Investing In A Developing Economy – A Possible Solution To Global Financial Crisis

INTRODUCTION

If there were security problems in Nigeria, no businessman would go to the country to explore opportunities, companies like Celtel, MTN, Etisalat, would not have ventured into security risk country to do business. Those who spread rumour about security and corruption problems in Nigeria are saying so to stop others from making money in the country. Figures don’t lie. They are the biggest testimonies for how conducive Nigeria’s environment for business and opportunities are. If you want to do business in Africa and record good returns on your investment, I welcome you to come to Nigeria. The political environment in Africa, particularly in Nigeria is tremendous.

Dr. Hamadoun Toure,

Secretary General,

International Telecommunications Union,

Cited in the Punch Newspaper, May 13, 2008)

What is happening currently with the Nigerian financial system is far from being affected in any way by the global credit crisis. At global level currently, the banks are under-capitalised, but Nigerian banks are over-capitalised. And I do not think this is a problem at all. I believe that Nigerian banks are under pressure from other economies within Africa continent that are affected by the credit challenges.

– Gordon Smith,

Head of Research, Africa and the Middle East, International Consilium,

(Reported in the Punch Newspaper, June 30th, 2008).

The foregoing statements aptly connote two understandings of the state of Nigerian economy. These understandings show that, the economy is one of the fastest growing economies in Africa and in the world. Although Nigeria has had hash economic history, it has undergone and still undergoing economic reforms, which are aimed at making Nigeria the Africa’s financial hub and one of the twenty largest economies in the world by the year 2020. Needless to say that the country has experienced political instability, corruption, and poor macroeconomic management in the past, this was responsible for unpleasant and harsh economic situation. The government relentless efforts to reposition the economy have translated into a remarkable economic growth and development. Several mechanisms have been put in place to sustain this growth and development, capable of balancing the interests of stakeholders. Perhaps, this view must have influenced Gordon Smith submission. He described Nigeria as the most dynamic market in Africa, which is under severe pressure from some countries in Africa to serve as a cushion against the effects of global turbulence. He also noted that some countries like Ghana, Malawi, Mauritius, among others were depending on her at the moment due to global risk exposure and that the country’s economy, led by the consolidated banks, was far from being affected by the global credit crisis currently rocking the world’s financial giants. He stressed further that foreign investors, who will be patient enough to weigh the Nigerian financial system on the credit risk perspective relative to global events, will find the nation’s financial sector more interesting to invest and raise capital from.

Faced with numerous challenges, Nigerian government is determined to strengthen, diversify and make the economy attractive and investment-friendly to both local and foreign investors. The government has adopted total liberalization and globalization as the economic policy, instituted privatization and commercialization programmes of public enterprises, provided total security for business and people, extended invitation to domestic and foreign investors, abolished laws inhibiting competition, embraced and fine-tuned policies to ensure quick realization of growth and development of all sectors of the economy. The effort is already paying off as Nigeria is now the focus for foreign investment thereby increased exponentially Foreign Direct Investment (FDI). Scores of economic missions and delegations from developed and developing countries have visited Nigeria, thus accelerating the growth of the economy at a very fast rate.

It becomes pertinent to direct the course of this discussion to embrace the second understanding of the above statements made by Hamadoun Toure and Gordon Smith. However, it becomes more pertinent to enumerate the inherent investment opportunities in Nigerian economy before discussing the issue of security as raised by Toure.

INVESTMENT OPPORTUNITIES AND SECURITY ISSUE IN NIGERIA

No doubt, Nigeria is an investment haven with countless and lucrative investment opportunities including oil and gas, solid mineral, agriculture, tourism, telecommunication, power and steel, transport, trade processing zone, financial sector, real estate / property, manufacturing, sport and entertainment, and fashion industry. Investors have a wide range of opportunities to choose from. It is important to note that the rate of growth of investment is fantastic and exponential in any of these sectors. Investors are at advantage of presenting their products and services to already-made market taking advantage of the population of over 140 million.

In telecommunication, statistics reveals that mobile phone users in Africa were about 280 million, overtaking United States and Canada with their 277 million users in the opening quarter of 2008. With 70 million connections in 2007, the Continent became the fastest growing region in the world, representing a growth of 38 per cent, ahead of the Middle-East (33 per cent) and the Asia-Pacific (29 per cent).It was also revealed that the fastest growing markets are located in northern and western Africa, representing altogether 63 per cent of the total connections in the region. The record showed that Nigeria, Zambia, Tanzania, The Democratic Republic of Congo, Kenya, Algeria, Tunisia, Ghana and South Africa are highly competitive markets in the Region. The record further contends that two-third of Africa’s telephony are in their early phase of development, with penetration rates below 30 per cent at the end of 2007.In percentage terms, it was noted that Africa is the fastest growing market in the world, but also the second smallest in terms of connections after Middle-East.

As Nigeria accounts for 57 per cent of the West Africa mobile phones, the country is acknowledged as the leading and the fastest growing telecom market in Africa. With mobile phone users at 44,932,181 and 734,444 for GSM and mobile CDMA respectively, her contributions to West Africa and Africa’s telecommunication growth can not be overemphasized. While the overall economic growth rate stands at 7% per annum, the mobile telephony is about 35-50%. Assuming that each of these connections was busy for a minute in a day, the country telecoms market has the capacity to generate over USD 16 million per day (USD16, 666,667) and close to USD 6 billion per year (USD 5,833,333,300). This is why telecom companies such as Visafone and Etisalat quickly joined the likes of MTN, Globacom, Celtel and other telecoms service providers in exploiting opportunities in the country.

Early this year, one of the main GSM service providers with a subscriber base of over 15 million announced a profit after taxation of USD650 million (78 billion naira) for the year 2007.Putting all these together, one can easily understand Toure’s submission describing Nigerian telecoms market as the best investment destination in Africa.

Recognizing the fact that the Nigeria telecoms industry is enormous and there is need to further exploit the sector to its fullest, the Nigeria Communication Commission (NCC) and the Ministry of State for Information and Communications have made their positions clear by extending invitation to global investors for active participation in the sector as they are willing to grant pioneer status and license for prospective applicants for various undertaking such as Fixed telephony, Mobile telephony, Fixed satellite (VSAT),Paging, Payphone, Internet and other value added services.

With the above facts, one can safely conclude that Nigerian telecom sector offers fantastic and lucrative investment opportunities to global investors. And putting into consideration 40% GSM market growth rate in the first quarter of this year (2008), there is potential for high return on investment in this sector.

Agriculture, the dominant sector of Nigeria economy, engages about 70 per cent of the population directly and provides nearly 88 percent of non-oil foreign exchange earnings. It contributes about 41 per cent of the GDP of the country. The sector recorded an overall growth rate average of 7 per cent in the last three years, a major improvement from under 3 per cent in the 90’s.

Statistically, 91 million hectares of the country’s total land area of 92.4 million hectares is adjudged to be suitable for cultivation. Approximately half of this cultivable land is effectively under permanent and arable crops, while the rest is covered by forest wood land, permanent pasture and built up areas. Among the states, which have the most abundant land, areas are Niger (7.6 million hectares) and Borno (2.8 million hectares).

Agriculture crops in Nigeria are grouped into cereals, root and tuber crops, grains legumes and other legumes, oil seeds and nuts, tree crops, and vegetable and fruits. Governments and the Ministries of Agriculture have made land acquisition easy, encouraged agricultural practices, extended (still extending) invitation to foreign investors and have put in place several incentives to stimulate growth in the sector. Despite, the agricultural potential of Nigeria is barely being tapped and this explains the inability of the country to meet the ever-increasing demand for agricultural products and her rank as 55th in the world (although first in Africa) in farm output.

As the world experiences food crisis and persistent rise in fuel price, the country’s agriculture offers unlimited opportunities for foreign investors and the world at large to provide solutions to these crises. Foreign investors will find investments in cultivation of sugar cane, sugar beet, sweet sorghum, starch (corn/maize), palm oil, soybeans, jatropha, and algae. These products are lucrative as they are potential for biofuels, a good substitute for fossil fuel. Presently, there is a very high demand for these crops from the developed economies.

Solid Mineral is another sector with great investment opportunities. Nigeria is endowed with numerous mineral resources. Recent policy reforms have brought the solid minerals sector to the fore. The emphasis is on encouraging massive foreign investors’ participation in this sector as less than 0.5 per cent is contributed to the Gross Domestic Products from Solid mineral sector. However, the Ministry of Mines and Steel and the Ministry of state’s focal attention in the last one year is to strategically place the country in a better position to explore and exploit just seven minerals in the plethora of minerals so as to increase Gross Domestic Product to 5 per cent within the next few years. The seven strategic minerals are coal, bitumen, limestone, iron-ore, barite, gold and lead / zinc.

Coal can be found in Enugu, Benue and Kogi. Within these three districts 396 million metric tones can be demonstrated using JORC classification criteria, while an additional 1,091 million tones of inferred and hypothetical coal resourced for the areas studied is 1481 million tones.

Knowing fully that development of coal will assist in the realization of energy, the Government and the Ministries are inviting foreign investors to participate actively in the exploration and exploitation of the mineral. Companies such as Denver Resources and Western Metals have already committed US$10 million and US$15 million respectively for two coal fields in the country. Another Chinese firm, Grid Xin Yuan International Investment Company that is providing more than half of China’s electricity needs is also in the country, indicating their interest in the development of a coal field in Kogi State.

The Bitumen reserve in the country is estimated at more than 27 billion barrels of oil equivalent while iron-ore is estimated at over 5 billion inferred reserves with presence in Kogi, Enugu, Niger, Zamfara and Kaduna States. Gold in just 10 locations is estimated at 50,000 ounces, barites 10 million metric tones and limestone at 2.3 trillion reserves.

Talc with an estimated reserve of over 100 million tones can be found in Niger, Osun, Kogi, Kwara, Ogun, Taraba and Kaduna States.The colour of the Nigerian talc varies from white through milky-white to grey. The talc industry represents one of the most versatile sectors of the industrial minerals in the world. The exploitation of the vast talc deposits in Nigeria would therefore satisfy not only the local demands but also that of the international market as well.

The national demand for table salt, caustic soda, chlorine, sodium bicarbonate, sodium hydrochloric acid and hydrogen peroxide exceeds one million tones. A colossal amount of money is expended annually to import these chemicals. There are salt springs at Awe (Platue State), Enugu, and Uburu ( Imo State), while rock salt is available in Benue State. A total reserve of 1.5 billion tones has been indicated. Government, to ascertain the quantum of reserves, is now carrying out further investigations.

In the same vain, large bentonite reserves of 700 million tones are available in many states of federation ready for massive development and exploitation, over 7.5 million tones of barite been identified in Taraba and Bauchi states, and an estimated reserve of 3 billion tones of good kaolinific clays has also been identified.

Gemstone mining has boomed in various parts of Plateau, Kaduna and Bauchi States for years. Some of these gemstones include Sapphire, Ruby, Aquamarine, Emerald, Tourmaline, Topaz, Gamet, Amethyst, Zircon, and Fluorspar, which are among the best in world. Good prospects exist in this area for viable investment. Understanding that this sector requires urgent investment, the Ministry has directed miners who are still in small artisan levels to form cooperatives so as to benefit from World Bank US$10 million assistance. Apart from this, three Nigerian Banks have also established solid minerals desk with fund of over US$ 8 million each for the development of the sector.

Foreign investors will find this sector worth-investing on as Nigerian governments have put in place various incentives and strategies for investment such as 3-5 years tax holiday, deferred royalty payments, possible capitalization of expenditure on exploration and surveys, extension of infrastructure and provision of 100% foreign ownership of mining concerns.

Recognizing that only a sustained macroeconomic environment and a sound and vibrant financial system can propel the economy to achieve the country’s desire to become one of 20 largest economies in the world by the year 2020, on the July 6, 2004 the Federal Government through the Central Bank of Nigeria (CBN), under the leadership of its Governor, Professor Charles Soludo launched a 13-point reform agenda to restructure, refocus and strengthen the Nigerian Financial System. To complement this agenda, another comprehensive long-term reform agenda for the Financial System (the Financial System Strategy 2020-FSS2020) was launched. The grand objectives of these agendas are substantially being achieved. The country financial system now comprises of strong, efficient and internationally competitive banks with an eye for global markets, a capital market with highest returns on investment, in dollar terms, a sound and rewarding insurance industry and other competitive financial participants.

Gordon was right in his submission to have described Nigeria as the most dynamic market in Africa. His view that “foreign investors, who will be patient enough to weigh the Nigerian Financial System on the credit risk perspective relative to the global event, will find the nation’s financial sector more interesting to invest and raise funds from” x-rays the truth about the country’s financial sector.

The country’s banking system is the safest and the soundest it has ever produced in history. It is the fastest growing banking system in Africa and one of the fastest in the world. In fact, the most outstanding contribution towards realization of the country’s dream came from this sub-sector. Economic analysts have observed that it has taken Nigeria less than 3 years to achieve what it took South Africa 20 years to achieve in the area of banking. In a short word, a world-class banking system has emerged in Nigeria.

Statistically, banking sector contributes 10 per cent to the Gross Domestic Product (GDP) and represents 60 per cent of the stock market capitalization, while there was a reduction in the number of banks from 89 to 25, the number of banks branches rose by 33 per cent from 3383 in 2004 to 4500 in 2007. The total asset base of banks rose by 104 per cent from $ 26.8 billions ( 3.21 trillion naira) in 2004 to $54.7 billion ( 6.56 trillion naira) by mid 2007; capital and reserves rose by 192 per cent from $2.72 billion (327 billion naira) to $7.98 billion ( 957 billion naira); capital adequacy ratio rose by 42.6 per cent, point from 15.18 per cent to 21.6 per cent and ratio of non-performing loans total loan improved massively by 51.3 per cent, point from 19.5 per cent to 9.5 per cent. The sector has also remained one of the most profitable in the country’s capital market. It was noted that 13 out of 21 quoted banks on the Nigerian Stock Exchange recorded returns in excess of 100 per cent since January 2007.

According to the April 2008 edition of the African Business, (the best-selling Pan-African Business Magazine published in London) 18 out of 28 West African Companies with market capitalisation of more than $1 billion are Nigerian Banks. The magazine stated that First Bank Nigeria Plc with market capitalization of $7.4 billion remains the largest company in West Africa. Two other Nigerian banks namely Intercontinental Bank Plc and United Bank for Africa (UBA) remain the second and the third largest companies in the sub-region with market capitalization of $6.2 billion and $4.6 billion respectively.

Apparently, the rising tide of banks in the country from all indications has made the sub-sector very attractive, not only to local investors, but also to foreign investors, and in particular, foreign banks. For instance, the consolidation of Regent Bank, Chartered Bank and IBTC to form IBTC Chartered Bank attracted the interest of the Standard Bank Group, the largest financial institution in Africa with a market capitalization of $ 17.8 billion, whose subsidiary Stanbic Bank, also of South Africa has just sealed a Merger deal for the latest Merger in the country, Stanbic IBTC Bank Plc. In this direction, other foreign banks have started making enquiries with CBN of a possible Merger or take-over.

To further substantiate the opportunities the banking sub-sector offers the global investors, a cursory look into Intercontinental Bank Plc will reveal the success of banking system in the country. Intercontinental Bank Plc is known to be the second largest companies in West Africa to have recorded a phenomenal growth in gross earnings, which stood at $1.45 billion ( 173.5 billion naira) in 2008. This is an increase of 99 per cent over the $728 million (87.4 billion naira) in 2007, profit after tax grew by 102 per cent to $380 million ( 45.6 billion naira) as against $188 million (22.6 billion) in 2007, while the capital base rose to $1.67 billion from $1.31 billion. The bank deposit base soared to $8.75 billion ( 1.05 trillion naira), an increase of 126 per cent from $3.9 billion (468 billion naira) in 2007, while the total assets also recorded a quantum leap to $14.2 billion (1.7 trillion naira), representing a growth of 108 per cent from $6.86 billion( 823 billion).

The bank is also in strategic partnership with BNP Paribas, the world leading energy financing bank, Afrexim Bank; Export Development Canada (EDC); Finance for Development (FMO); China Exim Bank; Export-Import of United States; International Finance Corporation in financing projects in different sectors of the economy. However, it is relevant to say that the success recorded by Intercontinental bank is a good example of the Nigerian banks’ strength and prospects, and a testimony to opportunities available to global investors in the country’ financial sector.

Apart from the above, Nigerian Capital Market offers viable opportunities as it is positioned to help companies to raise capital, and to generate high returns on investment. Its total market capitalization has grown by over 4000 per cent to $100 billion (12 trillion naira) in March, 2008, up from $2.39 billion (287 billion naira ) in August 1999.Among emerging markets, the Nigerian Capital market remains one of the most viable in terms of returns on equity. Historically, the market has delivered 28 per cent returns.

Insurance industry is not an exemption to this growth and development the country’s financial sector is witnessing. Although there are few black spots on the regulatory handling, the industry has equally recorded success in their reforms and operations. With the inflow of robust capital, insurance companies are now faced with the challenges of delivering returns to shareholders, maximizing value and exploring overseas markets. Their presence can be felt in countries like Ghana, Liberia, Sierra Leone, Sao Tome, South Africa among others.

Although Goldman Sachs’ report titled “New Market Analyst” with issue number 08/09 released on March 13, 2008 (cited in the Thisday newspaper March 19,2008) posited that Nigeria is a better economy than South Africa, International Monetary Fund (IMF) reported that Nigeria and South Africa got close to 50 per cent of the $53 billion private equity and debt flow to Sub-Saharan Africa in 2007. This underscores the growing confidence of International bodies and foreign investors in country’s financial sector and economy at large.

Furthermore, Fitch Rating Agency and the Standard and Poor rated Nigeria BB-(minus) in the area of sovereign credit, high in development of local currency debt market, and low in the areas of debt to GDP ratio and inflation. The opportunities for growth in Nigeria financial sector are still strong as the underlying fundamentals driving the growth are still present. All these and more, position the financial sector and the country at large as a leading and most dynamic market in Africa and present viable investment opportunities to global investors.

Needless to say that the opportunities presented above are typical examples and an evidence of opportunities awaiting foreign investors in other sectors of the economy.

Nigeria is the largest producer and exporter of oil in Africa (although recently placed second behind Angola in the latest OPEC report as a result of Niger Delta Crisis) with a production of 2.5 million barrels and above a day. Besides, the Nigeria is the 7th world’s gas reserve holder and the highest flaring nation in the world, with the potential to become a major player in LNG export. It has annual gas flares’ capacity to generate over 12000 MW of electricity needed to catalyze the growth of any economy. Although it currently flares an average of 1.2 TCF of gas annually, the sector has the potential to generate great returns on investment.

One of the greatest opportunities awaiting foreign investors is Real Estate / Property. For instance, Lagos Metropolis with a population of about 18 million has attained mega city status. The State has one of the highest urbanization rates in the world according to the World Bank. Consequently, there is an insatiable demand for housing delivery, which has necessitated the introduction of the New Private Estate Developers Scheme. Under the programme, the government will make large parcels of land ranging from 1 to 25 hectares available to corporate organizations capable of undertaking development and delivery of housing units. Such organization must however demonstrate that they have the financial capacity and technical expertise to deliver quality and affordable housing units.

Among other sectors of the economy that foreign investors will find viable and worth-investing on are Transport, Sport and Entertainment, Tourism, Power and Steel, Export Processing Zones, Privatization. And available records reveal that the rate of returns in these sectors is as high as in the sectors discussed above.

Apart from the opportunities mentioned above which our office is strategically positioned to maximize opportunities for the benefit of prospective investors. We also offer consultancy services in the areas of general management, manufacturing, marketing, finance and accounting, personnel, research and development, packaging, administration, international operation, specialized services and other value-adding services. And our strategic partnership with national and international companies put us in position to deliver quality service and high returns on investment.

Nevertheless, there have been fears raised by international observers, agents and bodies that Nigeria is a high-risk nation for investment and other business transactions. This development is attributed to security, multiple taxation, epileptic power supply, bad roads and poor work environment.

It may appear that doing business in Nigeria is challenging because of the activities of a few untrustworthy Nigerians who are unscrupulous. But such are simply characterization of human nature; as it can be found anywhere else in the world. It must be said emphatically that the world has been biased in their judgment and treatment of Nigeria security issue. There have never been terrorist attacks, suicide bombings or kidnapping until recently when the issue of Niger Delta came on board.

Niger Delta region-the source of nation’s oil wealth- has become an area of perennial tension, agitation, and recently, militancy. However, a confluence of factors such as environmental damage by oil exploitation, failure to develop the region, lack of job opportunities and sense of deep deprivation from the low share of derivation revenue accruing to the states in the region, has led to the present situation. Acknowledging their situation, the Federal Government has organised a Summit, to be chaired by Professor Ibrahim Gambari, the United Nations Under Secretary General, to provide everlasting solution to the crisis. Frankly speaking, Nigeria is a safe and investment-friendly place and Nigerians are accommodating and industrious.

Cyber Crime is another fearsome crime, which often put-off prospective investors from involving or investing in the business opportunities in Nigeria. This crime was actually imported into the country by expatriates. It has never been part of Nigeria culture. It is perpetrated by a few section of the population. Their operations are carried out via Internet and their targets are people who transact business via the medium. They pose as government officials and sometimes as businessmen with United Kingdom identity who deal in digital products. However the list of their tricks and operations is not exhaustive. With the help of Economic and Financial Crime Commission (EFCC), Independent Corrupt Practices and Related Commission (ICPC), and other Anti-Criminal Agencies, Cyber Crime and their perpetrators are under control and disappearing.

The grand objective of the present administration, as encapsulated in VISION 2020, is to make Nigeria a major industrial and economic power, and one of the 20 largest economies in the World by the year 2020 by providing enabling investment and business environment and maximum security for active participation of local and particularly, foreign investors. The realization of these aspirations had informed the radical and pragmatic reforms designed to increase the attractiveness of Nigeria’s investment opportunities and foster the growing confidence in the economy. In this direction, the Federal Government has provided incentives and strategies for investment such as 3-5 years tax holiday, deferred royalty, possible capitalization of expenditure and provision of infrastructures such as road and electricity, just to mention a few.

African economy is witnessing the strongest growth in 30 years; no doubt, Nigeria is one of the major contributors to this development. Most commentators have observed that the opportunities for business and investment in the country look increasingly rosy with GDP growth of 7 per cent in 2007 and 13 per cent in the next 12 years. The International Monetary Fund (IMF) forecast of 9 per cent growth rate for Nigeria in 2008 (which is second to India 10 per cent and ahead of China 8 per cent) lays credence to their observations.

Furthermore, the increase in Foreign Direct Investment, the entrance of multinational companies, the strong financial sector, the favourable and tremendous business environment, the government support, the abundant natural resources, and the population of over 140 million people, among others, put Nigeria in a comparative ( and possibly absolute) advantage over other African countries.

Just as it is difficult to ignore China as a market in the global arena, (one out of every five persons in the world is Chinese) so is it very difficult to ignore Nigeria as a market in Africa (one out of every three persons in Africa is Nigerian). With a population of over 140 million people and its economic potential, Nigeria still remains Africa most important market.

IMPACT OF GLOBAL FINANCIAL CRISIS IN A DEVELOPING ECONOMY

Unlike China and India, African economy(developing economies) is yet to be integrated into the world economy. This is as a result of slow rate of integration and globalization at which the economy is being fixed into the global economic and financial system. Consequently, developing economies will only suffer a limited financial impact from the credit crunch. However, this is not to say that developing economies are in isolation and totally free from the crisis.

To grant a point, this paper will continue to use Nigerian economy for its analysis as it represents a paradigm of a developing economy with valid and considerable variables.

According to the report from a recently concluded Bankers Committee Meeting, which ended on October 20 th, 2008 , the Nigerian banks are safe as they operate at 22 per cent capital adequacy ratio( 14 per cent above the world 8 per cent requirement) and the financial sector is far from being affected by the current global financial crisis. The report also posits that any bail-out scheme is unnecessary as the situation that warranted bail-out schemes in developed economies- poor quality assets and heavy loan losses resulting from exposure to inadequately collateralised mortgage loans- is absent in Nigeria. To underscore its point, the report noted that, as the Direct Foreign Investment in Nigerian banks is comparatively low and the banks connection with their foreign counterparts is loosely fixed, the impact of the crisis will be limited and indirect.

Conclusion

The words of Mr. Dominique Strauss-Kahn, the Managing Director of International Monetary Fund, at a meeting in Washington D.C are the corner stones of the concluding thoughts of this paper. He stressed as follow:

We meet at an extra-ordinarily difficult time- a time of uncertainty and insecurity, with a danger that those fears push us away from- not towards- a more inclusive and sustainable globalization….At its best, multilateralism is a means for solving problems among countries, with the group at the table willing to take constructive action together. When multilateralism is dysfunctional, globalization can be a Babel of Tower, with competing national interests colliding to benefit none. The new multilateralism, suiting our times, is likely to be a flexible network, not fixed system. It needs to maximize the strengths of interconnecting actors, public and private, profit-making and civil society Non-Governmental Organisations (NGOs). The multilateralism must respect state sovereignties while solving interconnected problems that transcend borders…The private sector cannot restore confidence on its own. Macroeconomic policy measures by governments cannot restore confidence on their own. Piecemeal measures on financial markets will not restore confidence on their own. What will restore confidence is government intervention which is clear, comprehensive and cooperative among countries..The world must act quickly, forcefully and cooperatively to contain the ongoing financial and economic downturn.

Thus, the position of this paper is that the confidence will only be restored if “government intervention which is clear, comprehensive and cooperative” is complemented with investment in developing economies with less or no crisis impact as “flexible multilateralism” and cooperative and sustainable globalization is solution that suits our time, not” economic isolationism”.

World’s Biggest Hacker – A Challenge to the Financial, Technology and Corporate Sector Security

Ahmedabad, Gujarat (PRWeb) March 18, 2007 — Born in small village of most famous Indian city known as Pink City of India. Mr. Sharma is in the field of security research from last 8 years. He has now full control over the global web security system. His life was full of struggle and overloaded stress. He mentions his strength and pride by specifying himself as a Full-stop on E-system. His aim was to perform unique tasks across globe, something which no one other then him can perform. He proved this through a LIVE ON AIR telecast on one of the most reputed news channel INDIA TV (http://www.indiatvnews.com). This telecast was aired in the Breaking News on INDIA TV and was the world’s first longest hacking and security related news telecast. This telecast was shown from 9:00 PM to 12:30 AM and is one of the best serialized news programme of India. Minister of Information Technology, Technical Experts, Stock Exchange Experts, Cyber Crime Experts, Indian Star Editors Team and Corporate Profiles were all present during this telecast. Mr. Sharma had hacked several Internet Banking, Internet Trading and Internet Shopping websites all in a single attempt. Recently, Mr. Sharma had also announced about his new security firm Shubhlabh Technologies. He mentions hacking as an expert level work which is technical art of finding vulnerabilities in existing weak security of any online activity through Internet. Kalpesh Sharma, shows the LIVE demonstration on net banking and its loopholes. He proved that no bank is safe for your money. He challenged to all banks that he can hack any bank site because of their loopholes. However, his intention behind proving was to help out peoples become safe and aware of technical security.

First he reserved an airticket on indiatimes.com shopping website for free. The payment was done by hacking the site of IDBI Bank payment gateway. Secondly, he purchased a raincoat from rediff shopping website and payment was done through hacking of Federal Bank. From both websites he received the receipt with order number and confirmed payment that the payment is done and we will deliver it within 3 days…

Alongwith, Mr. Sharma also went for discussion through a debate in the same LIVE telecast with Mr. Dhrender Kumar (Stock Exchange Expert) and Pawan Duggal (Cyber Law Expert) and they felt shocked when they saw all these right in front of their eyes. Mr. Dhrender said that, ” I am shocked to see this situation. Now our money is not safe and we could not take physical risk to keep huge amount of funds with us, because technical era is on it’s way towards progress. In order to avoid this we are using Net Banking, but as seen there are several vulnerabilities in banking system also… “

Mr Pawan Duggal described about some clauses and sections of Information Security Act, and asked peoples who lost their money, can claim up to 10 Million INR. But you have to prove it in the court of law, which is almost very difficult to perform. You can’t get help from consumer court as well, in this situation. No one knows what can be done? Mr. Sharma also hacked the so called safe website of shares and securities trading i.e Indiabulls.com and transferred 100 INR into his Union Bank Savings Account. Indiabulls database site reflected the balance fluctuations, immediately. For discussion on this, Mr Gagan Banga (President of Indiabulls) was called in this LIVE telecast. But instead of accepting his company’s technical mistakes, he challenged against Mr. Sharma’s claims. He fully denied though everything was seen by millions of peoples across nation. He said that, ” It’s not possible to hack our trading website”. Then, Mr. Sharma challenged him to prove it right in that running LIVE telecast, and asked him for oral permissions. Mr. Sharma also added that let public viewers of this telecast give their decisions after he demonstrates it right now. Once Mr. Gagan felt nervous ! because by this they can loose the confidence of people. But at last he accepted that challenge and told to Mr. Sharma that he can come in his office and hack Mr. Gagan’s account. I will give you permission to hack my account, but I can’t give permissions for other hacking other’s accounts. This shows Mr. Gagan have doubt about his website and was afraid of Mr. Sharma’s Challenge.

For further discussion Mr. Shakeel Ahmed (IT Minister of India) came and he told that he is not a technical person, but he will definitely do well for people’s of his country with his technical team… In short, none of our money is safe until and unless, online security vulnerabilities are not removed completely. In order to know more about Mr. Sharma’s research activities and services please go through [http://kalpeshsharma.page.tl]

Best Company to Invest Your Money – Guidelines for Evaluating Stocks and Financial Strength

First of all, it’s never a good idea to put all of your money into a single investment. Always keep your portfolio as diverse as you possibly can. It is very common to ask questions such as “best company to invest your money”. It’s ideal to conduct research on a few companies or products at a time and invest regularly. Be sure and join an investment newsletter that offers the top picks by the experts who really have an innovative approach to the stock market.

A beginning investor should never begin with an individual stock. If you’re new and just starting with your portfolio, it is much riskier to buy an individual stock than it is to buy a low-cost mutual fund that includes a group of stocks.

Regardless of your experience level a lot of people recommend that “FAANG” is a way to go, or at least used as a starting point. These are the “Big 5” Facebook / Amazon Apple / Netflix / Google. These 5 tech giants have their hands in just about everything these days and still have the potential to disrupt the industries and economy that they don’t already.

Do some research on all of the industries these big 5 are involved in to help you make your decision on the best company to invest your money in. Consider competitors as well, such as Disney, Microsoft, Yahoo!, Baidu, etc… Baidu (BIDU) has a huge stronghold in China, and is slowly growing on a global level.

Is There a Best Company to Invest Your Money In?

Always consider factors like debt, price, and valuation when investing. Do research on a company’s background and current financial situation to find out if it’s in debt. The more debt a business is in, the more money it has to spend on payments and interests. Also, look into dividends, and the company’s history in paying them. Are the dividends being increased or not?

Don’t make the mistake in assuming that a stock is going to be a bargain just because the price is very low. You must understand why and how that price went down and if it is going to rebound. Volatility is to be expected on occasion as well, so don’t panic or be surprised over it.

Some classes or training can really go a long way – especially if you want to try and make a living with investing in the stock market. You won’t get rich overnight, but you will likely find success after a while if you learn about the common evaluation metrics, like price-to-earnings ratio, debt-to-equity ratios, dividend yields, etc.

One way to learn about the stock market and get some ideas on the best company to invest your money is to join Capitalist Exploits. The newsletter is provided by professional money managers who track trends and capital flows to establish where the true value lies.

Exploring Your Career Path in the Financial Sector

Are you searching for a job in the financial sector? There are many excellent career choices in this industry that will give you great pay and benefits. Choosing a career as a financial planner is an excellent idea if you’re looking for a highly lucrative position with a bright future ahead of it. Jobs in the financial planning industry are expected to increase by nearly 27 percent by 2022. It’s a great idea to get in on the ground floor of an industry that is guaranteed to provide a lifetime of lucrative employment and career advancement opportunities.

What Sort of Degree Do You Need to Become a Financial Planner?

You can’t just expect to walk in and nab a “plum” financial planner position. You must show proof that you possess the necessary qualifications. A Bachelor’s degree in a financial field is an excellent starting point. It may get you in the door at some places. However, more and more employers are insisting that applicants for financial planning positions possess an MBA. This is especially true if you will be seeking a position that enables you to climb the corporate ladder to a senior management or even partner position.

You Will Need to Obtain Certification as a Financial Planner

The next step to becoming a financial planner is to obtain the necessary certification. The two most well-known types of certifications are Certified Financial Planner (CFP) and Chartered Financial Analyst (CFA). To qualify for the CFP exam, you will need three years’ experience in a finance-related industry. You also will need to have a Bachelor’s degree or better. And, finally, you will need to pass a thorough background check. The exam itself lasts 10 hours and is split over 2 days. To qualify to take the even more grueling CFA exam, you will need four years’ experience.

It Pays to Get Your License to Sell Stocks and Bonds

As a financial planner, being able to sell stocks and bonds is not necessarily a requirement. However, being qualified in this area certainly doesn’t hurt. You can obtain a Financial Industry Regulatory Authority (FINRA) license, such as the Series 6, 7 or 63, to be able to sell mutual funds, stocks, bonds, or insurance to a client. It’s an excellent way to gain more valuable industry experience and qualifications. At the same time, you are also making yourself indispensable to the needs of your clients and your employer.

What is the Career Path of a Modern Financial Planner?

Once you have achieved the necessary college degree to enter the financial industry, your career path will require first gaining three or four years’ worth of experience in junior positions. After gaining the necessary certifications, you will be able to work as a financial planner in an unsupervised capacity.

You will be qualified to receive your base salary, plus incentives and bonuses. That can easily add another five figures to your annual pay. As you work your way upward to a senior position, you can earn a six-figure base salary with matching bonuses and incentives. The career of a financial planner is thus a highly lucrative path to consider.

How to Prepare a Financial Plan for a Hotel

Isn’t your childhood dream to own a high-rise building with an elegant interior and one of the city’s best hotels? What would be the next step if you suddenly decided to open a hotel? The next step is to make a financial plan. It’s like a blueprint for the hotel’s day-to-day operations and activities. Entrepreneurs are submerged in troubled waters at this point.

Many entrepreneurs face a dilemma in the planning stage of their businesses, whether they are new to the industry or have been in it for a long time. One of the most common problems they experience is with their finances. When you don’t know how to plan for business finances, who wouldn’t get grumpy?

Your hotel budget should be as clear as a crystal to you. It will assist you in developing a feasible plan or strategy for allocating budget to key areas that can generate profit.

Here are some tips on how you can prepare a Financial Plan for a hotel:

1. Determine the type of hotel you want to open.

This is critical because it will serve as a guide and a starting point for understanding your target market. It’s important to remember that different types of hotels require different budgets.

2. Make a list of all the factors that could affect a hotel’s profit generation and all the accommodation units, services, and amenities that you have.

All the factors that may affect the hotel’s finances must be considered, and all the hotel’s offerings and services must be acknowledged. You will have a better idea of what you can offer your customers this way.

3. Make a budget for the hotel’s expenses.

Even if you are still in the planning and development stages, you must anticipate or estimate how you will allocate the budget for all the services, accommodations, and amenities you will provide. This will assist you in gaining insight and determining whether it is necessary for the long run to generate profit despite its costs.

This will also serve as a guide for keeping your company running smoothly. Forecasting startup costs will help you decide how to adjust and allocate your finances to finally open your hotel. 4. Use a plan to project or predict assumptions.

4. Use a plan to project or predict assumptions.

If you’re starting from scratch, creating a plan that projects your forecast of the overall performance of the hotel will help you determine the probable profit, cash flow, and risks. These forecasts or assumptions will assist you in predicting the hotel’s demand and future performance.

Forecasting or generating forecasts is an important component of managing finances or creating a financial plan since it will better prepare you to deal with future uncertainties. You must be ahead of the game in order to make modifications to maximize revenue, resources, and prevent any dangers, as they say, “If you plan to fail, you plan to fail.”

If you’re having trouble organizing your business’s finances and don’t have a basic understanding of how to plan and anticipate cash flows, as well as prepare reports and analyses, we offer a simple and painless solution for you. You can check out our best-tailored fit financial model for your business at http://www.efinancialmodels.com.

Have a great time, hustlin’!

Modern Financial Management Theories & Small Businesses

The following are some examples of modern financial management theories formulated on principles considered as ‘a set of fundamental tenets that form the basis for financial theory and decision-making in finance’ (Emery et al.1991). An attempt would be made to relate the principles behind these concepts to small businesses’ financial management.

Agency Theory

Agency theory deals with the people who own a business enterprise and all others who have interests in it, for example managers, banks, creditors, family members, and employees. The agency theory postulates that the day to day running of a business enterprise is carried out by managers as agents who have been engaged by the owners of the business as principals who are also known as shareholders. The theory is on the notion of the principle of ‘two-sided transactions’ which holds that any financial transactions involve two parties, both acting in their own best interests, but with different expectations.

Problems usually identified with agency theory may include:

i. Information asymmetry- a situation in which agents have information on the financial circumstances and prospects of the enterprise that is not known to principals (Emery et al.1991). For example ‘The Business Roundtable’ emphasised that in planning communications with shareholders and investors, companies should consider never misleading or misinforming stockholders about the corporation’s operations or financial condition. In spite of this principle, there was lack of transparency from Enron’s management leading to its collapse;

ii. Moral hazard-a situation in which agents deliberately take advantage of information asymmetry to redistribute wealth to themselves in an unseen manner which is ultimately to the detriment of principals. A case in point is the failure of the Board of directors of Enron’s compensation committee to ask any question about the award of salaries, perks, annuities, life insurance and rewards to the executive members at a critical point in the life of Enron; with one executive on record to have received a share of ownership of a corporate jet as a reward and also a loan of $77m to the CEO even though the Sarbanes-Oxley Act in the US bans loans by companies to their executives; and

iii. Adverse selection-this concerns a situation in which agents misrepresent the skills or abilities they bring to an enterprise. As a result of that the principal’s wealth is not maximised (Emery et al.1991).

In response to the inherent risk posed by agents’ quest to make the most of their interests to the disadvantage of principals (i.e. all stakeholders), each stakeholder tries to increase the reward expected in return for participation in the enterprise. Creditors may increase the interest rates they get from the enterprise. Other responses are monitoring and bonding to improve principal’s access to reliable information and devising means to find a common ground for agents and principals respectively.

Emanating from the risks faced in agency theory, researchers on small business financial management contend that in many small enterprises the agency relationship between owners and managers may be absent because the owners are also managers; and that the predominantly nature of SMEs make the usual solutions to agency problems such as monitoring and bonding costly thereby increasing the cost of transactions between various stakeholders (Emery et al.1991).

Nevertheless, the theory provides useful knowledge into many matters in SMEs financial management and shows considerable avenues as to how SMEs financial management should be practiced and perceived. It also enables academic and practitioners to pursue strategies that could help sustain the growth of SMEs.

Signaling Theory

Signaling theory rests on the transfer and interpretation of information at hand about a business enterprise to the capital market, and the impounding of the resulting perceptions into the terms on which finance is made available to the enterprise. In other words, flows of funds between an enterprise and the capital market are dependent on the flow of information between them. (Emery et al, 1991). For example management’s decision to make an acquisition or divest; repurchase outstanding shares; as well as decisions by outsiders like for example an institutional investor deciding to withhold a certain amount of equity or debt finance. The emerging evidence on the relevance of signaling theory to small enterprise financial management is mixed. Until recently, there has been no substantial and reliable empirical evidence that signaling theory accurately represents particular situations in SME financial management, or that it adds insights that are not provided by modern theory (Emery et al.1991).

Keasey et al(1992) writes that of the ability of small enterprises to signal their value to potential investors, only the signal of the disclosure of an earnings forecast were found to be positively and significantly related to enterprise value amongst the following: percentage of equity retained by owners, the net proceeds raised by an equity issue, the choice of financial advisor to an issue (presuming that a more reputable accountant, banker or auditor may cause greater faith to be placed in the prospectus for the float), and the level of under pricing of an issue. Signaling theory is now considered to be more insightful for some aspects of small enterprise financial management than others (Emery et al 1991).

The Pecking-Order Theory or Framework (POF)

This is another financial theory, which is to be considered in relation to SMEs financial management. It is a finance theory which suggests that management prefers to finance first from retained earnings, then with debt, followed by hybrid forms of finance such as convertible loans, and last of all by using externally issued equity; with bankruptcy costs, agency costs, and information asymmetries playing little role in affecting the capital structure policy. A research study carried out by Norton (1991b) found out that 75% of the small enterprises used seemed to make financial structure decisions within a hierarchical or pecking order framework .Holmes et al. (1991) admitted that POF is consistent with small business sectors because they are owner-managed and do not want to dilute their ownership. Owner-managed businesses usually prefer retained profits because they want to maintain the control of assets and business operations.

This is not strange considering the fact that in Ghana, according to empirical evidence, SMEs funding is made up of about 86% of own equity as well as loans from family and friends(See Table 1). Losing this money is like losing one’s own reputation which is considered very serious customarily in Ghana.

Access to capital

The 1971 Bolton report on small firms outlined issues underlying the concept of ‘finance gap’ (this has two components-knowledge gap-debt is restricted due to lack of awareness of appropriate sources, advantages and disadvantages of finance; and supply gap-unavailability of funds or cost of debt to small enterprises exceeds the cost of debt for larger enterprises.) that: there are a set of difficulties which face a small company. Small companies are hit harder by taxation, face higher investigation costs for loans, are generally less well informed of sources of finance and are less able to satisfy loan requirements. Small firms have limited access to the capital and money markets and therefore suffer from chronic undercapitalization. As a result; they are likely to have excessive recourse to expensive funds which act as a brake on their economic development.

Leverage

This is the term used to describe the converse of gearing which is the proportion of total assets financed by equity and may be called equity to assets ratio. The studies under review in this section on leverage are focused on total debt as a percentage of equity or total assets. There are however, some studies on the relative proportions of different types of debt held by small and large enterprises.

Equity Funds

Equity is also known as owners’ equity, capital, or net worth.

Costand et al (1990) suggests that ‘larger firms will use greater levels of debt financing than small firms. This implies that larger firms will rely relatively less on equity financing than do smaller firms.’ According to the pecking order framework, the small enterprises have two problems when it comes to equity funding [McMahon et al. (1993, pp153)]:

1) Small enterprises usually do not have the option of issuing additional equity to the public.

2) Owner-managers are strongly averse to any dilution of their ownership interest and control. This way they are unlike the managers of large concerns who usually have only a limited degree of control and limited, if any, ownership interest, and are therefore prepared to recognise a broader range of funding options.

Financial Management in SME

With high spate of financial problems contributing to the high rate of failures in small medium enterprises, what do the literature on small business say on financial management in small businesses to combat such failures?

Osteryoung et al (1997) writes that “while financial management is a critical element of the management of a business as a whole, within this function the management of its assets is perhaps the most important. In the long term, the purchase of assets directs the course that the business will take during the life of these assets, but the business will never see the long term if it cannot plan an appropriate policy to effectively manage its working capital.” In effect the poor financial management of owner-managers or lack of financial management altogether is the main cause underlying the problems in SME financial management.

Hall and Young(1991) in a study in the UK of 3 samples of 100 small enterprises that were subject to involuntary liquidation in 1973,1978,and 1983 found out that the reasons given for failure,49.8% were of financial nature. On the perceptions of official receivers interviewed for the same small enterprises, 86.6% of the 247 reasons given were of a financial nature. The positive correlation between poor or nil financial management (including basic accounting) and business failure has well been documented in western countries according to Peacock (1985a).

It is gainsaying the fact that despite the need to manage every aspect of their small enterprises with very little internal and external support, it is often the case that owner-managers only have experience or training in some functional areas.

There is a school of thought that believes “a well-run business enterprise should be as unconscious of its finances as healthy a fit person is of his or her breathing”. It must be possible to undertake production, marketing, distribution and the like, without repeatedly causing, or being hindered by, financial pressures and strains. It does not mean, however, that financial management can be ignored by a small enterprise owner-manager; or as is often done, given to an accountant to take care of. Whether it is obvious or not to the casual observer, in prosperous small enterprises the owner-managers themselves have a firm grasp of the principles of financial management and are actively involved in applying them to their own situation.” McMahon et al. (1993).

Some researchers tried to predict small enterprise failure to mitigate the collapse of small businesses. McNamara et al (1988) developed a model to predict small enterprise failures giving the following four reasons:

– To enable management to respond quickly to changing conditions

– To train lenders in recognising the important factors involved in determining an enterprise’s likelihood of failing

– To assist lending organisations in their marketing by identifying their customer’s financial needs more effectively

– To act as a filter in the credit evaluation process.

They went on to argue that small enterprises are very different from large ones in the area of borrowing by small enterprises, lack of long-term debt finance and different taxation provisions.

For small private companies, these measures are unreliable and textbook methods for judging investment opportunities are not always useful in organisations that are privately owned to give a true and fair view of events taking place in the company.

Thus,modern financial management is not the ultimate answer to every business problem including both large and small businesses.However,it could be argued that there is some food for thought for SMEs concerning every concept considered in this study. For example it could be seen (from the literature reviewed )that, financial records are meant to examine and analyse corporate operations. Return on equity, return on assets, return on investment, and debt to equity ratios are useful yardsticks for measuring the performance of big business and SMEs as well.

Why Financial Planning Is Important for Your Business?

Importance of Financial Planning for Businesses

  1. To manage cash flow

The cash flow of a business may vary from time to time. There may be times that there’s a high cash flow, but there are seasons that it can be low. Through these data, you can anticipate the possible risks like cash shortage. Having a financial plan can help you avoid the negative consequences, and you can ensure that the stability of the cash flow is maintained.

  1. It helps in creating marketing strategies

Before jumping into a marketing strategy or campaign, it is important to consider the financial planning. Such plan will determine if the marketing campaign is worth it, and if it can be helpful in the long-run. The financial plan can weigh if the expense for a marketing strategy can really generate a good profit.

  1. To control business risks

You don’t have to worry about uncertain circumstances if you have a plan. Including business insurance expenses, losses, and other unexpected expense in your financial plan can help you to continue your business. Just like when the pandemic happened – no one knows that it will happen, and we’ll never know when this will end. All you can do as a business owner is to continue to create new financial plans on a monthly basis to gain a better insight of your business.

  1. To have a long-term view of the business

The future condition of the business is also as important as the present. Financial planing can help you to have a clear view of your business in the long-run. The financial reports will help the business owners to gain insights about their business functions. They can even come up with expansion and sales programs which can also help in the sustainability of the business in the future.

It is never a waste of time. Without it, you can have a hard time to assess the performance of your business, and your business can possibly turn into a disaster. It can reduce the uncertainties which can help in the sustainability and profitability of the business in the long-run. You can possibly meet your short-term and long-term goals by having a solid financial plan. It doesn’t matter how big or small your business is, it can still collapse if you don’t have a proper planning. It might take some of your time to plan, but it’s better than nothing at all.

Why Most Individuals Give Up on Their Financial MLM Business – Get Proper MLM Business Advice

A Promise for a Great Financial MLM Business

During the course of our life, many of us have been approached by some type of MLM business opportunity. All sorts of companies have a division of MLM, or are fully MLM. I am sure you could think of Pampered Chef, American Express, Cutco, Primerica, World Financial Group, the list goes on pretty much forever. I myself was approached by a financial MLM business opportunity, and it was by Primerica, and World Financial Group. Now, I was definitely promised a great financial MLM business by the person who approached me. Yes, I was told I was going to make a ton of money and I could retire early, not to mention have people constantly work for me and so on.

Being a big person on the saying “Look before you leap,” I decided to do some heavy research. The biggest fault that I found in both of the companies that invited me to work for them was the system! So what exactly do I mean by that? Well, I am talking about the way you generate leads for your financial MLM business of course! The system was very bland, and made you tap into your own family or “warm market” as they call it.

Let me put it to you this way, your family/warm market are those individuals that somehow know everything there is to know about you and you are going to close a deal on them, right? Think about this for a minute, because this was the first thing to come to my mind; you, who could possibly be unemployed right now, or a plumber, or anything for that matter are all of a sudden a financial expert? You are supposed to close your parents, who wiped your butt, and know all there is to know about you, are all of a sudden going to take financial advice from you right? WRONG!

One of the biggest reasons people give up on their financial MLM business is the actual system they are signing up for. What are you supposed to do when your warm market runs dry? What I am trying to say is your warm market should not be the only way to get leads for your financial MLM business. There are companies out there with a much better system that is available to you, so you do not have to go to your friends and family. If you would like to start a financial MLM business, or get out of the pitfall of the one you are currently in, really spend some time to research the company that you are going in to.

Selecting the Proper Company for Your Financial MLM Business

Picking the proper company to represent for your financial MLM business is key. If you went on the Google machine right now and ended up researching a company and nothing but lawsuit’s and scams about the company came up, why in the heck would you go and work for it? Now I am not talking about the concept of MLM, I am talking about companies that use the MLM model. I am a huge fan of MLM, its a necessity in my opinion. My reason for it being a necessity? I don’t approve of individuals that just punch in and punch out and receive a paycheck for their “hard work”. When you look into a company, the system they use should be your top priority. The second, and I would like to note just as important is their ethics.

A great deal of individuals get all pumped about starting a new financial MLM business and end up throwing in the towel after finding out all the dirt on the particular company that they joined. I cannot stress how important the ethics of a company are, to the agent and the client. How could you feel comfortable representing that companies products while knowing that they have faced tons of lawsuits? I sure wouldn’t. Your client will go on the computer and research everything there is to know about your company and how they represent themselves before they go into your products. So save yourself the troubles and frustrations of your client backing out due to bad ethics of the company.

Benefits of Starting a Financial MLM Business

Finding the company with the right system, and great ethics is not difficult at all. When you do, you will start seeing the full benefits of what a financial MLM business can do for you. After some searching I found a wonderful company. I mentioned I have been in the financial industry for about 3 years now, and I have been very successful in it. You can have great success, just like me without the hassle of heckling your friends and family for some minuscule deal.

Multiple sources of income is where the world is at. The old days of going to work for a company for 30 years and retiring with a great pension is out. Individuals and business’ alike were hit very hard with this economic crunch, some individuals are barely staying afloat, and most business’ are downsizing. If you talk to any successful individuals they will tell you what their job is, and then what their business is. I know of individuals that are in the real estate business, but have a primary job as a school teacher just to keep from going insane. A financial MLM business is just one of the many ways that could very well mean the difference between you having financial independence in your life, or having a constant struggle for income. Having a backup is never bad, in the event that one income source dries up, you wouldn’t be in a panic state of mind. If you only have one source of income, ask yourself this; what would you do right now if that income dried up?

Up-line’s in Your Financial MLM Business

The roll of a sponsor or up-line in your financial MLM business is to assist you from the ground up to get your financial MLM business going. I am sure you are wondering how you pick a good up-line right? Don’t be afraid to ask questions. I would interview your up-line. You see, in an financial MLM business, you have an option to join the company or not and I am sure your sponsor would want nothing more than for you to join so that he or she can make money off of your personal production. Spend some time getting to know who you are going to be working with, and for. If the individual that presented the opportunity to you was not doing very well in the company, but you absolutely loved the products, the system, and the ethics of that particular company and you think you could really be on the top why limit yourself? Contact someone in the company who you believe would be a better sponsor.

I know what you are thinking, its kind of unfair to the guy who brought you there in the first place. Well you know what? This is your financial MLM business, and you are seeking to be successful. You are going to invest your time, efforts, and money to your business and I am sure you are looking for a good result to come out of your investment.

By applying what you have read in this article you will avoid being one of those individuals that throw in the towel to their financial MLM business. Pick the proper financial MLM company to immediately better your business, a good system where you don’t have to relentlessly hunt for leads will make all the difference. Finding an ethical company means a great backbone for you, and reassurance to your clients. Remember the benefits of starting a financial MLM business, its all about multiple sources of income. Finally, don’t be afraid to get to know who your up-line or sponsor is, and how that individual can affect your success in your financial MLM business.

To Your Success

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