your money ezine
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May 27, 2009TRANSCRIPT
Your Money eZine www.yourmoneyezine.com
“Another bill again”…. The refrain of this popular reggae song has taken on new meaning in light of the Government’s plan to issue a 5000 dollar denomi-nation of Jamaican currency this year. The announce-ment has caused some trepidation among the citizens of Jamaica who are fearful that this is a sign that the country is in far worse shape than was thought.
Traditionally the issuance of higher denominations of a country’s currency is a sign that the value of the currency is declining usually because of high inflation rates and at the most extreme, hyperinflation. In order to get some perspective on the issue, Your Money sought the opinion of Scotia DBG’s Assis-tant Vice President of Projects and Strategic Planning, Johan Heaven.
YM: Do You ThInk The IssuAnce of A 5000 DenoMInATIon Is necessArY AT ThIs TIMe?Jh: The central bank has reported in its findings that the number of $1000 bills that are presently in cir-culation is quite a bit above the ideal level that they would like. In light of that I would say that it is indeed necessary to go ahead with a new denomination at
this time.
YM: Is ThIs new bIll A DIrecT InDIcATor of The verY poor heAlTh of our econoMY AT ThIs TIMe?Jh: The economy Is in a bad state, I wouldn’t say it is in dire straits but it is certainly bad enough to warrant the issu-ance of the new bill. The fundamentals, dollar devaluation, inflation etc are un-der pressure and the new denomination is a direct result of that. Inflation had been double digits over the past couple of years and high single dig-its the years before that. The thousand dollars is purchas-ing less and less and the amount of bills that are being carried by individuals has increased.
YM: The publIc seeMs To be AlMosT unAnI-MouslY AGAInsT The bIll; Do You ThInk ThAT ThIs Is A resulT of The AverAGe MAn noT be-InG fullY AwAre of our sITuATIon?Jh: I could see how it looks bad to the average man, it might look like the dollar is devaluing to a point that it is worthless but from the present figures I think it is a necessary step.
YM: Do You ThInk The recessIon cAuseD ThIs Move or DID IT sIMplY speeD up The pro-cess?Jh: Jamaica was heading down this road, as you can see our dollar has devalued by 25% over the past year and a lot of that can be attributed to the reces-sion
YM: Are There AnY posITIves reGArDInG The InTroDucInG of ThIs noTe?Jh: It will definitely cut down on the number of notes needed to carry out large transactions, efficiency will increase, and money will mover through the system at a much faster rate.B
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Jamaica’s $5,000 Bill!Scotia DBG Assistant Vice President of Projects and Strategic
Planning, Johan Heaven gives his thoughts
Story continues below
advertisementScotia DBG’s Assistant Vice Pres-ident of Projects and Strategic Planning, Johan Heaven.
Your Money eZine www.yourmoneyezine.com
Question: I try read articles in the newspa-pers that talk about investments, but I don’t under-stand a lot of the jargon that is used. what are some of the basic things I need to know about investing?
Answer: Investing is not difficult to do, once you study, comprehend and apply the basic con-cepts. here are some important terms that can help you to understand the world of investing:
1. what is investing? Investing is when you com-mit money to a project or endeavour and expect to make a profit. You can invest in business ventures, real estate, physical products, or lending money.
2. what is an investment instrument? This is any item that is bought with the intention for it to in-crease in value in the future, when it can be sold at a higher price, and/or provide an income stream.
3. where can you invest? Most investments are bought in financial markets. A financial market is a mechanism that facilitates the organised buying and selling (trading) of financial instruments.
4. what is a security? This is an investment instrument with a financial value that represents an investor’s claim over real assets or a future income stream. what is legally classified as a security is dependent on a country’s regulatory structure.
5. how are securities classified? Debt securities entitle the owner to principal and interest payments from the issuer of the security; and equity securities entitle the holder to part ownership in the issuing entity, and a claim on part of its assets and earnings. securities can be further classified into different asset classes based on their common features.
6. what is the securities market? This is the loca-tion where investors can buy securities from the enti-ties that create and issue them. securities can also be traded among investors as well.
7. what is the primary market? This is the market where new securities are created and offered for sale to the public for the first time. Money is passed directly between the issuing agency and the investor.
8. what is the secondary market? This is where previously issued securities are traded among inves-tors. It allows investors to get cash in exchange for
securities bought in the primary market.
9. what is an exchange? This is a mutual orga-nization or corporation that provides facilities for persons to trade financial instruments. An exchange may be a physical location where traders meet, or a virtual location where electronic trading occurs without the parties being present.
10. what is over-the-counter (oTc) trading? This trading is done directly between two parties who agree on the terms of the contract. Transactions are usually done over the telephone or electronic net-work, as there is no central organized trading place.
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10 Smart Steps to: Learn about investing
Provided by: Financially S.M.A.R.T. Services
Financially S.M.A.R.T. Services is Ja-maica’s number one source for prac-tical, down-to-earth and independent answers for all questions relating to personal finance. Get more money smart advice at www.financiallysmar-tonline.com. Email [email protected] with comments or questions.
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Your Money eZine www.yourmoneyezine.com
n today’s increasingly virtual world, it is pos-sible to run an enterprise from practically any location. business owners can communicate with their customers, suppliers and the world at large, by simply clicking a computer mouse or
a blackberry keypad.
Technological advancements and industry changes have given many entrepreneurs the option to oper-ate from home. breaking free of the traditional brick-and-mortar office can have many advantages for a business owner.
BENEFITS OF A hOME BASEfirstly, recurring costs such as rent and utilities can be significantly reduced. In fact, if you operate out of your home, a portion of your household expenses can be attributed to the business and are allowable deductions for tax purposes. lower operating costs can help you to be more competitive in pricing your
product or service.
You can actually get more done at home by cutting out the time normally spent in commuting to the office. even better, think of all the money you can save on
gasoline and other transportation ex-penses! A home office allows you to select your own work schedule, so that you can be more productive in the times that best suit you.
To decide if a home based busi-ness is right for you, ask yourself
this basic question: “will my clients ever need to come into my office to see me?” Is the answer is a definite ‘no’ then go right ahead and set up shop in the comfort of your own home.
Although becoming a stay-at-home entrepreneur might seem like the right move, here are some other im-portant points to consider before you take that step:
1. CAN YOU CREATE ThE RIGhT wORk ENvIRON-MENT?
remember that the entrepre-
neurial life requires you to initially work harder than you did at your nine-to-five. If you have attention-craving children, or noisy/nosy neighbours, you might find that you’re not able to concentrate on building your business.
2. DO YOU hAvE ENOUGh SPACE TO wORk?Although you might start off with the dining table dou-bling as your office desk, you might soon realise its limitations for work purposes. eventually you’ll begin to crave the order that storage containers and filing cabinets can bring.
3. ARE YOU DISCI-PLINED ENOUGh TO wORk FROM hOME?let’s face it; you have to be extraordinarily focused to ignore the temptation of the tele-vision when you’re at home. Add the refuge of the refrigerator and the bliss of your bed to the list of home-based distractions that can destroy the urge to work.
4. DOES A hOME OFFICE SUITE YOUR BUSI-NESS IMAGE?Although your clients may never visit, the address on your business card can leave clues. people may think you’re a small time operator if you work from home; so as your business grows, it may become necessary to leave the home office behind.
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EThe Stay-At-Home
Entrepreneurby: cherryl hanson simpson
I
( (Cherryl is a financial consultant and coach, and founder of Financially S.M.A.R.T. Services. See more of her work at www.financiallysmartonline.com. Email Cherryl at advice@finan-ciallysmartonline. com. Please add this address to your email address book in order to ensure you receive a response.
Your Money eZine www.yourmoneyezine.com
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