The Importance of Proper Mortgage Advice

With the UK property market continuing to show little sign of any major recovery in the near future (perhaps with the exception of the prime London property sector) it is more important than ever that any investment you make in the residential property market is a sound one; backed up by good advice. Long gone are the heady days when you could buy just about any type of property in any area of the UK and make a profit within a few years simply due to rising house prices. For those who refurbished a property the returns were even greater and in an even shorter space of time but reality has now hit home.

Or, at least, it should have. Worryingly though there are still substantial numbers of borrowers taking out bridging loans in order to secure the house they want to buy but before they have completed the sale of their old home, or even secured a buyer. In an uncertain market like the one we are currently in people should be very cautious about any sort of loan they take out but particularly one such as a bridging loan where the costs of borrowing can soon spiral out of control.

It is important that buyers view any house purchase with a long term view and do not assume that it is easy to secure a buyer for any home. Even a highly desirable home in a good location still needs to find the one buyer who is actually ready to buy and can secure the appropriate level of borrowing. Large numbers of house sales are falling through because lending criteria or personal circumstances change between an offer being accepted and a sale being completed. A reassurance that a buyer will complete is not a completed sale and only when contracts are signed can you have some certainty of the sale being finalised (although even then it is not unheard of for the transaction to fall through).

So with all this uncertainty in the market it is surprising that the Financial Services Authority (FSA) reports an increase in the number of bridging loans and the FSA is urging consumers to seek proper advice from a regulated mortgage broker to be certain they are receiving the right advice.

While the FSA is spot checking brokers arranging bridging loans many of these are for buy-to-let properties or development opportunities and as such are viewed as being commercial rather than residential lending, making it difficult for them to regulate. And, of course, there are circumstances such as investing in a buy-to-let property where a bridging loan is a useful solution to help an individual investor to complete a purchase.

Anyone considering a bridging loan should be aware of the risks involved and the potential cost implications should the period of the loan have to be extended. A typical interest rate on a bridging loan is 1 per cent per month and a typical administration fee is also 1 per cent. So, for example, on a £1 million pound mortgage the administration fee would be £10,000 and the interest payments would be £10,000 per month so every month beyond what was budgeted for could have a significant impact on overall costs of a large mortgage. Some lenders can charge up to double these typical rates and fees.

Vehicle Accident Checklist

No matter how careful a driver you are, chances are you will at some point find yourself involved in a road accident. For any accident situation the best thing you can do is be well informed, and well insured. Below are some key factors to keep in mind if you ever find yourself involved in a vehicle accident:

1: Assess the damage

Assessing damage, includes assessing damage to yourself and any passengers, not just your vehicle. You and your passenger's health should be your number one priority. If it appears that emergency treatment is required or you have any major concerns, then make sure to call for an ambulance. Do not take any risks with regards to you or your passenger's health. Remember to that not all damage may be visible, such as in the case of head trauma. If in any doubt, call for an ambulance. It is better to be safe than sorry. Next, check on your vehicle to see what damage has been caused. Then, contact the police. They will fill out a police report on the accident, which is an important requirement for your insurance claim.

2: Check for any witnesses

Take a look around for any bystanders who may have witnessed the accident take place, and request their contact details. Their testimony of the event will aid your insurance claim. Witnesses to the accident will prove particularly important if there is any insurance claim dispute. They can then be contacted for their version of the event.

3: Exchange details with any third party

If any third party is involved in the accident, make sure to exchange contact information, insurance details and your license plate numbers. Double check that you have taken down their driving license details correctly.

4: Make an insurance claim

Fill out an insurance claim with your insurance company as soon as possible. Better yet, if you have the insurance company details at hand whilst at the scene, call the company from there. Many companies provide their clients with a 24 hour claim hotline, so even if your accident happens outside of normal working hours, they will still be contactable. Of course, your insurance package will dictate what you can claim for. So make sure that you check out comprehensive car insurance comparisons to choose which insurance cover best suits you. Be aware that your insurance company will likely ask for your version of events that led to the accident, so be clear in your mind how the event took place. The best thing to do is to try write down the details of the accident as soon as you have an opportunity to do so, as your memory will still be fresh. If you are the party at fault then the other party shall make the claim against your insurance company for damages, so they will need your insurance details. In order to be well covered, consider taking out income protection insurance on top of your regular car insurance, which will cover loss of earnings if you are unable to work for any period of time due to the accident. Additional insurance may mean more outlay, but in terms of peace of mind, it is invaluable.

Procter and Gamble's Acquisition of Gillette Analysis

P&G's businesses were organized into three product based segments: household care, health, baby and family care, and beauty care. P&G became a national consumer products company with 30 brands and production facilities across the US and Canada by 1890. P&G also experienced an increase of more than 40% in their revenues between 2001 and 2005. In 2005, P&G executed its largest acquisition with the takeover of Gillette Company.

I. Reasons for P&G's Acquisition of Gillette

A) Companies have complementary strengths in product innovation and selling activities

P&G has a distribution system that is internationally spread out as compared to Gillette. Management is expected to take Gillette products into developing markets such as China that were served by P&G, but not Gillette immediately after the merger. P&G and Gillette also plan to share their R&D costs to further develop their products to better suit their customer's needs.

B) Stronger lineup of brands

Gillette was a well-known brand in the razor market and it also has a 70% market share in the global razor market. It has a strong competitive position and Gillette has been successful in persuading their customers to trade up to higher-price-point personal care items. Gillette's customers also tended to be highly loyal. Acquisition of Gillette will definitely provide a competitive edge to P&G as Gillette is will provide a stronger lineup of brands to P&G in the consumer products industry.

C) Generate additional opportunities for economies of scale

Gillette has a huge market share on its own while P&G has an internationally spread out distribution system. Combining these companies' strengths together will enable both P&G and Gillette to reduce per unit cost by achieving economies of scale.

D) Enhance relationships and bargaining power with retail buyers

The strong competitive position that Gillette has in the consumer products industry will increase the bargaining power that P&G has over its retail buyers. P&G will be able to strengthen their market position through this acquisition. A stronger brand portfolio would also definitely help enhance relationships.

II. Ways to Generate Expected Synergies

A) Layoffs

Layoffs are generally expected when a company undergoes merger and acquisitions. It is estimated that about 4% of the total combined workforce will be laid off due to this acquisition. This is to remove management overlaps due to merging operations in more than 80 countries across the world. These lay-offs will not only come from Gillette's former operations, but also Procter and Gamble's management.

B) Business Elimination

Since both Gillette and P&G are operating in the consumer goods segment, they tend to have a few products that overlap each other. Both Gillette and P&G have to sell off some of their product line to remove this overlapping and generate synergy between them. The integration of the companies' product line is important to ensure synergy exists between them and non-profitable products are removed from their product line.

III. Financial Analysis of P&G

Profit margin for P&G was pretty low from years 2000-2004. P&G experienced an increase in their profit margin after 2001. Gillette on the other hand, had a steadily increasing profit margin since 2000. They also had a higher profit margin as compared to P&G.

This indicates that Gillette's performance has been increasing steadily since 2000 and they have been experiencing increase in their sales and net earnings yearly. P&G has much higher sales and net earnings as compared to Gillette due to their internationally dispersed distribution system. However, P&G is still unable to match Gillette's profit margin performance which is higher than P&G.

The FCF productivity of P&G increased from 2000 to 2002 and then decreased from 2002 onwards. Gillette on the other hand, experienced a decline from 2000 to 2002, a short increase from 2002 to 2003 and then a decline again from 2003 onwards.

This indicates that both Gillette and P&G do not have much free cash flow in their company. However, P&G's free cash flow performance has been much better as compared to Gillette's performance. This low free cash flow may pose a problem to P&G to acquire Gillette.

P&G has much more free cash flows as compared to Gillette and this can definitely help Gillette improve their free cash flow productivity performance. However, the acquisition price offered for Gillette was $57 billion which is really high and would definitely affect P&G's free cash flow productivity performance.

IV. Conclusions and Recommendations

Even though the free cash flows may pose a problem in the acquisition of Gillette, I believe that P&G should still acquire Gillette as Gillette can definitely help improve P&G's financial performance and help provide P&G with a competitive edge in the consumer products industry. P&G will also be able to improve Gillette's free cash flow performance by their large amount of free cash flows and I believe that there will be many willing investors who would find P&G's stock very attractive during the acquisition process.

******************************************************************
Chloe Hung is a recent graduate from Drake University majoring in Actuarial Science and Finance. She has a strong passion for the finance and actuarial field and is constantly looking for opportunities to gain experience in these fields

Is It Easy to Make Money and Become Rich?

If you listen to the so-called gurus who are trying to sell their money-making products, it sounds extremely easy and quick to make loads of money and become filthy rich. Whether they are selling their software to earn money online using the internet or pushing newsletter subscriptions to advise people on which stocks to buy, they make it sound unbelievably simple with super fast results being likely. All you need to do is buy their products and follow their advice.

Needing money is common for most people. Although honest work with a regular job is the way for most to try to achieve their goals, it is not unusual to want to try something which promises fast returns.

Whether you are looking for a home based business which will help take the edge off the tight financial picture you are facing or you want to become wealthy beyond your wildest imagination, there seems to be a myriad of ways available to you. Whether they work or not is a different matter.

Jerry was investigating ways to earn money online so he signed up for several free offers which held big promises of wealth. All he had to do was purchase this incredibly easy to use software which would bring sales rushing to his website. He did not have a website and did not know how to get one, but the material said that they would provide everything for him so that he could start to earn money immediately. It sounded too good to be true, but it did sound believable if someone were going to help him every step of the way as indicated. He signed up and paid the money. It was very difficult to understand what to do, and he gave up on it.

If it were that easy, everyone would be rich. Some of those gurus are wealthy, but others are just struggling people who are trying to make it. It is the same when a person starts out in network marketing (MLM or multi-level marketing). Selling products is not easy without a real belief that they will be of value to the consumer. No one has success at first, but you need to act like you are successful in order to convince anyone to join you in the effort. You must rely on the success of others until you find your own.

No, it is not that easy to make money and become rich. No matter what people may tell you, it is likely going to take a super amount of effort and hard work to ever get to the point where you feel rich. It may be totally worth it for those who are willing to do what it takes.

We all know rich people, and we know that success can be achieved. If we are willing to work hard and are not too impatient by giving up too soon when success may be on the horizon, we just might become successful and rich.

How to Make Money, With Your Money! By Nathalie Martin

I am sure, like me, you keep hearing about how bad the economy is at the moment, and how poor interest rates are on savings, but how high they are on debt. Banks do not seem the safe money-keeping houses they used to be, so people are looking for better things to do with their money, and I don't blame them! Most working adults by the time they are 30 will have either just started saving, or have a substantial amount saved for a rainy day. This money at the moment seems to just be sitting there, yes it may be safe, but it is not getting bigger! I have been exploring ways to get my money working for me, and here are some of the best and most simple options I have found.

Investing money you already have is a bit of a gamble (but not gambling, I am assured), stocks and shares fluctuate depending on the market so it is not easy to predict. There is not a set limit to the amount you can start investing with, £5 a week will gradually show you a return. You can invest in stocks, where you are buying a share of the company, so you also get a share of their profits (dividends). The value of these fluctuates and does not guarantee you any return, but can potentially offer the highest out of any investment, so it is whether you want to take the risk. Or, if this is too speculative for you, bonds are the traditional alternative. There are different types (treasury, agency, corporate, depending on the institution you are buying them from) and they give you a fixed amount of interest on a fixed date. Here you are lending money to that institution, and they give you interest on that amount and eventually pay you back in full. This sounds quite scary so I have left it well alone, but as the results can be so rewarding, you may take your chances!

An ISA account is a savings account where the interest is tax exempt. You can opt for a stocks and shares ISA where you can invest your money in shares or investment funds with a limit of £11,280. Here you encounter the same risks as above, by dealing in the stock market. Or you can choose a cash ISA option which limits you to only 50% of this. Different accounts have different terms and conditions, so some may only offer you tax-exempt interest until you withdraw money, and permit you to transfer between accounts, while others do not. It is important to shop around and see which account works best for your needs. This is a valuable option if you are quite efficient with your money and know your financial stuff (this is not me!).

This is like a savings account with no regular interest, but acts as more of a lottery where every month cash prizes are drawn. You can win between £25 and £1 million, or nothing at all. This option is a bit more fun in that it's like a game, and the amount you pay in (multiples of £100 a time) stays the same regardless of how much you win, so you can withdraw it whenever you like without loss. Having had some of these for years I would recommend them as a safe option, but if you are anywhere near as unlucky as I am (I have only won £200 once in four years!), you may want to take the risk for a bigger return, or just invest as much as possible to increase your chances of a big win, without any chance of loss.

Letting a property is a big investment, but it also has a big return. Obviously it depends on just how big those savings are that you have, but with rent prices climbing very quickly you can expect a minimum of £1200 a month for a four bed house in certain areas, which is isn't bad is it! This does not necessarily have to be a huge hassle either, letting agents work as a go between for you and the tenants and it is their responsibility to manage the property, contracts and rent so you do not have to lift a finger if you do not want to! As popular as this is for many, it completely depends on just how much you have saved. For me, this one may have to wait a while!