Archive for March 21, 2013

Teaching Individuals to Use Tools for Understanding Personal Debt

In this day and age one can turn to the internet to find free tools — such as this amortization calculator to help understand and get a handle on their personal debt.

To get the best interest rates and mortgage loans you can afford, you will need to compare several mortgage loan quotes and their terms, rates and loan amounts, you can do this easily with the help of an amortization calculator.

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An amortization calculator will typically let you know how much you may have to pay on a mortgage loan on a monthly basis (this is usually the same for each month), the total interest you will pay on the loan, the total amount you will pay for the term of the loan, and the date you will completely pay the loan off. You can compile a list of the different mortgage loan quotes you have, and then calculate all of these for each one of them, in order to compare and get the best mortgage loan for yourself.

In addition to this, if you also want to see the effect of paying on a mortgage loan early, that is, if you want to see how doing a prepayment on a loan, will affect how much you may have to pay overall, you may use some of this type of calculators to check that too.  If you try online you can use multiple checks if you have an automatic ip changer running in the background.  You should be able to see and review the effect of doing a one-time, bi-weekly, monthly or annual prepayment on a loan. You will however need to bear in mind that, depending on the terms and conditions that governs a specific loan, there may be a prepayment clause on some loans that would allow a lender to charge you with some fees for paying early. You will need to find out if there is a prepayment clause on a loan before you take it up.

You may get an amortization schedule for each loan with the calculator too. The amortization schedule will provide with some information on the outstanding balances you owe on a loan, per month. In addition to helping you with your comparisons, using an amortization calculator will also provide you with some idea on how much you will need to earn on a month basis, in order to quality for some specific loan amounts.

Airports and Development

For personal finances a good way to relieve the pressure of debt is simply to cut out a lot of expenses. If you have a credit card bill to pay off then you could take sandwiches to work instead of going out. The money saved could be used to pay off the debt. The case with national economies is very much different. Since 2008 the IMF has been advocating slashing budgets and reducing costs.

In some cases this strategy is not foolish. Some costs are unneccesary, and more scrutiny into how public funds are spent is always welcome. However, there is a direct correlation between government spending and economic growth. When you reduce public spending you shrink the national economy. Countries like Spain and Portugal need to increase the tax revenues they collect. An expanding economy is the best way to achieve this. Unfortunately, austerity plans foisted on them by the EU are counter-productive.

Asian economies are a good example of effective use of public spending to improve the economy. Thailand has been able to increase its investment in education, pensions, public works etc. by promoting strategic development in co-operation with business. A good example of this is the airport being built in Koh Phangan. It is Thailand’s fifth largest island and until recently a tourist backwater.

Since interest in the Full Moon Party exploded visitor numbers to the island have increased dramatically. The central government has identified the island for infrastructure development. Works are underway to improve roads, water supply and the internet connection. At the same time permission has been given for Kan Air to build an airport near Thong Nai Pan in the north east of Koh Phangan. It is this type of strategic spending on development that helps to boost local economies and help the lives of ordinary people.

Whereas in the case of koh Phangan an airport is clearly a good idea it is often not in other places. Japan uses major construction projects to pork barrel for elections. The airports become a drain on finances and are often used very little. Moreover, there are negative environmental implications to many airport sites.

Airports are clealry not detrimental to development but their efficaciousness to the local economy needs to be studied case by case.

To read more about Koh Phangan Airport click here.

Debt and Wineries Opening

wine barrel racksSo a winery carries debt like no other business that I can think of.  Given that nations in Africa carry debt like no others in the world-I thought it might be a good idea to try and put the two of them together and find a workable solution for Africa by looking at how the wine industry behaves.

First, the average winery has to have a two year lag between creating their first wine and when they are able to sell that same wine.  Wine often spends over a year in a barrel (which runs the winery about $1200 by the way) and then another year in bottle, before it can be sold.

As you might expect, that is a rather large undertaking to say the least.

JC Stennant

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