Giving up a steady job for a home business is a dauntless and risky move. But, it is one that all entrepreneurs will eventually have to take, if they are ever going to fulfill their ambitions of being truly successful. No home business can start without its usual risks and that applies to any entrepreneur when he leaves his regular employment. However the risks become calculated ones when you have the right idea, the finances, the right plan and the ability to put in your best efforts, and you could expect great rewards.
Starting your own business is the testing platform for your risk taking ability and if anyone tells you something else, ignore. Provided you quit when you are ready to commit to serious effort and do not expect the world to reward you for minimum effort, the process of handing in your notice shouldn't be too risky. Having your own business is all about taking calculated risks and taking the right decisions at the right time to reap in the profits later. Like many things in life, practice perfects your analytical abilities.
Giving up your job to start a home business can be difficult on a number of levels, despite the fact that it is fundamental to being an entrepreneur. Firstly, this is a painful personal decision to say farewell to old office colleagues and friends. This becomes even tougher when you have an overwhelming sense of loyalty and people tend to depend on you, you could feel really guilty and uneasy. Over and above this, quitting a job also means that your financial resources are drying up and this can be dangerous if you have to pay the bills and take care of people around you.
Overcoming these obstacles is difficult, and will require a great deal of thought and dedication. The decision to quit from your regular job must be taken sensibly and you ought to feel extremely confident about your business plan before you take this critical step. Never quit your 9 to 5 job before all your plans to start the new enterprise is in order including enough money saved up which would help in your day to day expenses till your home business takes off profitably. A partner can help you out in this time if he or she decides to foot all your bills.
You can expect loss in the first year, as is usual, and then if everything goes the way you have planned you could break even in the next couple of years. The fortunate ones start making money in year three. Is it hard starting a new home business?
Thursday, October 30, 2008
Tuesday, October 28, 2008
Future Investment
No one knows what the future will bring but it is not very likely that anyone will be able to rely on the social security handouts or even retirement funds. For the majority of us that means investing in our future as there may come a time when it s no longer possible to work, whether we want to or not
There is nothing wrong with having short term savings in a low interest savings account but you cannot expect these to grow at a rate that will provide for the future. There are also other reasons to invest that might not be relate to retirement like paying to educate your offspring, buying a home abroad or an expensive car for example.
If you have the money to invest and want to see a quick and healthy return on your savings then you can invest in the more risky areas where large short term gains can be made. If you are saving for the far off future, such as retirement, you would want to make safer investments that grow over a longer period of time.
The longer you plan this investment the greater the time period allowed for growth and it also allows for an early or unexpected retirement. A great deal of faith has been lost in retirement funds, and those companies that manage them in recent years and Enron is a prime example of this but nor can anyone rely on social security benefits either so this really only leaves investing as a real alternative.
While investment can be very profitable, realistically it has to be looked upon as a long term project or game, one that the result will not be forthcoming until the time you decide to end it. Games require two things, rules and a plan of how it is to be won and investing needs this strategy too. All this is really is a set of rules and steps you need to carry out to invest your money and receive the planned return a a set point in the future.
Every type of fund has different areas that can be used to suit the needs of the investor and as such makes each fund highly individual. You cannot even discuss this subject without mentioning the stock market with millions of companies around the world where stocks can be purchased for long (and short) term financial gain. This is not an area that should be rushed as like a game there are rules and if you do not know them you will not play very well and the chances of winning, reduced so learn what you can before indulging. Achieving your aim of financial freedom must start with researching the subject then putting into play your plan but there is no point starting this unless you are sure that your present financial needs are catered for.
There is nothing wrong with having short term savings in a low interest savings account but you cannot expect these to grow at a rate that will provide for the future. There are also other reasons to invest that might not be relate to retirement like paying to educate your offspring, buying a home abroad or an expensive car for example.
If you have the money to invest and want to see a quick and healthy return on your savings then you can invest in the more risky areas where large short term gains can be made. If you are saving for the far off future, such as retirement, you would want to make safer investments that grow over a longer period of time.
The longer you plan this investment the greater the time period allowed for growth and it also allows for an early or unexpected retirement. A great deal of faith has been lost in retirement funds, and those companies that manage them in recent years and Enron is a prime example of this but nor can anyone rely on social security benefits either so this really only leaves investing as a real alternative.
While investment can be very profitable, realistically it has to be looked upon as a long term project or game, one that the result will not be forthcoming until the time you decide to end it. Games require two things, rules and a plan of how it is to be won and investing needs this strategy too. All this is really is a set of rules and steps you need to carry out to invest your money and receive the planned return a a set point in the future.
Every type of fund has different areas that can be used to suit the needs of the investor and as such makes each fund highly individual. You cannot even discuss this subject without mentioning the stock market with millions of companies around the world where stocks can be purchased for long (and short) term financial gain. This is not an area that should be rushed as like a game there are rules and if you do not know them you will not play very well and the chances of winning, reduced so learn what you can before indulging. Achieving your aim of financial freedom must start with researching the subject then putting into play your plan but there is no point starting this unless you are sure that your present financial needs are catered for.
Monday, October 27, 2008
Investment Laws and Policies
Foreign Investments Act
Republic Act 7042 as amended by RA 8179, also known as the Foreign Investments Act of 1991, is the basic law that governs foreign investments in the Philippines. It is considered a landmark legislation because it liberalized the entry of foreign investments into the country.
KEY FEATURES OF THE FIA
- Concept of a negative list
- Opened domestic market to 100% foreign investment except those in the Foreign Investment Negative List (FINL)
- Redefined “export enterprise” to mean at least 60% for export
- Allowed 100% foreign ownership of business activities outside FINL but WITHOUT incentives
Under this law, foreign investors are allowed to invest 100% equity in companies engaged in almost all types of business activities subject to certain restrictions as prescribed in the Foreign Investments Negative List (FINL).
The FINL is a shortlist of investment areas or activities which may be opened to foreign investors and/or reserved to Filipino nationals. The Foreign Investments Negative Lists (FINL) are classified as follows:
List A - consists of areas of activities reserved to Philippine nationals where foreign equity participation in any domestic or export enterprise engaged in any activity listed therein shall be limited to a maximum of forty percent (40%) as prescribed by the Constitution and other specific laws
List B - consists of areas of activities where foreign ownership is limited pursuant to law such as defense or law enforcement-related activities, which have negative implications on public health and morals, and small and medium-scale enterprises.
The FIA clearly states that if the activity to be engaged in : is not included in the FINL, is more than 40% foreign-owned, and will cater to the domestic market, the capital required is at least two hundred thousand dollars (US$200,000.00). The capital may be lowered to one hundred thousand dollars (US$100,000.00), if activity involves advance technology, or the company employs at least 50 direct employees
If the foreign company will export at least 60% of its output, or a trader that purchases products domestically will export at least 60% of its purchases, the required capital of US$200,000.00 paid-in is not applicable
If the company is at least 60% Filipino - 40% foreign-owned and will cater to the domestic market, paid-in capital can be less than US$200,000.00
Specific Areas of Equal Investment Rights for Former Filipino Nationals
While most areas of businesses have limits for foreign investors, Section 9 of the amended Foreign Investments Act of 1991 lists the following types of businesses where former natural-born Filipinos can enjoy the same investment rights as a Philippine citizen.
- Cooperatives
- Thrift banks and private development bank
- Rural banks
- Financing companies
Former natural born Filipinos can also engage in activities under List B of the FINL. This means that their investments shall be treated as Filipino or will be considered as forming part of Filipino investments in activities closed or limited to foreign participation.
The equal investment rights of former Filipino nationals do not extend to activities under List A of FINL which are reserved for Filipino citizens under the Constitution.
Former natural born Filipinos have also been given the right to be transferees of private land up to a maximum of 5,000 square meters in the case of urban land or three (3) hectares in the case of rural land to be used for business or other purposes.
SOURCE: Philippine Board of Investment
Republic Act 7042 as amended by RA 8179, also known as the Foreign Investments Act of 1991, is the basic law that governs foreign investments in the Philippines. It is considered a landmark legislation because it liberalized the entry of foreign investments into the country.
KEY FEATURES OF THE FIA
- Concept of a negative list
- Opened domestic market to 100% foreign investment except those in the Foreign Investment Negative List (FINL)
- Redefined “export enterprise” to mean at least 60% for export
- Allowed 100% foreign ownership of business activities outside FINL but WITHOUT incentives
Under this law, foreign investors are allowed to invest 100% equity in companies engaged in almost all types of business activities subject to certain restrictions as prescribed in the Foreign Investments Negative List (FINL).
The FINL is a shortlist of investment areas or activities which may be opened to foreign investors and/or reserved to Filipino nationals. The Foreign Investments Negative Lists (FINL) are classified as follows:
List A - consists of areas of activities reserved to Philippine nationals where foreign equity participation in any domestic or export enterprise engaged in any activity listed therein shall be limited to a maximum of forty percent (40%) as prescribed by the Constitution and other specific laws
List B - consists of areas of activities where foreign ownership is limited pursuant to law such as defense or law enforcement-related activities, which have negative implications on public health and morals, and small and medium-scale enterprises.
The FIA clearly states that if the activity to be engaged in : is not included in the FINL, is more than 40% foreign-owned, and will cater to the domestic market, the capital required is at least two hundred thousand dollars (US$200,000.00). The capital may be lowered to one hundred thousand dollars (US$100,000.00), if activity involves advance technology, or the company employs at least 50 direct employees
If the foreign company will export at least 60% of its output, or a trader that purchases products domestically will export at least 60% of its purchases, the required capital of US$200,000.00 paid-in is not applicable
If the company is at least 60% Filipino - 40% foreign-owned and will cater to the domestic market, paid-in capital can be less than US$200,000.00
Specific Areas of Equal Investment Rights for Former Filipino Nationals
While most areas of businesses have limits for foreign investors, Section 9 of the amended Foreign Investments Act of 1991 lists the following types of businesses where former natural-born Filipinos can enjoy the same investment rights as a Philippine citizen.
- Cooperatives
- Thrift banks and private development bank
- Rural banks
- Financing companies
Former natural born Filipinos can also engage in activities under List B of the FINL. This means that their investments shall be treated as Filipino or will be considered as forming part of Filipino investments in activities closed or limited to foreign participation.
The equal investment rights of former Filipino nationals do not extend to activities under List A of FINL which are reserved for Filipino citizens under the Constitution.
Former natural born Filipinos have also been given the right to be transferees of private land up to a maximum of 5,000 square meters in the case of urban land or three (3) hectares in the case of rural land to be used for business or other purposes.
SOURCE: Philippine Board of Investment
Sunday, October 26, 2008
Philippine Real Estate
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