Thursday, February 21, 2008
Money has served as the medium of exchanging goods and services for more than 5000 years. Different people have adopted or adapted different forms of money all over the world. These forms offer an insight into the nature of money and the history of its use. We might presume that we are familiar with all forms of money but that would be presuming wrongly. For example, did you know that ‘axes’ were once used as money?
Even today, money is being preserved in a variety of monetary forms. Many banks and governments in the western world store their reserves as ingots of gold. With the evolution of light weighted paper notes, bank notes, cheque books to 21st century’s instant credit cards, man has always preferred convenient alternative spending-power. Modern technology has made it possible for us to live in a cashless society where plastic cards offer instant credit and money can be removed from bank accounts through telephone lines.
Functions of Money :
Money is used as the medium of exchanging goods/services and the means of payment. It is the store of value or wealth in accordance to the common belief that the form of money retains value over time. Loans and payments and deals are agreed to and contracted upon in terms of money. Money is considered as the best means of settling future accounts. It is referred as the liquid asset and is a causative factor as well as controller in the economy.
There are different types of pensions available today, but the two main types are: 'occupational schemes' - for those employed by a company with five or more staff, and 'personal pension plans' - for the self-employed or those exempt from an occupational scheme.
Occupational schemes can be paid as a 'defined benefit', which means that the retirement fund is calculated using an employee's age, final salary and length of employment, or as money purchase', in which case the amount paid out when the individual retires is only dependent on the size of the fund, regardless of how many years the person in question has actually worked for the company.
In a personal pension plan (PPP), the self-employed and those unable or choosing not, to join an employer's (occupational) pension scheme, can take out a PPP. There are limits on the contributions you can make based on your age and percentage of earnings. Maximum 25 per cent of the fund will be available at your retirement in the form of tax free cash. The balance amount can be used to buy a pension scheme.
Today, over 85 per cent of all daily transactions involve trading of the major currencies, which include the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and the Australian Dollar. The most often traded or 'liquid' currencies are those of countries with stable governments, respected central banks, and low inflation.
Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations and individuals trading one currency for another. This lack of a physical exchange enables the Forex market to operate on a 24-hour basis, moving from one time zone to the next, across each of the world’s major financial centres every day.
The objective of currency trading is to exchange one currency for another in the expectation that the market rate or price will change so that the currency you bought has increased its value relative to the one you sold. If you have bought a currency and the price appreciates in value, the trader must sell the currency back in order to close the position, and hopefully to realise the profit.
The commission charged by the stockbroker or share dealing service may depend upon the kind of service that you’re looking for. The cheapest way to deal in shares is usually on an 'execution only' basis, which means that a broker will act on your instructions to buy or sell but will not give you advice on the merits of the transaction.
But if you’re new to share dealing, there are a few factors to consider before investing your money. Firstly, you need to calculate how much money you’ve available to buy the shares. Remember that share value can decrease as well as increase, so make sure you aren't investing money that you cannot live without.
Also think about how long you want to invest your money for. Are you looking to create an income from your shares through dividends, which are paid twice a year, or do you want to create a lump sum through the increase in share value (capital growth)? Asking yourself these questions will help you determine the type of portfolio that you want to put together.
Although share dealing is always going to pose a certain amount of risk, there are ways to minimise the possibility of losing money. One way is to invest in 'blue chip' companies. A blue chip is a well-established, highly successful company with a good track record on the Stock Exchange and they offer investors a more secure option, although even this can never be guaranteed.
Another way to minimise risk when share-dealing is to spread your investment over a number of different companies and industries as this will help you avoid losing your entire investment wealth should one particular company or industry suddenly come crashing down.
Before investing, it’s important to ask yourself few questions like: Am I prepared to take the risk of investing? If not, the interest earned on your savings account would be ideal for you. Secondly, don't invest if you can’t live without it, or if it might change your life if you lose it. Thirdly, remember that investment is a long-term plan. For instance, if the stock market crashes, you might have to wait for some time (six months or more at times) before you get your money back or make a profit.
If you’re sure about your investment, then here are some of the products:
Stocks and Shares - By buying shares you’re actually giving companies your money to help them run their business. In return, if they’re successful and their share price goes up, you’ll benefit from the rise in value. Equally, if the company's value falls, you'll be losing money.
Unit Trusts and Investment Trusts - Unlike shares, Unit Trust puts your money into several companies at once. This way, you're spreading your risk across the fortunes of many companies, whereby some might lose money, but some will rise in value. Also, a Trust contains not just your money, but others also, and this larger pot of cash usually gets the Trust a better deal. Most important, your funds are managed after by a Fund Manager whose job day-in and day-out is to look for the best place to park your funds.
Tracker Funds - They invest widely in top companies and are called trackers because they (usually) track the FTSE Index (which is an indicator of how well the stock market is doing). Basically, they are a logical extension of trusts. So, if the FTSE goes up then the value of your investment goes up and vice versa. Trackers are just an easy way to tell what's going on with your cash.
Bonds - Bonds are a loan given to the government for a set length of time, usually between three months and five years. But, because there's no risk, they don't pay back particularly well.
Property – As prices of property is sky-rocketing in many areas, buying and selling property can be very lucrative. However, a lot of money is required to start with, and if the value of your property falls, you stand to lose a large amount of money.
All said and done, it’s important that you don’t jump into investment without getting an advice from Independent Financial Adviser. For stocks and shares, you need to know about the way stockbrokers charge. Basically, there are two types - discretionary and execution-only. Discretionary is where a broker will take your money and invest it as they see fit. This cost more than execution-only, where a broker will simply put your cash into the companies you ask them to. Finally, don't forget that you do have to pay tax on your profits from investing. The government offers some investment schemes which are tax-free.
At present, there are a number of banks and building societies where you can park your funds, but they will not bring you good returns. Some of them do pay a bonus if you don’t make a withdrawal for a certain period, but if you do so, your interest rate is affected. There are others who specify a minimum amount that you need to keep in the account for it to remain alive.
If you’re contemplating on opening a savings account, here are some of the options available:
Notice accounts – In notice account you cannot withdraw the money before time, which is specified during the opening of the account, as you stand to lose interest for the number days. The advantage of opening a notice account is that it gives better interest rate than the others. So also, the more number of notices with you, the better interest rate you’ll get.
Postal accounts – Since it is done through the post, it enables the provider to offer higher rate of interest. Most postal accounts use first class post, but then at times you do have to rely on the efficiency of the post.
Regular savings accounts – If you’re able to save a set amount each month then this account is ideal for you. Though it allows only one or two withdrawals a year, and a handful of them offer bonus.
Fixed rate accounts – Here you get an access to your money deposited plus a fixed rate interest after a period of time. In fixed rate account, interest rate can increase or fall and you’re only affected once the fixed period is over.
For any organization, getting the most out of its cash resources is not possible by keeping a tight grip on its monies. How well an organization is run is best reflected in the ways that it spends its working capital. If, in the purchase of a fax machine, there is a possibility of saving even a penny, a smart organization would find that possibility and make that saving. Mind you, it’s not the same as penny pinching. It’s one of those time-tested ways of getting the maximum mileage out of your cash reserves. And the principles of money management apply as much to individuals as they do to organisations.
Good money management is vital if you don’t have enough of it. In the case of a voluntary organization, the responsibility for money management rests upon the shoulders of the finance management committee. Such committees usually monitor the voluntary organization’s finances by careful budgeting. For control of their cash corpus, they look beyond inactive cash in floats and go for bank accounts such as ‘Treasurer’s account’. Such accounts generate more interest while the principal amount is lying idle.
Another good idea on this route is the term deposit. Depending on the timing of cash needs, one could place the money in a term deposit, thus maximizing the interest generated.
More mileage for charity
If you are a charity organization, it is advisable to inform the bank. Because then the bank will support your effort by adding gross interest to the account. Charities should utilize the tax benefits allowed them. Tax paying donors can be encouraged to use covenants or gift aid, because they are entitled to relief on the payment.
Charity organizations must maximize their earnings by ensuring that dues are collected as quickly as possibly and payments are delayed as far as is reasonably possible. The organization can use the full credit terms offered by a supplier. However some care should be taken so as to avoid penalty interest. Delayed VAT and tax payments to suppliers can be counter-productive as it may jeopardise future supplies. Secondly, one must also compare the benefits of a discount offered by the supplier for early payment, with the loss of interest incurred by making the payment early.
Tame the bulls and bears
An even better option would be to invest amounts that would otherwise lie idle for a long time, into investment instruments such as stocks and shares. Avoid the equity route altogether (as you would not want to subject the organization’s money to the high risk and volatility of the bourses). Opt instead for instruments, like debt, that generate steady returns.
Buying fixed assets
Every organization has to spend a good portion of its working capital in the purchase of necessary equipment or fixed assets. Such purchases are known as capital purchases. Depending on the organization’s resources, it is important to consider and compare the payment options available when making capital purchases. The options would include outright payment as well as ‘hire purchase’ or ‘lease purchase’ schemes. Hire purchase schemes are effectively loans so there would be a cost of borrowing added to the overall amount. This needs to be considered against factors such as inflation rate, interest rate, to determine which one is a better option: outright payment or lease purchase. Consider also the penalties for early repayment.
Whether you are an organization or an individual, take particular care to monitor the movements in your cash reserves, evaluate the true worth every benefit you get and watch every outgo – including the tax you pay. If you do all these things then you are sure to keep debt at bay.
However in this money-oriented world where you need to pay even for drinking water money saved is money earned. There is no such thing as a free lunch. It is the most difficult task to find a cheap place to spend the night.
Still, saving money is just about the easiest thing imaginable that only requires a little creativity and self-discipline. If you make saving a part of your wage criteria and utilize your brain more than your bank account, you can be rich in no days.
Listed below are a few ways of saving your precious money.
- Quit smoking and drinking.
- Keep a safe distance from ATM cash point machines that charge a fee for every transaction.
- Try to raise the insurance deductibles on your car.
- Prefer eating breakfast at home and carrying your lunch box everyday.
- Take your own time to buy anything that is expensive. There is a chance that you may forget it.
- Cut off the exorbitant health club fees by following a healthy diet and exercise regimen; exercise outside in the warmer months.
- Silk flowers may not have the freshness and scent but will save your money from buying flowers that wilt off in a day. Gift homemade treats.
- Smart purchasing is another effective key to saving money. It is advisable to take an inventory of your current needs before you decide to turn pennies into pounds through the saving route. Begin with the biggest item that has the potential to save more. Following are few tips for starters:
- House Mortgages: Owning a home is one of your biggest expenses. If the interest rate of buying a home on mortgage is 9 ¾% and 7 ¾% interests is available in the market, then you are paying a big price for not investigating on the available options.
- Home repairs, improvements and remodelling are quite an expensive affair. Therefore it is always wise to get things compared.
- The car is your next big expense. Calculate the best monthly instalment for your budget. Avoid mistakes as these can cost you on monthly basis. Think of ways by which you can economize and save the money in maintenance, insurance and operating expenses.
- Credit Card Debt is one of the biggest financial drains for most of the families in UK. To have a better control over your spending, stop being extravagant and dump all your high interest credit cards.
- Telephone: Although the local phone services in UK is currently monitored and has fixed pricing, it is the long distance phone calls that can worry you.
If you are living in a country like Finland where everything is taxed beyond all proportions, saving money can be a tough job. In Finland, a pint of lager (it isn't even a pint, but a lousy half litre) will cost you €4.5 Euros. At the current rate of exchange, it is a bit over £3. Therefore cut down your extravagant habits if you want to save money.
Your hobbies can fetch you a few million pounds. Skills, contacts and knowledge that are gained and developed in hobbies like upholstery, or interior design, gardening or picture framing can boost your income. Such skills are god-gifted. Right from selling your work to teaching the craft to others, there are plenty of opportunities of making money.
If you are planning to set up a new venture, plan carefully to make it a success. You can come up with millions of ideas when you sit idle. All you need to do is take pen and paper and catch every idea that passes through your mind and jot it down. The ideas should be unique and should be your own invention. You can take suggestions from your family members and friends. Once you have finalised the theme of your new venture, research on similar businesses in your area. Find out what people want.
The Internet can be another lucrative area for creative people. Individuals with a talent for writing, drawing, photography or music can use the Internet to make enough to live comfortably at the same time do what they like to do professionally.
Wednesday, February 20, 2008
|Maulana Pribadi (email@example.com) has sent you this story.|
|Message: Assalamu'alaykum wR wB, Sudah saatnya Indonesia menerbitkan sukuk. Semoga pemerintah dan DPR segera menyusun undang-undang sukuk.......... Maulana Pribadi|
Sunday, February 10, 2008
Alhamdulillahi Robbil'aalamiin wa solatu wa salamu 'ala asrofil anbiyai wal mursaliin Muhammadin wa 'ala alihi wa sohbihi wa ajma'iin
SUKSES yang paling utama adalah ketika diri kita bisa membebaskan diri dari segala bentuk peribadahan/penyembahan/penghambaan/kecintaan/kecendrungan/kegandrungan atas/kepada/terhadap segala sesuatu, kecuali Allah Subhanahu wa Ta'ala. Sebagaimana firman Allah dalam Al Quran:
"Dan (ingatlah) ketika Ibrahim berkata kepada bapak dan kaumnya: "Sesungguhnya aku melepaskan diri dari segala apa yang kamu sembah, kecuali Allah saja Tuhan yang telah menciptakan aku, karena hanya Dia yang akan menunjukiku (kepada jalan kebenaran)" (Al Quran surah Az-Zukhruf (43) : 26-27)
Diriwayatkan dalam Shahih (Muslim), bahwa Nabi Muhammad Shallallahu 'Alaihi Wasallam bersabda:
"Barangsiapa mengucapkan "LA ILAHA ILLALLAH" dan mengingkari segala sembahan selain Allah, haramlah harta dan darahnya, sedang hisab (perhitungan) nya adalah terserah kepada Alla 'Azza wa Jalla."
Demikian semoga bisa menjadi perenungan kita bersama.......
Billahi taufiq wal hidayah wassalamu'alaykum wa rohmatullohi wa barokatuhu,
Saturday, February 09, 2008
Sabtu, 26 januari 2008 02:17 WIB
Koh Young Hun
Tiga puluh tahun yang lalu, saya mendengar dari profesor saya di ruang kelas bahwa Indonesia merupakan negara yang berpotensi tinggi, karena sumber daya alam dan manusianya begitu kaya. Tiga puluh tahun sudah lewat, dan saya sudah menjadi profesor. Saya masih juga mengatakan kepada murid-murid saya bahwa Indonesia negara besar dan berpotensi tinggi dengan alasan yang sama. Tanggal 19 Desember 2007, rakyat Korea (Korsel) memilih presiden baru, yaitu Lee Myung-bak (biasa disebut MB) yang akan memulai lima tahun masa jabatannya pada 25 Februari mendatang. MB berjanji bahwa dalam masa jabatannya Korea akan lebih maju dengan wawasan 7-4-7, yang berisikan bahwa 7 persen pertumbuhan ekonomi per tahun, 40.000 dollar AS pendapatan per kapita, dan negara ke-7 terbesar dari segi ekonominya (sekarang ke-11 terbesar). Pada hemat saya, Indonesia juga bisa, karena negara ini punya kemampuan.