Japan is bracing itself against the economic consequences of the rampant coronavirus with another billion-dollar stimulus package. The government passed measures of one trillion yen to support affected companies on Tuesday. Around half of this is provided in the form of interest-free loans for small and medium-sized companies that lack financial resources as a result of sharp sales losses. In addition, part-time workers who are unable to pursue their jobs as a result of school closings and instead have to look after their children at home are provided with the financial aid of 4100 yen per day, the media reported.
Coronavirus puts Japan in crisis, shakes up the global economy
Just a month ago, the government of right-wing Prime Minister Shinzo Abe had put together a first package against the virus crisis, which included low-interest loans of over 500 billion yen for small and medium-sized companies in the tourism industry and other sectors particularly affected by the virus. The virus crisis hits Japan at a time when the world’s third-largest economy is in danger of slipping into recession.
On Tuesday, the cabinet also approved a bill that would give the head of government the power to declare a state of emergency if necessary. Abe had been harshly criticized for not initially taking the novel coronavirus seriously and reacting inadequately to it. Japan, which plans to host the Olympic Games in the summer, has now stepped up the measures. Abe called on Tuesday to cancel large events beyond mid-March to prevent the new pathogen from spreading further. So far, around 1200 infections have been confirmed in Japan, of which around 700 cases are people aboard a cruise ship that has been temporarily quarantined.
Money cannot buy happiness but studies show that money has a huge impact on happiness.
Many people aim to become a millionaire. And even if you don’t hit that high note, you would at least want to experience financial security for your family and something to hold on to when you reach senior age. Money (after all) can make anyone a lot happier.
Can Money Impact Happiness?
Various studies into the influence that money has on happiness show that money does make people happy. It is about what you do with your money and what you spend it on. But then, of course, you have to have it. And how much is enough to be happy? Tip of the veil: you don’t have to be a millionaire …
Spend smarter Spend your money on things that give you more free time. So you don’t need more money to become happier, you just have to spend it differently.
There are plenty of things with which you ‘buy time’. For a – relatively – small amount you can, for example, have your groceries delivered at home or someone who cleans your house. Although that person only comes once a month, it does give you time for other fun things!
A lot happier
So you get time in return! You can, for example, spend that on your friends or family. Or you can pick up your neglected hobby, talk to your partner, hug your turtle, visit your grandmother or annoy your best friend. And yes, that makes you happy.
Is there a lucky formula?
Yes! It is there! OMG! Research has shown that everyone’s happiness consists of three building blocks, namely: goals, charging points and people. Goals ensure that you have something to look forward to. A reason to get out of bed and have a perspective on the future. And now it comes: charging points are the biggest problem for people. You probably have a telephone and are – whether you want it or not – to a certain extent addicted to that thing. In summary: You get new impulses again and again and that costs energy.
How many knocks do you need?
If you want to be able to do all this, you need money. You have to earn enough money to be able to take free time and recharge yourself. So there is a maximum limit to which money makes us satisfied with our quality of life. What? Yes really. Research has even been done. Up to the limit of EUR 67,900 on an annual basis, more income generally means more happiness. According to this research, ‘happy’ people earn on average between € 53,000 and € 67,900 per year.
For some millennials certainly finding the right way to manage finances is not an easy matter, especially for those of you who have never set personal money directly. Often the contents of the account suddenly thin out without knowing where it just went.
Such events can certainly be experienced by everyone and even financial advisers though you know. Like Mada Aryanugraha who now works as a financial planner and CEO of the SiPundi website portal that provides information and strategies to the public about the financial industry.
Millennials Are Spending A Lot
Middle-class millennials are arguably spending a lot of time in coffee shops, theaters, traveling, and even getting addicted to devices due to film or music applications.
Seeing this phenomenon, OneShildt financial planner Budi Raharjo said the lifestyle was very common among millennials. According to him, the average level of their early career income was higher and a better education.
“So that it has a higher disposable income [residual income beyond basic needs] compared to the previous generation,”
Not only that, he considered the millennial generation to experience a shift in financial priorities. They see that experience is far more important than asset ownership at a young age. Whereas the previous generation considered the millennial style to be consumptive.
Social Media Highly Influences The Millennial Lifestyle
The rapid flow of information on social media, he continued, is one of the factors that influence the millennial lifestyle. Not only that, according to him millennial also has a character that is far more daring to try new things. Moreover, millennial has many choices and offers of products and services for various lifestyles.
Even so, he said the reason for the lack of knowledge in good financial management from a young age, can influence the emergence of that lifestyle.
Ideally, Budi continued, lifestyle should also consider financial capacity first. “If the income is still UMP, then spending should be tertiary, such as lifestyle and traveling avoided. It would be better if the expenditure was only made if the income was more than 2 times the UMP, “he continued.
If you want a vacation, the allocation for recreation can be limited to a maximum of about 5-8% of income a year. Then to hang out and watch movies can be limited to around 1-2 times per month.
There are many ways that millennials can start saving for the future. However, if faced with a car accident, there is always a way to get the money you need from your insurance claim like through car accident loans. But this doesn’t mean that money is easily accessible, millennials will have to learn to prioritize in order to put their finances on the right track.
Reaching the age of 55 and having problems for cash, the best way to solve this is to equity release. However, this is only possible if you have your own home. Furthermore, doing so is not as easy as it looks. The rates maintain its cheapest value but the equity release remains being expensive.
Below are some key areas that one must have to take into account before digging in to the equity release scheme. It is also a good thing if one must understand to use the Equity Release Calculator • SovereignBoss. And, it is important to learn the essential ways to manage and improve your finances.
Scaling down your property
Primarily, considering to scale down your property is really just an option when it comes to equity release. However, thinking that scaling down would be good, then better to do it as soon as possible. Having this in mind, the decision of moving away if you opt to scale down your property would give a greater effect both on the personal and social aspect. Moreover, financing this option is necessary as the costs can be typically high.
Equity Release Definition
Basically, equity release is one mode of breaking in the worth of one’s property and convert it to lump sum in a form of cash. This can be done through various policies that allow someone to release the funds connected to your home. Moreover, paying the mortgage in full is not necessary for the release of equity.
The basic rule is it is allowed to get the money being released in a single lump sum for number of smaller amounts payable with interest.
The Process of Equity Release
Generally, equity release falls into two primary processes: the mortgage and home renovation. Explained below are the differences of each.
1. Lifetime mortgage
This process is generally common for individuals at 55+ years old. It works by borrowing some of the home’s asset at a fixed interest rate. Repayments are not applicable with the old school method of lump-sum mortgages. Meaning, the interest increases faster as the amount of borrowed is also increasing in time. This is in reciprocal with the process under the normal mortgage. Keep in mind that lifetime mortgage is not the same with the standard mortgage.
2. House renovation
This is mostly applicable for those aged 65 up. With this, the providers grant lump sum for a specific percentage of the home generally at the rate below the value in the market. The nice thing is that the lump sump is tax-free. Further, one can stay at the property, but, in the event that it is sold, the revenues will be divided on the lender and owner’s percentages. In short, when the value of the property increases, the amount it gets also rises.
There are a lot of loan options available for small businesses today. The easiest type of loan to secure is unsecured business loans. This is not really a loan. It’s more like a business credit card. So if you do have good credit or good credit partner or a guarantor, you can get five times the amount of money from whatever your highest credit limit account is now.
Business Loans for Small Company
Look at your credit report. Whatever is the highest limit you have on a credit card is, you could typically get unsecured financing fives times that amount of money. You can get approved regardless of your company size. Also, the rate starts at 0% so this is perfect to start a business because you can get a zero percent rate for generally six to eighteen months. After which, your rate will follow a normal credit card rate.
You can also get approved without your financials. If you are not a start up and you need a no-doc type of loan, unsecured financing is the best way to go.
This is another type of small business financing. You can get this regardless of your company size. These loans use assets as the main factor for approval. Rates are usually five percent or less or even as low as one percent regardless of your credit score. You can get approved if you have 401k or stocks, inventory, equipment, real estate, or book of business including purchase orders or account receivables. So regardless if you are a small business, you could still get approved for this type of financing. Depending on the value of your assets as collateral, you can get large amounts of money.
Business credit is another great option because any company, regardless of size can get business credit even if you are just opening your business. There’s no personal credit check required. So if you have consumer credit issues, this can be a great option for you. It takes about 6 months total time to get approved for business credit cards with limits of $10,000 or higher. These are visa-mastercard type of cards. Amongst that 6 months, you are also getting approved for vendor credit and store credit.
There’s a lot of funding options available for large and small businesses but they all need cash flows of $10,000 or higher monthly cashflows to qualify. This is includes cash advances, private money, conventional loans, SBA alternative loans. All these become available to you when you have revenue in tax returns. So even if you are a small business if you have tax returns and bank statements to show deposits of $10,000 a month or more, even proof of small amounts of profit and gross revenue, then this opens up a lot of other funding options.
For many who wants to start a new business, the main question is where to get the funds to get started?
For famous businessmen like Dan Lok, they would tell you to get a job because you need money to start anything.
After you get a job, then you can plan something on the side – the side hustle. This means converting your extra time into money. Dan Lok refers to this as High-Income Skills.
Dan Lok defines High-Income Skills as a skill that can make you a targeted income or more in a month’s time. It is not a business but a skill set that you can develop and sell to the market in exchange for money.
In a corporation, who do you think is the owner or the owners? Shareholders are, in fact, the owners of a corporation. They are institutions, businesses, and even individuals who have ownership of the company stocks. Stocks are issued to the market for sale and bought by the public who have the interest to improve their personal finance.
When an individual buys shares of stocks, the person becomes a shareholder of the company (the individual who purchased stocks have the ability to trade it in the market which works much like world oil trade).
Regardless if you are a solo shop owner, you’re the shareholder as a result of your invested affinity for your business. Since shareholders have ownership of the firm, they’re eligible to the earnings of the entire firm.
Shareholder wealth is a suitable target for commercial companies in capitalist societies. Within a capitalist society, individuals have private ownership of various goods and services. Those people have the means of production to generate cash. The profits of companies within the economy are attributed to these individuals.
Shareholder Wealth Maximization
If business managers want to increase the wealth of the company, they actually want to increase the company’s share price. As the share price rises, the company’s value and shareholders will increase.
People generally think that the manager of one company is the owner. This may be true for small businesses or partnerships. In larger businesses, there can be numerous managers and staff, and they really do not own the business. Do they benefit from the business apart from their salary and benefits? If employees are shareholders, they have a tendency to be more concerned about the company.
Therefore, numerous firms motivate employees to turn into shareholders. The fact is, a number of companies offer stocks to employees at discounted prices.
Disputes Involving Managers and Owners
Since the managers of a company are instructed and carefully guided by the BOD (Board of Directors), and for the reason that they don’t profit directly with the company’s target to increase shareholder wealth (unless of course, they’re also investors in the company), clash can occasionally occur between managers and stockholders. This clash is referred to as the agency problem.
Managers act as shareholders’ agents. When there is an agency problem, it’s crucial to resolve the issues as soon as it arises to prevent complications inside the company which could obstruct overall performance.
Responsibility Towards The Society
Could a company try to maximize the wealth of its shareholders and at the same time take on social responsibility? Yes! When they try to raise their stock prices, do they really care about social welfare? Yes again.
Take into account the Great Recession of 2008 and the subprime crisis. At that time, think of the huge banks that released these mortgages, were they socially responsible? Lots of people say no or not really. Whilst they seem to be worried about their portfolio, banks were not really accountable. This portfolio abounds with dangerous assets that ultimately result in the breakdown of many huge banking institutions, as they took the operating risk of numerous financial establishments.
Consequently, their share prices dropped with them. One could surmise to state that they weren’t socially accountable.
Conversely, give some thought to General Motors. Right after nearly failing the Great Recession, they transformed the company around, paid back debts and, manufactured better motor vehicles. Because of this, it eventually increased its share prices. The reason behind is that GM has taken full steps which includes social responsibility instead of taking advantage of for profit. Companies, corporations, or businesses cannot really exist and gain profit over time without becoming socially responsible.
One of the reasons that business firms are increasing their share price instead of seeking other means for profit is due to the concept of risks and rewards. Shareholder maximization takes into careful account risks and the return of investments while the focus of profit maximization is a short term goal in the lines of financial management.