Lessons In Personal Finance

There are many lessons that are not taught to children in school. For instance, the way credit cards function, the money that one earns by working as well as the importance of saving are some important criteria that need to be talked about with your children. You need to explain to your children that money is something that is earned in return for the work that you do. As it does not come from an endless supply, the importance of spending it right and saving is some important concepts that need to be developed at an early age. This article is on explaining the importance of money and savings for your children.

Educating children about finances

It is necessary that children are educated about certain key concepts of personal finance that are usually not talked about in school. In order to help them understand the value of money and not have to learn it the hard way, it is necessary to inculcate certain values about money in them from an early age. With the financial crisis that recently crippled the world, people need to understand that there are certain simple concepts in personal finance that are often overlooked. For instance, the principle of living by the adage of borrowing less than how much you are able to repay is important as that is something modern people tend to forget and overlook. Go Here to know about How US Economy Surges Up With Job Additions.


Source of money

You need to explain to your children that money does not grow on trees. They might get confused when they see you swiping a card and collecting the change, walking away with groceries from the store and so forth, imagining an endless source of money that you probably have. It is necessary to explain to them where the money comes from, the basic way salary or earnings get accrued in a bank account and are paid through the debit or credit cards, in the latter case a payment made against a future repayment that would be done by you.

How money is earned?

It is necessary that parents explain to their kids how money is earned through work. One of the ways of inculcating the sense of earning is to encourage them to do household chores or take on work like cleaning the yard against which they can receive money as a reward. However, it is necessary to segregate principal responsibilities that are independent of rewards while others that can be done in order to earn money in return.

Understanding the importance of savings

Kids want every cool toy that comes into the market and if parents are to fulfill their every request you would not be teaching them the importance of how one has to work hard to achieve certain things in life. You need to give your kids a lesson how they can save their earnings or rewards they get and use the money to buy the items they wish to have.

Basics of investing and credit

Along with adults, youngsters also need to understand the basics of credit and investing options. Many adults often remain clueless about the interest that accumulates on credit taken up. These are certain concepts that even young adults need to be made aware of.

Profitable Companies In US Not Up For Tax Payment

It is often said that taxes and death are two certainties in life that people cannot avoid. However, there are certain profitable companies that have been able to escape the tax front. There are about 27 companies that are part of the Standard & Poor’s index of 500 companies where there are firms like LVLTA which is a Level 3 Communications company, United Continental airline and General Motors, amongst others who have reported that there are no income taxes that they are liable to pay for 2015. This is despite the profits in the pre tax segment that have been reported. This data has been published in USA TODAY as per the data analyzed by a global market intelligence firm S& P. This Article talks about how certain US companies have avoided heavy taxes.

What the study shows?

The analysis was based on profitable firms of the last financial year. That is because firms that have lost money in the last financial year, like energy companies, would not be expected from making tax payments. As far as investors are concerned, those who are looking to escape the taxman might not stand to have an advantage. Companies that did not have taxes to pay have not done well on the shares front as the average on shares has been down by 11%. This is twice more the decline that was noted in the previous period when a similar analysis was done by S&P.


Link between performance and tax bills

Many might find it surprising that underperformance has become an issue when companies have put in effort and come up with lowered tax bills this year. That points to the fact that income tax might not have a direct linkage on how well a company or an industry performs in a financial period. It is merely an issue that is the bottom of the financial earnings and profitability list. Some investors however point out that companies that have been paying fewer taxes could be due to the slow pace of growth in profits and revenue. For most companies in the US the focus is to build on their bottom line, but for some it also involves finding ways on how to reduce the liabilities in the tax segment. Click Here for How Does Filing Income Taxes In The US Work?

Different steps companies have taken

There are different steps that companies have taken in order to reduce their tax burden. For instance, some companies like Pfizer, the drug maker company, took advantage of the lowered rates in taxes overseas. This is a practice that is not without criticism in the economy. However, the drug maker formed a plan of merger with Allergan and they moved their company headquarters to the country of Ireland. There are other companies that have been looking to move their headquarters to lower tax paying places. However, state authorities are coming up with concepts like paying an exit fee for those looking to move their key operations to lower tax paying regions.

Slow Sales Makes Starbucks Cut Its Revenue Forecast

Starbucks reduces its revenue forecast for the year after missing third quarter sales targets.  The Seattle based popular coffee brand Starbucks has decided to go slow on its sales forecast after its revenue in the third quarter saw a small slump with regards to its sales estimates. The sales in the global stores as well as its US flagship stores in the third quarter have seen a growth of 4 percent in all popular locations. It is expected that this figure would increase to about 5 to 6 percent for the year. This is a good sign for this popular coffee store.

The Chairman and the CEO of Starbucks, Howard Shultz, in a meeting with the analysts, said that the marketplace has been a bit challenging this time round due to civil problems in terms of race and the ambiguity surrounding the US presidential election. All this has led to the company showing lesser sales than what was targeted to achieve for the third quarter.  Howard said that there is nothing to worry about as the kind of community that Starbucks has created over the years will help the company to realize its targets soon.

These results of the third quarter could be the after effects of the revision of the Starbucks rewards program that was carried out in April. There were many speculations, then that the revised program could drive away customers from entering the stores. Schultz admitted that the roll out of the new reward program for regular customers at the same time as the Frappuccino Happy Hour annual promotion has negatively impacted the company as they were not able to build the necessary awareness in the market.


The Chief Operating Officer of Starbucks Kevin Johnson said that the new rewards program will take something to sink in. The customers will start to realize its benefits and start to use it more. It is now based on the spending made by the customers rather than the transactions they make. Many customers are looking to split their purchases in order to get more points. There are many who are of the opinion that the new rewards program favored those who spend money on buying expensive drinks.  To know more about the US markets and its uncertainty, please Check Out This Link “US Equities In An Unfavorable Position”.

The analysts had estimated that the Starbucks sales would touch $5.34 billion this quarter, but it fell short of the mark and was able to reach just $5.24 billion. The slowdown in sales of Starbucks has made the analysts think and come out with the revised sales expectation on the mid single digits than the previously announced above mid-single digits. The outlets that have shown a slump is the sales through the US Starbucks outlets. The sales across the new outlets opened last year have seen an increase of 4% from the previous year’s same quarter reading. Even though the sales have shown improvements, there has not been any change in the number of transactions made.

Despite the launch of the new rewards program and the criticisms it faces from some customers, the loyalty membership of Starbucks grew by 18% when compared to last year. There are over 12.3 million active users of the Starbucks reward program.

Master Plan Of Tesla’s CEO Puts Investors In Doubt

Huge sustainability plans spelt out by Tesla Motors CEO Elon Musk. The new master plan put forth by Tesla Motors CEO Elon Musk has not impressed its investors fully. They are quite uncertain at this stage as to whether the plan would work for Tesla. You might be aware that Tesla Motors is the youngest American car maker and is known for its popular electric cars. The new ideas put forth by the Tesla Chief have seen a decline of 3.4% of Tesla shares last week in the NASDAQ trading.

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The big goals of Elon Musk are to come out with fully automated urban transit vehicles like the bus system apart from driverless car technology. The Tesla is also looking to create a new energy division and to build heavy duty electric trucks through the California based company, Palo Alto. These are really big and ambitious goals that Tesla CEO has proposed and it looks like these plans will not be a cheap proposition.

Elon said that the company is looking to boost its annual production of its electric autos to tenfold. The company will soon be eliminating the issues of quality that its new electric car Model X crossover is facing. Apart from this, Elon Musk also said that the company is going to inaugurate its huge Lithium-ion battery plant in Nevada next week and it could be called as the Gigafactory.

Tesla Motors has also plans to acquire the SolarCity Corp, a solar power company. Musk is seeking the permission of his board to carry out the desired purchase of the company. This company is run by Musk’s cousins and he is also the chairman and a major investor in the company.


The ambitious plans of Musk are not really impressing the company’s investors. This announcement by him came after the crash of an Autopilot engaged Model X car on July 1 and the reviews put forth by the safety regulators of the US after the fatal crash of the Autopilot system of the Tesla S model in May. These are not considered to be light issues with the investors and they seriously doubt whether the proposed plans of Tesla’s CEO would really work wonders for the company. The investors feel that Musk should be focusing on just producing electric cars at the moment and stop thinking of adding more business ventures. Not all investors are game for the proposed battery powered compact SUV, a public battery bus and the electric semi-truck.

The skeptics say that the Master Plan of Musk does not contain any information as to how these plans could be turned into a reality. The plan is short of financial details even though it has exhilarating visions for the future. It is not just Tesla, but popular automakers like Volkswagen, Daimler AG, Toyota and General Motors are also having plans to come out with electric cars, plug-ins and hybrids to their existing fleet.

Musk has his focus on sustainability and is on a vision to change the thinking of the world. There is no doubt that his followers will be supporting his sustainability goals.

Few Tips On How To Earn Tax Free Income

It is not easy to Avoid Paying Taxes when getting a paycheck. There are quite a few things that you can do in order to save some of your money from going as taxes.

Municipal bonds investment

One of the best ways to earn tax free income is to invest in municipal bonds. These are debt duties brought forth by the counties, cities or states or any other government entities to help them raise funds for important projects like building rails, schools or highways. By purchasing these municipal bonds, you can enjoy federal tax freedom. You should do a little bit of research to find out which of the municipal bonds are tax free and buy bonds only from your state.

Open a health savings account

It is better off for you to open a Health Savings Account or contribute to it in order to meet the medical expenses that might come your way. There are a few specifics that you need to meet in order to qualify for the HAS account. You should not be enrolled in Medicare to get an HSA. You can use the money to pay for the medical expenses and the money spent will not be taxable.

Renting your home

If you are looking to enjoy some tax free income, then consider renting your home. The income that you receive by renting out your home for 14 days or less is completely free. There is no limit on the amount that you can charge as rent and therefore you can earn as much as you want in the 14 days. The vacation homes that you possess can also be rented out in this fashion to earn tax free income. If you want to know the ‘Different Ways To Invest Tax Free’, then do not miss to Click On This Link.


Hold on to your stocks

Holding on to your stocks longer, say about one year and a day, can earn you lower the tax rate on capital gains. If you are in the lower earning and the ordinary income tax bracket of 10% to 15%, then you get special offers for holding on to your investments for a longer period of time. The capital gains tax rate is 0% and thereby single filers can earn up to $37,650 in 2016 without paying a single penny.

Accepting gift

One of the easiest ways to receive money from someone without being taxed for it is to accept it as a gift. The taxpayers are allowed to shell out up to $14,000 in a year to any people they like, according to the IRS. Any gift over this amount would be taxed by the IRS. This exemption on annual gift tax increases once every three to four years. This is a very handy option for all wealthy couples or individuals looking to pass their income to their children or grandchildren.

Go green

There is a tax credit on offer for all homeowners installing alternative energy sources in their homes. It is equal to 30% of what you spend on solar water heaters, solar electric systems, etc.

These are the few tips that will help you to save some money that you need to pay as taxes.

How Fiscal Aid Can Limit An Economy?

Financial aid that is provided to certain countries might not be the solution to a problem. This can be seen in several contexts. For instance, with the current global economy slowing down, many financial experts like economists or Federal Reserve experts are talking about how fiscal expansion that is powered or financed by money is not the best tool kit to use.

This article looks at the adverse effects of monetary aid to an economy.

Money that is newly printed and quoted as a helicopter drops often creates counter attacks that are strong which is often talked about by different people, including the chief economists in Japan who are spearheading the economic recovery in the country. There is a risk inherent in printing new money, which lies in it being used in excess. The question lies in whether responsibilities and rules are devised right to protect against such danger. In certain countries the alternative that is sought is monetary finance that is implemented without the right framework in place. To Understand The Factors That Influence Market TrendsVisit This Link.

An act in balance

Indeed, in many cases where monetary funds’ need to be rescued, there is a case built for monetary finance that is hard to dispute. This policy stimulates demand while other policies, such as negative interest rates and fiscal deficits that are debt financed are often proven to be ineffective. The impact on demand needs to be calibrated as a small amount also can provide the right stimulus for price levels as well as output. However, if the amount is large then inflation is produced in excess.

There are certain complexities that are involved in case of excess money coming into an economy. Money creation might finance cuts in taxes rather than increasing public expenditure which will impact on whether consumers will save or spend and this can be an unstable act.


Money creation which is done by central banks leads to increase in reserves for the commercial banks, which lead to increase in lending activities. It is argued that in these contexts there needs to be a cautious approach such as making certain reserve levels mandatory to ensure that adverse effects do not come about.

Politicians might use the same for favors to get their political parties in power

There is a powerful argument that stands in the way of new money creation which many economists in Japan asset which is the risk that lies in the political circles of it being misused. Politicians will easily use the excess funds to gain party favors and dish out money ad hoc to deserving or undeserving parties and organizations. This is, indeed, an important risk that should not be ignored.

History has provided several instances when monetary finance in excess has led to adverse results. For instance, in Weimar Germany or in different emerging economies, governments have often pressurized the central banks to create new money in order to finance deficits in the fiscal corpus and that has led to high inflation as an end result. Indeed, this is a policy that needs to be avoided as it is not a sustainable solution and only makes matters worse for an economy.

Banking Crisis To One Of The Oldest World Bank

There is a battle that is brewing for bailing out Monte Dei Paschi for Italy with the EU authorities. The bank’s headquarters are at Siena in Italy. This lender has suffered the worst in the stress tests that the continent has exerted on the financial sector. As a result, the bank, which is considered the third largest lender in the global economy, is involved in a conflict between EU and Italy concerning the rules which govern how banks need to be bailed out. The results of stress tests in Europe are about to be released and for that reason, this dispute is culminating over Banca Monte Dei Paschi Siena SpA.

Take a look at the crisis that has hit Monte Dei Paschi. Financial Firms From London Are Welcome To Paris, Go Here For More Details.

There are about €50 billion of bad loans in the books of the bank and it is set to become one of the worst performers of the continent. This will trigger calls for raising capital and more pressure on the bank to reduce some of the many bad debts on its books. It could increase failing of the banking system of the country and make the economic situation worse for the country.

Financial analysts are of the opinion that private investors will probably not finance recapitalization efforts for the bank, which is the oldest bank in the world, founded in the year 1472. The Italian officials are looking to get government support in the matter. The rule that applies here is that public funds cannot be used for bailout situations unless the possibility of private investors is exhausted. Hence, a contest is on to see which side will come to the aid first.


The Bank of Italy’s governor, state that the situation of high uncertainty might get public intervention in as the confidence needs to be sustained in the banking system. The representatives of Monte are not commenting at the moment.

It is felt that this standoff is one of the dire consequences of the UK vote for an EU that happened last month. With concerns about the unity of the Euro zone and stability of the banking system, lenders are looking at billions in debts that might sour overnight.

There might be loopholes in the rules which Italian officials are looking into so that they can avoid having to wipe out retail investors who hold billions in bank bonds. There are about a sixth of these bonds that are of the riskiest type and these would be targeted in case there is a bailout. This bank is believed to have €5 billion, which are outstanding risky bonds that are held mainly by Italian households.

Holdings of bank investors in Europe have been threatened and that has ended badly. For instance, some investors took legal action against the central bank of Portugal as it took about two billion of their bonds to bolster the capital levels of the bank. The bond values plummeted and that again sent shock waves through the debt markets in the continent. The situation definitely stands grim today for the world’s oldest bank.

Economy Of China And How Strong It Is?

If you are looking at China’s growth, it should be evident that it remains strong as in the second quarter of this financial year. The economy has increased by 6.7%, which is a year on year figure. This data stays intact for the first quarter. The stock market having crashed last year and depreciation of Yuan, many would have expected that the Chinese economy would still be struggling this year. Many had predicted that China would move into recession this year. However, this year sees the Chinese economy and its proponent’s upbeat about its growth. For US Economy News, Go Here.

For those who would like to delve deeper into the economy’s state and understand how sustainable this growth rate is, they will know that the government has smoothened out the growth trends. The government has been playing around with GDP deflation last year when it depicted growth to be stronger than what was the real picture. The deflector has jumped high in the second quarter and the figures are closely aligned with price movements. There are different indicators for the economy, such as the investment in infrastructure that has moved up as well as property market that has been buoyant. There are other economic indicators as well, such as travel and personal consumption sector like automobile that have been buoyant as well.

Take A Look at the present state of China’s economy.


Reason to worry

The worry if any is not that the growth depicted for the economy might be misleading but that the investment engine might not be balanced right. As investment is around half of the GDP of the country, the growth in this sector is propelled by state investments. The slowdown in investments by the private sector has been high, almost forty percent as compared to 2011 figures which have slowed down by the first half of the year. There are industries that are plagued by overcapacity as well as businesses that are apprehensive of the future and are hoarding cash instead of investing further. Investment spending by the state has increased and doubled, as per the pace found in 2011. The government has definitely put in a major thrust for the Chinese economy.

Summarizing the situation

What the Chinese government has been doing might not be right to criticize. The government definitely has the fiscal capacity by which it can support the growth of the economy. The government is investing in sewage systems, subway outlays, housing development and others which are needed for the future and are propelling growth for the year as well. Some experts state that this kind of growth led by the government is not sustainable. The companies that are state owned are indebted and they run less efficiently than private sector companies. Hence, such companies investing in state investments are not a sustainable proposition. Many bankers in the economy state that, this kind of growth will prove more costly and less profitable for the economy in the long run.

California State Takes On World Economies

It is true that California has grown to achieve the status of a world economy, compared to economies like Brazil or France that have achieved admirable progress over the last year. This US state has achieved the status of being the sixth largest economy in the world as per findings of 2015. The tech sector is still on the rise in this state as well as expansion being seen in other industries. As a result the state economy has moved up ahead of France and Brazil as per the findings in 2015. These are the findings of the Center for Continuing Study of the Californian Economy, for understand How US Economy Will Surpass The Challenges,  Go Here. These reports reiterate the hope that US economy will bolster its growth rate this year.

Gross earnings

The state gross product has risen to 2.5 trillion in US dollars by 2015. That is an increase by 4.1 percent as per the previous year when adjustments are made for inflation. This is more than the national growth rate, which was 2.4 percent. It has helped to bump up the gross domestic product for the country as a whole of $17.8 trillion.


Sector wise contributions

The tech sector has been the crucial one that has led growth for the state, but there are other contributing factors as well. The economists point out the reason for the growth has been due to a more even spread of growth in the state economy in all arts like Southern California that has picked up the pace akin to the Bay Area. This region has seen a record rise in tourism along with media related activities like television production, motion picture earnings and expand in the warehouse and port businesses as well. These growths have been recorded for financial year 2015 as per the survey.

Comparing with world economies

The growth of California state could also be termed phenomenal in a relative term. It is because of the recession that took over the world along with the turmoil that came by for the US government and a decline in earnings due to oil prices plummeting. Brazil also saw its GDP fall as there were fluctuations in the currency of the country. These factors also led to economic contraction in this region and led to comparatively highlight of the growth in the California state.

Today the US economy leads the way, followed by China. Japan follows after China, which is valued at $10.9 trillion, while Japan has third highest earnings of $4.1 trillion. Germany comes forth followed by the UK. Germany and Japan are strong economies in the global scenario, but both countries are seeing a rise in the elderly population due to which their earnings are on the decrease. It is also predicted that the UK will fall behind and go into recession as the second half of the year comes around. The main focus needs to be on the key factors and those are growth rate of jobs and unemployment being on the decline.

Financial Firms From London Are Welcome To Paris

London based financial firms are welcome to Paris. France is coming up with ways to make Paris more attractive as a financial center for London based financial firms. The city is set to rival London’s established economic base. The turn of the events, that have come about after Britain voted to get out of the European Union have set the wheels rolling in other countries. The French government in particular is willing to woo the firms that are set to move base from London to cities like Frankfurt, Dublin or Amsterdam. The French government is planning to woo these firms so that they consider Paris as their next destination. In order to increase the suitability of the area the government is looking into taxation matters as well as the expat status in the country.

Paris to become the next London

In general Paris is being touted as the destination for London based firms and they are being wooed to come and invest in France. Britain has about two million people or more who work in the financial firms and banks. Many firms have been looking to relocate their employees and operations as they lose the right to sell different financial services across the European Union.

With the inevitable having taken place, the French president has been working on adapting regulations and modifying tax schemes so that London bankers find Paris to be the next destination for them. The chief executive of French Banking Federation also pointed out how the government and officials need to be more proactive in getting hold of financial firms that are UK based and wish to relocate from the country. Find More News here about How The European Markets Are In The Favor Of The Federal Bank.


Brexit and its repercussions

The results of the vote of Britain to leave the EU have led to the markets as well as world leaders to become unnerved as the repercussions of such a decision are several. A political crisis emerged when the vote came out about the country wanting to leave the EU even after its own prime minister left office as he had declared if such an outcome came about. He continues in a caretaker role for the country till the Conservative Party elects a new leader within the next three months. He has also failed to invoke Article 50 which is the Lisbon Treaty on EU. This would have allowed two years for the exit negotiations take place. This has further led to the confusion as there is little clarity as to how negotiations with the EU will proceed regarding the country’s relationship with the Union in the future. Cameron had appealed that the voters vote for a greater unity of the region and the Finance Minster also stated that the region will have economic volatility if Brexit came about. The main Leave campaign was built around stalling the immigration problem from moving to Britain and the resolutions that had been taken at Brussels that the country did not want.