and home improvement. If your credit is good, you can get a lower interest rate than you would receive from more traditional sources.

Lending Club has been written up by CBS News, The Wall Street Journal, The New York Times, ABC News and quite a few more. Read the news coverage and see what you think.

Since traditional loans are harder to get and social lending clubs have become a viable source of loans, the Securities and Exchange Commission is busy trying to form regulations and approve each club. Two clubs awaiting approval are Loanio.com and Prosper.com. They have suspended operations and hope to reopen soon. At the rate the economy is crashing, let’s hope it’s soon!

Loanio.com and prosper.com are for riskier loans. They facilitate loans between borrowers and lenders. Be sure to gather as much information as you can and understand the risks and your rights before you borrow or lend.

Private Student Loans

The demand for student loans has increased while the availability of loans has decreased. GreenNote is a social lending club for student loans and they provide fixed rates and no co-signer or citizenship is needed. Relatives, friends or anyone who wants to invest in you, can fund your education. GreenNote formalizes the loan and handles all the details, including repayment. Read news and press releases for GreenNote.

Be careful, these loans are real and need to be paid back. Missed or late payments will be reported to credit bureaus.

How to Get Started in Owning a Franchise

Get Started in Owning a Franchise

There’s lots of advantages to owning a franchise. You can operate under an established name, sell products people already want, have a pre-determined pricing structure, and it can be a valuable opportunity. Some may be more beneficial than others, and you’ll have to do your homework though! Is a franchise investment for you?

While it’s still no walk in the park; a franchise could be saving grace for anybody who wants some of the ‘work’ that owning a business involves done for them. This bonus comes at a heft cost, and there are lots of pros, and cons to the situation. Let’s examine each of them.

The number one pro to owning a franchise is of course operating under an established name. Let’s say somebody is driving down the road, and they see two resturants – Burger King, and Joe’s burger shack. People are more likely to stop at the place that they are familiar with (Unless of course they’re an avid BK hater).

There’s always the one extremist who’s totally against Mc Donalds, KFC, or any other chain. Whether it’s because they’re funded by the Church of Satan, they way they supposedly treat employees, ect. The people who appreciate a chain store more than outweighs those that do not; else this model would not exist.

You also can take into account that all your product sourcing, pricing, and materials are through the company. This means that you won’t have to barter with dealers, and go through the hassle of making sure you can turn a profit for the price you charge. The only problem with that is that the corporation can charge you anything that they want. You’re only allowed to by cups from them, buy computers from them, buy fries from them, ect.

There’s also a certain code of ethics you’re not allowed to change. Typically regarding wages, benefits, practices, how employees are handled, ect. For example somebody I know used to be a manager of Papa John’s. Per their chain’s rules they are not allowed to hire any drivers with traffic violations – No exceptions. Things like this will be beyond your control with a franchise; wherein if you owned your own business the law is made by you.

There can be other rules involved with you even purchasing a franchise though too. For example Chik Fil-a manually approves buyers, and if they deem that where you wish to put the franchise is unacceptable they’ll deny your claim. The fees for operating different entities varies a lot as well. It can be anywhere from $70k to upwards of $1 million dollars. The price tag is not for the faint of heart, but if you’ve got the cash it can be worthwhile to you.

Some people own several franchises whether they be the same store or different businesses, and make a pretty penny doing it. A franchise owner does not always manage the franchise either; meaning they don’t come to the store everyday, and do the dirty work. Many simply bank roll the operation, and collect the rewards – opting to pay somebody else to over see operations for them.

You also will not have to deal with the hassle of supplying benefits to your employees. Since you are owning a franchise any of that goes through the actual corporation, and they can take part directly. This goes for training as well – Your store will most likely recieve pre-made materials for your future employees.

If you decide you want out of this particular franchise you’re free to sell it at anytime most cases to another individual. Our local Dominoes pizza store trades owners probably a couple times a year – Mostly because they find out that particular chain has a very low profit margin, and expensive equipment.

Enterpeneur.com recently released their list of the top franchise opportunities for 2009! Start up costs in parenthesis.

  1. Subway ($78k -$238k)

Subway is a very popular sub chain. Growing in name for value, and health reasons. Personally I detest their food, but considering the low start up costs, and big profit potential I’d probably still own one of those if I were to go a franchise route.

  1. Mc Donalds ($950k – $1.8M)

The biggest burger chain in the world of course commands a high price. No doubt you’re paying for their big name, and not equipment charges. While this is pretty much guaranteed to turn a profit – It might be a while before you recoup your expenses on this one.

  1. Liberty Tax Service ( $53k – $66k)

Very cheap start up costs, but low profit potential in my opinion. More, and more people are getting their taxes done online, and with software these days (including me). It’s not hard to do them yourself, and I don’t think it will be much longer before people refuse to pay $70 to pay money to the government. There’s also a limited time frame to do business so the earnings seem small to me – Not something people would want every week like fast food.

  1. Sonic Drive-Thru ($1.2M – $3.2 M)

This franchise seems rather expensive considering their popularity, and their equipment costs. This resturant pretty much consists of a kitchen, and outside dining room!

  1. Intercontinental Hotels Groups (Varies)

In the right area a hotel could be a very good investment. I live in what may be the vacation capital of the United States – Everyone wants to come to sunny Florida, and they need a place to stay! The pricing is unlisted, and probably varies by location, and building size.

  1. Ace Hardware ($243k – $1m)

Ace Hardware is of course a hardware store – which again looks overpriced to me. They pale in comparison to competitiors like Home Depot, and Lowes who have a much bigger selection. The store layouts are basic, and unimpressive. I don’t see the huge profit potential from something so pricey, and yet so small.

  1. Pizza Hut ($638k – 2.9 M)

A popular pizza chain. The have the advantage sometimes of being both a sit down resturant, and a delivery service. Similar stores like dominoes, Hungry Howies, and Papa John’s do not offer a dining room. Again, a tad pricey for their offering I think. Perhaps to be more exclusive, but they may offer better profit margins than competitors.

  1. UPS Store ($171k – $280k)

This one looks like an opportunity to me – Owning an internationally recognized postal carrier outlet. Especially in a busy shopping center where people could do their shopping, and mail their packages all in one go. While I use USPS myself; I know somebody who mails packages at UPS about every week. The start up costs are much lower than some of the other options as well. Could be very busy during holidays too.

  1. Circle K ( $161k – $1.4m)

Circle K is a quickie mart type of store, but can also have gas pumps. Any place convienient to the main road that sells gas can make a pretty penny. I’m surprised this one is so cheap considering the prices to install pumps, maintain gas containers, ect. Though that will probably all come out of your pocket – Something to watch out for.

  1. Papa John’s Pizza ( $135k – $431k)

Cheaper than the other pizza place on the list, but probably not quite as popular. This one seems like a better value to own, but you’d have to do your market research before buying. Some of those marked as more expensive may be that way, because of their desirability. The profit margins they turn, the desire for their product, ect. Investing in a business peddling pricey products at this time may not be wise, but a company like Mc Donalds with it’s dollar menu should be seeing pricing booms.

Even if a family can’t afford to drop a good $100 at Outback for dinner they can afford to spend a few dollars at McDonalds instead. A recession puts a strain on every business, but some are doing better than others. You might look into lower cost resturants, or discount stores such as Dollar Tree too.

If you don’t have a load of cash sitting around it is possible to get financing for a franchise purchase – though this will be no easy feat. If you have less than perfect credit then you will have quite a time doing it. Below 700 probably will not net you a loan for an expensive business venture.