Financial Articles

Want to learn how to earn 44% annual returns from your investments? Then consider private equity.

From 1992-2002, the top 25% of U.S. private equity managers returned 44.5% annually while the second 25% of private equity managers only returned 14.3% (Source: Venture Economics, Morningstar Principia). The returns of top private equity firms have been so solid that even private institutional endowments like that of Yale University expects almost a third of their portfolio return to come from the 17.5 % it had invested in private equity (Source: Yale Endowment 2003 report).

The risks of private equity are often misunderstood. Even though a lot of wealthy people have been investing in private equity for many years, it is still an investment vehicle surrounded by many misunderstandings. Private equity funds cover a wide range of different sectors as well as a wide range of structures. There are leveraged buyout funds, venture capital funds, distressed debts funds and mezzanine financing funds to name several.

Often, private equity is looked upon mistakenly by investors as a murky industry. To the contrary, the companies that comprise private equity funds typically have much higher transparency than publicly traded companies. Forensic accountants that work for private equity funds receive the type of access to company’s accounting to search for weaknesses or hemorrhaging business units on a level that public equity analysts only dream about. Furthermore, many well known private equity firms attract top government cabinet officials and even ex-head of states to their boards, the benefits of which are quite self-explanatory.

One such example is the Carlyle Group. At one point and time in recent history, the Carlyle Group could boast as board members or senior advisors, an ex-American president, a former British Prime Minister, an ex-Filipino president, an ex-U.S. Secretary of Defense and Deputy Director of the CIA, an ex-U.S. Secretary of State, and an ex-White House budget advisor. And this elite composition of board members is rather not the exception but more the growing rule of private equity firms. Because of the heavy political and corporate links of private equity funds, identifying those private equity firms with the most influential board members and advisors can be crucial to that particular private equity group’s performance.

So what’s the downside you ask? Private equity is an exclusive club. Often minimum buy in levels are $250,000 and it is not rare for this level to be $500,000 or more. Also depending on the type of private equity fund you buy into, the liquidity may not be that great. For example if you buy into a leveraged buyout fund, investors often receive a return on invested capital after the private equity firm restructures a company and takes it IPO. This process could last six months for a quick turnaround or perhaps a couple of years. Obviously the reduced liquidity means that you have to be wealthy enough to afford longer timelines from the expected returns of private equity funds.

However, these drawbacks can be offset by the potential for phenomenal returns. If you can afford it, private equity is an investment vehicle worth a second look.

Article By: John Kim

It is possible to fix your bad credit, with time, patience and determination. The first step in repairing poor credit is fixing any problems you may have with money.

1) Get a credit reports on yourself and check out what is on them. To get yours free go to www.annualcreditreport.com. You are allowed by U.S. law to get a free copy from each of the three major credit companies once every 12 months.

2) Once you have your credit reports, check them for accuracy. If there are any errors or things you disagree with, you are entiltled by the Fair Credit Reporting Act law to dispute anything in the report that is not accurate. Write to the credit reporting company and explain what the problems are. They will then investigate the matter and let you know what happens. If they find the information is not accurate, they will fix that on your credit report.

Unfortunately you can’t remove anything negative that is accurate information about you. Only time can do that. But adding more good information does help.

3) If your credit needs repair, start work on it now. Start paying off old unpaid debts and loans, starting with the smallest ones.

4) Start paying more than the minimum payment on your current credit card payments.

5) Do not get into any new debt. This is essential. Make it a priority to get out of debt. Cut up (or lock up) the credit cards, if they are a problem for you. Make it a commitment to become debt free.

6) Live within your means. Make a budget and live by it.

7) Start saving money. If you have poor credit, it is much easier to buy a home or a car with a cash down payment, than without one.

There are many sources of help available. Consumer Credit Counseling Service is one of the best for help repairing credit and getting debt under control. Their website is located at http://www.cccsintl.org. Consumer Credit Counseling Service provides budget counseling, educational programs, debt management assistance and housing counseling. There are also many local branches of this nonprofit organization, so check for one near your location.

There are many “for profit” organizations that will help you with debt consolidation loans, but beware! They often are very expensive. You can get free reliable help that you can trust from a non-profit organization like Consumer Credit Counseling Service instead of paying hundreds of dollars to one of them. Or, you can educate yourself and do it for free.

Some other good places to go online for more credit and financial advice are listed on my website at http://i-can-buy.com/resources.html.

Article By: Alexis Dey

It is possible to fix your bad credit, with time, patience and determination. The first step in repairing poor credit is fixing any problems you may have with money.

1) Get a credit reports on yourself and check out what is on them. To get yours free go to www.annualcreditreport.com. You are allowed by U.S. law to get a free copy from each of the three major credit companies once every 12 months.

2) Once you have your credit reports, check them for accuracy. If there are any errors or things you disagree with, you are entiltled by the Fair Credit Reporting Act law to dispute anything in the report that is not accurate. Write to the credit reporting company and explain what the problems are. They will then investigate the matter and let you know what happens. If they find the information is not accurate, they will fix that on your credit report.

Unfortunately you can’t remove anything negative that is accurate information about you. Only time can do that. But adding more good information does help.

3) If your credit needs repair, start work on it now. Start paying off old unpaid debts and loans, starting with the smallest ones.

4) Start paying more than the minimum payment on your current credit card payments.

5) Do not get into any new debt. This is essential. Make it a priority to get out of debt. Cut up (or lock up) the credit cards, if they are a problem for you. Make it a commitment to become debt free.

6) Live within your means. Make a budget and live by it.

7) Start saving money. If you have poor credit, it is much easier to buy a home or a car with a cash down payment, than without one.

There are many sources of help available. Consumer Credit Counseling Service is one of the best for help repairing credit and getting debt under control. Their website is located at http://www.cccsintl.org. Consumer Credit Counseling Service provides budget counseling, educational programs, debt management assistance and housing counseling. There are also many local branches of this nonprofit organization, so check for one near your location.

There are many “for profit” organizations that will help you with debt consolidation loans, but beware! They often are very expensive. You can get free reliable help that you can trust from a non-profit organization like Consumer Credit Counseling Service instead of paying hundreds of dollars to one of them. Or, you can educate yourself and do it for free.

Some other good places to go online for more credit and financial advice are listed on my website at http://i-can-buy.com/resources.html.

About the Author

By Alexis Dey © 2006 Mohave Publishing. http://mohavepublishing.com. For ideas on how to buy a house when you can’t qualify for a home mortgage loan because of poor credit, look for the exclusive FREE e-book, Buying a Home When You Have Bad Credit,” which can found at http://I-can-buy.com.