investment/economics

Economics
In economics, investment is the production per unit time of goods which are not consumed but are to be used for future production. Examples include tangibles (such as building a railroad or factory) and intangibles (such as a year of schooling or on-the-job training). In measures of national income and output, gross investment I is also a component of Gross domestic product (GDP), given in the formula GDP = C + I + G + NX, where C is consumption, G is government spending, and NX is net exports. Thus investment is everything that remains of production after consumption, government spending, and exports are subtracted.
I is divided into non-residential investment (such as factories) and residential investment (new houses). Net investment deducts depreciation from gross investment. It is the value of the net increase in the capital stock per year.
Investment, as production over a period of time ("per year"), is not capital. The time dimension of investment makes it a flow. By contrast, capital is a stock, that is, an accumulation measurable at a point in time (say December 31st).
Investment is often modeled as a function of Income and Interest rates, given by the relation I = f(Y, r). An increase in income encourages higher investment, whereas a higher interest rate may discourage investment as it becomes more costly to borrow money. Even if a firm chooses to use its own funds in an investment, the interest rate represents an opportunity cost of investing those funds rather than loaning them out for interest.

Investment

Investment or investing is a term with several closely-related meanings in business management, finance and economics, related to saving or deferring consumption. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. The word originates in the Latin "vestis", meaning garment, and refers to the act of putting things (money or other claims to resources) into others' pockets.The basic meaning of the term being an asset held to have some recurring or capital gains. It is an asset that is expected to give returns without any work on the asset perse.
Types of investments
The term "investment" is used differently in economics and in finance. Economists refer to a real investment (such as a machine or a house), while financial economists refer to a financial asset, such as money that is put into a bank or the market, which may then be used to buy a real asset.

Business ManagementThe investment decision (also known as capital budgeting) is one of the fundamental decisions of business management: managers determine the assets that the business enterprise obtains. These assets may be physical (such as buildings or machinery), intangible (such as patents, software, goodwill), or financial (see below). The manager must assess whether the net present value of the investment to the enterprise is positive; the net present value is calculated using the enterprise's marginal cost of capital.
A business might invest with the goal of making profit. These are marketable securities or passive investment. It might also invest with the goal of controlling or influencing the operation of the second company, the investee. These are called intercorporate, long-term and strategic investments. Hence, a company can have none, some or total control over the investee's strategic, operating, investing and financing decisions. One can control a company by owning over 50% ownership, or have the ability to elect a majority of the Board of Directors.

Superannuation

Do you rule your superannuation or does it rule you?
It's easy to fall for some myths about your super unless you do some clear thinking about who is in charge. Virtually all Australian employees now have a superannuation account, many have several, even more than they know about. We all hope to use this money to fund our retirement, but unless you look after your super then you are in danger of losing some of your money along the way.
Myth number 1. Someone else can look after my super. Only partly right. It is possible go through your working life letting your super run on autopilot, but you may be in for an unpleasant surprise if you don't keep an eye on your super. Make sure your employer is paying the correct amount, and that if your employer goes broke your super is still available.
If you change jobs you need to decide if you wish to 'roll over' the money into another fund. This is especially important if you change jobs frequently. You can find that you have relatively small amounts scattered over several funds, and in each you will be paying a management fee before you earn any distribution or interest. In the long term inflation will eat away at the value of your principle, even though the dollar amount stays the same. Many super companies provide a free service to consolidate small accounts for you. Use them.
Myth number 2. It's not my money until I retire. Dead wrong. It's your money, just like the rest of the money in your pay packet. Super funds are providing a service of managing your money until you can legally access it when you retire. You have control of it. After July 2005 you will have even more say about your money. If you are not happy with the service you should tell the service provider. If they can't fix your problem, then you can sack them and put your money elsewhere.
Myth number 3. I don't need to worry about it until I am at least fifty-something. Not really. Australians are enjoying longer lives and better health. You will need more money if you want to have more options in retirement. You will probably need to top up your super to achieve financial independence in your golden years. The sooner you start the better.
The Australian Government is generously giving away our money to help lower and middle income earners top up their super. It's called the superannuation co-contribution scheme. If you, or your spouse, are eligible you should make sure you get your share.
Fact number 1.Our superannuation is our money. To look after your super you need to learn about your rights and options. It's a long term task. You need to get information and advice. Don't rush, but start soon.


About The Author
Darby Higgs is a Melbourne-based web writer. He is the manager and editor of its-our-money.com a website aiming to empower investors in retirement funds to take a more active role in the governance of their money.

Franchise

It seems completely absurd that franchise buyers lie about their financial position, available cash and abilities in order to buy a franchise. After spending 8 years setting up franchises around the nation and fielding inquiries I am appalled at the lack of integrity of the average business buyer. If you wonder why franchisors make franchise buyers fill out forms and ask lots of questions it is because 75% or more of every franchise inquiry to a franchise company is misrepresentative of their reality. A franchise opportunity seller should beware of franchise buyers lying on forms.
Why do we have laws for franchise companies and yet none for franchise buyers or investors? It is appalling the lack of integrity of the average American or in this case investor of a franchise. Some of these liars waste our valuable time as the fraudulently make up a falsehood picture of their financial ability and business acumen. They ought to be thrown in jail.
Well, I guess I really went off on the franchise buyers. At the time of this statement in 1999 I had just hung up on four franchise buyers that week, feeling it hopeless to even have further conversations with anyone inquiring. Turned out not all these potential franchise candidates or buyers were real, many were competitors and even some believe it or not were working for the government as entrapment phone solicitors. One we later got to know was a 26-year old homosexual Attorney working for the Federal Trade Commission, who upon my visit to the FTC office in Washington DC, starred at my rear end the entire time?
We franchisors work very hard and can usually help a franchisee into a very small business of their own position, but we need straight answers; such as their true financial picture. If we get a song and a dance about how much money they have, and then we start the process only to find out that they really do not have as much as they said then we have a franchisee who may fail simply due to being under capitalized.
The most common reason small businesses fail as surveyed time and time again by the SBA; Small Business Administration and other groups is the fact that the business was under captialized. If we have franchise buyers who want colorful brochures, great, but level with us. Tell us you just want someone to tell you, you are great and you just want someone to yell at due to your personal frustrations. If you have little money state that, there maybe a plan to help you along. Then after that is over we can be serious about winning market share and having all the game plan laid out carefully. I doubt if the US Military wants to fight a war with generals who do not have bad information, pilots who do not follow orders, Navy Seal Teams who are untrained, an intelligence agency who lies or allies who are actually hostile and full of misinformation. To win a war in franchising you must above all be on the same team, from the beginning. It is imperative that every one understands each other's goals to win.
Franchise buyers who want to be argumentative towards their future business partner in order to vent off anger from their previous downsizing company and tyrant boss should wait until they are better understanding of their current situation and ready to review why they are where they are, before they try to buy a franchise. A franchisor that puts up with such non-sense has no business franchising, because that franchisor is clearly out for just the money and that short term attitude will kill the long term win-win partnership that is needed to dominate the market place. A franchisor such as that should not be in the franchising business. Franchisees who lie from the start are not good team members and once that bond of integrity is broken there can be no more trust. Advice; if you are going to buy a franchise, be upfront and honest with your future business partners, you moron. Think about it.

"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs

About Health Insurance: Group vs Individual

Group vs Individual Insurance

Before deciding on a type of health plan, it's important to know what kind of coverage is out there. There are a lot of different ways to get health insurance and it's good to know what you may be eligible for before you start your health insurance search.

Group Health Insurance
The majority of people under the age of 65 have medical insurance through their employers' group insurance. According to the National Coalition on Helath Care, in 2005, over 80 percent of employees were eligible for employer-group insurance and 83 percent of those who were offered, opted for these types of plans. This is usually because employers and other organizations can get better rates because they have a large number of people to cover. The insurance company sees it as good risk because they'll probably end up paying out very little for many people in the group, while collecting premiums from everyone. Normally, this translates into premiums that are much lower than those found in individual health insurance plans and are the same price for everyone in the group regardless of their health.

While employers aren't required by law to provide health insurance, they may have a difficult time finding good employees if they don't. Also, once group insurance is offered, it falls under the protection of the Health Insurance Portability and Accountability Act (HIPAA) regulations. These regulations protect employees by ensuring that everyone is given access to the employer's health insurance plan regardless of their health status. The act also helps regulate waiting periods of health plans to help achieve continuous coverage for most employees and helps ensure that employees have access to health care if they lose their job.

Because health insurance rates are re-negotiated each year based on the previous year's health care costs, some employers offer wellness programs for their employees. By keeping employees healthier, they can lower medical costs. Participation in these programs can sometimes make employees eligible for reduced health insurance premiums. For employees who pay a portion of the premium themselves (which is typical), this can mean eliminating some or all of that charge.

Most employer's group insurance plans are managed care plans, typically either HMOs or PPOs. Both of these types of plans will be explored in detail later in this article.

Individual Health Insurance
Individual health insurance is the most expensive option for people who don't have coverage (or don't have enough coverage) through employers. Physical exams and questionnaires are usually a part of the application process, so poor health can really make a difference in the cost and eligibility. Types of insurance plans include fee-for-service plans, PPOs, HMOs and catastrophe insurance. Many companies offer health insurance for individuals and specialize in short-term coverage to fill in between employer coverage.