An Economic Outlook and the Contrary Nature of Forex Trading

canstockphoto5964748The U.S. economy entered a critical period this week, as Barack Obama finally signed a bill to authorise the much anticipated sequester cuts. With more than $85 million to be cut from the public spending budget, there is a great deal of apprehension among American households, business owners and even Wall Street traders.

While many economists predicted that this would have a detrimental impact on those who trade fx and stocks, however, it appears as though investors are bracing themselves for potential gains. Both the U.S. Dollar and stocks have edged higher in the last week, as strong economic figures and manufacturing gains have combined to help offset the immediate impact of budget cuts.

The Long Term Portents for the U.S. Economy

While the U.S. economy has become extremely well versed in the art of recovery, its perpetual resilience continues to defy financial experts. Given that the federal government have outwardly fought hard to resist budget cuts by implementing several temporary fiscal measures, it would be reasonable to assume that their impact would be immediate and potentially devastating. This has not proven to be the case, however, at least in the immediate aftermath of the bills inauguration.

The weeks to follow may tell a different story, however, especially once the proposed cull of public sector job comes to fruition. With the potential for more than 1 million workers to lose their income and thousands more staff facing significant pay cuts, there is the chance that the economy could enter a significant decline during the second financial quarter. Additional spending cuts on educational programs and welfare will take their toll over a longer period of time, and these may well cause a gradual depreciation of sentiment among American citizens.

The Prospects for the Contrary Forex Market

While the economic condition is likely to worsen before it improves, however, it is fair to say that the implementation of sequester costs offered a fascinating insight into the contrary nature of the forex market. While it would be reasonable to presume that the value of the U.S. Dollar would plummet in line with fading economic sentiment, it has instead rebounded and continued its prolonged ascent. Trading volumes within the forex market have also remained unchanged, which suggests that corporate institutions and independent investors are unmoved by the drastic budget cuts.

While the forex market may be contrary in its nature, however, it is not immune to continued periods of economic hardship. Should the initial resilience of the U.S. economy find itself overwhelmed once the sequester cuts begin to take their toll, even experienced Wall Street traders may be forced to consider embracing a more risk averse investment philosophy. While it is easy to remain positive and bold during short term periods of hardship, the prospect of another recession is bound to influence both trading volume and the underlying value of the nation’s currency.

Although it is clear that the years following the global recession have forced traders to develop greater levels of resilience and determinism, this only applies to short term fluctuations and economic shifts. In instances where the U.S. economy is driven to the brink of recession, however, forex and financial market traders will have to adapt their strategies and minimise the risks that they face on a daily basis.

Aussie Businesses Say Growth Lies in Tax Cuts

canstockphoto0550848A Western Australia lobby group has embraced comments from the Premier that suggest tax relief measures will be adopted if he is re-elected. The Chamber for Commerce and Industry has asked the state government to lift the tax threshold from $750,000 to $1.5 million, with the Premier saying details about the structure of the relief will be announced as his campaign unfolds.

The Chief Executive of the CCI says that the new measures are intended to provide relief for small businesses especially which are struggling under volatile local and international forces. He added that the next authority figure in Western Australia needs to be able to meet small business demands.

As far as politics are concerned citizens and small businesses are hoping that the threshold will be lifted so that more people can be employed and businesses can grow. The CCI CEO says the tax relief measures are affordable for the government, with the last decade seeing tax collections increase from $900 million to $3.3 billion. He claims that small businesses are being discriminated against for hiring Western Australian workers in order to expand their businesses. In 2012 the state budget incorporated a rebate for approximately 7000 Western Australia businesses.

In response the government has said it is limited by GST cuts and the only way to give businesses what they need is to drop the tax threshold. He said payroll tax elimination would be ideal but it was unrealistic.

The mining sector has also come out in full force over taxation issues in the sector, following the decline in government’s resource taxes, dropping them well below anticipated figures. The Minerals Council of Australia, representing most of the country’s miners, has unveiled a new advertising campaign about the Minerals Resource Rent Tax in response to two major multinational players that have acquired credits of $1.7 billion and which could be used to counteract the Minerals Resource Rent Tax.

The council has taken the opportunity to highlight the fact that the tax is for top-up purposes and should be reviewed as separate to company royalties and taxes. The council claimed that the mining industry was paying its share of taxes, a figure amounting to over $130 billion since 2000. The industry body has been very vocal about the “super profits” tax imposed on the mining industry which was announced in 2010, and which ended Kevin Rudd’s tenure as Prime Minister. Following Julia Gillard’s appointment, substantial changes to the tax rate have been made and it now only includes coal and iron ore.

Six months into its implementation though, the government has only claimed $126 million of the anticipated $2 billion for the first year.

In defence the government claims revenues have been affected by the drop in commodity prices but the structure of the tax has come under scrutiny. Newspaper reports have already isolated three major mining companies that are exempt from tax, alluding to a loophole in the law which gives preference to the country’s largest mining companies.

The call for government intervention comes after a period of stagnated growth for the economy in 2012 while the government was focused on returning the domestic budget to surplus. The last year saw contractions in a number of key industries and among small businesses, a move to serviced offices from worldwide provider that offer fully-inclusive packages and provide full spectrum business services in order to remain competitive. A number of major companies have also relocated to more sophisticated business centres where all of their professional needs are taken care of, in an effort to streamline operations and operate on more economical frameworks that still ensure access to top class facilities, essential technology and prime locations in central business areas.

Do You Use Video Conferencing At Work?

The Rise of Video Conferencing
Source: The Rise of Video Conferencing

Infographic provided by video conference calling firm Powwownow. 

How to Hire Your First Employee

For a small business owner, perhaps no day is more monumental than the day you hire your first employee.  Does anything say success more than this?  You have reached a point where  you can no longer keep up with the work yourself and need assistance.

Before you hire the first employee, determine whether you want to hire an independent contractor or an employee.

Independent Contractor

An independent contractor is often a freelancer you hire to help you sporadically or at less than a full-time basis.  The benefits to hiring an independent contractor is that you do not have to pay benefits such as sick days, vacation days, or health insurance.

The drawback is that you may experience turn around in the position, and you may find that your needs for the employee are greater than a part-time, temporary position.


If you hire an employee, the person can work full-time and perhaps provide you with greater assistance than an independent contractor.

However, there are many steps you have to take before hiring your first employee.  These include, but are not limited to:

1.  Getting an EIN (employer identification number)

2.  Utilizing payroll software to keep track of payment and taxes for your new employee, among other things

3.  Completing employee verification paperwork within 3 days of hiring your new employee

4.  Registering with your state’s new hire reporting program

5.  Filing taxes

6.  Remaining organized by setting up a filing system and employee record keeping, if you don’t already have these things in place

Hiring an employee can be an important step to reducing your stress as a business owner.  In addition, an employee can free up your time so you have more time to be creative and manage the business, allowing you to grow the business even more.

Carefully choose between an independent contractor and employee.  Alternatively, you could hire an independent contractor and then eventually hire that person as your employee.

No matter your decision, do not be intimidated by the hiring process.  There are plenty of resources to assist you in following all of the proper steps.  In the end, hiring an employee is probably best for your business.

Safety Tips for Small Businesses

Safety SignFor most small businesses, the number on expense beyond payroll revolves around employee safety and injuries.

Depending on the business, this may or may not hold true, but for most, safety is a large expense.  However, there are a number of things that you can do to lower your expenses when it comes to employee safety.

Fire Protection

Having basic fire protection in place is one of the biggest safety tips that you can do.  This covers a wide variety of topics, from ensuring that you have policies and procedures in place to prevent fires from occurring, to making sure that you have the proper safety equipment to deal with a fire.  If you feel you need to get the right equipment, you can get fire extinguishers from

Having solid fire protection plans can lower your cost of insurance and save you money.

Emergency Plans

Emergency planning is essential for all types of businesses.  But emergency planning should include more than just what to do if XYZ happens – it should also include how to deal with basic safety emergencies like a medical emergency or injury.  Having emergency plans in place can greatly reduce workplace expenses because employees will receive the proper care sooner.

Some basic emergency planning includes partnering with a nurse line to provide over the phone medical aid if necessary, and having first aid kits available in different locations throughout the workplace.  These simple safety strategies can prove effective later.


Finally, one of the biggest determinants of a safety culture is employee morale.  The sad truth is that unhappy employees also happen to get injured more often and cost the company more money.  It is important to stay close to the morale of your employees and deal with poor performing employees swiftly.  You don’t want to end up having to pay for an employee’s workman’s compensation insurance for an accident that could have been prevented because they were a poor performer to begin with.

**Photo by calignosus on Flickr**

Negotiating from a Position of Power

There are times when two coworkers with paychecks that are complete equal are able to drive home in two very different cars. They might own the exact same amount of money on their cars, but one coworker is driving a five-star vehicle and the other coworker has a three-star ride. What is the difference? The coworker with the five-star vehicle utilizes more sophisticated negotiation tactics.

There are many cases in life when the price of an item is open for negotiation. Negotiation skills come in handy when asking for a raise, looking for a better deal on a car or when slashing the price of a home.

The first step in the negotiation process is for the negotiator to be clear on the highest and lowest price that the negotiator is willing to pay. By understanding the cutoff point, the negotiator can then make it clear that he or she is not a buyer at a particular price.

Very rarely will a negotiator be able to succeed with a win-lose proposition where the negotiator is the winner. The negotiator must give almost as much as he or she intends to receive. The negotiator should try to give the other party as much as he or she wants while getting the better deal overall.

Tough negotiations are tough. This statement might sound obvious, but negotiators should never expect that the other side will go down without a fight. For example, with car sales, the salesman will try to sell the car for the highest price possible.

When the car buyer knows what price to shoot for because TrueCar reveals the best price for a new car, the car dealer will not likely be willing to sell the car for a low price. Tough negotiations take time and the salesman might return to his manager multiple times before finally agreeing to the low price. The key is to only raise the price enough to get an excellent deal.

Ideal negotiation strategies vary depending on who the other party is. With a car sales associate, the hardline approach may work because the customer is unlikely to see the sales associate again. With a boss, the hardline approach may not be ideal because the employee will come to work and see the boss everyday. With salary negotiations, it is more important for the employee to articulate how he or she brings value to the employer.

Why Do I Need Professional Indemnity Insurance?

All businesses aim to minimise the risks to their profitability but it is not possible to safeguard against every possible eventuality that the business may encounter. This is particularly true for professional services partly because of the often more complex nature of the advice, guidance and tasks that they are providing for their clients.

Mistakes can be made or advice can prove misleading, resulting in financial loss or business injury for a client. This is true whether you are a sole trader or have a number of employees in the business working for you. An injured client may make a claim against your business for compensation for their losses arising as a result.

Responding to claims can be financially crippling for a business. Those who are un-insured may simply be unable to pay. For this reason professionals such as financial advisors are legally required to have professional indemnity insurance to protect the interests of the general public.

Any business which provides a professional service would benefit from having similar insurance cover from a company like and potential clients will be reassured that if anything does go wrong your business is financially capable of putting things right. Professional indemnity (PI) insurance is specifically designed for professional services businesses and insurers are generally experts within this field.

This is essential back up for you and your business to help ensure that you are not held liable for any false or unreasonable claims. It is also worth considering that in some cases PR or marketing activity may be needed to restore confidence in your business after a claim has been made.

This too has a cost, quite separate from the legal aspects, so having as much financial support for the legal and compensation expenses of a claim as possible is critical for the continued success of your business.

Beginner’s Guide to Life Assurance…

Life assurance (sometimes known as life insurance) is probably the most important insurance policy that you can have. It is designed with one goal in mind, to answer the question “what would happen financially to those nearest to me if I were to die?” Policies vary greatly and you have to be careful when taking out a policy that it meets all of your requirements.

Why Assurance not Insurance

You may have seen products like Legal and General Life Assurance, and wondered what ‘assurance’ is. Assurance is an insurance policy for something that is ‘assured’, something that will definitely happen. In general, in the UK, you get life assurance because it’s a sure thing that you will die. However, it’s not guaranteed that you will die within the term of the policy, so fixed term policies often come under the heading “life insurance”.

Basic Policies

Many people assume that life assurance will cover all their finances in the event of their death, unfortunately, this is not the case. A basic policy will agree a certain payout within a certain time frame, and that is it. Other policies can usually be included with a life assurance policy (for a higher premium), popular options are ‘critical illness cover’, ‘mortgage assurance’ and ‘funeral cover’. For someone with a young family, mortgage assurance is probably the most important, though critical illness cover is worth looking at.

Are Costs Fixed?

There’s a great amount of variation in the life assurance market, and some providers offer markedly better deals than others (although you should always be wary of what’s in the small print). Life assurance, perhaps more than any other product, is worth considering extremely carefully and shopping around, after all, it’s the only policy that you don’t want to pay out, and the only one that you can’t help deal with in the event of it paying out. Make sure you do your research, check out a comparison website or three, and don’t compromise premium costs for quality of coverage.

Is It Worth Having?

Ultimately, you will have to answer that question yourself, however, if you don’t have anyone who is directly dependent on you, the answer is probably ‘no’. It may be worth looking at a ‘whole life insurance’ plan which has certain inheritance tax benefits attached to it. If you have a young family, or a loved one that relies on your income, then a life assurance policy is certainly worth the cost of the premiums.


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