19/11/2019 Finance makes the world a new place

Merits and Demerits of Equity Finance

Equity finance means the owner, personal funds and finance. Normally little scale enterprise like partnerships and sole proprietorships are operated by their owner trough their own finance. Joint stock firms operate on the basis of equity shares, but their management is distinct from share holders and investors.

Merits of Equity Finance:

Following would be the merits of equity finance:

(i) Permanent in Nature: Equity finance is permanent in nature. There is absolutely no need to repay it unless liquidation happen. Shares after sold remain in the industry. If any share holder desires to sell these shares he can do so inside the stock exchange where corporation is listed. However, this will not pose any liquidity difficulty for the company.

(ii) Solvency: Equity finance increases the solvency of your business. In addition, it helps in increasing the financial standing. In occasions of will need the share capital is usually enhanced by inviting delivers from the basic public to subscribe for new shares. This will enable the company to effectively face the economic crisis.

(iii) Credit Worthiness: Higher equity finance increases credit worthiness. A organization in which equity finance has high proportion can effortlessly take loan from banks. In contrast to these businesses which are beneath really serious debt burden, no longer remain eye-catching for investors. Larger proportion of equity finance implies that less money will probably be needed for payment of interest on loans and monetary costs, so much from the profit might be distributed amongst share holders.

(iv) No Interest: No interest is paid to any outsider in case of equity finance. This increases the net revenue of your enterprise which might be employed to expand the scale of operations.

(v) Motivation: As in equity finance all the profit stay using the owner, so it gives him motivation …

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Get Back to the Basics of Personal Finance

With all the conflicting financial advice you get from television, magazines, newspapers, and the internet, it’s easy to conclude that personal finance is roughly as difficult as putting a man on the moon; however, nothing could be further from the truth. Fact is, the financial media has a vested interest in making things seem hard. If their readers/viewers knew just how easy it is to save and invest their hard-earned money, they might conclude they don’t need any professional help at all.Of course, then their ad revenue would plummet and they’d all be out of a job, and we can’t have that, can we?

Easy As One, Two, Three

Pretty much everything you need to know about personal finance can be summed up in three rules. Sure, you could do hours and hours of research into advanced investing techniques, but these three simple rules will get you 95% of the way there.

Spend Less Than You Earn – Sounds obvious, right?Well then how come the majority of Americans just don’t do it? It doesn’t matter how high your investment returns are if you never have any capital to invest. First things first.

Higher Returns Mean Higher Risk – If there is one immutable law of the financial universe it’s that you can’t get higher returns without taking on higher risk.Stocks generally outperform bonds and savings accounts over long periods of time, but that extra return comes only at the expense of extra risk.Anybody who promises you high returns with little or no risk is a con artist.There are no exceptions to this rule.

Costs Matter – How do you ever expect to get rich if you’re constantly paying fat commissions to snooty, know-it-all financial advisers?Investing isn’t complicated and you don’t need help outside what you can get for …

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