Why Car Buying is one of People's Least Favorite Activities

To numerous people visiting the DMV is their idea of Hell, but to countless others the terror begins before they've even driven their car off of the lot. You would assume that buying a car would be a happy and somewhat exciting occasion, but that isn't always the case. Buying a car is a task that almost everyone will undertake at some time in their life, and for some people, it is a task that they will undertake numerous times over their lifetime. When asked, customers say that visiting a car dealership makes them feel stupid, weak, powerless, and manipulated. They find that the process of buying a car is extremely stressful, and the process seems to take forever. Ultimately, they leave the car lot after spending a large amount of money feeling as if they have been taken advantage of.

Critics believe that local legislature has been changed to ensure that your car buying experience remains an unpleasant one. A paper by economist Fiona Scott Morton published in the Journal of Economic Perspectives states that “There is a system of state franchise laws that protect the profits of new car dealers.” States earn approximately 20 percent of all states sales taxes from auto dealers, and these car dealerships account for up to 8 percent of all retail employment. The majority of these taxes that are generated by car dealerships account for 89 percent of tax revenue that states earn. Because of this, local and state car dealership associations have gained considerable power over local legislatures. The result of this influence has resulted in a set of state laws that basically guarantee car dealership survival and profitability. Evidence shows that the result of these laws have caused distribution costs and retail prices to climb higher than they should be. This means that the excess costs are transferred to consumers, making it harder for them to find an actual “good deal” on their vehicle purchase.

Although consumers take a big hit, this legislature affects car manufacturers as well. Manufacturers deal with car dealerships directly, and the current legislature that is in place comes at the expense of their profits as well. For instance, a manufacturer can't simply close a dealership that is causing it to lose money, even if the dealership's contract with the manufacturer has expired. In order for the dealership to be closed, the motion must first pass through the car dealership review board. The problem with this is that the review board is made up of car dealers, so the manufacturers don't really stand a chance. For example, in 2008, Chrysler and GM were facing bankruptcy. The government stepped in, and both manufacturers began the process of restructuring. Both manufacturers planned to close approximately 2,200 dealerships, but all of the designated dealerships weren't closed. The manufacturers were forced to reinstate almost 700 of the dealerships, and countless others were referred to arbitrary hearings to become reinstated against the manufacturer's wishes. In the end, it's not hard to see that car dealerships are causing grief for both their customers and the manufacturers that help to keep them in business.



About the Author: Blair Thomas is an electronic payment expert, who loves all things finance and planning.  He is also the co-founder of eMerchantBroker.com, the credit repair merchant account company in the country. If you would like to see what he's up to, add him to your Google+ circle.

Basics of Stock Markets: The A-Z Quick Sheet for a Beginner-Level Investor

Several individuals wish to engage themselves in stock market and invest their money in stocks, but they don’t have an idea about Stock markets and how they work. In fact, there may be lot of info available to you, but they may all seem confusing without actually knowing the basics. This post aims at educating the beginners about the basics of stocks market. Read on to enlighten yourself about the A-Z of stock market. 

Getting a Better Picture

First of all, it is important to get a clear picture of what stocks are! Literally, a share of stock is the ownership of a firm. When you purchase a share of stock, you are eligible for a small fraction of the earnings and assets of that company. The assets here include everything owned by the company (trademarks, equipment, buildings) and earnings refer to all the money the firm gets in from trading its services and products.

As a beginner, it is quite evident that you may wonder why a firm would want to share its earnings and assets with the public. This is because the company needs money. Firms have just two ways to raise money to expand the business or cover start up. It can either sell stock (called equity financing) or borrow money (called debt financing).

Generating Funds with Stock Selling

The downside of borrowing funds is that the firm has to repay the loan with interest. However, fewer strings are attached with stock selling. The company need not pay interest or there is no need to repay the money. Equity financing gives out the risk of its business to a large group of stock holders (the investors). If the company loses, the owner does not lose all his money, but rather loses many smaller parts of other individuals’ money.

Understanding the Fluctuations

When you plan to enter the stock market and start observing things, you may often hear the work stock prices. This is one thing that you need to know about before investing in the stock market. Stock price refers to the price that a particular stock sells for and it is fixed by many market factors like trading trends, economy condition, technical or financial reports of a company, and spending trends.

Knowing the Market Capitalization

Next, you need to stay aware of what market capitalization is. It is the value of the stock or the company that is being offered. If you want to assess the market capitalization of a specific stock or company, use the formula: number of outstanding shares X the stock price

Once you are thorough with the basics, you need to know how to buy or sell shares. In order to purchase a stock, you need to set up some type of investment account. In several cases, you need to open a new investment account with a stock broker or open an online investment account if you want to proceed without a stock broker’s assistance.

Before You Start Trading

Once an account is established, you have to fund it before making a purchase. After funding, you can enter your stock purchase order. Once you are ready to trade shares, you will have to enter the sell order through your online account or tell the stock broker that you wish to sell few shares.

Learning how the stock market works is just the beginning and experience is what will teach you practical things in due course of time.


About the author: Tobias Wilhelm is the owner of a stock market website, where he tries to educate the stock investors about stock markets and how they work.

Interesting Facts about Sunglasses Industry

In a period of global recession the sunglasses industry is one of the few retail sectors currently experiencing growth. This has been backed up by a number of statistical overviews suggesting that in September 2011 the industry grew by 3.2 per cent in the US when compared to the findings in September 2010. This being said, being successful in the sunglasses industry can be particularly challenging when we consider the tough competition as well as the changing styles and fashion. With this in mind, here are a few interesting facts about this booming industry.

A Quick Industry Overview

Sunglasses sales and manufacturing makes up to 10 per cent of the whole vision care industry, and although in 2008 and 2009 there was a slight drop in sales as a result of less credit availability, the industry is continuing to show steady growth annually.

Industry Giants

One of the most important industry players is an Italian company Luxottica with company's shares being worth more than 50 USD per share. Luxottica manufactures in and around 70 per cent of popular branded sunglasses including Burberry, Chanel, Versace, Prada and Ralph Lauren under an exclusive license. This company also owns a number of leading brands including the ever-popular Ray Ban and Oakley. Furthermore, Luxottica also owns a number of vision care retailers including Sunglass Hut and Pearle Vision. Another important player in the sunglasses business is an Italian company Safilo whose shares are worth more than 12 USD per share. Safilo owns a license to manufacture brands like Dior, Alexsander McQueen, Gucci and many more.

Industry Profitability

It is fair to say that designer sunglasses have one of the greatest profit margins when all products are considered. In addition to this, the technology used to maximise the health benefits of wearing sunglasses is fairly inexpensive. This therefore means that the manufacturers of high-end branded sunglasses reap the rewards as customers pay for the designer label.

Industry Considerations

In order to break into the sunglasses business buying in bulk from a wholesaler is often the best way to get you started within this competitive industry. It is therefore crucial that sunglasses retailers do their research in order to keep up with the latest fashion trends to ensure that they do not buy outdated styles.

Nowadays sunglasses have become not only a tool to protect one's eyes, but also an important accessory to make a fashion statement, and this in turn means that the industry will continue to be successful in the years to come.

Impact of the UK Budgetary Announcement 2013

The announcement of the UK budget will have a lot of impact especially to the both the employers and the contractors.

The budget has greatly considered the working parent. Parents will benefit from the new tax free vouchers that will offer £ 1,200 childcare to parents earning less than £150,000 per year, aimed at encouraging more parents to return to work after maternity or paternity leave. This will come as a boost to employers in the region.

The other set of good news to the contractors is that the 3% increase in fuel tax that was due in September has been scrapped and so has the escalating beer tax which will now be replaced by a cut of 1p per pint. Other alcohol duty rises remain in place though, such as 10 pence extra on a bottle of wine. Gin drinkers are the hardest hit and must pay 39p extra!

A focus on more sober matters, the chancellor steered clear of pension tax. This will come as a huge relief to contractors as pensions seem to have suffered in recent budgets, with annual allowance falling from £ 255,000 to £ 40,000 over the last three years of budget statements, while the lifetime allowance reducing from £ 1.8m to £ 1.25m. This has come in amid speculation that there could have been a further cut to £ 30,000 a year.

The government is also set to cap long term care at £ 72,000. This will put a limit on the proportion of an individual's wealth that can be consumed to pay up for their later years, although this is all in theory. This will provide peace of mind to those who want to plan for their old age and leave savings to their children.

There has also been a major boost to investors as Osborne has scrapped duty on the shares traded in growth markets. This will allow contractors interested in self-investment to access far greater range of options.

It is also a major relief as the tax loop hole that allowed many companies to dodge around £ 100m in national insurance will now be closed. It is important that the government closes this loophole as soon as possible, ensuring that no worker is left unaware that their tax status makes them ineligible for such benefits. Every worker should be secure in the knowledge that the correct tax is being paid by their employer so that they are not exposed to unnecessary risks.

It is also good news to all employers as from April 2014; the government will give businesses and charities an entitlement to a £ 2,000 Employment Allowance per year towards their employer National Insurance contributions (NICs) bill. This will particularly help small businesses who want to hire their first employee or expand their workforce;

The government also intends to promote exports and inward investment by providing support for more than 32,000 SMEs to export in 2012-13 and also provide support to UK exporters to win contracts worth over £ 3.2bn. Also encourage investment across sectors and regions.

The UK government also sets out to make UK the best place for business by improving access to finance and support to new and growing businesses. This will be possible through Seed Enterprise Investment Scheme and expanded Venture Capital Trusts and Enterprise Investment Scheme, funding raised so far through the Business Finance Partnership and the increasing number of banks and building societies signed up to the Funding for Lending Scheme.


The article was written on behalf of a paye umbrella company for contractors who also provide accountancy services to limited companies.

Intervention threat trips Kiwi dollar

On Monday night eight armed men broke into Zaventem airport near Brussels.  They drove to a Swiss-registered aircraft that was loading on the ramp and transferred 120 packages from the hold into their van.  Mistaking their actions for the normal behaviour of baggage handlers, police allowed the men to carry off diamonds worth $50m.  So far the men have not been caught.

If apprehended, they are likely to be charged with either insider trading or money laundering, both of which carry heavier penalties than armed robbery so don’t expect them to be using services on the internet to send money online.

As diamonds typically change hands for US dollars and the thieves (one assumes) are Eurolanders, they will already be looking at a book loss of €250k on their booty, the euro having strengthened by one US cent between Friday night and this morning.  If they were British bandits they would be looking at a mark-up of about £70k, since sterling has fallen by a third of a US cent over the same period.

The pound had a tough day on Tuesday. It fell by nearly a cent against the euro in money transfers, the Swiss franc and the Australian dollar and is down by one yen. As can be seen from its smaller quarter-cent losses to the US dollar and the Aussie, sterling committed no major blunder but, like the diamonds on the plane, just happened to be in the wrong place at the wrong time.  The wrong place was right on the four-year-old trend support for sterling/euro, which investors have made several attempts to break in the last couple of weeks and had another go at on Monday afternoon.

In the unlikely event that the raiders came from New Zealand they will consider themselves particularly fortunate that the NZ dollar chose yesterday to be the world's worst-performing major currency, thereby handing them a book profit of NZ$350k on their booty. The Kiwi's setback came early this morning after Reserve Bank of New Zealand Governor Graeme Wheeler warned that "the Kiwi is not a one-way bet" and that he is "prepared to intervene".

One must presume that Mr. Wheeler took the precaution of clearing his intervention threat with Prime Minister John Key, the one-time global head of foreign exchange for Merrill Lynch. In April last year Mr. Key described such action as "the stuff of LaLa Land", saying "I don't believe in intervention - never have and frankly never will. I spent my professional life looking at it and it fails." Of course, the prime minister might have changed his mind about intervention since then, having realised that he is just about the only world leader not so engaged.

The highlights of Monday's ecostats were the much stronger readings from ZEW's surveys of German and Euroland investor sentiment.  They didn't have much immediate impact but will have done no harm to pro-euro attitudes.  Worse-than-expected Japanese trade figures overnight sent the yen only temporarily lower.

With German inflation (1.9%) out of the way and with French inflation and Italian industrial production unlikely to influence investors, the most important items on the morning agenda are the UK employment data and the Monetary Policy Committee minutes.  US building permits, housing starts and producer prices this afternoon ought not to affect the dollar but the FOMC minutes at 19:00h might.

What Will Replace the Mining Boom?

As Australia reaches the end of its mining and resources boom the country faces a proverbial turning point in investment critics say the economy could be facing off against some particularly tough problems. The mining boom that lasted a decade, ranging from Western Australia’s Pilbara region to Queensland’s Gladstone has been pegged as the country’s economic saviour. It was so “safe” that it protected the economy throughout the global financial crisis. But now that times are changing an urgent substitute is required.

The last five to ten years have witnessed inflations in the prices of both iron ore and coal as China has had an insatiable need for raw materials. The departure of this major player has had its effects on the market but China’s absence has been down played by the government. The government has defended its stance on the issue by alluding to the “mega projects” in the pipeline for the resources sector, implying that this is where the economy can pick up from. The project approvals will flood the economy with investments worth billions, according to the Bureau of Resources and Energy Economics.

$268.4 billion was committed to energy and resource projects by October this year. That means that 87% of projects have been finalised through financial decision but economists tell us it is too little to meet demands. They are asking pertinent questions about what will come after all this investment as the country does not have much support beyond what is on offer in the resources sector. As we come to the end of a resource boom the prices of commodities are stabilising or dropping in some cases. It also means that the number of investors the country has to borrow money from has dropped significantly.

$268 million has already been committed to resource investment, $292 billion of projects are stuck in the feasibility stage and $133 billion have been announced publicly. Those that have not been booked are considered questionable and unconfirmed and it is likely that the country will see fewer projects come to fruition than what was originally forecast. Furthermore the increase in value for committed projects is not so much a case of more projects being pushed through than it is a matter of the costs to complete the projects going up.

In retail growth has been very modest while services and manufacturing are contracting. The general outlook for business in 2013 is that it will also contract. This, in light of the government’s commitment to budget surplus, is likely to mean that the government’s contribution to economic growth is likely to fall short of what is required.

The RBA thinks that to get around this consumer spending needs to be stimulated through lower interest rates. According to the RBA it is construction that will step into the big shoes left by the departure of the mining industry. Housing Industry Association spokesman David Bare has said that the construction sector is likely to be affected by the government’s red tape and the expense of doing business in the country.

With the cash rate at the same level as during the global financial crisis, non-mining sectors are particularly vulnerable, despite the hub of activity in the mining sector and interest rates hitting record lows. Banks like Bankwest have been relatively slow to react to the interest rate reductions with few of them passing the full interest rate reduction onto their customers and customers, of course, have been even slower to respond to the bait that has been put in front of them.

The RBA has also shown its interest in dropping the Australian dollar from its current high in order to give more impetus to tourism and manufacturing.