Most people are looking for the latest ideas to achieve financial freedom. People want to better their lifestyles and they want to look out for the future. They want to be able to spend more time with their family and less time working. They want to be able to live the life of their dreams but unfortunately, most people don’t ever realize their dreams in life, not because they don’t want to, or because they are lazy, but because they don’t know how. Before I get on to the list of the latest ideas to achieve financial freedom, let’s first look at what most people are doing in life today, yet are not likely to gain financial freedom.

Ideas that just don’t work:

1. Saving money

Yes, you can get wealthy and become financially free by saving money, the truth is this method takes many, many years. Now, I am not saying don’t save money, in fact if you study successful people and principles, you will see that one of the steps to wealth is in fact to save money. What I am saying is that saving money on its own will not likely be enough to gain financial independence. There are a couple of reasons for this. Firstly, most people spend what they earn; they don’t have money left over every month to save. Secondly the rate of inflation is usually higher than the interest rate banks give, so in the end you are actually losing out. For this reason I would not consider saving money as one of the latest Ideas to achieve financial freedom.

2. Being an employee

The biggest problem with being an employee is that you trade time for money, and we all only have 24 hours in a day (caught in the Rat Race). There is a minute percentage of employees that actually earn enough money that they can save/invest it quicker than they spend it. These people however are not the average person. They are people with three or four degrees and were always the ‘A’ student. These are the really brainy guys. Also, another big problem with being an employee is that you don’t get paid your full worth, you can’t get paid your full worth because your company has to make a profit from you.

3. Self employed

Being self employed is better than being an employee because you don’t have a boss, and you are a little bit more in control of what you do day in and day out. Again, however, the biggest problem with being self employed is that you trade your time for money. If you don’t work, you don’t get paid. The reason the above methods are not considered latest Ideas to achieve financial freedom and unlikely to make you financially free is because they all lack leverage.

Now let’s look at some of the Latest Ideas to achieve financial freedom that do work:

1. Start your own Business from ground level:

If you have a passion for a particular product or service, or if you have identified an unfulfilled gap in the market, then potentially you could start your own business. I say potentially because you would need to do full due diligence before jumping straight in. Most multi-million pound corporations were started by a single person with an idea, from very humble beginnings in a garage or spare bedroom. Some examples of such companies are Microsoft, Virgin, Dell and EBay to name but a few. If you see an opportunity and you have faith and determination, you can make it really, really big! So do you have the next of the latest ideas to achieve financial freedom?

2. Network Marketing / MLM

Starting your own business from scratch can be very daunting and costly if you have no previous experience running a business. This is where network marketing is the perfect training ground. You buy into an established ’system’ for what is relatively very low start up costs and you earn while you learn. Network marketing is not like being employed. If you work your business, you can turn it into a million pound organisation. Similarly, if you don’t work at it, you will not succeed. Network marketing is unfortunately one of the latest Ideas to achieve financial freedom that people are very sceptical about; People dismiss it as a pyramid scheme without understanding the difference.

3. Property Investment

Property investment isn’t one of the latest ideas to achieve financial freedom as it has been around for centuries, but in my opinion, is the best medium to long term investment you can make. Statistically, properties in the UK alone have increased by about 10% per year for the last 80 years. Sure there have been periods where property prices have slumped, but they always regain that loss, and always go up in value over the long run.

4. Investing in Shares

There are a number of different shares you can buy, including preference shares, bonds, and gilts but the most popular type is the ordinary share. Ordinary shares simply represent ownership of a company. So, when you buy shares, also known as equities or stocks, you literally become a part-owner of that business. If, for example, a ABC Plc has 100,000 shares worth £1 each and you buy £1,000 of shares, you own 1% of the company. As a shareholder you have a say in the company’s affairs by voting at company meetings and, of course, the ability to share in its fortunes. If the company does well, the value of your investment should rise but if it does badly, you could see your shares fall in value.

5. Self Development

Let’s face it, the only way to get rich quick is to win the lottery, inherit a fortune or rob a bank. The odds of winning the lottery are practically impossible, not many people have rich grandparents, nor does the prospect of jail appeal to average person. It is however possible for each one of us to make millions upon millions every year, but the truth is we don’t know how. Your not going to find a book with a readymade recipe for wealth that will make you wealthy after reading it once, because if that book did exist, we would all be wealthy wouldn’t we. But what we do need to do is learn from the best. Learn from people who have been there and done it already, and how we do that is by surrounding ourselves with their presence, their knowledge and their experiences and we do that in the form of books and audio training. Self development is the most underrated of latest Ideas to achieve financial freedom, yet probably the most important.

6. Clear Bad Debts

Firstly, we need to understand that there are ‘good’ debts and ‘bad’ debts and we need to understand the difference between them. Not all debts are ‘bad’. Some debts can actually make you money. The richest people in the world today have millions of dollars worth of debt, because they understand leverage. If you have a mortgage for a buy-to-let property and you have tenants paying off the mortgage, this is a ‘good’ debt as it makes you money. You want to accumulate as much ‘good’ debt as you can. Examples of ‘bad’ debts are credit cards, car payments, department store cards etc. You are generally paying a fortune (anywhere up to 30%) for these debts and all it is doing is restricting your monthly cash flow. Setup a system so you can pay these debts off quicker, and be disciplined not to get into these debts again. This does not mean you’ll never have a fancy car or boat, but what it does mean is that if you do your investing correctly, and build your businesses, you will be able to buy that car cash.

7. Make Money Online

There are a number of ways you can make money online, working from home and one such way is affiliate marketing. Affiliate marketing is effectively promoting web business, and being rewarded for every visitor, subscriber, customer, and/or sale provided for your efforts. Another way to make money online is create your own web page. A web page on its own won’t make you money, but if you can create a website that generates large volumes of traffic, you can make money by getting companies to advertise on your site. Another way which has become very popular with people working from home is through EBay. Some people browse EBay all day, and find items that are undervalued. They buy these items, and resell them again for a profit. Some people make or distribute products through EBay, and they are making very, very good money indeed.om

8. Create unique product / Service / Invention

Another way to make a lot of money is to invent an object or service that will make people’s lives easier, or that a lot of people will want. Coming up with inventions is a lot harder that it sounds, but not all inventions have to be complicated. While browsing the internet, I came across a website that sells plastic wishbones. Yes, somebody has come up with an idea to replicate turkey wishbones for Thanks Giving in the States, the idea is that you buy a couple of them and everyone at the table’s wish can come true, not just one persons. The company is now producing over 30 000 wishbones a year and at $3 each they are making a fortune

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Alex welcomes back to the show film-maker, broadcaster and former broker and options trader, Max Keiser. Keiser is the host of On the Edge, a program of news and analysis hosted by Iran’s Press TV, and he also hosts Keiser Report, a financial tabloid, that broadcasts on Russia Today. Keiser correctly predicted the sub-prime mortgage-backed securities crisis would result in recession and also predicted the break-down of Iceland’s economy in 2008. maxkeiser.com prisonplanet.tv

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UK Financials Introduce Bad Credit Secured Loans: To Meet All Your Immediate Needs

Funds in the Times of Needs for Poor Creditors

Loans for benefit can be availed in both secured and unsecured form. A secured loan for people on benefit requires you to place collateral against the loan amount. This can be any of your property like home, car, jewelry etc. Placing collateral helps you to avail loans for people on benefit at lower interest rate and with flexible repayment duration.

The secured loans are available for a longer time period. This implied that one can repay the amount of loan in a longer period ranging between 1 to 10 years. This lessens their burden of debt redemption. The interest rates are also quite nominal for these loans. It facilitates the borrowers to raise an amount as big as 50000 pounds. The monetary position can be settled by such a big amount. However it is always suggested that one should raise a genuine amount of loan so that he can repay it to avoid any took over of his pledged asset.

Secured loans online is perfect example of modern day technology. The whole process is electronically done starting from filling up of application form, submission of various documents and then approval of loan amount and in the end of payment of her/his debt.

Thus you can deal with these loans by sitting in your bedroom. This not only saves you from physical harassment but also not kills your precious time and money. In order to avail these loans you have to satisfy following prerequisites:

a) You must be an U.K. citizen.

b) You must be residing at your current address since 6 months.

c) You must have a full time paid job.

d) You must have a bank account on your name.

e) The property to be kept as collateral should be on your name only.

The process of availing the secured loans with the online money lenders is easy and fast. Once you fill in the details in the application form, you may be asked to send in the documents related to your asset as well. Once you fax them, it hardly takes any time to assess the value of the asset. Once the asset is valuated, you are informed about the amount you can get as loan against the loan. This does not take more than 36 hours. The best part is that you can get a loan which is equivalent to the market value of your asset.

Fixed interest rates option has the interest payment to be made each month as a fixed amount for principle and interest. In the variable interest rate option one can have the interest on the principle varying according to the market conditions. This is a better option in the times of recession because the banks have been made to cut down their interest rates considerably, by the central banks of each country. The UK central bank has also official announced that the interest rates should be lowered to facilitate business.

Ravi Mishra is the author of loans. where visitors can apply for any type of loans online.If you want to learn more about Unsecured Tenant Loan Fair Credit, urgent loan for tenant, unsecured loan for tenants visit http://www.ukfinancials.com

UK Financials Ltd,

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223 Regent Street, London – W1B 2QD

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An Argentine opinion on the Global Financial Crisis, describing the whole Global Financial System as one vast Ponzi Scheme. Like a pyramid, it has four sides and is a predictable model. The four sides are: (1) Artificially control the supply of public State-issued Currency, (2) Artificially impose Banking Money as the primary source of funding in the economy, (3) Promote doing everything by Debt and (4) Erect complex channels that allow privatizing profits when the Model is in expansion mode and socialize losses when the model goes into contraction mode.

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UK Financials Ltd Announced Online Home Loans – Dream Home with the help of a loan!

Home Loans Are The Simplest Way To Get A Loan.

Making the most out of home loans getting a home loan seems a difficult task if you are in the list of people with bad credit history. If you are tired of rejected Home loan applications because of your bad credit then you need to seriously think about Home loans specially prepared for people with poor credit.

The time period for repaying the amount of the secure Home loans is ranging from three to thirty years. The amount which can be attained through the loan differs from five thousand pounds to at least seventy five thousand pounds. At the same time, if the annual income of the respective borrower is more and has a decent credit history, the value of the amount for the secured home loan can also increase.

Now with most of the borrowers fall in the bad credit range, the lenders also have started offering loans to people with bad credit. You need not travel a lot or visit too many centers to get this loan. You can sit at your home or office and log on to the net and get as much information as you want regarding this loan. You need to search for Home loans bad credit on your computer and you are rewarded with a lot many lenders. They also offer online quotes which you can ask for. On getting these quotes you should make a comparison of all the quotes for interest rates, repayment periods and other such factors and make a note of the one most suitable to you.

Home Loan Finders have hundreds of brokers and lenders competing for your business, once you submit your enquiry the broker with the lowest rate will get you home loan best designed for you and will contact you directly.

These loans can easily be attained through financial institutions, high street banks, private lenders or even the easiest online medium of financial assistance. Online mode helps the borrower to avail these loans faster.

The process of availing the secured Home loans with the online money lenders is easy and fast. Once you fill in the details in the application form, you may be asked to send in the documents related to your asset as well. Once you fax them, it hardly takes any time to assess the value of the Home. Once the asset is valuated, you are informed about the amount you can get as loan against the loan. This does not take more than 36 hours.

After approval, you get a call to discuss the repayment terms. Upon a common agreement of the repayment term, you get the cash transferred to your checking account within one hour. The entire process takes no longer than 36 hours. This is why the schemes are known as fast home loans. Not only does these schemes serve the purpose of offering loans to people who cannot place collateral, the process is so fast that you do not have to wait for long.

Ravi Mihsra can tell you how to look better, live better and breathe better by giving you tips to improve your finances. His ideas can help you rejuvenate your money. To find Cheap homeowner loans, Home secured loans UK, Bad credit homeowner loan , Homeowner personal loans visit www.ukfinancialsltd.co.uk

UK Financials Ltd,

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223 Regent Street, London – W1B 2QD

0871 956 2700

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Ravi Mihsra can tell you how to look better, live better and breathe better by giving you tips to improve your finances. His ideas can help you rejuvenate your money. To find Cheap homeowner loans, Home secured loans UK, Bad credit homeowner loan , Homeowner personal loans visit www.ukfinancialsltd.co.uk

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Do you need financial aid to fund your college study? If you need it, do you know what type of financial aids you can look for? Most students will search for scholarships first before they look for other alternatives while other students may just realize a few of them, making them miss the other opportunities to get money to fund their education. Let’s explore the type of financial aids available for college students so that you have a better idea on what to look for.

There are many types of financial support given out by various organizations, universities and colleges, either private or government bodies to college and universities students. While a few of them are free money which do not to be paid back, others financial aids are offered to the students in a form of loans that need to be repaid after the students complete their study.

In general, financial aids for students can be categorized into 4 groups:

Group 1: Gifted aids – Grant, Fellowship and Scholarship

Most students know what scholarship is. But many are confused with grant and fellowship. What are the differences between these three and how you can qualify for any of them?

In fact, both scholarship and fellowship are sub-group of grant. Grant is the gifted financial aids that provide to the students without the need to be paid back. In some extend, fellowship is the same with scholarship which is the free money given to students for funding their education. Most often, fellowship refers to a fund awarded to graduate students at universities or colleges. Whereas, scholarships are awards at degree or certification levels based on merit or academic achievement. Since, they are gifted free money, many students are competing to win them and you need to outperform other competitors in order to secure one. Hence, when you apply for these grants, make sure you are qualified to apply and meet the application requirements, else you application may not even get reviewed.

Group 2: Student loans

Most often, students who fail to secure any grant will turn to apply for student loan if they really need a financial aid for their study. Student loans need to be paid back. But, you should aware that there are student loans being offered with zero interest by charities and associations. If you need to apply for a student loan, you may want to give first priority to the loans with zero interest, so that you just need to pay back the amount you have borrowed. Other than the zero-interest loan, some student loan may offers in partial scholarship form. It allows you to pay back only a certain percentage of the loan amount if you achieve excellent result in academic or merit.

Group 3: Work study

Most colleges and universities offer jobs to their students so the students can earn money to fund their education cost. This is a type of financial aid program to enable students to work at the college or university where they study and earn the money to support the tuition fee and part of their living expenses. Because of the vacancies are limited, you need to apply it early. There are not many requirements you need to fulfil in order to qualify for the work study as long as you show to the school you need the job to get the money to fund your education.

Group 4: Waiver

Under some special circumstances, schools may allow the students to attend their degree program without the need to pay for tuition fee and other related costs. This is a special financial aid program that enables students to attend the degree program for free, but it has rather strict eligibility requirements that you need to fulfil if you want to qualify for it.

Summary

You are not limited to scholarships and student loan to get a financial aid for your study, there are more than two types of financial aids you can look for. Hopefully, you have understood them and make sure you don’t miss the opportunities for the type of financial aids you are qualified for.

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1. What is Financial Aid?
   Financial aid is monetary aid to help you pay for your college education. Aid is made available from grants, college scholarships, student loans, and part-time employment from federal, state, institutional, and private sources. The types and amounts of aid awarded are determined by financial need, available funds, student classification, academic performance, and sometimes the timeliness of application.
2. What is the FAFSA?
   FAFSA stands for Free Application for Federal Student Aid. The FAFSA is the Federal Department of educations primary application for financial aid and is the gateway form to just about any other federal, state or private grants, college scholarships, student loans or college work study programs. The FAFSA form must be filled out each year between January 1 and March 10th (although some colleges have their own earlier deadlines) and can be completed online or by mail. Four to six weeks after you file the FAFSA (two to four weeks if you filed electronically), you will receive your Student Aid Report (SAR) which will contain a summary of the information you submitted on your FAFSA and presents your Expected Family contributions (EFC) which tells you the amount your family is expected to contribute towards your education. The amount of financial aid is then determined approximately by the tuition of your college subtracted by your EFC.If you do not receive the SAR within a reasonable amount of time, you can call the Federal Processor at 1-319-337-5665. Review the SAR carefully for errors. If necessary, make any corrections on Part 2 of the SAR and return it promptly to the address listed on the form. You will then be sent a new SAR with the changes made.
3. What is the College Scholarship Services Profile (CSS Profile)?
   Some colleges also require you to fill out a College Scholarship Services Profile form in addition to the FAFSA. It is a secondary financial aid form that supplies further information about your family income. Be sure to check whether this form is necessary and about specific deadlines with your college directly.
4. What is the difference between a Grant, a Student Loan and a College Scholarship?
   A grant is free money from government or non-profit organizations that does not need to be repaid. Grants are usually determined by financial need but can also be influenced by academic merit. Unlike grants, student loans are money loaned from an academic institution, financial institution, or federal government that must be repaid. Like a grant, a student scholarship is free money, but is generally offered through colleges, businesses, private individuals and outside sponsors. Those awarded by the college itself are often called MERIT AID. While grants tend to be issued according to financial need, college scholarships are awarded on a broad-base of criteria, the most common being academic merit. Furthermore, to receive any grants or loans you must complete a FAFSA, however, many scholarships may not require you to complete a FAFSA to be eligible. Instead, you may need to obtain application material directly from the donor of the scholarship.
5. What are the different kinds of grants?
   There are federal as well as campus-based (institutional) grants. Federal Grants are free gift money from the Federal Department of Education while campus-based grants are government funds issued directly from your college. The campus-based grants provide a certain amount of funds for each participating school to administer each year. When the money for a program is gone, no more awards can be made from that program for that year, so make sure you find out about the types of grants awarded by each college you are considering as well as their specific deadline.Below are some of the most common grants.Federal Grants
   
   Pell Grants are considered a foundation of federal financial aid, to which aid from other federal and non-federal sources might be added. Pell Grants are usually only awarded to undergraduate students who have not earned a bachelors or a professional degree. The amount you get depends on your financial need, your colleges tuition, your status as a full-time or part-time student and your plans to attend school for a full academic year or less.The Academic Competitiveness Grant is a new grant available to first year college students who graduated from high school after January 1, 2006 or for second year college students who graduated from high school after January 1, 2005. Only students who are eligible for a Federal Pell Grant and who has successfully completed a rigorous high school program as determined by the state or local education agency and recognized by the Secretary of Education. An Academic Competitiveness Grant will provide up to $750 for the first year of undergraduate study and up to $1,300 for the second year of undergraduate study for full-time students who are eligible for a Federal Pell Grant.The National Science and Mathematics Access to Retain Talent Grant (AKA the National Smart Grant) is available during the third and fourth years of undergraduate study to full-time students who are eligible for the Federal Pell Grant and who are majoring in physical life, or computer sciences, mathematics, technology, or engineering or in a foreign language determined critical to national security. The student must have also maintained a cumulative grade point average (GPA) of at least 3.0 in coursework required for the major. The National SMART Grant award is in addition to the students Pell Grant award.Campus-based Grants The Federal Supplemental Educational Opportunity Grant (FSEOG)
   The FSEOG is a campus-based grant aimed at assisting students with exceptional financial need. Pell Grant recipients with the lowest expected family contributions (EFCs) will be considered first for a FSEOG. You can receive between $100 and $4,000 a year depending on when you apply, your financial need, the funding at the school you are attending, and the policies of the financial aid office at your school.
6. What are the different kinds of student loans?
   A student loan is money that needs to be repaid after you have completed your studies. Generally, interest rates are low- so that you do not rack up as much debt as you would with a credit card or bank loan.There are campus-based loans, which you repay directly to your college, as well as federal loans which you repay either directly to the U.S. government or to your financial institution.Campus-based LoansFederal Perkins Loan
   The Federal Perkins loan is a campus- based loan because it is administered directly by the financial aid office at each participating school. In other words, your school is the lender although the loan is made with government funds. Your school will either pay you directly or apply your loan to your school charges. Youll receive the loan in at least two payments during the academic year. You can borrow up to $4,000 for each year of undergraduate study with a maximum of $20,000 for your entire undergraduate degree. The amount you receive depends on when you apply, your financial need and the funding level at your school. The Federal Perkins Loan is a low-interest , 5 % loan for students with exceptional financial need. You must repay this loan directly to your school and you have nine months to begin your repayment plan after you graduate. Generally you will make monthly payments to the school that loaned you the money over a 10 year period.Federal LoansThe U.S. Department of Education administers the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Both the FFEL and Direct Loan programs consist of what are generally known as 1. Stafford Loans (for students) and 2. PLUS loans (for Parents).Schools generally participate in either the FFEL or Direct Loan program, but sometimes schools participate in both. For either type of loan, you must fill out FAFSA, after which your school will review the results and will review the results and will inform you about your loan eligibility. You also will have to sign a promissory note, a binding legal document that lists the conditions under which youre borrowing, and the terms under which you agree to repay the loan.
   1. Stafford Loans
      Stafford loans are federal loans for students. Eligibility rules and loan amounts are identical under both the FFEL and Direct loan programs, but providers and repayment plans differ. For all Stafford loans first disbursed on or after July 1, 2006, the interest rate is fixed at 6.8 percent. However, you can be considered for a subsidized loan, depending on your financial need, in which the government will pay (subsidize) the interest on your loan while youre in school, for the first six months after you leave school and if you qualify to have your payments deferred. You might be able to borrow loan funds beyond your subsidized loan amount even if you dont have demonstrated financial need. In that case, youll receive an unsubsidized loan. Your school will subtract the total of your other financial aid from your cost of attendance to determine whether you are eligible for an unsubsidized loan. Unlike a subsidized loan, you are responsible for youre the interest from the time the loan is disbursed until the time it is repaid in full.After you graduate, you will have a six month grace-period before you must begin repayment. During this period of time, youll receive repayment information, and youll be notified of your first payment due date. You are responsible for beginning repayment on time, even if you dont receive this information. You will receive more detailed information on your repayment options during entrance and exit counselling sessions provided by your school.
      • Federal Family Education Loan (FFEL)Funds from your FFEL will come from a bank, credit union or other lender that participates in the program. Schools that participate in the FFEL program, will usually have a list of preferred lenders. Student loan borrowers may choose a lender from that list, or choose a different lender they prefer. Your loan money must first be applied to pay for tuition and fees, room and board and other school charges. If money remains, youll receive the funds by cheque or in cash.Besides interests, you will pay a fee of up to 4 % of the loan, deducted proportionately from each loan disbursement. For a FFEL Stafford Loan, a portion of this fee goes to the federal government, and a portion goes to the guaranty agency (the organization that administers the FFEL Program in your state) to help reduce the cost of your loans.
      • Direct LoanUnder the direct loan program, the funds for your loan come directly from the federal government and you will need to repay your Direct Loan to the U.S. Department of Educations Direct Loan Servicing Center. Like the FFEL loan, you will pay a fee of up to 4 % of the loan. For a direct Stafford Loan, the entire fee goes to the government to help reduce the cost of the loans.
   2. PLUS Loans (Parent Loans)Parents can borrow a PLUS Loan to help pay your education expenses if you are a dependent undergraduate student enrolled at least half time in an eligible program at an eligible school. PLUS Loans are available through the Federal Family Education Loan (FFEL) Program and the Direct Loan Program. Your parents can get either loan, but not both, for you during the same enrolment period. They must also have an acceptable credit history.For a Direct PLUS Loan, your parents must complete a Direct PLUS Loan application and promissory note, contained in a single form that you get from your schools financial aid office.For a FFEL PLUS Loan, your parents must complete and submit a PLUS Loan application available from your school, lender, or your state guaranty agency. After the school completes its portion of the application, it must be sent to a lender for evaluation.
7. What are the different kinds of scholarships?Scholarships are awarded on a broad-base of criteria, the most common being academic merit. Many scholarships carry conditions besides academic merit, such as financial need, affiliation with a group-, leadership, athletic talent, artistic or musical ability etc. Some scholarships are awarded by the college itself, often called MERIT AID. Other scholarships are awarded by outside sponsors. For some scholarships, you need to be nominated. For most of them, you apply directly to a sponsor. Because there are so many different types of scholarships, you should check directly with your financial aid office at your college.
8. Can I apply for a grant, a loan and a scholarship at the same time? Yes. You can team up different types of financial aid or simply have one kind. Nevertheless, some types of financial aid are contingent on others. For example, you can only receive an Academic Competitive Grant or a Federal Supplemental Educational Opportunity Grant if you have received a Pell Grant. While you cannot team up a FFEL loan with a direct loan, you may be eligible to receive a subsidized loan (in which the interest is paid by the government) and an unsubsidized loan (in which you are responsible for the interest) at the same time. You can also combine grants with loans and scholarships, so it never hurts to try to get as many different varieties of aid as possible!
9. What is the Federal Work Study Program?The Federal Work-Study Program (FWS) is a campus-based program that provides part-time jobs for undergraduate and graduate students with financial need, that allows them to earn money to help pay education expenses. The program encourages community service work and work related to the recipients course of study.
10. How often should I apply for financial aid?You will need to apply for financial aid each year. Even if you did not qualify this year, you should reapply next year since financial circumstances can change. The number of family members in college, for example can have a big impact on your eligibility for financial aid. If you submitted a FAFSA during the previous year, you may be able to complete the shorter Renewal FAFSA form instead. The renewal FAFSA will be mailed to your home. The renewal FAFSA preprints most of your answers from the previous years FAFSA. Verify that the old responses are still accurate and provide corrections or new answers where appropriate. If you dont receive a renewal FAFSA by February 15, fill out a new FAFSA form.
11. How do I know whether I am eligible for financial aid?
    
    Dont assume that you will not qualify for financial aid. Nearly all U.S. citizens or eligible non-citizens enrolled at least half the time are now eligible for some form of financial aid. Even if you dont qualify for a grant, free college info is still available, and you may still be eligible for other forms of financial assistance. Many families dont apply for financial aid, because they believe that they earn too much money. However, you dont need to be from a low-income family to receive financial aid. Some loans and scholarships are available regardless of need. Many factors are used to determine your eligibility for financial aid and there is no simple cut-off base on

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This video was created by the US Government Accountability Office (GA0) and can be accessed at: www.gao.gov It is my understanding that works done by employees of the US Government, working in their official capacity, cannot be copyrighted. I have uploaded this video because I think it is an important message that more people need to hear.

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A. Because it systematically lowers interest rates

B. To buy and sell quickly and cheaply are parts of the financial system

C. It improves liquidy and efficiency of financial markets

D. None of the above

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As the new year begins, you may have thought about making resolutions or setting new financial goals for the upcoming year. Settling debts and achieving financial freedom are probably some goals that you consider high priorities. Below are some things to keep in mind as you continue to work towards becoming debt-free.

Take Baby Steps

Experts say that most individuals do not keep resolutions because they are too complicated or too “big.” Accomplishing major goals like settling outstanding debts does not occur overnight. Doing all you can to stay on your debt negotiation program will make you more likely to reach your financial goals. Making your monthly payments and settling one debt at a time allows you to take small manageable steps towards that “big” goal of being free of burdensome debt.

Spend Extra Funds Wisely

Your goal is to complete your debtsettlement program as soon as possible. One way to increase your settlement account is to put any extra money that you receive towards your program savings. We realize that many of you must follow a strict budget. However, throughout the year, you may receive additional money from tax refunds, wage increases, holiday bonuses, inheritances, contest winnings, etc. Every dollar amount, regardless of how small, will bring you one step closer to financial freedom.

Put It In Writing

Making a list of your goals may help make them seem more attainable. Throughout the year, take a look at this list to evaluate your progress. Because life constantly changes, be sure to periodically update your goals to reflect these changes.

Change Your Habits

Resolving to become debt-free will also involve changing some of your financial habits. This publication strives to offer valuable money saving tips on a monthly basis. Try to take advantage of the many helpful resources such as these as you contemplate your financial strategies for the upcoming year. Discover cost-conscious ways that will meet the needs of you and your family. Would you benefit from bringing a lunch to work instead of eating out? Could you reduce the amount of your utility consumption or find a better rate on your auto insurance? Would a part-time job fit into your schedule?

Stay Organized

Establish a filing system for all of your financial documents. Knowing when your bills are due and paying them on time may help you achieve your goals. Balance your checkbook and make a monthly budget. If you know how your money is being spent, you bring a clearer perspective to your financial plan. Disorganization may cause chaos and confusion, which may delay your financial goals.

Stop Trying To ‘Keep Up With The Joneses’

You may know of a friend or neighbor that buys a new vehicle every few years or shops frequently for the latest gadgets. Because we live in such a consumer-driven society, it is easy to fall into this trap. Having the need to always purchase the latest and greatest can really hinder financial goals and create more debt. When compelled to spend a lot of money on items that are not necessities, keep your financial goals in mind.

Don’t Get Discouraged

You may stumble upon a series of road blocks on the road to financial freedom. If you encounter difficult situations remember your ultimate goal is to be free of debt. You can also contact your debt settlement company when you have any questions about your program or a problem with a specific collector.

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Bill Loughborough is Founder and President of Credit Answers, one of the best debt settlement companies in America. Credit Answers specializes in debt management, credit card debt settlement, debt negotiation and avoiding bankruptcy. Credit Answers team of experts work to enable a new and fresh financial start for individuals with debt problems. We realize the importance of money in people’s lives and also the accompanied strain that debt can cause. Our team has helped thousands of clients across the nation.

Bill started Credit Answers in 2006 and has built it into one of the leading debt settlement / debt relief companies in the U.S. At Credit Answers we encourage our customers to Live Better Debt Free.

For More information please visit: www.creditanswers.com

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2.0   CONCERNS ABOUT POVERTY

 As we got ready to complete the first half of the decade of the 1990s, growing concerns about poverty stood out in political agendas all over the industrialized and the developing worlds including Zambia.

The stubbornness of poverty, even in the richest of nations, is being met with increasing impatience, and governments of diverse ideological persuasions are trying to do something about it, while donors and other international agencies have been rushed into offering their support to these efforts. This has even been hastened by the deepening global financial and economic crisis that is sweeping the entire globe.

 But, from good intentions to actual successful remedies there is a long way. Thus, both conceptualizers and practitioners are once again looking for operational approaches to deal with poverty. And so, the old question of credit extension re-emerges which hinges on financial inclusion.  Financial inclusion plays a critical role in reducing poverty. But with this financial crisis blowing across the globe is financial inclusion possible?

Cross sectional data have shown that people with access to credit have less incidence of poverty. As we well know, the extent to which the reduction of poverty and/or the alleviation of its consequences has been a public policy issue which has differed significantly across countries and over time. In Zambia, for example, poverty was at the top of the nation’s agenda during the preparation of Poverty Reduction Strategy Paper which saw the country qualify to Highly Indebted Poor Countries Initiative program steered by the International Monetary Fund. One of the key issues considered in this paper was access to credit.

Further, in the early 1980s, not only was poverty merely one of several explicit policy concerns, but many chose instead to highlight the counterproductive nature and high fiscal costs of some of the poverty alleviation programs that had been adopted earlier.

More recently, as we move into the 1990s, public attention has focused again on the potential role of both government and of the publicly-supported non-government organizations (NGOs) in directly alleviating the continuing plight of the poor.

Three decades ago, as new programs were being introduced and old programs were being

expanded, an optimistic view prevailed. The belief was that if stable economic growth could be maintained, government actions could actually solve the poverty problem if only sufficient resources were devoted to the task (Danziger and Weinberg).

It is against this backdrop that some countries have come up with a deliberate vision of promoting sustainable financial service providers to the unbanked nationals with emphasis on the provisions of low interest rates.

3.0    FINANCIAL INCLUSION AND POVERTY

In the letter of transmittal of the 1964 Economic Report of the President, President Johnson announced: “We know what must be done and this Nation of Abundance can surely afford to do it” (Johnson). Soon optimism was followed, however, by a diminishing faith in the government’s ability to solve any problem (Aaron) and by strong arguments that social problems cannot be solved by “throwing money at them.” This is one of the perceptions that led to promotion of the private sector, but with the recent economic crisis, we have seen the USA Government increasingly taking up its role that was negated to the private sector.

 Despite this skepticism, in the 1990s the pendulum of public opinion has been swinging

back and new initiatives to address the challenge of poverty are being proposed. In general, among these recent initiatives, specialized credit programs for the poor are

becoming increasingly popular (Jordan; Minsky et al.). As many believe that a more effective design of the poverty alleviation programs would prevent their earlier shortcomings, it becomes critical to identify lessons learned from earlier experiments. What do we know about more effective program designs? As experience accumulates on the performance of credit (and of  Income from a country, Costa Rica, where these objectives of renewed growth with improved social conditions are being achieved quite successfully, and thus we are optimists about well-designed structural adjustment programs). Hence the need to encourage microfinance institutions so that many people will have access to credit any time they need so. This is how financial inclusion can be promoted in poor countries.

 There are legal requirements that a financial service provider needs to adhere to before a license is granted to an institution. However it is the deliberate policy of most central banks to relax some of these legal requirements so as to maximize the numbers of the players in the market, especially those whose operational objectives is to serve the unbanked. In this case, this will positively affect one the fundamentals of economics, demand and supply. Once there are more financial service providers, this will subsequently increase competition, leading to fall in interest rates, the price of money.

Further there is need to come up with other programs explicitly designed to assist the poor, in this regard there is need to take stock of all antipoverty policies that have worked and which have not. We need complimentary policies that will support on the promotion of financial inclusion. The Government should come in and come up with fiscal policies that will lessen the hurdles that applicants in financial service face. The tax regime should be favorable to all players in the market whose objective is to serve the poor people. In this case, in addition to encouraging formal financial service providers, the country will promote informal players as well.

 A substantial abode of experience (positive and negative) on credit programs for the poor has been accumulated in low income countries. Many of the lessons learned are relevant for any country wishing to pursue this deliberate policy. The evolution of public policy has not been different in other developing nations, where poverty is so conspicuous. Leaving behind the “basic needs” paradigm of the 1970s, for most of the developing world in the 1980s were a “decade of structural adjustment,” dominated by stabilization efforts designed to bring national expenditure in line with national income (or output) as well as by attempts to increase national income, through policy reforms that have promoted a more efficient use of resources (Grootaert and Kanbur).

There is a strong professional consensus that these adjustment programs of the 1980s were successful in moving many countries toward internal and external macroeconomic balance. With the attainment of this objective we need to avail all the credit resources that the poor desperate need. The debate is intense, however, about whether these objectives could have been achieved “while better protecting the poor and providing the basis to incorporate them in the growth process.” However, let it be emphasized that, this is not the place to solve this issue. To begin with, establishing causality between specific policies and the evolution of the standards of living of different socio-economic groups is a particularly difficult exercise. This is also the case, of course, of attempts to establish the impact of credit programs on final beneficiaries (Rhyne). In the case of structural adjustment efforts, in any case, the outcome depends strongly on the initial conditions and on the types of policies adopted.

In any case, regardless of whether the observed poverty outcomes of the 1980s stemmed

from past policies which militated against growth or from the adjustment policies that inevitably followed as the earlier strategies failed (Morley), there is no doubt that both low-income country governments and international donors have been increasingly concerned with poverty alleviation.

There are two dimensions to this preoccupation.

A first type of concern relates to the need to achieve growth with equity over the long term. This requires policies and programs that foster the participation of the poor in the process of economic growth, by creating employment opportunities and by increasing their access to income-generating assets; and by raising the productivity of their assets, both physical and human (Grootaert and Kanbur). We believe that, if efficiently provided, financial services may play an important role in this task of incorporating (some of) the poor to processes of economic growth in most poor countries.

A second type of concern relates to the need to mitigate the transitional cost of adjustment for the most vulnerable groups of society. We believe formal financial services can play a very limited role in this effort, if any. Other fiscal mechanisms provide a more cost-effective approach to assist those unfortunate who have no productive opportunities and, therefore, no debt capacity. The use of credit in this case carries an excessive social cost and is easily counterproductive, as one would not want to burden the unviable with additional debt they cannot repay (Adams). In dealing with these (poverty) issues it is always difficult to bridge the gap between moral obligations, calling for private and public charity, on the one hand, and the economic requirements that could improve the lot of the poor, on the other (Schultz). It appears, nevertheless, that financial services can have a sustainable economic role only in the second case. In this case it is our desire that to encourage more players in informal financial services, any country and regulating authorities need to relax some requirements on governance and prudential issues when the opportunities for improvement do exist. To understand why this is the case, one needs to appreciate the nature of finance and the importance of its economic contributions as far as economic development, particularly poverty reduction is concerned.

4.0   FUNCTIONS OF FINANCE

 The financial system is a key component of the institutional infrastructure that is required

for the efficient operation of all markets. The most important contribution of the financial system is its ability to induce a larger size and foster a greater degree of integration of the markets for provision of goods and services, factors of production, and other assets. This expansion of markets is a precondition for powerful processes of division of labor and specialization, greater competition, the use of modern technologies, and the exploitation of economies of scale and of economies of scope. As already noted by Adam Smith, these are the processes that increase the productivity of available resources and lead to economic growth. With economic growth there are multiplier effects that spill off to poverty reduction.

The expansion and integration of markets is achieved through the provision of monetization services and the efficient management of the payments system, the development of services of intermediation between surplus and deficit economics agents, and the establishment of opportunities for the accumulation of stores of value, the management of liquidity, and the transformation, sharing, pooling, and diversification of risk (Long). Particularly important are the services of financial intermediation, which transfer purchasing power from agents with resources in excess of those needed to take advantage of their own (internal) opportunities (surplus agents, such as savers), to those with better opportunities but not enough resources of their own (deficit agents, such as investors). This is critical for financial inclusiveness. By making this division of labor between savers and investors possible, financial intermediaries channel resources from producers, activities, and regions with a limited growth potential to those where a more rapid expansion of output is possible.

Since there always are more economic agents who claim that they have superior uses for

resources than there is purchasing power available, financial markets must contribute to the selection of the best possible uses of resources. These markets can also offer monitoring services, ensuring that funds are profitably used, as promised, and they can contribute to the enforcement of contracts, making sure that those who have borrowed repay the loans (Stiglitz).  This is where regulators such as central banks come into play. After all, finance is about promises to pay in the future that are expected to be fulfilled. If this is not handled properly the consequences are disastrous, like the current economic crisis that has its roots in poor regulation of the financial sector. The conditions of such repayment influence, in turn, who bears what risks.

 We cannot sufficiently emphasize the extent to which the efficient provision of financial services is extremely critical for the operation of the economy at large. Because financial markets essentially influence the allocation of resources, Stiglitz has compared them to the “brain” of the entire economic system, the central locus of decision making: if they fail. . .the performance of the entire economic system may be impaired. Why this is the case is a complex question, but if it is indeed so, there is clearly a major social interest at stake here. Most governments have recognized this and many have gone to extremes in order to prevent a collapse of their financial systems. Frequently, however, while recognizing but (mis)understanding their powers, governments have intervened in financial markets, in the pursuit of a varied range of worthy nonfinancial objectives, but with negative consequences. We need to think through as regulators therefore to mitigate this competing needs of positive and negative consequences when coming up with financial inclusion vision.

5.0   FINANCE AND POVERTY: LESSONS FROM THE PAST

 A good number of the initiatives to directly assist the poor with financial services (may)

fall under this category of unsuccessful interventions. In considering such interventions,

moreover, a key question to address is their potential cost in terms of the reduced efficiency of the financial system at large. This is a cost that it might be worth enduring, if the expected benefits were sufficiently large. Unfortunately, this is typically not the case, given the very nature of financial markets.

According to Gonzalez-Vega this is one of the most important lessons learned from earlier attempts to use formal financial markets to ostensibly promote particular activities, to compensate producers for other repressive policies, to free them from the grip of moneylenders, or to redistribute income towards the poor (Gonzalez-Vega 1993). The subsidized interest rates and administrative loan allocations through targeted credit programs, used for these purposes, did not displace informal sources of financial services and hardly promoted anything. They only redistributed income, but in reverse, from poor to rich (Gonzalez-Vega 1984). So, despite the best of intentions, they frequently turned out to be harmful for the particular segments of the population (marginal clientele) they had been set out to help. As a country, therefore we need a concise visionary action to avoid redistribution of income from the poor to the rich. This is common where commercial lenders with the high pegged interest rates are targeting the poor exploitatively.

These outcomes are well known and have been extensively documented for dozens of

countries (Adams et al.). Too much effort was spent in small farmer credit programs, for

example, to obtain meager results. The primary objective of increasing the farmers’ access to formal credit was poorly met and a reduction in the cost of borrowing was achieved only for a few larger borrowers in most poor countries. Despite artificially low interest rates, formal credit did not become cheap for small rural producers and most credit portfolios became concentrated in a few hands.  Even in stagnant economies, nevertheless, finance plays a role in consumption smoothing. This role is frequently performed well by informal financial arrangements (Udry).

More importantly, these government-sponsored credit programs distracted attention from technological innovation, infrastructure development, and human capital formation, which directly increase the productivity of resources. Finance, instead, can only contribute to this goal indirectly, by making it possible for some to take advantage of the opportunities created by those other growth-inducing processes. In the absence of such opportunities, however, there is only a limited role for finance to play.

There is an increasing body of evidence confirming that economic growth and reductions

in poverty go hand in hand. Clearly, a substantial improvement in living standards requires economic growth (Biggs et al.). Further, securing full participation of the poor in such process is a long-term effort and it involves improving their employability, expanding the educational opportunities for their children, improving the performance of labor markets, creating a hospitable environment for their productive activities and much more. An efficient provision of the financial services that they demand is part (but only a part) of all of this process.

So, to the question “Can financial services be used to assist the poor in improving their

lot?” the answer is “only when finance is allowed to do what finance is supposed to do.”

That is, only when:

(a)        finance allows a transfer of purchasing power from uses with low to uses with high marginal rates of return;

(b)        finance contributes to more efficient inter-temporal decisions about saving, the

accumulation of assets, and investment;

(c)        finance makes possible a less costly management of liquidity and accumulation of stores of value; and

(d)        finance offers better ways to deal with the risks implicit in economic activities.

Otherwise, financial interventions (such as the early subsidized and targeted credit

programs) are a weak instrument to achieve different, non-financial objectives and frequently lead to unexpectedly negative outcomes (Gonzalez-Vega, 1994). This section can be summarized with the proposition that many ingredients are needed for the poor to come out of poverty and that credit is only one of them. Credit is an important ingredient, but it is not even the most important one. Financial services play the key role of facilitating the work of growth-promoting forces, but only when the opportunities exist. In this case the poor also need saving facilities as it is one of the most important ways of storing their value. Therefore poor countries should encourage deposit taking MFIs for this objective to be fully met.

6.0   LESSONS LEARNED ABOUT LOANS AND DEPOSITS

As alluded to above, a second important lesson learned from accumulated experience is that, among financial services, credit is not the only one that is important for the poor. In particular, deposit facilities provide valuable services for liquidity management and for the accumulation of stores of value by poor firm-households. Researchers are always surprised by the intensity of the demand for deposit facilities in the rural areas of very poor countries (Gonzalez-Vega et al.). According Robinson, to satisfaction of this demand has been a distinctive feature of programs that have been successful in delivering financial services to the poor (Robinson). An outstanding example is the unit desa program of the Bank Rakyat Indonesia, with over 12,000,000 small depositors for only over 2,000,000 small borrowers (Patten and Rosengard). Thus, while not all producers demand loans and, among those in need the majority needs saving facilities. Among others, we need to emphasize the importance of payments services, particularly for remittances and other money transfers In this regard financial inclusion will be approached in a holistic manner. We fully agree that a payments service is another important service for the poor. Therefore payment system should collaborate well with saving and provision of credit for the full attainment of financial inclusion.

Empirical evidence clearly demonstrates that the poor do not demand credit all of the time, most (if not all) economic agents demand deposit and other facilities for liquidity management and reserve accumulation, all of the time.

A third lesson from direct experience is that the demand for credit is not just a demand for loanable funds. Finance is intimately linked to inter-temporal decisions, and in this sense it plays a critical role not only in savings and investment processes but also in dealing with the lack of synchronization between income generating (production) and spending activities (consumption and input use decisions), as well. Finance is also closely associated with risk management. It facilitates the accumulation of reserves for precautionary reasons (to be able to survive emergencies) and for speculative purposes (to be able to take advantage of unexpected future opportunities). For this, being creditworthy is critical. Being creditworthy is equivalent to possessing a credit reserve: poor people do not necessarily want a loan now; they want the opportunity to get one, if and when they need it (Baker). They want this potential access to a loan to be reliable, to result in a timely and flexible disbursement of funds, to be always there. According to research finding, because the informal sources of credit do offer these opportunities, poor people are reluctant to substitute formal sources of funds, no matter how subsidized, for the flexible and reliable informal financial arrangements that have served them well over the years.

Thus, what matters is not just access to loanable funds (credit) but the development of an

established credit relationship. This, in turn, implies a sense of permanency of the financial institution. A fourth lesson learned, in this connection, is that a financial intermediary cannot be restricted to credit provision alone but to institutional framework support.

7.0   INSTITUTIONAL VIABILITY AND THE POOR

With every program we have learned that the most severe deficiency of the earlier

interventions to provide financial services to the poor was the lack of institutional viability of the organizations that were created for that purpose. For instance, why does viability matter so much?  The concern with viability springs first from a clear recognition of the scarcity of resources. If resources are limited, without self-sufficient financial institutions there is little hope for reaching the numbers of poor firm-households that are potential borrowers and depositors. The amounts required are beyond the ability and willingness of governments and donors to provide them (Otero and Rhyne).  We therefore, as poor nations need to guard against weak prospective financial services in the system to compliment government and donors’ efforts.

The alternative to viable organizations are expensive, unviable quasi-fiscal programs that reach only a selected few beneficiaries. Thus, viability matters the most from this equity perspective: to be able to reach more than just a privileged few. Moreover, if the objective were just a one-time (transitory) injection of funds, then lump-sum transfers are always a more efficient way of accomplishing this. If, on the other hand, sustainability is important, then the viability of the financial organization matters.

Further, in addition to being fiscally feasible, the most important contribution of a concern with institutional viability is that it elicits appropriate incentives among all the participants in financial transactions. Thus, for example, while poor loan recovery rapidly destroys viability, an image of viability improves repayment discipline. A reputation as a good borrower in an established intermediary-client relationship is a more valuable intangible asset if the financial institution is expected to be permanent rather than transitory.

When this intangible asset is sufficiently valuable, it elicits punctual repayment. When the organization’s survival is questioned, on the other hand, default follows in stampede, and institutional breakdown becomes a self-fulfilling prophecy. Viability matters when repayment matters. Therefore, there is strong need to ensure that borrowers have a good credit culture. This is where a strong credit reference service is imperatively needed to enhance good credit culture.

In this way, a concern with viability makes it possible to identify one way how interest

rates and default rates are linked. Too low interest rates that cause intermediary losses are

perceived by borrowers as signals of lack of permanency and thus delinquency follows..

Moreover, in the same way that very high interest rates may induce adverse selection (Stiglitz and Weiss), too low rates tend to attract rent seekers who eventually default (Gonzalez-Vega 1993). Thus, both too high and too low interest rates may reduce expected intermediary profits through higher expected default rates. There is need to strike a balance, to make sure that real interest rates strike a balance

As another example, the targeting of loan uses, irrelevant because of the fungibility of

funds (Von Pischke and Adams), basically increases both lender and borrower transaction costs and reduces the quality of the services supplied by the intermediary and thus lowers the value of the intermediary-client relationship.

In summary, targeting hurts viability in several ways. It reduces the scope for portfolio diversification in already highly specialized lenders. It limits the lender’s degrees of freedom in screening loan applicants, and it reduces incentives for vigorous loan collection, shifting accountability for default from the lender to the donor that conditions the availability of funds to their use for specific targets (Aguilera-Alfred and Gonzalez-Vega).  Findings reveal that compliance with the targeting becomes imperatively difficult, for a long time many donors ignored this potential impact of targeting on delinquency, but they were very surprised when rampant default destroyed the institutions that had been (ab)used to easily channel donor funds.

 Deposit mobilization, on the other hand, is not an easy task. It requires an appropriate organizational design, liability management techniques, and prudential supervision to protect depositors. You therefore require a strong and resilient regulator.

Finally, deposit mobilization is also intimately linked to the importance of institutional

viability. Deposits provide information to the lender about the potential borrowers, create a basis of mutual trust, and facilitate the accumulation of a down payment that can serve as a deductible in any future loan contract. Deposits contribute, therefore, to the solution of difficult information problems frequently encountered in financial markets. Moreover, healthy deposit mobilization creates an image of institutional viability that promotes repayment. Thus, while donor-funded loans may not be repaid, those funded with the neighbor’s deposits are (Aguilera-Alfred andGonzalez-Vega).

Most importantly, depositors create institutional independence from the whims of donors

and politicians; they shield the financial organization from political intrusion (Poyo, Gonzalez-Vega and Aguilera-Alfred). In general, deposit mobilization contributes to sustainability and to an organizational environment (corporate culture) where permanency becomes an important (compatible) incentive to attract and retain competent managers and induce the agency’s staff to behave in ways compatible with the viability of organization. For them, the value of their relationship with the organization increases when deposits are an important source of funds. This encourages correct decisions and effort (Chaves 1993).

8.0   FORMAL AND INFORMAL FINANCE

Against this backdrop as poor countries formulate financial inclusion vision and strategy they need to recapitulate the following into consideration that:

(a)        The poor need more than just financial services; the non-financial ingredients of growth and development matter;

(b)        The poor need more than just credit; deposit facilities may matter even more.

(c)        The poor need more than just loanable funds; they need a permanent, flexible and reliable credit relationship;

(d)        In consequence, the poor need viable, efficient, profitable, well-managed financial

intermediaries with which to establish these permanent relationships.

9.0              OBSERVATIONS

One important additional lesson increasingly learned over the past decades is that informal financial arrangements are pervasive and very successful in providing several (some) types of financial services among the poor (Bouman and Hospes). They are timely, reliable, and levy low transaction costs on their clients, mostly for loans of small amounts and at short terms.

The value and importance of these informal financial arrangements have been increasingly recognized and visions of exploitation have been replaced by attempts to either replicate their features or link informal lenders to national financial networks (Adams and Fitchett). But, as Hugo Pirela has asked “if this is the case, why would additional (semi-formal and formal) financial intermediaries be needed to do a job that indigenous, informal arrangements are already doing to well?” The fact is that, despite their valuable contributions, informal financial arrangements suffer from several limitations.

These shortcomings stem from the very features that make informal transactions competitive in the first place. They are grounded in the local economy and are thereby limited hence the need to formalize them in form of microfinance institutions.

Moreover, successful finance requires inputs for screening loan applicants (information management for creditworthiness evaluation and loan approval), for monitoring borrowers, and for the efficient design and enforcement of contracts. These costs are a function of distance (geographic, occupational, and ethnic) and of feasible technologies used to produce these services.

In addition, alternative technological arrangements result in specific comparative advantages in the provision of financial services in specific market niches. The choice of appropriate technology thus becomes critical.

Much technological progress has taken place in the area of microfinance (Christen, Rhyne, and Vogel). The key to success is to design an intervention that is properly dimensioned to the size of the market and compatible with the nature of the clientele (Chaves and Gonzalez-Vega).

Traditional banking technology, for example, is prohibitively expensive for loans to the poor in real terms. Both lender and borrower transaction costs are too high in this case. Moreover, as the poor are so heterogeneous, so are the financial services that they demand, creating opportunities for different types of intermediaries.

Commercial banks may, of course, adopt more information-intensive technologies than those that rely on traditional collateral; that is, embark on “downgrading” strategies (Krahnen and Schmidt). This adaptation of commercial banks’ technology of extending loans is clearly taking a centre stage in Zambia. We have seen a lot of banks extending microfinance services to the public, but this is explicitly available to the elite.

Although there are major advantages in using banks as intermediaries, to reach marginal clientele they need a technological revolution. Other non-bank organizations may possess comparative advantages in information and contract enforcement among this clientele. They may eventually be “upgraded” to become more like banks. In either case, the challenge is to bring together those who have the informational and enforcement advantages (usually local agents) and those with sufficient resources and willingness.

Appropriate technology is clearly a necessary condition for reaching the poor with

sustainable financial services. It is not a sufficient condition, however. While policies,

procedures and technologies matter, policies will not be enacted, procedures will not be revised, and technologies will not be adopted, unless it is in someone’s interest to do so.

In the end, all decisions are made by individuals, who pursue their own objective functions, given existing constraints.

Institutions constrain individual behavior, define property rights and incentives, and embody the rules of the game (North). Organizational design matters a lot because individual choices are induced and/or constrained by the structure of incentives within the organization.

Organizational design is critical because it influences behavior and behavior influences performance. If what matters is not just loanable funds but viable organizations, emphasis on designing efficient and viable organizations is critical. The dilemma is that a flood of donor and government funds tends to destroy adequate organizational designs. Because wealth constraints matter, how to overcome those constraints without at the same time destroying the intermediary involved is a major challenge.

It seems that the most difficult remaining question in the provision of financial services

to the poor is thus the design of organizations with the correct structure of incentives and

governance rules (Chaves 1994). As this depends so much on the structure of property rights of the organization, there are serious questions about the extent to which intermediaries with diffused property rights structures (such as the old public development banks and the new NGOs) or with conflicting governance rules (such as credit cooperatives) will be able to generate sustainable financial intermediation. The greatest challenge for the progress of finance for the poor, therefore, is in the institutional design of such organizations. This is, according to Krahnen and Schmidt, the most promising and critical area for future donor assistance.

Moreover, because of several limitations of locally-based financial arrangements (limited

opportunities for risk diversification and intermediation), appropriate links of the local

intermediaries to the aggregate financial system must be established, in order to increase the viability of enforcement-effective and informationally-advantaged agents, which may suffer from local, covariant, systemic risks and from limited opportunities for intermediation between surplus and deficit units. Ultimately, what matters is the development of financial systems and networks (e.g., new ways of economic organization).

As markets grow and institutions are developed, formality will increase (although informality will not disappear), and the introduction of modern institutions will be required. For this, appropriate policies, cost-effective technologies, and viable organizational designs will still be needed.

10.0          CONCLUSION

Therefore the vision of the poor countries in promoting this concept of financial inclusion in poverty reduction need to focus on the concerns about poverty raised in this paper;the relationship between financial inclusion and poverty, functions of finance, finance and poverty: lessons from the past, lessons learned about loans and deposits, institutional viability and the poor, formal and informal finance and lastly the relevant observations made in this paper.  REFERENCES

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Chaves, Rodrigo A. and Claudio Gonzalez-Vega (1994b), “The design of Successful Rural Financial Intermediaries: Evidence from Indonesia,” World Development, forthcoming.

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Washington, D.C.: IMCC, unpublished report.

Danziger, Sheldon H. and Daniel H. Weinberg (1986), “Introduction,” in Sheldon H. Danzigerand Daniel H. Weinberg (eds.), Fighting Poverty. What Works and What Doesn’t,Cambridge, Mass.: Harvard University Press.

Gonzalez-Vega Claudio (1984), “Cheap Agricultural Credit: Redistribution in Reverse,” in Dale W Adams, Douglas H. Graham, and J.D. Von Pischke (eds.), Undermining Rural Development with Cheap Credit, Boulder, Co.: Westview Press.

Gonzalez-Vega, Claudio (1993), “From Policies, to Technologies, to Organizations: The

Evolution of The Ohio State University Vision of Rural Financial Markets,” Economics

and Sociology Occasional Paper No. 2062, Columbus, Ohio: The Ohio State University.

Gonzalez-Vega, Claudio (1994), “Stages in the Evolution of Thought on Rural Finance. A Vision from The Ohio State University,” Economics and Sociology Occasional Paper No. 2134, Columbus, Ohio: The Ohio State University.

Gonzalez-Vega, Claudio, Jose Alfredo Guerrero, Archibaldo Vasquez and Cameron Thraen (1992), “La Demanda por Servicios de Depósito en las Areas Rurales de la República Dominicana,”in Claudio Gonzalez-Vega (ed.), República Dominicana: Mercados Financieros Rurales y Mouilización de Depósitos, Santo Domingo: The Ohio State University.

Grootaert, Christiaan and Ravi Kanbur (1990), “Policy-Oriented Analysis of Poverty and the Social Dimensions of Structural Adjustment,” Washington, D.C.: The World Bank SDAWorking Paper.

Harrington, Michael (1962), The Other America: Poverty in the United States, New York:MacMillan.

Jensen, Michael C. and William H. Meckling (1976), “Theory of the Firm, Managerial Behavior,

Agency Costs, and Ownership Structure,” Journal of Financial Economics, 3:305-360.

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Washington, D.C.: GPO.

Jordan, Jerry L. (1993), “Community Lending and Economic Development,” Economic Commentary, Federal Reserve Bank of Cleveland, November.

Krahnen, Jan Pieter and Reinhard H. Schmidt (1994), Development Finance as Institution Building.

A New Approach to Poverty-Oriented Banking, Boulder, Co.: Westview Press.

Christen, Robert Peck, Elisabeth Rhyne and Robert C. Vogel (1994), “Maximizing the Outreach of Microenterprise Finance: The Emerging Lessons of Successful Programs,”

Washington, D.C.: IMCC, unpublished report.

Danziger, Sheldon H. and Daniel H. Weinberg (1986), “Introduction,” in Sheldon H. Danziger and Daniel H. Weinberg (eds.), Fighting Poverty. What Works and What Doesn’t,Cambridge, Mass.: Harvard University Press.

Gonzalez-Vega Claudio (1984), “Cheap Agricultural Credit: Redistribution in Reverse,” in Dale W Adams, Douglas H. Graham, and J.D. Von Pischke (eds.), Undermining Rural Development with Cheap Credit, Boulder, Co.: Westview Press.

Gonzalez-Vega, Claudio (1993), “From Policies, to Technologies, to Organizations: The

Evolution of The Ohio State University Vision of Rural Financial Markets,” Economics

and Sociology Occasional Paper No. 2062, Columbus, Ohio: The Ohio State University.

Gonzalez-Vega, Claudio (1994), “Stages in the Evolution of Thought on Rural Finance. A Vision from The Ohio State University,” Economics and Sociology Occasional Paper No. 2134, Columbus, Ohio: The Ohio State University.

Gonzalez-Vega, Claudio, Jose Alfredo Guerrero, Archibaldo Vasquez and Cameron Thraen(1992), “La Demanda por Servicios de Depósito en las Areas Rurales de la República Dominicana,”in Claudio Gonzalez-Vega (ed.), República Dominicana: Mercados Financieros Rurales y Mouilización de Depósitos, Santo Domingo: The Ohio State University.

Grootaert, Christiaan and Ravi Kanbur (1990), “Policy-Oriented Analysis of Poverty and the Social Dimensions of Structural Adjustment,” Washington, D.C.: The World Bank SDA Working Paper.

Harrington, Michael (1962), The Other America: Poverty in the United States, New York:MacMillan.

Jensen, Michael C. and William H. Meckling (1976), “Theory of the Firm, Managerial Behavior,Agency Costs, and Ownership Structure,” Journal of Financial Economics, 3:305-360.

Johnson, Lyndon (1964), “Letter of Transmittal,” in Economic Report of the President,

Washington, D.C.: GPO.

Jordan, Jerry L. (1993), “Community Lending and Economic Development,” Economic Commentary,Federal Reserve Bank of Cleveland, November.

Krahnen, Jan Pieter and Reinhard H. Schmidt (1994), Development Finance as Institution Building.A New Approach to Poverty-Oriented Banking, Boulder, Co.: Westview Press.

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Udry, Christopher (1990), “Credit Markets in Northern Nigeria: Credit as Insurance in a Rural Economy,” The World Bank Economic Review, Vol. 4, No. 3, pp. 251-71.

Von Pischke, J.D. (1991), Finance at the Frontier. Debt Capacity and the Role of Credit in thePrivate Economy, Washington, D.C.: The World Bank.

Von Pischke, J.D. and Dale W Adams (1983), “Fungibility and the Design and Evaluation of Agricultural Credit Project,” American Journal of Agricultural Economics, Vol. 62, No.4, November.

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PERSONAL DATA (BIODATA) SURNAME: MUMA OTHER NAMES: FRANCIS, MULENGA SEX: MALE MARITAL STATUS MARRIED DATE OF BIRTH: 29.12.73 PLACE OF BIRTH: LUSAKA ZAMBIA VILLAGE: MUCHILINGWA CHIEF: MWAMBA DISTRICT: KASAMA NATIONALITY: ZAMBIAN LANGUAGES SPOKEN: ENGLISH, BEMBA, NYANJA CHINESE ACADEMIC BACKGROUND ACADEMIC QUALIFICATIONS INSTITUTIONS ATTENDED YEAR M.A. Degree in Development Economics (University of Kent, UK) 1998 B.A. Degree in Economics & Development Studies (University of Zambia) 1996 Chartered Institute of Purchasing (Zambia Institute of Management) Jan-Jul’97 Grade 12 Certificate Hillcrest Senior Technical Sec School 1991 Grade 9 Certificate Lubuto Secondary school 1988 Grade 7 Certificate Lubuto Primary school 1986 SCHOLARSHIPS: OVERSEAS DEVELOPMENT ADMNISTRATION AND SHARED SCHOLARSHIOP (ODASS) SCHOLAR 1997-98 CHINESE SCHOLARSHIP COUNCIL 2008-12 * The Author is currently pursunig a PhD in Public Economics at Xiamen University in People’ Republic of China.

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Financial freedom gives you the flexibility to pursue your dreams, enjoy your family and free time, or enjoy your retirement. Financial freedom doesnt simply mean being out of debt. It means being comfortable with your income and financial future, knowing how to live within your means, and having enough money to accomplish your goals. The first step to financial freedom is getting out of debt.

Gaining Debt Freedom

The first step to achieving financial freedom is to resolve your debt. Make a list of all of your debts, and rank them according to type, amount, and interest rate.

Your goal should be to pay off all of the credit card and personal loans as quickly as possible. Car loans can either be paid off next or paid off over time. If your student loans have a low interest rate (below 6%), then paying them off doesnt need to be a priority. Your mortgage is considered a good debt. Paying it off early isnt necessary for financial freedom unless youve completed the other steps.

If you need help paying off your debts, you may need to consider getting some sort of debt help such as debt consolidation or debt settlement.

Controlling Your Expenses

Learning to manage your expenses is a big part of paying down debt, but its also important for people who dont have debt. Your expenses should be at least 20% lower than your income. That allows you to respond to any financial surprises, as well as save and invest money for the future.

If youre currently living paycheck to paycheck, or are close to it, list all of your expenses and income and see where you can make cuts or improve your income. Accomplishing both would give you the most benefit. Once youve reduced your expenses, use the difference to pay down debt, contribute to savings, or invest in your retirement.

Saving for the Future

Once your debt is eliminated and your expenses are manageable, the next step is saving for the future. There are three aspects to saving:

• Retirement investments
• The emergency fund
• Investments

If you have a retirement plan at work that offers matching funds, contribute at least enough to receive the full match. From there you can decide how much more to contribute. If you dont have matching, contribute to the plan anyway. Due to the wonders of compounded interest, youll be amazed by how your money will grow.

In addition to retirement, you should establish an emergency fund. Ideally, your fund should contain enough to cover three months expenses, but you can save more.

Once your retirement and savings plans are in place, start investing in the stock market. Index funds are the best way to get your feet wet.

Enjoying Financial Freedom

Once youve achieved financial freedom, youll no longer experience the day-to-day stress of worrying about paying bills and youll have the financial flexibility to take a vacation, retire early, or support your children and grandchildren. Financial freedom is more than a financial status, though. Its also a mindset. Once you attain it, you can only keep it by maintaining the practices that got you there.

Source: http://www.bills.com/financial-freedom/

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Alex welcomes back to the show film-maker, broadcaster and former broker and options trader, Max Keiser. Keiser is the host of On the Edge, a program of news and analysis hosted by Iran’s Press TV, and he also hosts Keiser Report, a financial tabloid, that broadcasts on Russia Today. Keiser correctly predicted the sub-prime mortgage-backed securities crisis would result in recession and also predicted the break-down of Iceland’s economy in 2008. maxkeiser.com prisonplanet.tv

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Justin has more than 5 years experience as a financial adviser, his key areas are loan consolidation, debt relief, mortgages etc.

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There are many people who are comfortable with managing their credit card debt all by themselves. However, there are many of those who arent. Credit card debt can be a complicated problem for those who arent very familiar with financial issues. For this reason, professional credit card debt management services have been very popular.

Even those who are comfortable with financial topics have much to gain from engaging the services of credit card debt management services. The most obvious reason for this is that financial consultants and debt counselors deal with debt management on a daily basis. Their knowledge and experience make them experts in the field and having them help you out with your financial situation will prove to be very beneficial.

In addition, professionals from credit card debt management agencies would have relevant knowledge regarding all sorts of financial issues. This involves the latest promos as well as tricks that can help anyone out of any type of financial situation. Apart from this, those who have been practicing this type of profession would already have contacts and relationships with different creditors. This may allow them to negotiate your debt or payment schedule for you. For all these reasons, anyone with credit card debt will be able to benefit from this type of service.

Depending on exactly what type of assistance you need, credit card debt management services can either handle your financial issues themselves or simply provide you with advice on how to do it yourself. Many people have depended on credit card debt management services and they can indeed be very helpful. However, it is important for you to remember that engaging the services of a credit card debt management service cannot be effective unless you are willing to work on your financial issues yourself. When you make use of credit card debt management services, there will be very strict guidelines for you to follow. Those guidelines will be developed specifically for your financial situation by the financial agency you employ. They may involve minimizing your expenditure and re-appropriating your current budgets.

The benefits you have to gain from engaging the services of a credit card debt management depend mostly on your specific situation and the agency that you hire. When you already have financial issues, you should obviously be smart about your expenses. There are many credit card debt management services available today and some are definitely better than others. For this reason, it is imperative that you research on experience and credentials before you choose an agency. It would also be best if you ask your friends or relatives for recommendations. The last thing you want to do is spend on an agency that cannot help you. However, do not make costs your primary factor in choosing a credit card debt management service. Check out what you have to gain and compare those with the fees that they charge. More often than not, the benefits of hiring a financial agency outweigh the costs.

Once you are out of debt and wish to remain debt free then the best course of action is to spend only what you have. You should have a single unsecured credit card for emergency purposes only. However, if you like the idea of carrying plastic oppose to cash then you should apply for a reloadable prepaid credit card which gives you the option to carry plastic for your own cash.

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Michael David is an expert writer. He has years of experience writing and producing quality content. Before you consult a credit card debt management service I’d recommend you read Dave Ramsey’s Total Money Makeover: A Proven Plan for Financial Fitness. This book will give you the ins and outs of becoming debt free and will guide you to financial freedom. It’s definitely an eye opener and will change your life for the better.

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• So you have financial problems ?

With the ever increasing cost of living and the period of easy financing by our banks a lot of people have over extended themselves financially. Basically if your monthly income is lower than your expenditure on a regular base you have a problem. (If it only happens occasionally then you should be OK if you of course saved in the better months).

So you find your self in this difficult situation? Is it the end of the world ? Not really but you must take action to reverse the situation. If you ignore it and hope the situation will improve by it selves then we have news for you. It won’t. Rather take action immediately and speak to your bank manager before he want to see you.

So what actions can one take to reverse the situation.

• Work out a budget
• Cut up your credit cards and store cards (except for one you might need it in an emergency)
• Cut unnecessary expenses (which ties in with your budget)
• Consolidate your debt
• Increase your income

How to work out your budget

1. Add all your monthly income together to see what is available
2. Start adding up all fixed expenses and classify them with 2 classifications. The first classification is the type of expenditure, the second classification is importance or need factor
3. Start adding up all the variable expenses and again classify them in 2 different classifications

Now you will have a clear idea of how much you spend and on what and how much more you spend monthly above your income

Cut up your credit cards and store cards

This should be fairly easy. Take a scissor and start cutting and feel good about your selves.

Why keep one card. Sometimes one has an emergency or a cash flow problem so to have some backup is all ways good.

Cut unnecessary expenses

Now that you know how much you spend monthly and have cut up your credit cards etc. (which should stop you from impulse spending) you can analyse the budget you made.

Now start taking away those expenses which the lowest need factor/importance. (And you still can treat your selves to an evening out, but maybe go to a less expensive place and less often)

Consolidate your debt

Now that your credit cards are gone it is time to start paying them of. But it might be wise to consolidate all debt you have into one account for example your home loan and start paying lower interest rates. credit cards,personal loans etc are notorious for high interest rates. So speak to your bank about how to consolidate. They should be all to happy that you take your financial future in your own hands

Increase your income

This might be the most difficult of them all, because maybe you all ready have 2 incomes or you work double shifts. So this option is depending on one’s personal situation

If one follows up on even some of the suggestions in this article you might be well on your way to turning around your finances without winning the lotto

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Financial Reporter is the maintainer of the following independant financial and banking blog in south africa Banking and Finance Blog and an easy to use loan calculator

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