Obstacles Preventing Bitcoin from General Circulation

The first-ever, widely-recognized digital currency Bitcoin is gaining a menacing reputation among different governments, which is preventing it from going into general circulation. While many people, including investors and financial experts in the government itself, agree that bitcoin can be a great alternative currency in the future, governments mention the following as their problems.

1.    Lack of Transparency

The bitcoin network, managed by an automated program, records all bitcoin activity in the entire world. The network encrypts allthese transactions, which allow great privacy for many users. Governments are concerned that because of bitcoin’s history of being used as a medium for illegal drug and substance purchases over the Internet, it might become a “shady” medium that ensures no trace from purchase can be made.

2.    Lack of Regulation

Bitcoin has no bank and is managed by not one individual or government. It is a currency that self-regulates. There is no “printing mint”, instead, miners, who are rewarded for having their machines solve complex algorithms using “mining rigs” or powerful computer units, ensure the speed of money production. This decentralized feature is also not recorded and cannot be regulated.

3.    Money Laundering

Because all transactions with bitcoins are encrypted and its high exchange rate due to bustling activity, governments fear that bitcoin can become a medium for money laundering.

Credit Cards and the Effects of a Mis Sold PPI

Payment protection insurance is the biggest financial scandal in the United Kingdom and clearly, banks made a huge profit if the bill is reaching £20 billion, roughly the price of two London Olympics in one year. PPI could be sold on your loan, mortgage or credit card.

If you were mis sold PPI on credit cards, the higher your credit limit, the higher the premium you are paying for the insurance. The same is also true if your credit card has a higher interest rate.

A mis sold PPI could possibly increase your interest rate. Bank employees may not inform you that you were issued an insurance policy for your credit card. Instead, the item would be listed with the descriptors “security”, “protection” or ASU protection.

In some cases, mis sold PPI is not listed as an item on your bank bills and instead, your monthly repayment or your interest rates increase. This is a compound interest rate and resolving this matter can be quite complicated as your loan repayments are tangled with your insurance repayments.

Mis sold PPI could give you an average of £3000 in refunds, but you could be owed more due to your compound interest rates. It would be wise to consult with a PPI claims management company to help you successfully reclaim your refunds.

Alternatives to Debt Consolidation

The alternative to bankruptcy is debt consolidation, but debt consolidation has its advantages and disadvantages. Here are a few alternatives to debt consolidation.

1.    Aggressive Payment Plans

Some debtors actually “snowball” their debts. Snowballing means to pay for a debt’s minimum fee then gradually increase your repayments until you could pay off your debt. By listing all your repayments due for the month, arranging them in the order of highest to lowest interest rate and deciding on the minimum constant repayment you could provide to all your debts, then you could gradually reduce your bills.

2.    Lower Your Interest Rates

Negotiate your credit card interest rates with your lender or creditor. You could actually save hundreds just by negotiating your interest rate with your lender. When negotiating, make it a point to point out that you couldn’t go paying the high credit card rates and that you are considering other options aside from the credit card. Once the bank or lender reviews your history and finds you qualify for a lower interest rate, you are in good hands. However, the results of this alternative cannot be guaranteed completely.

3.     Credit Card Relief Programs

Not only you suffer from credit card or loan debts as many people are also having trouble making repayments. In this case, you could actually get financial assistance from credit card relief programs. Review your household, education and miscellaneous expenses (which you will need to note down), lenders may consider helping you by putting you in their credit relief programs. Most lenders have a financial hardship department.

Some Ways to Save Money Using Your Credit Cards

Sure, a credit card could get you into deep debt but it could actually save you money if you know how to use it right. Here are a few tips that could help you save money using your credit cards.

1.    Rewards Cards

Credit card rewards are available for some credit card owners, which help offset your expenses with the rewards they accrue. However, these cards have very high interest rates. Paying in full each month helps you spend more with credit card reward cards.

2.    Pay More Than the Minimum

Most credit cards remain free if you pay more than the minimum fees you are entitled to pay monthly. However, if you could pay for more than the minimum, you avoid higher interest rates that could plague your financial status for years.

3.    Too Many Cards

Always research before you apply for a new credit card. It is important that you limit your ownership of credit cards, especially the higher-rate ones. Owning too many cards could spell you trouble, even if they guarantee you good rewards or discounts from select merchant promotions.

4.    Cash Advances

Don’t make use of your credit card if you are not going to swipe it in merchant stores. Cash advances usually add a 1-5% fee for every cash advance you make.  

UK Tax Guide for the Self-Employed

Self-employed UK citizens have a special tax scheme. You either pay lower or higher than the conventional UK employee depending on the nature of your business. Here is a short guide to your taxes.

1.    Confirming Self-Employment

A self-employed must register his or her business with Her Majesty’s Revenue and Customs or HMRC within three months of self-employment declaration. Self-employed people may also register for VAT. Upon registration, you should keep all the income and expenses related to your tax return for five years.

2.    Liabilities

The United Kingdom has different kinds of taxes for the self-employed such as National Insurance, VAT, capital gains tax and business rates. Most self-employed pay national insurance and Class 1 contributions for those with employees in their business. Business rates apply for your properties and real estate where business is done and capital gains tax is accrued when selling business properties. All self-employed also pay a percentage for income tax.

3.    Tax Deductions

Anything that is not considered or declared a capital asset is non-taxable and you could claim tax deductions on the following.

1.    Employers’ National Insurance

2.    Employees’ insurance, childcare provision and pension benefits

3.    Costs of Training for Employees

4.    Business Premise Maintenance

5.    Council Tax

6.    Cleaning

7.    General Maintenance

Why Consider Investing in Stock Futures?

Stock futures, similar to put options, allow you to sell a quantity of stock at a fixed price to another investor regardless of market fluctuations. Stock futures allow investors precise calculations on their profits or losses in the future and give them a heads-up on where to adjust their portfolios.

However, stock futures have their own disadvantages. With a fixed number of stocks and prices, the market fluctuation’s gain cannot increase the price of the stocks. Any investor’s short or long order could mean greater losses for their portfolio, and even if predicted, could go beyond the loss threshold they set.

Dealing in stock futures have been a common investor trade practice and the two or more parties are legally bound to fulfil their responsibilities. It is also a way for forecasters to know the trends in the market, especially the level of investor confidence in different markets.

Most systematic investors make use of stock futures since many want to increase the predictability and assess risk levels instead of increasing their profits. Stock futures are a good way to stabilize portfolios during a market slump.

If you do not wish to invest in stock futures, it is highly important that you read or know about the futures forecasts because they could guide you about the risks involved in the industries you’re willing to partake.

Why Are Some Banks Not Paying Up for Mis Sold PPI Claims

PPI’s complete UK compensation package had increased to £25 billion in 2013 from its starting £9 billion in compensation, but still, banks are rejecting majority of PPI claims coming from customers or their PPI claim company thinking that they are fraudulent or lacking evidence. The Financial Ombudsman actually found that in 2011-2012, three quarters of the claims rejected by banks are in favour of customers, indicating that banks are not willing to pay up for their sins.

Chief Ombudsman of the FOS Natalie Ceeney explained the situation that the FOS is admittedly dealing with one of the biggest clean-ups in the UK’s financial services history. The Ombudsman is the last department for obtaining justice for customers since they have legally binding powers that allow them to have the banks do as they decide.

Even if banks are not paying up, they have different responses to the large quantity of legitimate PPI claims coming into banks.

Barclays said that it is committed to resolving all PPI claims quickly and effectively. They have effectively reduced the time it takes to process the claims. They continually blame Claims Management Companies for clogging the system with fraudulent claims.

Lloyds said that PPI claims relate to historic processes and procedures and that the FOS numbers do not show the same progress in other areas of the claiming process. They said they had issues in distributing PPI compensation payments to customers in the last half of the previous year.

Determining Your Investment Attitude

The stock market is a battleground of knowing when a business will reach full bloom and placing your money where there is growth. You need experience to develop a good investment strategy. Here are a few common investor attitudes and their effects on the growth and sustainability of your investments 

1.     The Patient Investor

A patient investor is one who works hard for their money and will choose their portfolio’s sustainability rather than having higher potential returns. A patient investor has the temperance to wait for quality companies to have their stock shaken down. They ensure low risks and look for quality companies that literally pay investors back through dividend stocks.

2.     The Risk Taker

A risk-taking investor is one who realizes proper business practices are important, but they choose to up the notch by taking their investments from big-name companies to these companies’ lesser known competition. Even if these companies fluctuate rapidly in a single trading day, they can tolerate the roller coaster ride to get improved returns.

3.     The Innovation Addict

An investor finds innovation and unique products the basis for investing in a company. New jet skis with literal jets will attract these investors. Most of these investors look for companies that try to defy the current market with new ideas and products. They look for inventors and innovators. However, they face great risks with their investments.

The Different Kinds of Financial Instruments

When I say stock market, usually, the person I’m conversing with tells me “oh it’s about investing in stocks and bonds right?” Sometimes, this particular mindset of only stocks and bonds in the stock market limits a person in investing in the other areas of the financial market due to a lack of knowledge of financial instruments. Here is a list of common financial instruments in the stock market today.

1.     Financial Instruments and Commodities

Financial instruments are securities whereas commodities are existing rare minerals such as gold, nickel, platinum, zinc, etc. In the stock market, investors buy different kinds of financial instruments to ensure they maximize their gains and cut their losses.

2.     Debt Securities

Bonds are a form of debt which companies, local governments and federal governments issue to raise money in the capital markets. Capital markets assumes that the money generated has a payout period greater than one year. Most bonds and other forms of debt securities have the investor lend money to the issuer for exchange of ongoing interest payments. Most bonds have a seven-year maturity period that guarantees the added interest rate on top of the original principal amount.

3.     Futures

Sometimes, you might hear about futures contracts between investors and you find yourself puzzled.  A futures contract is a guarantee between money managers that allows them to purchase or sell securities and commodities at a fixed price at a given time in the future at a price agreed upon by both parties

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4.     Options

Options allow investors the option to buy other financial instruments at a pre-determined price within a given time frame.

Where to Get Small Business Loans?

The current economy provides two options for individual financial and economic growth: either you step up a career ladder or you make your own small business. A career ladder makes you an employee who continually evolves into a leader of the company. As a small business proprietor, you instantly become your own boss and you will need a business loan to begin your business.

If you’ve saved enough capital for your business, you may or may not need to get a small business loans, but in case you do, there are three options for you to get them.

1.     The Banks

Financial institutions and banks still have the best offers when it comes to opening small businesses. However, you’ll need a good credit score to ensure you have a low-interest business loan. If you have an existing business, the business’ records and accounting must hold strong to get low-interest business loans.

2.     Small Business Administration

Every country may have a SBA that regulates and disperses small business loans from financial institutions. If you get a loan from the SBA, you have a loan secured by the SBA, which might have average to low interest rates. The SBA also provides lessons in business management and financial areas of a business.

3.     Online

Some lending companies have used the Internet to render their services. While many small businesses found online loans to be effective, some found the high interest rates to be troublesome. Sure, the financial institution online does not mind your credit score, but you are entailed to pay some high interest rates if you’re not too careful.

Credit Union Financing: Feasible than Bank Financing?

Credit unions offer an alternative source of financing for many who have low credit scores or bad bank standing, but credit unions differ greatly from how banks function to serve their customers. Unlike banks who try to attract customers to purchase or consider financial products and services, credit unions could only serve specific customers. Credit unions also have the following differences with banks.

1.     Common Ground

A customer must have a common ground with the credit union. For example, a medical professional’s credit union may require a customer to be a medical professional. Some credit unions only accept certain ethnicities, races, religions or other categories.

2.     Limited Offers

Credit unions interview their customers and analyse their financial capability. This helps them identify the proper financial products that their customer could surely repay within the time allotted to them. The reason for a credit union’s limited offers is that credit unions only have a limited mint; banks have vaults and banks aim to make profits. Credit unions only depend on member contributions and break evens.

3.     Credit Score

A credit union member does not need a good credit score to get a loan, mortgage or credit card. As long as they have financial stability, they could get a financial deal not based on their credit score.

4.     Low-Interest, Low Values

Credit union products are low-interest products and sometimes, they cannot repay the full amount of a car loan, a mortgage or other financing. Again, the reason for this is their limited resources and non-profit principle. Yet, you still pay less even if you have to pay for the rest of the product or service.

The Great Advantages of Financial Management

A small business also has a small budget and most entrepreneurs reserve that budget only for necessary investments. Most business owners skip having an accountant or a financial manager because they think it’s only “added budget weight” and that they can go the process alone. However, that is where they are mistaken. Financial managers can offer a lot for small business just for what seems a large sum for payment. Here are a few advantages of having one.

1.     Knowledge

Good financial management requires good knowledge about the subject itself. Financial managers research on business data, which they later analyse and discuss with you. The viewpoints they share show you the consequences of future actions and if the budget can handle future business objectives. Doing financial management by yourself or with a business partner can be tedious, while a financial manager can give you their complete insight about the business.

2.     Planning

Every company has its own objectives, which they strive to meet by the deadline and a financial manager can help meet these objectives properly. Financial managers outline the income of the business profits that might go to maintenance costs, employee payrolls and potential future investments. Financial managers could also advise owners how to reduce costs while increasing expenditures.

3.     Confidence

A good financial manager is more than somebody who could explain the numbers your company generates; they are also advisers that could help your company become stable in a crunch situation. A company with properly managed finances increases the chance of success and loyalty from employees and its own success.