Money Management Tips for Good Credit

Money management is a complicated thing , but revolves around the principles which seems simple is very difficult to put into practice . Good money management strategy will result in financial stability , good credit , and the ability to see into the future with ease. Here we will discuss some of the principles of simple money management and how to apply them in your life .

Keep Track of Your Credit Score

Many people seem to share the misconception that has no debts or late payments means they have a great credit score . In fact , your credit score is based on how you use your credit , so do not ever use your credit card can actually hurt your score . Instead , put the monthly bills on automatic payment plan on a credit card , then pay the bill in full each month . This will make your credit score and building active , at zero cost to you .

Recognize good vs. bad debt

There is an acceptable debt to have . An education , for example , is a strong investment that with some measures dividends paid out 15 % of the time, get yourself down to a reasonable amount of student loan debt can actually be a wise money management strategy , if you look around for cheap educational options that provide productive opportunities . Similarly , a mortgage can be a good investment in the long-term stability and equity , so do not be shy about signing a mortgage that is within your budget . Just because some people in over their heads in debt, student loans or get stuck paying the mortgage on the house when they bought above their ability , that should not deter a person from exercising prudence in the investment .

Your Debt Obligations

Too many people start to see their debt only as a fact of life , something they carry with them forever . Whether this is because they are overwhelmed by the amount of debt - it has become so large has lost all real meaning - or whether there are other factors at play , it is wise to open your eyes to your debt , to understand them and what it takes to make them disappear . Maybe you will have to adjust your spending habits , buying clothes less , eat less , get rid of unnecessary costs , even cutting down on driving to save gas . But the first priority should pull yourself out of your debt situation and to financial independence . There are many websites out there that are intended to help you educate yourself about managing money , taking advantage of the wealth of information and take your first step towards financial freedom .

Analysis of Target Corporation

TARGET CORPORATION ANALYSIS

The purpose of this memo is to evaluate Target's recent performance and compare Target's five proposed capital budgeting projects.

The first SuperTarget store opened in Omaha, Nebraska in 1995. Target differentiated itself from Wal-mart by focusing on their customer's shopping experience. The company had been highly successful at promoting its brand awareness with large advertising campaigns and as additional enhancement to the customer shopping experience, Target offered credit to qualified customers through its RED cards.

I. Target's Recent Performance Evaluation

Wal-Mart Revenue= $315.7 billion Wal-Mart Debt Rating= AA Wal-Mart Beta= 0.80

Costco Revenue= $52.9 billion Costco Debt Rating= A Costco Beta= 0.85

Target Revenue= $52.6 billion Target Debt Rating= A+ Target Beat= 1.05

Table 1: Retail Company Financial Information

Table 1 shows that Target's total revenue is the lowest as compared to Wal-mart and Costco but it performed better in relation to its company's debt management. Target's debt rating of A+ outperforms Wal-mart's or Costco's debt rating. This indicates that Target has very efficient debt management system in its company despite the fact that they need to acquire more funds to undertake their capital budgeting projects and the risk of them defaulting on their loan payments is very low. However, Target seems to be the riskiest company with a beta of 1.05 which is higher than the other two companies. I believe that Target's beta of 1.05 is not a very big issue as the total beta of the retail industry is 1.96 and Target's beta is still much lower than the overall industry's beta.

II. Target's Financial Ratios Evaluation

Net profit Margin (2005) = 6.89% (2006) = 4.58%
Return on Assets (ROA) (2005)= 5.84% (2006)= 6.88%
Return on Equity (ROE) (2005)= 24.55% (2006) = 16.95%
Asset Turnover Ratio (2005)= 1.44 (2006) = 1.50
Inventory Turnover Ratio (2005)=5.84 (2006)= 5.98

Table 2: Target's Financial Ratios

Table 2 shows that Target's net profit margin has decreased since 2005. ROE has also decreased since 2005 but ROA increased since 2005. Target's net profit margin decreased since 2005 because they decreased their interest expense in 2006. Target experienced a growth in sales and a decrease in interest expense from 2005 to 2006 which is a good sign for the company even though this resulted in a decrease in net profit margin. This decrease in net income also led to a decrease in ROE. The decrease in ROE is not a bad sign for Target as the total shareholders' equity actually increased from 2005 to 2006 which also caused the decrease in ROE. ROA improved from 2005 to 2006 which shows that management is really good at managing Target's assets to generate earnings.

Asset Turnover Ratio and Inventory Turnover Ratio improved since 2005 which indicates that Target is becoming more efficient in managing their assets and inventories. Turnover ratios are very important in the retail industry to ensure that the company is able to keep their costs low and generate significant profits. The improvement in inventory turnover for Target shows that Target is able to lower their warehouse and inventory costs in 2006 by effectively managing their inventory. This also led to the increase in sales for Target in 2006.

III. Capital Budgeting Projects Comparison

A. Gopher Place

The total population in the area in which it is located is one of the lowest among the others. There is the potential of cannibalism in that area if Target undertakes this project as there is a high density of Target stores already in that area. In addition, Wal-mart also plans to add two new supercenters there. Competition in this area will be pretty high with such a low population and so many stores. This project may not be able to generate high number of sales or profit for Target despite the huge population increase and high median income.

B. Whalen Court

It has the highest NPV due to its location in the most populated area. It will also bring the brand awareness that Target always sought for and provide free advertising to all passerby. However, the initial investment required for this project is huge and raises concerns on Target's ability to finance it. The risks associated with this project is too high as a small decrease in amount of sales will result in a huge negative NPV and losses to the company. This project may not be able to generate the high amount of sales or profit for Target as sales are expected to remain constant with a low population increase.

C. The Barn

It requires the least investment and produces a very favorable NPV. This small rural area will enable Target to expand their stores to a new market. However, it is located in an area with the second lowest total population. The median income of the population is also pretty low. Target can achieve huge profits in this area as only a small amount of sales is required to generate huge returns and Target will not encounter losses when sales decline. This project will generate huge amount of profit for Target despite the possibility that the amount of sales may be one of the lowest compared to the other projects.

D. Goldie's Square

It has the lowest NPV among all the other projects and does not look attractive from the NPV standpoint. However, it is located in a densely populated who have a high median income. A population with a high median income may result in Target acquiring many loyal customers. There is also a high population growth which indicates that sales will increase in the future. This project can generate the high amount of sales and profit for Target as growth materializes.

E. Stadium Remodel

It is located in an area with the highest median income and highest percentage of adults with 4+ years of college. Potential of sales look promising. However, there is not enough information to support this as sales has been declining previously. The outlook does not look too promising for this project. It is not a profitable project to undergo at this moment.

IV. Conclusion and Recommendation

Based on my evaluation of Target, I saw an overall improvement on Target's performance. I believe that Target will be able to earn huge profits and sales by sticking on to their marketing strategy and thorough analysis of future projects The Barn and Goldie's Square projects are the two projects that I would recommend as these are the most profitable projects among the others.

Forced To Retire

Birth control pills had not yet been invented. William Pearl hadn't been married 2 weeks before the first of his 14 children became a bun in Mama's oven. Until the day William was forced to retire from his longstanding job as Senior Clerk at Social Services he would be raising and supporting very young children.

So 35 years later when William Pearl turned 65 years old and faced the mandatory retirement, his youngest child Sam was only eleven. William, who was fit as a fiddle was not ready to be put out to pasture... he simply did not want to retire, and could not afford to retire.

The Pearl family lived on the top floor of a 5-story walk-up. The rundown tenement apartment had been home since William & Eva's first child Robert had come along years ago. Every single one of their offspring still lived in the apartment with them... even the 2 oldest who lived there with their spouses and children.

The long railroad-apartment was a beehive of activity and the only place to enjoy a brief moment of privacy was behind the locked door of the apartment's one bathroom. The 4 bedroom apartment had to accommodate 20 living, active, breathing souls... despite the fact that it was designed to house only a family of 5.

The bright, spacious living room with the crown-molding and high ceilings was William & Eva's bedroom, as well as the family den. The dining room was bedroom to the 6 youngest Pearl boys who were cozily packed against 3 walls, in bunk beds. The bedrooms off the corridor-of-a-hallway were divided up amongst everyone else.

There was lots of genuine love and warmth in the Pearl household. The cramped conditions didn't change that and may even have contributed to the great camaraderie everyone felt. It was like a small village where everyone cares for each other and gets along well.

William Pearl had no choice but to keep working so he sold greeting cards and did astrological charts for anyone interested. His pension was good. He had begun the pension plan during the years of a prosperous economy and was now assured a monetary payout plus full medical and dental coverage, for life. Fortunately, the pension covered all his basic expenses.

Unfortunately, it wasn't enough to cover everything, so working on commission, William sold his cards and books all over town. Between the commissions and astrological readings he was able to make ends meet to his satisfaction. William would never charge to do an astrological reading for you but he would accept donations. Oddly enough, he made more money that way.

William Pearl may have been forced to retire because of his age but he would never be forced to take money from his grown children if he did not have to. So he worked until the day he died. He claimed he would rather burn out than rust out.

Huge families were common once upon a time. Modern science has given us the ability to choose the size of our family now. So, in general, families like William & Eva's are rare today. Solid pension plans like William's that pay every penny of every expense are also rare. It is even rare for Americans to calculate how much they need to save for retirement... more than 50% do not.

Watching Out For Your Own Welfare

This is an incredible world full of remarkable people who have achieved great things. It is also a world which contains a lot of dishonest people and criminals who would do anything to make life miserable for their fellowmen.

Although the hope would be to engage with people who have integrity who want to do honest work and provide for themselves, there are many who would cheat, lie, and steal to get what they want. In that category of people fall those who resort to stealing another person's identity and money.

Needing money is not unusual, and most people will try to earn money honestly such as with regular employment or possibly a home based business (online work or network marketing also known as MLM or multi-level marketing) or find an extra part time job. There are many ways to earn extra money. Some people, however, are regularly committing dishonest acts against others. They are willing to try to improve their own station in life by doing criminal acts instead of working honestly to earn money.

Yet there are those who have mastered the techniques used by the perpetrators of these crimes. They do not seem to often be caught so they keep going. If they would be pursued more aggressively by the companies which may be losing money due to the fraud and law enforcement personnel who become aware of the crimes, these dishonest individuals might be deterred or caught and incarcerated.

So many people are suffering from the crimes of these criminals who are not being caught. It becomes extremely important to watch out for your own welfare. Some ways of doing it are:

• Check your credit report at least once a year
• Have fraud alerts available which alert you to unusual charges
• Check your charges online regularly
• Be careful with your credit card receipts and personal information
• Possibly sign up for a service to protect you in case someone steals your identity

Things can be going along just fine, and we may never imagine that identity theft would happen to us. We are not immune.

Restaurants and gas stations are easy targets for use of someone else's credit card if a person finds or steals a credit card. While checking her credit card charges online, Mary noticed two charges in a far away state. They were for gas and for a restaurant. She had not lost her card so she wondered how those charges could have been approved. She alerted the company that those were not her charges, and she was not held liable for them. She was told that an employee at some establishment might give the credit card number to a friend who uses it. How they can get away with such a thing in this day and age of machine approvals is still unknown. Criminal minds work in devious ways.

Being honest and working hard is admirable, and protecting oneself from those who do otherwise is smart. Being aware and watching out for yourself is important as you are on the quest to earn money and protect the money you have.

Workers Compensation Insurance - Learning The Basics

When it comes to the risks employees go through in these modern times, a great number of things could happen causing claims to occur. That's not to say that they will, but it's important to understand that there are situations that could arise where you are injured while performing everyday duties. This may seem like something that is unlikely and that won't happen to you, but it has been known to occur. This is especially true for those that are dealing with physical positions where lifting, awkward movements, and other tasks are part of everyday occurrences. For those that are dealing with the pressure of working and trying to remain on duty, it's important to understand workers compensation basics.

This type of insurance is meant to help people of all backgrounds deal with anything that could go wrong while at a job. Anything from back injuries to slips and falls, this insurance can bail you out when you need it most. While some people might be skeptical about paying for this option, it most certainly can help with a variety of things when you're injured. For instance, if you fall and you cannot return to your job at a full capacity, you can file a claim and get paid a salary while you are recuperating. This is one of the most important things to remember because if you are not able to perform duties, you may not be able to earn a paycheck to help with your bills, and more.

There is no reason why you should be healing and unable to help your family, which is why the whole concept of this insurance is crucial. Workers compensation basics should be understood by anyone that is at work in a place that could potentially be dangerous. Even if you are in a relatively safe position, paying for this option can really help when the times get tough. This is especially true if you're dealing with a chronic ailment or you need a leave of absence due to injury. You'll have to understand that the bills and other payments that you have to make will not cease because you're injured, and for that reason this can definitely save the day.

The price of this type of insurance is definitely one of varying costs. You'll have to discuss this option at length with a representative to ensure that you're getting the coverage that you need to protect yourself rom what may occur in the future. This is not something that you can pick up after the fact. Even if you feel that you're never in harms way, it's not a bad idea to at least look into this option, as it can definitely save you from unwarranted heartaches and beyond. Don't wait for an emergency or calamity to strike, look into this today and understand the basics before you spend any money. A small fee could end up saving your family's life in the future, and that's definitely worth investing in. Don't let the opportunity slip by, you'll most definitely regret it.

Direct Debit Payments a Top 5 Myths and the Truth Behind Them

Direct Debit payments are a quick, easy and popular- for over 50% of the UK bill paying population, a Direct Debit solution is their preferred payment method.

Despite their popularity, there still seem to be a few myths and misconceptions around Direct Debits, so we thought it would be interesting to highlight - and disprove - the 5 most common myths...

Myth #1 - Direct Debits are the same as Standing Orders

This product differ from Standing Orders in a number of ways. A Standing Order is for a fixed amount on a fixed date whereas this product are completely flexible, and can be for variable dates and amounts.

A Standing Order is originated (pushed) from the payer's bank, whereas a product is originated (pulled) from the organization collecting the money. Perhaps the most important fact for customers is that the payments are fully protected by the product Guarantee. A Standing Order offers no such protection.

Myth #2 - Direct Debit software is expensive

Many businesses are under the mistaken impression that the software needed to collect this payments is expensive.

The truth is quite the opposite, particularly if your solution is Cloud-based. You don't have to purchase any expensive in-house software, and you won't have to pay for installation or upgrades.

Myth #3 - Direct Debit software is difficult to install

With Cloud-based Management software, you don't need to waste any time installing or configuring hardware. The Cloud is simply remote access computing, with all the hardware and software needed sitting in a secure, external location - so you don't actually have to install anything. Your provider should take care of all that for you.

Myth #4 - Direct Debit software means lots of costly upgrades

A good Cloud-based solution will operate on a modular basis, so you only pay for what you use and can control your resources, with the ability to scale up or down on demand. For example, you shouldn't have to pay more if you want to add more payers - your annual subscription fee should cover additional payers, and allow your business to grow without any additional costs.

Myth #5 - Setting up Direct Debit Payments is time consuming

A popular misconception is that all customers have to sign a paper this Instruction, meaning that businesses have to arrange a face-to-face meeting or wait for the instruction to arrive in the post.

The Truth? Paperless the product instructions are a common sign-up method - and are much quicker than a paper approach. Instructions can be completed via the telephone, online or face-to-face.

Analysis of Tiffany and Co.

The purpose of this article is to discuss the risks of exchange rate exposures that Tiffany is facing.

Tiffany & Co was an internationally renowned retailer, designer, manufacturer and distributor of luxury goods. Tiffany was acquired by Avon Products in 1979 but was then bought back by its own management in 1984. After the company became profitable again, management offered Tiffany stock to the public in 1987 and in 1989, Mitsukoshi was the largest single institutional investor in Tiffany stock. In 1993, Tiffany concluded an agreement with its Japanese distributor, Mitsukoshi to assume management responsibilities in its wholly owned subsidiary, Tiffany & Co. Japan Inc.

I. Exchange Rate Fluctuations in 1993

Tiffany restructured its Japanese operations by selling directly to the Japanese market instead of selling to Mitsukoshi and Mitsukoshi selling it to Japan. Tiffany wanted greater control over its operations in Japan even though demand for Tiffany's products in Japan declined from 23% to 15% in 1992. However, Tiffany will still be required to pay fees of 27% of net retail sales in compensation to Mitsukoshi after this restructuring.

This change in operations exposed Tiffany directly to the exchange rate fluctuations which Mitsukoshi previously bore. Previously, Mitsukoshi ensured that Tiffany never had to worry about exchange-rate fluctuations and guaranteed a certain amount of cash flows to Tiffany in their wholesale transactions. Mitsukoshi bore the risk of any exchange-rate fluctuations that took place between the time it purchased the inventory from Tiffany and when it finally made the cash settlement.

Tiffany should be worried about the exchange rate fluctuations because the yen/dollar exchange rate is very volatile. Tiffany faced an additional risk by restructuring its Japanese operations as Mitsukoshi now no longer controls Tiffany's sales in Japan.

I believe that it is very important for Tiffany to consider the exchange rate fluctuations that it will expose itself to before it decides to assume complete control of its subsidiary store in Japan.

II. Extent of Tiffany's Exposure to Foreign Exchange Risk

• Economic Exposure

Tiffany is now exposed to foreign exchange rate risk. Tiffany has to bear the risk of any exchange-rate fluctuations that will take place when it assumes the responsibility for establishing yen retail price, holding inventory in Japan for sale, managing and funding local advertising and publicity programs and controlling local Japanese management.This may or may not decrease Tiffany's sales and income from their foreign operations. Table 1 below shows Tiffany's foreign operations performance from 1992 to 1993.

Table 1: Tiffany Co Foreign Operations ($000)

1993 Net Sales= $71,838
1994 Net Sales= $52,851

1993 Income/(loss) from operations= $2,381
1994 Income/(loss) from operations = $3,888

Table 1 clearly indicates that income from Tiffany's foreign operations decreased even though net sales increased in 1993. The additional economic exposure that Tiffany is now exposed to may decrease their income even further which will impact their net sales in the long run.

• Transaction Exposure

The restructuring of Tiffany's Japanese operations requires Tiffany to repurchase its inventory which will significantly decrease its net income. As it can be seen in Table 2 below, Tiffany is said to repurchase its inventory for $115 million in 1993.

Table 2: Tiffany Co Second Quarter Income Statements ($000)

1993 Product return for Japan realignment= ($115,000)
1992 Product return for Japan realignment= 0

1993 Net Income/Loss= ($31,513)
1992 Net Income/Loss= $6,992

However, Tiffany only managed to repurchase $52.5 million of inventory in July 1993 and Mitsukoshi agreed to accept a deferred payment on $25 million of this repurchased inventory, which was to be repaid in yen on a quarterly bases with interest of 6% per annum over the next 4.5 years. The remaining $62.5 million inventory will be repurchased throughout the period ending February 28, 1998 and payment for this warehouse will be made in yen.

The exchange rate fluctuation will definitely affect Tiffany's ability to repurchase their inventory. Besides that, this transaction exposure can also lead to major losses for Tiffany. The reduction in net income in Table 2 assumes that Tiffany actually repurchased all of their inventory by July 31, 1993. However, this assumption was not accurate and Tiffany is now only able to repurchase all of their inventory by 1998 which I believe will lead to a bigger decrease in net income as they are then required to make payment in yen from 1993 to 1998.

III. Conclusion and Recommendation

I believe that Tiffany is making the right choice by restructuring its Japanese operations. Tiffany will be able to experience huge profits by gaining more control in Japan if they plan their strategy wisely. It is important for Tiffany to hedge against the volatile exchange rates between the yen and the dollar and they can always buy options and future contracts to reduce this risk. I believe that the profits that Tiffany can earn by gaining control in Japan outweighs the exchange rate risk as this risk can be offset by hedging.