Open-end loans provide funds for projects, vacations, hobbies and more. They deliver access to an ongoing line of credit that can be redrawn and re-purposed anytime, if loan conditions are being met. Credit card owners may not be aware, but they also rely on a line of credit and an open-end loan. In other words, if a loan is flexible and doesn’t have an exact date for repayment, it is an open-end loan.
Fluctuating fortunes mean there will always be times when assistance is required to plug financial gaps, pay bills and keep the business afloat. There are options for quick finance, such as credit cards, but interest repayments can make them cost-prohibitive in many situations. An alternative loan option is a line of credit, with lower interest rates and other budget-friendly features.
A bank line of credit provides customers the opportunity to borrow additional funds or utilise equity. Banks extend lines of credit (LOC) for a multitude of purposes, from home renovations to business expansion and more. The most well-known of this loan type is the home equity line of credit (HELOC), usually used for renovating or remodelling established residences. A line of credit is also accessible to the self-employed, those with inconsistent earnings, and people wanting to get their business off the ground.
Bank cards are used for most financial transactions these days and people are familiar with the technology. However, there are differences between check cards, debit cards and credit cards that need to be understood. Bank cards can be used for financial freedom and financial restraint, ultimately assisting with money management – but only when used wisely.
Each type of card has its pros and cons, although they are all versatile and almost universally accepted. There are occasions where cash payment is still preferred, but almost everyone carries a check card, debit card or credit card. In fact, it’s not uncommon to carry a range of bank cards for specific purposes and payment options. Understanding the difference between check cards, debit cards and credit cards is relatively easy, as check and debit cards perform similar functions.
“Never invest in a business you cannot understand.” Warren Buffet
“Behind every stock is a company. Find out what it’s doing.” Peter Lynch
There are two key decisions in investment decision-making: the buy decision and the sell decision. By being aware of the common pitfalls of buy decisions, we can potentially save ourselves from a painful sell decision.
Social proof is an extremely powerful force. It’s often noticeable at intersections when a group of pedestrians are waiting to cross. Often, if one breaks rank, others quickly follow.
Guest post from from Lars Kroijer
With Donald Trump making headlines on an hourly basis and our social media accounts going crazy with comments on his presidency of it being an effective coup and a one-way route to the apocalypse, we are left asking ourselves: Should we perhaps change our investment strategy as a result?
In short the answer is yes, but perhaps not how you think.
In earlier blogs, I have outlined how I consider it highly unlikely for the vast majority of investors that they can beat the markets themselves through active stock selection, market timing, or via picking the one out of ten actively investment funds that may do so over a ten-year period. And that for your equity exposure you should pick as broad and cheap an index tracking exposure as you can get your hands on, namely a world equity index tracker. “Just” because Trump is now president of the United States, that is no less true. You most likely couldn’t beat the markets before November and still can’t.
Being young and in love is pretty much the closest we’ll ever come to feeling bulletproof. There’s an undeniable confidence that rises to the surface when you’ve got age on your side and a heart bursting with emotion. Colours seem brighter, food tastes better and risk is relegated to the back of your mind as you carry on with reckless abandon. Live in the moment, right? Wrong. Eventually the pitfalls will catch up with you and suddenly you’re partnered up but penniless. Rather than forget about your finances completely, a little bit of future proofing can be the perfect foundation for your happily ever after. Read on to find out the most common mistakes young people make – and you can avoid them.
Compensation for this post was provided by Upskilled. Opinions expressed here are my own.
The need for greater financial literacy among Australians is undeniable. Negotiating the financial landscape is an essential 21st Century life-skill, with everyone required to manage money effectively in order to achieve financial and lifestyle goals. The importance of financial literacy hasn’t gone unnoticed by governments either. Initiatives including the National Financial Literacy Strategy 2014-2017 and ASIC’s MoneySmart Teaching program are specifically designed to assist Australians overcome financial hurdles after completing their education.
Price of the Great Australian Dream – An infographic by the team at vouchercloud
Debt is an essential driver for growth in many businesses, and maintaining a sustainable level of debt as you grow can be a healthy way to finance your expanding business. However, having an unsustainable level of debt is all too common especially among small businesses. Every business should have a debt strategy that outlines how much debt is sustainable and how to manage or reduce debt.
Identify causes of debt
Check out this investing video series on www.kroijer.com by Lars Kroijer, who used to run a hedge fund in London. Basically it says you can’t beat the market, and explain why that is important.
For investors from Australia the message is – “don’t invest in Australia. You already have plenty of domestic exposure”. As an example, if you buy Australian stocks for your investment portfolio, you are adding concentration risk as you are already exposed to the economy via your job, house, insurance, etc. Instead you should try to decrease the correlation and concentration risk in a portfolio by investing globally. That way you lower the risk of losing money on your domestic investments at the same time and for the same reason (decline in local economy) that you lose your job, job prospects, your house is worth less, potentially your education worth less, etc.