Crosby Finance

When it comes to embracing net technology silver surfers are leading the way, according to recent research from two leading online advertising and measurement companies.

Those aged 55 and over are classified as silver surfers, referring to the prevalence of grey hair amongst the age group and research has identified that it is they who are logging on in ever greater numbers following the widespread roll-out of broadband across Europe. At the end of 2007 almost twice as many silver surfers were using the internet as at the start of the year, with a survey from net Value recording a staggering 90% increase.

So, proof that the older generation has eagerly embraced the internet and for them one particular feature is a godsend: online banking. Indeed, a survey by the European Interactive Advertising Agency (EIAA) found that 53% of silver surfer respondents did their banking online, taking advantage of the convenience of arranging their finances from the comfort of their own home.

The EIAA survey also found that older people spend almost 78% of their weekly average 8.8 hours online for personal reasons. As well as banking, the older generation also spend a lot of time investigating their family tree and shopping. They also spend more cash per head on the internet than any other age group, including surprisingly those in the 18 - 24 range, blowing apart the myth that the net is a youngsters’ phenomenon.

The major UK banks have not been slow to pick up on the rise of the silver surfer and typically offer products designed to appeal to more affluent people, particularly those looking for a monthly income from interest payments. So, in addition to providing day-to-day online banking via a current account most banks now offer online saving accounts, many of which offer a higher rate of interest than would be available through the branch network.

For example a monthly income online savings account can be set up to transfer the monthly interest automatically into the account-holder’s current account. Monthly income accounts are very popular amongst retired people as are other types of accounts that offer significantly higher interest rates in return for tying up the capital for a specified period.

It is these types of accounts that are attracting affluent and net-savvy silver surfers, although they are not exclusively for that age group. But, while the amount of older people on the net continues to grow you can be sure that banks will be rolling out accounts designed to appeal to them in ever greater numbers.

Finance is the general term applied to the commercial service of providing funds and capital. This is part of the area of economics that focuses on the strategies and methods of looking after money and other financial assets. A more general and accepted definition is the control of business plus public sector assets and money. People that look after or manage the arranging of finance are called finance managers.

Managing this involves dealing with the optimization and allocation of funds to various areas either by borrowing or by using those available from internal resources. The term optimization is used to explain the procedure whereby finance is maximized by reducing costs and increasing the return. Poor finance management is caused when managers neglect the rules and a deterioration occurs affecting markets around the world. It is for this very reason that finance managers are very careful with finance they agree too and where it is funded from.

Finance managers can be very short sighted, only looking at the initial cost involved and not the future return capability of the project. Finance managers are people who always like to see where they have been and do not look towards the future in the same way that a sales manager does. Many small business owners forget that the business loan they have arranged is not for personal use; a distinction which gets blurred regularly. Managers are rarely impressed with this situation as they believe they have aright to know what their money is being used for.

This may cause some concern amongst small business owners but they should train themselves to be more focused on their business which should in turn create a better frame of mind for the future. An important area for businesses to receive finance is their own bank or failing that good friends or even relatives. The simple trick is for finance managers to arrange loans using outside lenders thereby protecting their own assets whilst maximizing their own profit simultaneously. Bob Hope once said that you can only get a loan from a bank if you can prove to them you have absolutely no need for it; advice which could not be more true.

Part II

A lot of people think that the cost of living just naturally goes up; they rarely wonder WHY things cost more than they did ten years earlier. The few people who do put some thought into it think that the cost of buying things increased because manufacturing companies want more profit. Others think that the manufacturers HAVE to increase their prices because the cost of THEIR raw materials has increased, but this would beg the question, why did the cost of the raw materials increase?

We’ll answer those questions, but for now let’s see how a typical trade might go. In this example we’ll have two tradesmen, a carpenter and a blacksmith (we’re still in the era when people traded with gold and silver remember).

The blacksmith wants a bench which the carpenter can make, so the two come to an agreement on the price which is, say, two ounces of silver. Now, if the blacksmith already has the silver, he can simply exchange the ounce of silver for the bench, or perhaps pay one ounce as a down-payment and then would pay the other ounce upon receiving his finished bench. Both are happy with this arrangement.

Now, if the blacksmith doesn’t yet have the money, but he knows that an upcoming job shoeing some horses is going to bring him enough silver, he can offer the carpenter an IOU; a PROMISE that he will pay the carpenter as soon as he has the “money”.

In the first instance, they were trading via commodity, the first kind of “money”. In the second, they were using promissory “money” (and IOU). The third way they could trade is if they used fiat-money, that is a token (a small medallion perhaps) that a king (emperor/government/dictator) determined has a certain value.

Enter the COIN! Coins have been used by rulers as currency for thousands of years. These are in effect, pieces of metal (metal being very durable and long-lasting) that have a specific value.

Originally, coins were minted (where the word ‘money’ comes from) by PRIVATE companies. People would take their gold or silver to these trusted companies and these companies would divide the metal into fixed amounts (say 1/20th ounce each) and then stamp them with their OWN seal, guaranteeing that the metal was exactly that weight. They would, of course, charge for this service, otherwise they’d go out of business very quickly!

The word ‘dollar’ is a corruption of the European word ‘thaler’, which was a coin minted in the early 16th century in a town called Joachimsthal. The coin was called a Joachimsthaler, which was later shortened to simply a ‘thaler’ (the letter ‘a’ being pronounced ‘ah’). The original dollar was actually 1/20th of an ounce of gold.

As some people became wealthy( because of the products and services they produced for others), they had a problem. They didn’t want to keep their coins at home where they might be burgled, nor did they want to risk being robbed by carrying it with them each day. So other types of service companies appeared which were simply, secure warehouses.

These privately-owned warehouses would charge an agreed fee to securely look-after people’s gold and silver, and would give the people a slip of paper showing how much weight of metal was being kept in the warehouse(in England it would be weighed in ‘Pounds’ of silver). When the owner of the metal wanted some to use, he would simply take his slip of paper to the warehouse where his metal resided, and exchange it for the paper. If he had some left in the warehouse, he would be given a new slip of paper telling him how much he had remaining.

To make things even simpler for the owner of the metal, he would sometimes offer the slip of paper ITSELF as money, rather than going to the bother of traveling to the warehouse and taking his gold out. As long as both the metal owner and the person he was buying from trusted the warehouse (had confidence that the owners would give the bearer of the slip the amount of gold that it referred to) then this system would always work and no metal had to be carried around.

These warehouses were, of course, the first banks. But the banks soon realized that the rulers of their country (dictator/government/emperor/king etc.) didn’t like what they were doing. Why? Because the ruler didn’t have any CONTROL over the money! If they couldn’t control the money, how could they possibly control the people? (Whoever can afford an army controls the population).

So, in every country over the years, the rulers of those countries HAD to stop these private banks from trading. How did they do this?

Continued in Part Three

Elder financial abuse has existed for as long as elders have owned property and money. This article will discuss seven key elements to identify and combat elder financial abuse, and to recover what was wrongfully taken.

Key # 1: Age

In California, an “elder” is defined as someone 65 years of age or older. Age is an important factor because an “elder” is entitled to the remedies provided under the Elder Abuse and Dependent Adult Civil Protection Act, known as “EADACPA”.

Key # 2: Mental Capacity

Probate Code 811 provides a list of mental categories that a psychologist or medical doctor can use to assess an elder’s mental capacity. When you read this statute, you might think that you’d need a Master’s Degree in order to pass this “test”. It covers such assessments as logical thinking, analytical ability, and memory. However, a poor score in any one category does not warrant a determination that the elder lacks sufficient mental capacity.

In elder financial abuse cases, the mental capacity assessment must be focused in the context of a particular transaction, and the conclusion will be whether or not the elder possessed mental capacity at the time of the transaction.

For example, the question may be whether an elder had the mental capacity to sign a grant deed that transferred title of a home to a caregiver. In performing the mental capacity evaluation, the psychologist or psychiatrist will make this determination based upon the elder’s performance when the assessment is given.

The bottom line purpose of the test: At the time the elder signed the Grant Deed, did s/he have the mental capacity to understand that title to the home was being transferred to the caregiver?

This can be a challenging task for the evaluator, particularly when the Grant Deed was signed three years or more prior to the mental evaluation. It then becomes a forensic evaluation, and the mental capacity issue may have to be determined by a review of the elder’s medical and/or psychological records during the months leading up to the date the Grant Deed was signed. Sometimes, no such records exist and the evidence of mental incapacity must be obtained from other sources.

Key # 3: Identifying Elder Financial Abuse — Undue Influence

First of all, not all “influence” is undue. A wife of 40 years certainly “influences” her husband, and vice versa. There is nothing inherently wrong with this type of influence.

The type of influence that is “undue” takes place when one person takes advantage of another’s weaker state of mind. There are statutes and numerous cases that provide both definitions and factual backgrounds to illustrate various scenarios when such undue influence was used to manipulate and coerce an elder into unknowingly parting with their property and money.

Key # 4: Combating Elder Financial Abuse — EADACPA

The EADACPA statutes, under the Welfare & Institutions Code, provide nearly every remedy under the sun. Interestingly, EADACPA was enacted to provide an incentive for lawyers to take on elder abuse cases. Before EADACPA, attorneys were reluctant to accept such cases because their clients were often of ill-health and would sometimes die before their case went to trial. The right to recover “general damages” for pain and suffering would also die. A lawyer may have worked hundreds of hours on the case, and then “lose” because his client passed away before trial.

However, under EADACPA, the case continues even if the elder passes away during litigation. The elder’s family (successor in interest) is entitled to post-mortem recovery for pain and suffering, along with all other remedies allowed. Now, attorneys are more likely to accept such cases and devote the time and energy needed to litigate.

To prove an EADACPA claim, it must be shown by “clear and convincing” evidence that the defendant’s acts were done with “malice, oppression, fraud or recklessness”. This is a much higher burden of proof than the standard of a “preponderance of the evidence” that is required in most other civil cases.

However, a successful EADACPA claim will allow recovery of special damages, general damages, punitive damages, attorney fees and costs, as well as the potential for “enhanced remedies”.

Key 5: Common types of elder financial abuse

Elder abuse occurs in a myriad of ways. Somewhat ironically, the majority of perpetrators are the ones to whom the elder often devoted his/her life to: their children.

Financial powers of attorney are a classic form of financial abuse. Given this document, the “agent” can perform any financial transaction that the elder could, including mortgaging or selling the home and withdrawing money from bank accounts. Placed into the wrong hands, this document can become a “license to steal”.

Often, the elder signed the power of attorney many years ago and has forgotten all about it. Or, the bad son or daughter simply tricks their aging parent into signing.

A typical scenario involves a son or daughter who uses manipulation and trickery to have title to the elder’s home transferred. Often the home is owned outright, and the perpetrator can easily obtain an equity line of credit or other type of loan.

Unfortunately, these loans are often defaulted on for non-payment, leaving the elder to face eviction proceedings — totally unaware of how they became a victim.

Key # 6: Civil and Criminal Litigation

Fortunately, there are remedies available. Many of these cases are both civil and criminal in nature.

Penal Code Section 368 is very similar to the EADACPA statute, and can be prosecuted by the District Attorney’s Office — if they have the resources and personnel. California mandates that each county have an elder abuse prosecution unit; however, some counties lack sufficient funds and can spare only one deputy district attorney to handle all of the cases. They are often overwhelmed and unable to promptly respond.

Civilly, these cases can be brought under the EDACPA statues. If the client is 70+ years old, then a motion for preferential setting can be brought that requests a quick trial date. If granted, then a trial must take place within 120 days.

Key # 7: Recovery of property & money

Acting quickly is critical. Action must be taken immediately to stop the perpetrator from stealing any more property or money.

If title to a home has been transferred, then a Notice of Pending Real Property Claim (lis pendens) must be recorded with the County Recorder’s Office where the real property is located. Remember, this is a notice of a “pending claim”. The “pending claim” is the civil lawsuit that has been filed with the Court. There must be a pending court case (challenging ownership to the property) before a lis pendens can be recorded.

If the bad guy is making withdrawals from bank accounts, then the bank must immediately be notified. Remember: all bank employees are now “mandated reporters” and must alert law enforcement when elder financial abuse is reasonably suspected.

Understanding these seven key elements will assist elders, their family and loved ones to prevent financial abuse and to take quick action to recover property and money when such abuse has already occurred.

Once Upon A Time…men (and women) exchanged goods and services with each other and they called it “bartering”. In effect, they were exchanging something that they owned for something that they wanted or needed. What they owned may simply have been their time and strength, so they would labor for somebody else in exchange for things, perhaps food and shelter.

While communities were small, this worked reasonably well, and it still would, IF communities were small. Nowadays communities are rarely small, ranging from the thousands to the multiple millions. There are only a very few groups of people around the world who could pay for goods in this way anymore.

Then somebody (most likely several all around the globe) thought that it would be a good idea to barter with something that most people in their vicinity considered valuable. Thus, things like pebbles, crystals, ornaments, beads, etc. became the ‘money’ of that day (even TULIPS at one point!). Thousands of things have been used as money throughout history…we’re currently using zeros and ones in computer memory as money! (More on that later!).

Up until quite recently, precious metals like gold and silver were used as the prime ‘currency’ (meaning nothing more than “what’s used NOW”) in most of the world.

Gold and silver used to be exchanged by weight, NOT as coins. Because these metals were considered valuable by most people and were relatively easy to transport and hide, they became the DeFacto materials for trade.

And THERE is the most important aspect of money. MOST PEOPLE accepted it as a form of currency!

In and of itself, the metal had little value; they were nicely colored and could be used to make cups and bowls and trinkets, but other than that, at that time, they had no other applications.

For these metals to have any other kind of value, MOST PEOPLE had to have the CONFIDENCE that if they took the metal in return for something of theirs (wheat, a cow or a service of some kind), THEY could then go and do the same WITH that metal. If the confidence was not there, why would they accept it in the first place?

So what is money then? Well, there are several kinds: There is the commodity kind like the gold or silver; then there is the IOU note kind (you do/give something for you if you PROMISE to do/give something of agreed-upon value back to me) or PROMISSORY money.

Finally there is ‘fiat currency’, which is the currency that a ruling organization (king, emperor, dictator, government etc.) rules is the medium of exchange. THEY say it’s legal tender…so it’s legal tender!

There are numerous methods of budgeting, which include simply balancing your checkbook and making sure you keep track of all of the checks you write. There are software programs like MS Money and Quicken that allow you to see where your money is being spent. There are a few pencil and paper methods where you are told to write down everything you spend your money on and make sure that that never exceeds your monthly income.

The common trait among all of these methods; however, is that they take a pragmatic approach to budgeting. Rather than relying on principle, they treat each expense or “budget problem as unique. As such, there can be many different methods to budget your money, and the success or failure of a particular system depends on whether it works (at least in the short-term) regardless of the long-term consequences of the method. It is not surprising, then, that we see several different popular methods all claiming to be the right one or the best.

These methods are also 100% reactionary. Which means you are passively reacting to your money, your bills, and your financial life in general. The system depends on you reconciling your checkbook, or your spreadsheet, or whatever you’re using after you’ve already made purchases. These methods can only record and track your spending history, not help you control your current and future financial situation.

Then, there are what I call the “inspirational” methods. These are budgeting “tips” which set unrealistic expectations on you such as “just cut back on going out to the movies” or “always buy the generic brand” when grocery shopping. These methods attempt to control your lifestyle and dictate your wants and desires.

It is no surprise that, usually, these systems fail for most people because they present you with a dichotomy (a split) between “needs” and “wants” that makes life generally unpleasant. I’m not saying that there aren’t things that you should cut back on or that you don’t need to change your lifestyle in order to become financially successful. But, whatever changes you make to your life should be your choice, not your advisor’s.

Envelope Budgeting

You’ve probably heard of “the envelope method”. With “the envelope method”, each expense is written down on an envelope. Your entire paycheck is divided up into each envelope according to when each expense is due.

When you take money out of that envelope, it’s gone…so it’s rather easy to keep track of how much money you have left. However, it’s not always clear how much money you’ve spent, or how much money you are actually spending on a particular area of your life.

How do you come up with a sensible grocery budget? Do you spend too much money on cigarettes? Going out to eat? On entertainment? How do you start cutting back on gasoline use? School clothes for the kids? Groceries? Do you alter your lifestyle now in exchange for a better life later? The envelope method can’t really help you do this.

Abstract Budgeting

Abstract Budgeting reduces and simplifies all of the many financial problems in your life by using objective principles of concept formation and sound financial theory that actually works in practice. The budget is basically on “autopilot”.

Think about your gas and electric bill for a moment: Most utility companies offer their customers a “budget” that automatically ensures that they are paying the right amount of money every single month. It’s easy. it’s simple. You don’t have to think about how much gas and electric you are using. The same thing happens when you consolidate all of your outstanding debts into one easy payment. Part of the reason you do it is because it’s EASY.

The funny thing is…you can arrange your entire financial life this way. There’s no willpower involved…except perhaps the willpower to get started. You don’t need software, you don’t need to micromanage your life, and you don’t need to spend hours balancing your checkbook. In short, Abstract Budgeting allows you to manage your money instead of the other way around.

Do you want your credit score to plummet, go ahead and co-sign for someone. I personally believe this is a huge problem. With your credit score and credit report being the roadmap to financial health, the question is can you really afford to co-sign for friends and family. Over the years I have seen more problems with this issue. Here is how a co-signer can affect your personal credit.

Late Payments
If you co-sign for a family member your credit report could be at risk. If for some reason the family member is late on an obligation you co-signed for your credit score just dropped about 100 points. Most people don’t thing about this, but it happens all the time. Anytime someone is late on a obligation that reports to all 3 credit bureaus, that bad mark will be on there for 7 years. It’s not worth it. If you have to co-sign for someone make sure you are not getting ready to make a big purchase, because it could affect your purchasing power as well. Some banks like to see a payment history in good standing usually around 12 months on co-signed obligations. They also typically like to see proof that the payment is coming out of the person’s bank account you co-signed for. So co-signing opens up all kinds of worms in the world of finance.

Income to Debt Ratio
Once you have co-signed on a loan for a friend or family member it could affect your ability to get a loan for something else. That added debt that is showing up on your credit report is technically your responsibility as well. Let’s assume you have this car note you co-signed for and the payment is $500.00 a month. You have now added this debt to your portfolio of debts in a underwriters eyes. In order to buy something else an underwriter may require a good 12 month payment history by the other party to disallow a debt from your portfolio of obligations. So with this being said think real hard before you co-sign on anything. I don’t recommend it. There are ways for someone to get there credit established so they can get loans in there own name. The internet is a great resource. There is anything you can imagine on the web to help you achieve just about anything, including getting your own credit established so you don’t need a co-signer.

If your car breaks down - you go to a mechanic, right? If you have a health problem you go to a doctor. If you want to learn new skills you go to school or college. So if you want to learn how to create wealth and attain financial security it makes sense to take some tips from the experts - those people who are already living the life you are dreaming of.

Believe it or not creating wealth and financial security is not as simple as working hard and saving your pennies. Many people work hard their whole life and yet don’t have more than a subsistence lifestyle. Likewise many people save the first dollar they ever made, but they still don’t have financial security. Being wealthy and financially comfortable is a lot more than just having money in the bank - it is a way of life. And over the years some people have created that life for themselves - look at Donald Trump, Bill Gates or Tony Robbins for example. These people are not only rich in financial terms; they are also wealthy and they have financial security. And luckily for you there are people, just like the Trumps and Robbins of this world, who are happy to share with you their steps to success.

There are a lot of benefits in learning from successful people. Firstly although it might not be evident now, most people have to suffer a few hard knocks on their way to success. If you are learning from these people, you can avoid their mistakes. Secondly, when you learn from other people you are learning not just physical skills and goals, you are also learning about the mindset of these successful people - and that is the vitally important difference between having money and being wealthy. For example did you know that if you won the lottery today, you have more chance of being back where you were financially before you won the money within two years, than actually making a success of your life? Its true. Being wealthy and secure financially is a whole lot more than just having money.

So what can you do to start creating your wealthy and financially secure life? Do some homework. Seek out people and courses that are being run by those who are already living the life you want to have. Follow their advice; don’t be afraid to ask questions; and start learning how not only to make decent money, but also how to create for yourself the mindset of a successful and financial secure person.

The single biggest reason why people want to be wealthy and financially secure is because they then have the freedom to live their lives the way they want to. Wealthy and financially secure people have built up their financial system in such a way that it withstands Stock Market crashes, or high oil prices in the Middle East. They are living a good life that doesn’t threaten their financial security. They have the mindset of what it takes to be a success and have the freedom in life that financial security can achieve.

Believe it or not online banking has existed globally in some form since the early Eighties, in particular with the Videotex system. Unfortunately it eventually turned out to be a major flop, apart from in France. Luckily, almost three decades on, online security has dramatically increased allowing online banking to flourish.

The most notable security advancement is the implementation of SSL security, which stores all secure data remotely and can apply scripts to it, for example checking current balance. The encrypted information is then sent securely back to the user. Users can check the webpage and data they are sending is secured by ensuring there is a padlock symbol displayed in their browser.

Online banking has really only taken off in the last decade, when the first internet only banks started, including Egg, First-e and the Smile. Smile was the first full internet bank account, now owned by the co-operative is award winning and known for its corporate social responsibility.

Now a days online banking is just as strong as ever. All the major high-street banks also offer a special internet account or at least the option of online banking. The attraction of an online bank account is mainly ease and speed of access, paperless accounting and primarily more competitive interest rates available.

Due to the nature of online banking and the potential for illicit activities to take place, online banking has constantly been a target by thieves and cyber criminals. The security precautions employed by banks are considered the strongest in the world, therefore canny hackers tend to prefer targeting less aware customers.

A common attempt to obtain bank account information is to create look a like websites, impersonating the genuine bank websites, known as phishing. This technique can easily deceive experienced web users who would not consider themselves at high risk of being caught out. Once a customer opens the website they believe to be the banks, they often enter their personal details such as usernames, pin numbers or passwords. Your confidential details are then sent directly to the criminals who would attempt to use your details themselves.

Banks and security corporations are in an ongoing struggle to protect their customers and their funds from external threats. The latest innovation aimed at increasing online safety is the introduction of security tokens, a physical device that an authorized user of computer services is given to aid in authentication

So what is the future of online banking? Well the simple answer is as secure as your money is, exceptionally. With increasingly complicated security algorithms and authentication systems being developed, external threats are diminishing. Additionally new approaches of online banking are emerging, in particular mobile banking, definitely a technology we will become accustomed to and probably not live without over the forthcoming decade. If you are pursuing a career which will be as secure as your money, why not look into banking jobs, in particular online banking jobs?

As the first decade of this millennium comes to a close, we are confronted with more critical, complex questions regarding the management of our personal finances. As people switch or lose jobs, their financial security and social security suddenly disappear overnight without much due of any planning. As financial markets around the word become more volatile, general price level of our property prices, health care, expenses for necessity items becomes more of a worry than before. Are the solutions simple and straightforward? Hardly. However, have you ever thought about how much money will you need in the coming five years? Twenty years? To support a thirty year retirement? To cover the possibilities of unforeseen health problems? Most people can’t figure out what they need for the next week, month, let alone twenty years from now. Meeting today’s needs and wants is already so consuming of their time, money and effort and there is little left over for tomorrow and there after.

The reality is this: To meet and achieve your future goals, it requires considerable amount of energy, foresight, discipline, contingency planning, and a certain amount of good fortune to make your finances work. It requires a certain amount of professional skill to quantify and manage your personal finances.

Remember this: Whether you are an individual or the head of a family, you are the master of your destiny and CEO of your own financial well being. Regarding your personal finances, you may choose to do it all yourself, or delegate it to others such as financial advisors, CPAs, stockbrokers, insurance agents, etc. Regardless of which, you will ultimately need to arm yourself with the basics - the questions and answer at least some of the questions.

The aim of this blog is to help you to answer some of the questions which pertains from the broad perspective of your daily personal finance, management of income, spending, saving, budgeting, banking, credit debit issues. Moneypapa will be touching on some of the latest money making tips (both online and offline) that you can indulge as a sideline income.

Remember - You Plan to Fail if you Fail to Plan.