admin - Sahel Rafael Tamayo

July 15, 2019

How to Maximize Gas Mileage

With the continuous increase of gas prices, learning how to maximize gas mileage has become a crucial necessity. Through stretching a task of gas a bit further, you will be able to lower the number of times you fill up your vehicle per month. This then lets you save your budget, especially if you have a non-efficient car.

However, no matter what type of vehicle you drive, having some extra money each month is always a good thing. Cutting back on your gas expenses is also the perfect way to fatten up your bank account.

Below are some basic tips on how to maximize gas mileage for you to save a few bucks every chance you get:

Inflate Your Tires Properly

You can have your tires inflated if they look low. However, even if they are just a bit low and almost unnoticeable to the eye, inflating them can lower your mileage. Under-inflated tires only make your engine use up more gas for moving the car.

See to it that your tires have been inflated according to the pressure stated in the owner’s manual to achieve the perfect balance between traction and gas mileage. It translates to more savings since being under-inflated by 10 PSI for each tire easily costs you 5 MPG or even more.

Cut Down on Excess Weight

You will be surprised to know the weight of all the junk you’ve got stored and discarded in the trunk of your car. If your vehicle got front-wheel drive, having additional weight on the rear axle only means that the front wheels don’t get a good grip as expected of them. This can reduce your mileage. Any extra weight also means that your car’s engine need to work a bit harder just to move it, and again, this can reduce gas mileage. If there are lots of weights in your car, it is best to lighten it up for you to get an additional one to two miles more per gallon.

Stick with the Suggested Motor Oil

Never assume that you can just use any kind of motor oil for your vehicle. Remember that its engine has been specifically designed to work at its best with a particular type of motor oil. If the oil you are using is heavier than recommended, it will only create excessive friction, causing your engine to burn more fuel and work much harder. Check the owner’s manual to know the recommended motor oil for your car and stick to it.

Replace Spark Plugs and Air Filter

Replacing the spark plugs and air filter during routine checkup will not just make your car last much longer as this helps your engine efficiently burn gas. For majority of cars, it is simple task that will just cost you less than $50 if you prefer to go for the DIY route.

Learning how to maximize gas mileage can go a long way in helping you enjoy great savings. This also helps your car run better while increasing its overall life span.

July 15, 2019

Can a Landlord Ruin Your Credit If I Fall Behind on My Payment?

You must always pay your rent on time even if you’re having a disagreement with the landlord. If you do not pay your rent, he or she can evict you that could make renting more difficult. You can also ask for a lawyer’s help if you need to pay the rent and want to settle a dispute with your landlord.

But, can landlords ruin your credit if you fall behind on your payment? Well, landlords may affect your credit scores and reports in particular situations. Below are some of the ways landlords may affect your credit scorers and reports:

Owed Damages

Once you move out, the landlord has the right to charge you for the damages that they feel you caused to the property. Once you owe them money for the damages and you do not pay in a certain period of time, landlords may send your account to the collection agency that may report your debts to credit bureaus.

Broken Lease Contract

Once you have decided to get out of the property early and you have a lease agreement with your landlord, you will be responsible to pay for the entire lease unless you and the landlord have agreed on something already. See to it that the said agreement is in writing so your landlord will not sue you later for the remaining amount of money. Once they sue you, the judgment may end up on the credit report of yours.

Eviction

Another way that landlords may affect the credit score is an eviction. If you’re served an eviction notice, there is nothing you should worry about because you are not yet in trouble. If the landlord takes you to the small claims court or the civil court over eviction and judge rules in favor of your landlord, that judgment would end up in the credit report that may damage your credit severely.

Rent Default

If you do not pay your rent, the same thing applies. If you cannot pay the rent and get behind, the landlord may report you to the collection agency that would end up on credit report. Once a collection reports to credit bureaus, it will go to your report as delinquency that can hurt the credit more than the late payments or some minor credit infractions.

You should take note that any derogatory record on your credit report will stay on your report for a total of 7 years, which is quite a long time to wait for that details to disappear. See to it that you’re avoiding any particular derogatory records on your report or you might be digging out of the hole for some years. If you like to check your credit score to ensure that they’re in good standing, consider getting a free credit score.

If you want to know more information on how landlords can ruin your credit once you fall behind on your payment, always ask for professional assistance or ask somebody who experienced it before.

June 8, 2019

When to Sell Your Stock

Various sources have numerous recommendations for buying stocks, with the most prevalent ones coming from stockbrokers, analysts, investment managers, and investment newsletters. But, there is very limited advice on when to sell your stock. If you need a quick guide on the best time for selling your stock, here are a few tips you can keep in mind.

Deterioration in Fundamentals

Together with tracking the stock price of a firm after a price target is established, it is important to monitor how the underlying business performs. One good reason for selling is once you notice a decline in business fundamentals. In a perfect word, the investor will realize deterioration in profit margins, sales, cash flow or other primary operating fundamentals prior to the decline of the stock price. Analysts who have more experience may read deeper into financial statements, including filing footnotes other investors might overlook.

Fraud is among the more serious flaws in fundamentals. Investors who managed to spot financial fraud early on from the likes of Tyco, Enron, and WorldCom saved significant sums as these firms’ share prices went downhill.

Your Price Target is Hit

During the initial purchase of a stock, more astute investors often establish their price target or they have a range as to when they will consider selling their stock. Every purchase of stock must include the analysis of the stock’s worth, with the current price at substantial discount to the estimated value. For example, it would be worthy goal to sell out of the stock once its price is doubled and it is an implication that the investor assumes that it has been undervalued by 50 percent.

Even seasoned investors might find it hard to reach one price target. A range is much more realistic instead just like option to sell the position off while it rises to help lock in the gains.

A Better Opportunity Arrives

Opportunity cost is one advantage that you can obtain through going with a good alternative. Prior to owning any stock, you need to compare this with potential gains you can obtain when you own another stock. When the alternative is much better, it will make sense to sell the existing position and purchase the other.

It is can be very hard to accurately identify opportunity cost but it can include putting an investment in a competitor when its growth prospects is equally compelling and trades at much lower valuation.

After a Merger

In general, the average takeover premium or the price for buying out a company ranges from 20% to 40%. If luck is with the investor enough for owning a stock that gets acquired for a substantial premium, selling it would be the most ideal course of action. Choosing to continue to own the stick even following a merger could have some merits, like when the combined companies’ competitive position has significantly improved.

But, mergers have somewhat lousy success track records. In addition, the deal may take several months before it gets completed. Thus, from the perspective of opportunity cost, it makes sense to look for an alternative opportunity for investment with a better upside potential.

June 8, 2019

How to Buy Your First Stock

The stock market is one interesting place. If you have plans to enter it, chances are you are excited at the mere thought of earning some money on the side. Well, this is an actual possibility provided that you are playing all your cards the right way. However, taking the plunge into the world of stocks is not an easy feat, so you need to come fully equipped in every sense of the world.

Keep in mind the following tips on how to buy your first stock to ensure a successful venture.

Do Your Research

Prior to buying any stock, doing your research is the first step that can never be stressed enough. While there are a lot of experts and professionals out there who can give you sound advice, don’t forget that there are those who just claim to be experts whose advice might not really be as reliable. So, if some of your friends give you tip and encourage you to buy simply because this or that company is popular, make sure that you don’t just follow their advice blindly.

Start with Stable Stock from a Reliable Company

Beginners are recommended to start first with stable stock. It is best that you go for a company that has been in the industry for some time then read more about them. You can get some help from financial magazines and even websites. You need to look into the status and performance of the company you are considering as well as the market’s state as a whole. This can come in handy when making your final decision.

It is crucial to choose a stock and company that has been around for some time as it will give you better opportunity for making predictions of how the future will be like. While it may be great to invest in new companies, especially if you consider how people claimed to make lots of profits out of them, there is a considerable risk of ending up losing your money.

This means that although you might not get lots of excitement from a more solid stock, this will give you better peace of mind as you get to learn this and that and make yourself more familiar with the stock trade and finance world. There is so much for you to learn here and the process will take some time.

The process of learning itself is also quite an interesting one. Numerous outside influences affect the stock market, and these include legal affairs. In the past, the market has been affected by the tort system, with large verdicts almost commonplace. It is reason why market analysts always keep an eye out on what happens in courtrooms.

Start Small

Finally, make sure that you start small while learning. Yes, joining the stock market may seem like a gamble as some risks are always involved. There are a lot of uncertainties but you could reduce your financial loss if you do your research and watch out for influences that could affect your stock.

June 8, 2019

How Often Should You Be Investing

One of the biggest fears of most people when they first start investing is that they will make a dumb choice that will prevent them from enjoying the best returns on their investment. They feel anxious and worried about this and that fund, buying bonds, or buying real estate. Their anxieties and worries and indecisions continue to pile up that keeps them from making any investments in the first place.

Well, this is actually a big mistake and for a good reason. A poor choice in investment can take a really long time before it makes any substantial negative impact on your finances. However, it wouldn’t take that long before you notice a negative effect if you choose not to invest at all.

For instance, let’s say that you set aside $100 monthly for retirement. You can choose to put money aside in a randomly chosen investment earning 6% every year or the average or you could study it for 6 months and opt for a better investment with 7% returns per year.

All in all, the main point here is that when you first start to invest, it is much more important for you to start now and try putting away as much as possible as compared to finding that perfect investment.

However, what if you want to invest yet you got several debts piled before you. What should you do then?

It is critical that you always opt for the choice which can offer your dollar with the best long term return.

Thus, the first step you should take is to stop accumulating any new debt. It is important that you avoid incurring any personal debts if you wish to get ahead with your investment.

The second step is for you to set aside some money for retirement that matches that of your employer, assuming that your employer is offering a match. Why is that? This will be an instant return of 50% to 100% on your money. If the employer will match your savings for every dollar, this would instantly double your money. Make sure you grab this first.

After this, you can start paying down those debts with high interest. Usually, it means that you need to pay off things such as credit cards although you need to wait on other things such as house loans or car loans.

Following this, you can now invest in your retirement of a minimum of 10% of your current income or even a minimum of 15% if you feel like you are a bit behind.

Again, investing should be done as early as now. Always go for the best investment that you can find right away then start from there. If you wish to make changes later on, it is easy to do so but making up for the lost time will not be possible.

The secret for investing is to always start now and try contributing as much as you could and use frugality to your own advantage. If you don’t use these two tactics, you might end up finding yourself several years behind where you could have been.

June 8, 2019

How Much Cash Do You Need To Buy Your First Home

Mortgages may cause lots of headaches, but for some people they’re the only route to a new house. However, for some who will buy a house with cash, it can be possible. Having an on hand cash to close deal is frequently a must. Down payment is the hardest to cover since these are around twenty percent of the value of a home. Therefore, if you are gearing up to purchase a home anytime soon, it is a great idea to determine what types of cash reserves are needed and what they will be used for.

Consider the Down Payment

You might be one of those who want to take the mortgage route to purchasing a house. The most essential and biggest expense to worry about is the down payment. If you are applying for conventional mortgage, the golden rule is making a down payment of twenty percent of purchase price. For instance, for a house with a price tag of $250,000, you would need to make at least $50,000 down payment.

The requirements for down payment are a bit different if you are applying for a different kind of loan through FHA, USDA or VA loan. You might not have to put money down at all with USDA and VA. FHA loans require a down payment equal to 3.5 percent of purchase price. It’s a good choice for anybody who’s short on cash.

You will require your down payment in separate checking account or savings account. If your family member will give you the money as a gift, it is a great idea to let that sit in your account for several months. It is also essential to have a detailed documentation to show where money came from in case lenders ask for proof that down payment is considered a gift.

Pay for the Closing Costs

The closing costs basically refer to all expenses, which are due when the time you sign final mortgage paperwork. It includes things such as loan origination costs, attorney’s fees, and credit check fees. It isn’t unusual for the closing costs to run anywhere from two percent to five percent of purchase price.

Some Costs You Should Know

Prepaid expenses are basically the costs that might need to be paid out of your pockets prior to the closing. For instance, an appraisal is frequently paid upfront. Your lenders might also need you to pay for your home inspections before loans come to fruition. If you are rolling the property taxes and insurance of homeowner to your mortgage payment, you will also require to have enough money for covering the costs.

No matter what method you use for paying your new home, it is a personal decision. So, ensure you do ample research about which decisions should work best for you. For you to do this accurately, you might like to do deep dive to your finances monthly. This can help you see what type of cash you would require to make mortgage feasible. Never forget to include the outside costs including origination charges, paperwork fees, closing costs, and so on.

May 7, 2019

What is a Private Equity Fund?

A private equity fund is a pool of capital that will be invested in a company that represents a chance for high rate of return. Private equity funds come with fixed investment horizon that typically ranges from 4 to 7 years. At this point, the private equity firm hopes to exit the investment in a profitable manner. These exit strategies include selling the business to a strategic buyer or a different private equity firm and IPOs.

Accredited investors and institutional funds often compose the primary sources of a private equity fund since they can offer significant capital for a longer period of time. There is also a team of experts in investment from a certain private equity firm that raises and manages the funds.

What is Equity?

Equity is further subdivided to four primary components namely ordinary shares, CCPPO shares, preferred shares, and shareholder loans.

The equity proportion typically accounts for 30 to 40 percent of funding in the buyout. A private equity firm tends to invest in equity stake with 4 to 7 years of exit plan. Equity funding sources include private equity funds, management, investment banks, and subordinated debt holders. Most of the time, the equity fraction is composed of a combination of these different sources.

Two Types of Private Equity Funds

In general, a private equity fund falls into two primary categories: leveraged buyout or venture capital and buyout.

Leveraged Buyout (LBO) or Buyout

Leverage buyout funds invest in businesses that are already more mature, often taking the controlling interest. Leveraged buyout funds use large leverage amounts of increase the rate of return. These buyout funds have the tendency to be substantially bigger in size compared to venture capital funds.

Venture Capital (VC)

Venture capital funds refer to pools of capital that often invest in emerging, early stage, and small businesses expected to have high potential of growth but with limited access to some other capital forms. In the viewpoint of small startups that have ambitious innovations and value propositions, venture capital funds are an integral source for raising capital since they don’t have access to bigger amounts of debt. As for the investor’s point of view, even though venture capital funds have some risks from putting investments in an unconfirmed emerging business, they still have the ability to generate some really extraordinary returns.

Common Exit Routes for Private Equity Funds

Once they decide to exit, private equity firms can take any of two paths: partial exit or total exit. In wholesale exit, there could be a trade sale to a different buyer, a share repurchase, or leveraged buyout by a different private equity firm.

In partial exit, a private placement can happen where a different investor buys a part of the business. Corporate restructuring is another possibility in which the external investors can get involved to raise the position they have in the business through partially acquiring the stake of the private equity firm. Corporate venturing may also happen where the management increases business ownership.

May 7, 2019

How to Stop Procrastinating

Do you always find yourself wondering where you day went at the end of every day? If this sounds just like you, you are like millions of people on this planet. Boy, you are a procrastinator!

Procrastination is the number one reason why you remain to be in the exact same place you were last year. Procrastination is also why you constantly find yourself lingering in your past. Procrastination is the one that steals your dreams!

But, worry not because it doesn’t mean that you can just stick with your habit of procrastinating. Below are a few tips on how to stop procrastination so you can start chasing and achieving your goals in no time!

Focus, Focus, and Focus

Focus on a single task one at a time. Avoid thinking or worrying about the next task if you haven’t completed the current task yet. Also, don’t think about your previous task the moment you moved on to your next one. If the specific task you work on at the moment is a part of a bigger project, try to define a certain goal for that specific period of time.

Start with the Hardest Task

The task you find the hardest to do should be the first task you work on. Why? This is because doing this will give you that much needed gusto and shot of enthusiasms once you have completed it. That feeling of success that you generate from completing the hardest task will boost your productivity to dramatic levels.

Clear Your Mind by Clearing Your Desktop

Keeping your desktop clear and clean will let you focus one task at a time. You surely heard of the saying that a clean environment means a clean mind. So, ditch those mountains of paper and make sure that your desk and mind stay free from clutter.

Take Short Breaks Every Now and Then and Stay Hydrated

There are times when you feel as if your focus is going elsewhere. If this happens, drinking water might all that you need. Scientists have proven without a doubt that regular intake of fluid is important for creativity so see to it that you take regular breaks of 5 to 10 minutes to get a drink away from your desktop. You can also do a few exercises such as a short walk.

Develop a Reward System

This sounds great but many of you probably fail to do this consistently enough. This is a great incentive for you to push forward with a certain project. Come up with a reward system you can give yourself and you will be surprised how motivated you will feel in putting one foot before the other even when things get tough.

Be Enthusiastic

Finally, whatever you might be doing, whether taking out the trash or counting pennies, always do this with enthusiasm. Give it your best shot and bring your positive energy to the specific task at hand. Talk to yourself positively and convince yourself that the task you are doing is crucial for a bigger vision.

May 7, 2019

Top 10 Countries to Retire

If you want to make your money stretch further in your golden years, you might want to consider opting other countries for retirement. But, which country is the best for you? While everybody has an opinion in terms of ideal retirement spot, experts can make the decision making process easy for you. Below are some of the countries you can consider for your retirement:

Panama

Aside from being close to America, Panama also uses American dollar, so you do not need to worry about the currency fluctuations. Other than that, Panama provides countless of options to be a legal resident and its medical care is a priority.

Mexico

It provides a variety of options for established expat and seaside living communities in a lot of areas. Another magnet is affordability with a lot of expats living well on as low as $1200 monthly. The strong position of dollar against Mexican peso means that the cost of living offers better than the normal value.

Costa Rica

The unspoiled beaches and breathtaking landscapes have long fueled the popularity of this country among travelers. For the retirees, the highly regarded health care system with the costs a fraction of what you could pay in the US is a big draw. Getting the status as a resident is straightforward.

Ecuador

In terms of real estate availability and affordability, Ecuador stands out. It is not hard to live on $1,500 monthly and there’s no shortage of retiree benefits.

Colombia

If rejected as a retirement haven due to its reputation for drug cartels and conflict, Colombia has stepped to the spotlight as a great place for those who are looking for excellent health care, low cost of living, and temperate climate.

Spain

It sets apart from others due to its superior infrastructure, a laid-back lifestyle, and world-class health care system. For retirees who are on a budget, the real estate and low cost of living is appealing.

Malaysia

The cities of Malaysia take pride of an unrivaled public transportation system and some of the Asia’s friendliest people. Also, the country straddles the tourism market, which manages to offer both first class luxury vacations and memorable budget holidays.

Malta

This small island chain between the coasts of North Africa and Sicily is easy to miss. However, this Mediterranean destination has lots of visitors for decades because of the centuries-old cities, warm weather, and sapphire blue waters.

Portugal

Another cheap country, Portugal entices the retirees with its low cost of living as well as real estate. A couple may do well on $1,700 monthly in smaller cities including Lisbon, the capital, about $2,200 monthly or more is required. Some huge draws are the mild climate and superior white and red wines of the country.

Nicaragua

The biggest nation in Central America is Nicaragua. Even if it remains poor, there have been some major infrastructure improvements during the past several years including an expansion of Managua’s international airport. Other than that, there is little traffic, great health care, and low cost of living.

May 7, 2019

What is the Difference Between an LP and a GP in Private Equity

A lot of institutions as well as high net-worth individuals like to earn high returns compared to somebody else. The traditional investments including bonds and stocks do not typically earn an ROI and private companies. However, such investors never purchase companies directly. They actually invest through a private equity firm. For you to earn better than usual returns, you can consider a private equity fund.

For you to understand the concept of GP or General Partners and LP or Limited Partners, it is necessary to know how the private equity firm works. Once a private equity firm is established, it’ll have investors who’ve purchased Partnership Interest using their money. The private equity firm makes funds through that money and such funds contain capital used to begin or buy companies. Investors who have invested in every fund would be referred to as LP or Limited Partners and it’d led by a GP or General Partner.

Limited Partners – Who Are They?

The external investors in private equity funds are called LP or limited partners. Their liability is actually is limited to the extent of the invested capital. Not all may invest in private equity firm. Typically, the investors need to put $250K or more to the fund. Majority of private equity firms have investors including insurance companies, labor unions, pension funds, big wealthy families, foundations, university endowments, and so on.

The Limited Partners will give money to private equity firm through buying Partnership Interest and expect returns for it. Private equity performed far better compared to the public market in the past. Limited Partners invest their money and they are not involved with the fund management. This management is actually carried out by General Partner.

General Partner – Who is It?

If funds are made, you only need someone to manage it. It’s done by the GP or General Partner. All of the decisions for the fund of private equity are made by General Partner. These decisions may include which companies to sell or buy, what kind of companies to start, and more.

General Partner is basically paid either by way of a fixed compensation or management fee. Management fees are simply a percentage of the overall amount of the assets or capital of the fund. This percentage is not flexible and fixed. Generally, this fee actually ranges from 1-3 percent yearly of the committed capital. The management fees are stated as a percent each year of the assets under management.

General Partner or GP also gets a performance fee if she or he earns you lots of money. It’s done through the use of returns distribution waterfall. Other than their meager salaries, GPs also earn carry or carried interest. It’s the percentage of profits that funds earn on the investments. Performance fee is the other name for carried interest. It’s a fee charged based on overall amount of the profits that have been earned by the fund that particular year. In short, performance fee is the share of the net profits of the fund, which should be paid by GP.