SWIFT: A Preferred Method of International Currency Transfer

SWIFT Logo (Photo credit: Wikipedia)

It would be great if financial institutions around the globe could communicate with each other and all trade using the same currency. Unfortunately, this is unlikely to ever happen. Enter SWIFT. SWIFT stands for The Society for Worldwide Interbank Financial Telecommunication. It's a network that enables financial institutions to send and receive information about transactions in a secure and reliable environment.

The SWIFT secure messaging network runs from two redundant data centers. One of those data centers is located within the U.S. The other is in the Netherlands. Each center shares information in near-real-time. If one of the centers fails, the other is able to pick up the slack, handing the traffic for the entire network.

History

The SWIFT system didn't always exist. In fact, it's relatively new in the financial industry. Started in 1973, it was supported by 239 banks in 15 different countries. The major benefit of the organization at that time was that it established common standards for financial transactions and it also shared data processing systems as well as a worldwide communications network.

In 1977, the first message was sent. Just one year later, 10 million messages had been sent. Then, in 1979, the North American operating center opened up. The next year, Hong Kong and Singapore were connected to the system. From there, it grew steadily through the '80s, enhancing stability and security - the system also started turning a profit in 1982.

By 1991, the organization had been noticed by the Smithsonian and received the Computerworld Smithsonian Information technology Award for its standardized financial telecommunication work. Without SWIFT, worldwide financial transactions would be virtually impossible at scale since private networks would be unable to communicate with each other.

Swift Network Organization

In 2003, the system turned 30 and had a lot to show for it. Yearly traffic reached 2 billion FIN messages - nearly double the volume since 1999. In 2010, SWIFT acquired Sunguard's AMH business (Arkelis), thus extending its portfolio of high-end messaging services. In 2011, it's most innovative advancement ever happened. It launched SWIFTRemit - the first global platform for person-to-person payments.

Why It's Good

Financial institutions, by and large, love the SWIFT system. For them, it means a couple of things:

Security - Financial institutions can transmit data in an environment that is guaranteed to be secure, uniform, and reliable. Transactions between financial institutions would otherwise be inherently risky since data transfers on a public network are not secure enough for the kind of data that most financial institutions transfer.

Syntax Standards - Financial institutions need a "central hub" where they can communicate with each other. SWIFT provides that. Since it standardizes communication between all member institutions, it doesn't matter what internal, proprietary, system a company uses.

Integration - SWIFT provides real turn-key solutions for member institutions. These solutions provide members with "Computer-Based Terminals" so that each member can manage delivery and receipt of messages.

Consideration

Financial firms that make use of SWIFT systems often feel very secure using the system. However, after September 11, 2001, the U.S. government was allowed access to SWIFT's system. SWIFT has been criticized for allowing the government access to sensitive data. While the government has only ever accessed data in an attempt to track terrorist activity, some critics believe any access at all compromises the integrity and security of the system.

Dennis Tarver is a business finance consultant. His articles mainly appear on personal finance and business sites around the web. For more information about foreign currency payments, visit the link.

Public Liability Insurance - A Necessary Evil

We all know what a drain on our finances insurance can be. It's bad enough to already have to pay for health insurance, automobile insurance, and life insurance. But if you are a business professional, you really need to take a good hard look at whether or not you need to also be carrying what is known as public liability insurance as well. 

Let's say you are a driving instructor, for example. It's one thing to need coverage in case you get into an accident while conducting a driving lesson. But what if, during the course of your training session, you give improper directions to your student, which in turn causes him or her to get into an accident, resulting in bodily injury or property damage to your student, or to an innocent bystander, or to some property? 

That's where public liability insurance comes into play. If you feel that paying for public liability insurance is like throwing money away because it is seemingly too expensive, then you should consider how just expensive it might be if you end up becoming party to a lawsuit due to an accident you caused due to your own professional negligence while on the job. 

With the hospital bills and property damage you become liable to pay on behalf of the injured party, not to mention the legal fees associated with defending yourself in court, these costs, if you were to incur them, can end up costing you many times more than the mere pittance you would have to pay for public liability insurance. Check out the business website link for more information about public liability insurance.

Plan Ahead To Enjoy Your Retirement

Many of us hope to enjoy our retirement years sleeping in as late as we’d like or filling our days with the passions and hobbies that were put to the side during our working days. Traveling, visiting grandchildren, and taking up new interests are all beckoning as retirement draws nearer. 

However, without some careful planning, living on a fixed income and a new form of healthcare insurance can pose a struggle that will dampen those dreams of retirement. Unfortunately, the majority of us are somewhat behind in our retirement planning and haven’t made a plan to help us transition successfully to retirement. Wherever you are on the path to retirement, the time to make a plan is now. 

Plan Each Step Before You Take It

Simple advice, right? Just as in a chess game, each move you make in preparing for retirement will have an effect on the next move. You will want to consider factors such as when to retire, the quality of life you hope to enjoy, the dreams you want to live out, and the situations that you need to prepare for. Each of these decisions will be easier to make when you have time to study the consequences and contributing factors.

1- When is the right time to retire? Your retirement age will be influenced by the legal age of retirement in order to receive Social Security and Medicare. It may also be affected by the number of years you have put into your current job or the level of tenure which you have attained. Retirement budgets are usually calculated based on your age, the amount of savings and other financial resources you’ve set aside, and the retirement income you have earned from your qualifying jobs. Utilize an online retirement calculator or consult with a professional retirement planner so that you can retire at the most beneficial age.

2- Work out a retirement budget. List any of the debts that you currently have, your costs of living, and any other necessary and desired expenses. Use this information to create a budget. Keep in mind any new hobbies or activities that you are hoping to engage in. If you are hoping to begin traveling, then you will need to calculate those costs ahead of time if you hope to be able to afford any trips.

3- Plan ways to reduce unnecessary costs. While most of us hope to enjoy the same manner of living that we had while working, this is far from guaranteed. Planning ahead is the first step in protecting your income. Learning how to reduce living expenses is the second step. When you reduce your costs now and set aside the extra money, you will be better prepared to handle the emergencies and other unexpected expenses that will invariably occur.

4- Learn to spend wisely. Before retirement, many of us simply live from paycheck to paycheck and spend only what is left after paying bills. Living on a retirement income may present a new problem, especially if a substantial part of your income will come from savings that you can access readily. You may wish to re-take financial classes that you once took as a new homeowner or when you first began investing. You should probably consider enrolling in a course that is specifically taught to educate men and women approaching retirement. With this information, you will be better prepared to make the decisions that affect you personally.

5- During retirement, it will be more important than ever to know how to save your money. Don’t spend as if you don’t have another twenty years ahead of you. People are living longer than ever before and you may need to plan for several decades of retirement. You may feel tempted to spend money up front thinking that your expenses will remain stable. However, many aging adults find that the costs of living for seniors rise suddenly due to increased medical bills and other expenses related to getting older. 

A Successful Retirement Plan

After working for most of your life, you hope to enjoy a stable and peaceful retirement. If you want to avoid depending on your children or making other sacrifices of independence, then plan ahead and carefully consider each step before you take it. With a well-thought out budget and the determination to stick to it, you will have the monthly resources to meet your bills and financial obligations. By developing habits of frugal spending and generous saving, you can feel more comfortable pondering the future years approaching.

BIO:

Lauren Hill is a freelance writer, wife and mother of 2 really awesome kids. She enjoys writing on topics affecting our everyday lives. When she finds free time, you can find her in the garden, driving her kids to activities or blogging at www.laurenqhill.com

How to Make Money off Instagram

These days, everything is on Instagram. Everything, from that adorable puppy you saw a few blocks away, to that incredibly juicy burger you had for lunch. There are almost zero restrictions, and you are the judge of what is significant enough to be uploaded. Those that make the cut are seen by the millions of other Instagram users- whether they take a good look or simply pass over it, they've still seen it. And, without even noticing it, we've been giving these products free advertising. It’s happened over YouTube, it’s happened over Tumblr, it’s happened over all social media. We've been sending across different messages that translate into positive or negative reviews about a certain product. “This burger was delicious”. “This make up was good enough for me not to have to use a filter.” Instagram has effectively become a virtual marketplace full of digital billboards and static commercials- and small businesses, boutiques and companies are beginning to take advantage of that.

Social media marketing has become absolutely essential in this era since the digital platform has become easily the most accessible marketplace, and is readily available to anyone with an Internet connection. Suddenly anyone who is online is a potential customer. In Instagram, there are mainly two types of people who can take advantage of this and make money off of it: business owners, and product users. 

Product users are those who take good pictures of themselves enjoying a certain product, which turn into impromptu, unofficial advertisements. It’s rather similar to how some YouTubers get paid to include specific products in their videos and take the time to toss in a good word about them. There are companies who spotted this an as opportunity, and began paying these people to take more pictures of themselves enjoying their products. The users become unofficial paid models, and through them, companies are able to advertise themselves to the Instagram crowd.


The second group to take financial advantage of Instagram is the business owners. They take a more direct approach by presenting their business over Instagram. They try to gain a good following, present their products to their followers, and sell them online. Eventually their number of followers continuously grows and their name becomes more and more recognized. Many a small business has seen success this way and has gained loyal patrons over time.


We have crossed over into an era where so much can be done with the Internet. It has made us more accessible, more open and more able to express ourselves to an audience, live or otherwise. It literally helps us connect, and has been giving us more and more opportunities as its development continues. Instagram has evolved from a simple digital photo album to a plethora of possibilities and opportunities. Whether you are a small business owner or an everyday, average user, there is a chance for you to make money off of Instagram, and all it takes is a little bit of creativity. 

This article was provided by Steve of Buy-Instagram.com the premier site to get more instagram followers.

Should CDs Be in Your Portfolio?

Even though bank CD's are delivering historically low interest rates, investors should not ignore them as part of an overall investment plan. If one of your goals in your investment plan is diversification and safety then some cd's in your portfolio can provide this.

Maybe your as old as me and remember the days when cd's had rates as high as 15%. This occurred back in the days when Jimmy Carter was our president and inflation was rampant. I owned CD's at those rates and thought this is not to bad. Fast forward to today when the average cd's interest rate is one percent. Ouch! Why even bother?

According to Bankrate.com, the best six-month CD is paying an annual yield of just over 0.75% and one-year CDs are averaging 1%. These kinds of rates have turned away many previous owners. Many of our retired people used CDs exclusively because they were a hedge against inflation and also gave a nice return you would be able to live on. But today if you factor in inflation, you may even be experiencing "negative real yield" according to the Wall Street Journal. This is why people stay away from them. Why lock in your money for low or even negative returns.

The Benefits of Bank CDs

Is there a silver lining to CDs? One thing is for sure, they are definitely a safe investment. They are guaranteed by the Federal Deposit Insurance Corp. (FDIC) up to $250,000 per depositor, per bank. 

If you want to keep your money in a safe place that is guaranteed other than CDs you can look into U.S. government bonds that offer similar safety. Only problem with government bonds is that they average around 0.17%. For safety, CDs offer a guaranteed return and investment safety. For the small investor CDs provide an easy to understand way to make a small return on their savings.

The Uses for Bank CDs

Cds are about as simple as it comes to a safe interest bearing investment. Part of an overall investment portfolio strategy is having some money in a 100% safe investment vehicle. CDs perform this task well. If you are putting away cash for a future purchase and want it in a safe place then CDs are the way to go. You could be saving for a down payment on a home or a child's education. Long-term savings plans can use CDs as a tool to save for a particular amount of time. The longer the better. CDs can be the place you keep the part of your portfolio that you don't want to expose to market risk. 

Emergency funds can also be kept in CDs. By staggering the maturity dates over the next few years you always will be having one CD maturing. You can either take the money and use it for some emergency situation or re invest it. This technique called the "CD Ladder" allows you to constantly have money coming available for your emergency needs. Having the money this way helps you avoid the need to sell some stock investments in time of need. If you didn't have this easy way to access your cash you would be forced to sell some of your stocks or mutual fund investments. Quite possibly when you need money the most, your stock or mutual fund will be at an all time low. One of the best places to keep idle cash is in a CD.

One place that is offering very generous interest on CDs is CIT Bank. If you want CDs to be a part of your diversified portfolio, they offer some of the highest paying CD interest rates available today. 

Click HERE to view more details or sign up for a CIT CD account and 1.75% APY !

6 Tips for First Time Home Buyers

You've finally decided to make one of life’s biggest decisions – buying your first home. No longer will you have to deal with stuffy landlords, exorbitant rent prices, or annoying neighbors—you will finally have a space you can call all your own. Now that you've made this very adult decision, you need to consider a few things before you make one of the biggest purchases you will make in your entire life. Before you buy, you need to ask yourself some serious questions. If you already own property and are looking into purchasing income property, you will also need to do your homework.

Tips for Homeowners 

1. Know Your Budget and Mortgage Basics 

It’s important to know what you can afford to spend before you seriously start looking to buy. It is also equally important to know how much mortgage you qualify for. Look for first time homeowners seminars in your area to get more information or speak to a representative at your bank.

2. Get a Real Estate Agent you Trust

Looking for your dream home on your own can get overwhelming. This is where real estate agents come in. They can help you figure out the logistics of a sale, will negotiate prices for you, and will do all the paper work. It’s important you have a good rapport with your agent and that they know what your needs and wants are. Remember, you are the one who will be living in this home, not them.

3. Make a Smart Offer

Your real estate agent can help you navigate this important step of the purchasing process. This is your time to name a price as well as your conditions for purchasing. More than likely the seller will counter-offer, putting the ball back in your court. Once you come to an agreement, you will go into escrow which means you have 30 days in order to inspect and purchase the property.

4. Get a Home Inspection

During the escrow period, it is your responsibility to get a home inspection. During this inspection a trained professional will check every inch of the property to make sure it’s safe and sound and ready for purchase. If they find any issues (mold or other deficiencies the seller did not mention), you can still retract your offer.

5. Read Before You Sign

Like all things in life, it is always crucial to read the fine print before you sign any agreement. It is also important to get everything in writing and avoid verbal agreements. Your banker and real estate agent can help walk you through any language or steps you are unsure of.

6. Cover all Angles on Your Income Property

Income property is property that is bought with the intention of renting or leasing. It is a higher risk than owner occupied properties, but can be beneficial in helping you off-set the costs on your own home and bring in extra income. Before purchasing a residential or commercial income property you need to do your research. Know your rights as a landlord and see if the time and money put into the property will put you out ahead in the long run.



Angie Picardo is a staff writer for NerdWallet, a personal finance website dedicated to helping homeowners find the best credit cards.