Money Transfer

Every year, billions of dollars are recorded as remittances worldwide. With the advent of technology, there are several ways to send money home. With so many options available, it is very important to make the right choice to avoid paying an exorbitant fee to transfer money. There are three basic factors to be considered while transferring money. Understanding each of them will help us in sending money in the most optimal method.

1. Mode of Transfer

There are a couple of aspects while choosing a mode of money transfer. They are:

location of the sender and the receiver
awareness levels of the technology and the availability of the same
time availability and affordability
Taking all of the above into consideration, one can select a medium that best suits him/her.

Cash Transfer

One of the oldest methods of sending money, a cash transfer is a simple process of sending cash through a money transferrer. The receiver can collect the money or have it delivered by the money transferrer.

Bank Transfer

Today, several money transferrers have tied up with many leading international banks to empower their customers to make a bank transfer. Through this service, one can transfer money to the recipient's bank account.

Online Money Transfer

One can sit at the comfort of their home or work and send money through an online remittance portal. Most portals have the facility to remit the money to a bank account/ credit card /cash payout.

Mobile Money Transfer

This method of money transfer is ideal for those who have limited access to banks and transfer agents. Through this method, money can be sent to a recipient's mobile phone or mobile wallet. This is widely used in many countries in the African continent. Some of the other countries that have this facility are Bangladesh, Kenya, India and Philippines.

2. Cost of Transfer

The cost of sending money will depend on the exchange rates, mode of transfer (cash, bank, online), the commission charges levied by the remittance house etc. And they will vary depending on the service provider's network and the other value added services offered. Simply put, at the end of the transaction, calculating how much of money the recipient receives will give an idea of the cost of transaction. While availing a particular type of money transfer service, one should be well informed about the below:

Exchange Rate: This is the rate at which one currency is exchanged with another. This rate will vary from time to time, depending on the global financial scenario and other economic factors. It is always wise to wait until the receiver's currency value is lesser than the sender's currency value, so that more money can be sent. For instance, if someone living in the USA wants to send money to Mexico, they should ideally transfer money when the value of peso is lesser than dollar, so that, for each dollar more pesos can be sent.

Fees: This is the fees charged for transferring the money and will depend on the service provider and the mode of money transfer.

Tax: Some countries also levy a value added tax that is charged on the commission/ service fees. For more information speak to the customer care executive before you make a transaction.

3. Comparison

It is always good to weigh all the available options before transferring money. Comparing the exchange rates at various times will help in understanding the pattern. While one service provider might have a wide network, another might boast of having state-of-the-art technology. Hence understanding one's needs and choosing accordingly is crucial.

Always ensure you ask for a record of the transaction (bill/e-receipt) at the end of the transaction. This will authenticate the transaction and act as a reference for future purposes. Sending money home can be overwhelming with so many avenues, but gets easy once the above factors have been well considered.

Differences in IFRS and GAAP

One of the major differences with US Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Systems (IFRS) in regards to inventory is the fact that IFRS and GAAP do not allow the same methods for evaluating it. GAAP allows the use of FIFO, LIFO, and weighted average, while IFRS only allows the use of FIFO and weighted average. One important aspect to the different methods for the valuation of inventory is that it would not be necessary if inflation did not exist because all three methods would produce the same result. Inventory is defined as "the raw materials, work in process goods and finished goods that are will be available for sale" (Nguyen). IFRS is the accounting standard that is used in over 110 countries and GAAP is only used in the United States. According to Joseph Nguyen, a writer on Investopedia.com, GAAP is more of a "rule based" system and IFRS is a "principle based" system and because of this it represents a better accounting of a transaction (Nguyen). Even though GAAP and IFRS are different methods of accounting, GAAP is moving towards IFRS and could eventually be combined into one method of accounting, which would be beneficial because of the globalization of the world economy today.

The first in or first out method, which can be used in both IFRS and GAAP, is the valuation of inventory by assuming that the first unit of inventory is going to be the first unit moved out when it is sold (Inventory). An example of this is if a company produces 15 units of a product for twenty dollars per unit on Thursday and then produces 15 units of the same product for thirty dollars per unit on Friday, if these products were sold on Saturday the cost that is reported to the cost of goods sold is twenty dollars per unit because that product's inventory will be moved out first. This will be reported on the income statement and the remaining inventory will be valued at thirty dollars per unit and will be allocated to ending inventory, and this will be reported on the balance sheet (Inventory). This method is a very good way to value inventory because it gives us a closer indication of the exact value of the inventory. Using this method also increases net income, which in return also increases the taxes that must be paid by the company (Inventory). This method of first in, first out can be used in both IFRS and GAAP to value inventory.

The next method used to valuate inventory is called LIFO, This method can only be used in GAAP and not IFRS (IAS Plus). In this method the company is assuming that the last unit that is produced will be the first unit to move out after it is sold. Using the example above of a company producing a product on Thursday for twenty dollars per unit and another product on Friday for thirty dollars per unit, when it is sold on Saturday the cost reported to the cost of goods sold will be thirty dollars per unit which will be then reported on the income statement. The ending inventory will be valued at twenty dollars per unit which will be reported on the balance sheet. One reason for doing this is because it produced a higher cost of goods sold which will then calculate a lower net income. This is important because the lower net income will result in a lower amount of taxes that the company has to pay (Inventory).

The third method of accounting for inventory is the weighted average method which can be used in both GAAP and IFRS. This method is the least complicated of the three and uses the weighted average of all the units produced and uses the value for both cost of goods sold and ending inventory. Using the example above the weighted average will be ((15 X $20) + (15 X $30))/30= $25. This means that the values assigned to the cost of goods sold and ending inventory will be twenty five dollars, which will result in a net income in between the FIFO and LIFO method. This will also result of the amount of taxes to be paid in between the two methods (Inventory).

Hopefully the movement from GAAP to IFRS happens because this will help improve the valuation of companies of different countries and thus make it easier to compare them. One global method of accounting for assets, for example inventory, would make it easier because there would then be no need of an adjustment for a company that uses LIFO to an acceptable method of FIFO or weighted average (Nguyen).

Financial Sustainability

Sustainability is usually a term about environmental issues. Lately it's become more of a personal finance term as well. That's because financial decisions need to be sustained over the long term. To sustain you and your family over time, Financial Sustainability means planning and flexibility. Having Plans B, C and D is a necessity.

Here are a few tips for those who want to see their money stay around as long as they do.

Save Before You Invest

It's a good idea to secure at least nine months of living expenses saved before even thinking about investing. As you plan your savings strategy, make sure you contribute enough to your retirement funds, particularly if your employer still offers a 401(k) match. Once you have your emergency fund, keep on saving. A good goal is to put aside at least 10 percent of your earnings each month (or as you can afford it). By retirement, you'll have a nice chunk of money to nest in.

Keep Credit History Good

Being a habitual bill payer signals to banks and issuers that you are a risk worth taking. Paying credit cards or mortgages late will lead to negative consequences that damage your credit score and overall credit health. Banks and issuers consider payment history when evaluating your credit risk. A long-standing history of on-time payments suggests you are responsible and reliable borrower; a poor history suggests you many not repay debts and could result in a costly loss. Remember that a credit report is like an adult report card.

Spend for Retirement

A simple trick for saving: spend less than you earn. That might not be easy if you are already having trouble keeping up with bills. A spending plan would take care of that. Some people call this a budget, but since we're referring to retirement as something to buy, a spending plan is more appropriate. Think of a budget not as a means to the end of buying a 60-inch television but a budget that will sustain over decades that will put you out ahead financially once you're deep into retirement.

Savings Plans Are Still Good If You Can Get Them

If your company still offers a traditional retirement plan like a 401 (k) plan, it's a good idea to put in your money up to the point where the company stops matching your contribution. Even if the funds within the 401 (k) don't make great gains some years, at least you know you have the company match that doubled your contribution. A fairly high interest rate will come out of that. You might not have doubled your money by the time you are allowed to take it out, but it's going to be a lot higher than what you could make on any other investment.

20 Rules of Money

Part of knowing how to Manage your Money is knowing how money works, and knowing how money works is knowing the straight truths about this important and essential thing called money. Ignorance is all you need to Squander all you've sweated for-for years. As you read through, ensure you put all into memory as much as you can as this not only will help you make good financial decisions, it will keep you informed of all what money is about. Enjoy!

1. Acquiring Money is not a thing of luck, It's Work
2. Save Part of all you earn... Start Investing now for your Old Age!
3. If you've got debts, Pay them off as soon as possible. You need to experience the joy of a debt free life.
4. Keep for Contingencies. You never can tell what's gonna happen Next
5. A billion dollar today started with a Zero figure. Don't look too high, You may never get there. See the next step before you and make that move. Success is built on little stones laid up each day.
6. Believe you can make it- There is no barrier as long as you see the possibility in making it come to pass.
7. Money is no respecter of persons. It visits anyone who invites it.
8. Money Cannot buy Love. It only will support the love that has existed.
9. Money is good... The lack of it is the 'Seed of all Evil
10. Sow into Poeple's Lives with what you've got.
11. Never lend to friends or family unless you're ready to write it off.
12. Keep track of your Spending Habit-Money fades faster than you can imagine.
13. When you've made it, Don't flaunt it. It only attract robbers and thieves.
14. Until you know what to do with money, There's no point spending it.
15. Keep Learning about money, you can never learn enough.
16. -Money is OK
- Wanting money is OK
but the truth is, you've gotta work to have it.
17. Poor people have the most misconceptions about money.
18. Money is a good friend, and also, a bad enemy.
19. Don't do Bad things for money- It won't last.
20. Don't be frugal- Imagine if everyone in the world was like you.

Comparing GAAP

The United States of America uses a type of rule-based accounting standards called GAAP (Generally Accepted Accounting Principles) while over 110 countries around the world abide by a principle-based accounting system called IFRS (International Financial Reporting Standards). There are some differences between the frameworks of the two accounting standards, but there are also a striking amount of similarities. A question then arises: why does most of the world use IFRS while the United States uses GAAP? There are many pros to each methods as well as cons, looking at each method separately will help show why the majority of the financial world uses IFRS.

The International Financial Reporting Agency may trump GAAP primarily on the fact that it is more widely used, but looking more into the principles and framework it uses can help show why so many countries use it. When US countries that trade internationally finish their fiscal year, their accountants take time to convert each financial statement to abide by IFRS so international companies can see how they have done in the past year(s). This goes to show that by switching to IFRS US companies would save time and money each year, which is how Dr. Holger Daske explains it in his book by claiming: the argument set forth by international reporting standards is that a universal set of regulations will help to lower the cost of capital for the adopter (Daske 332). The SEC is looking to make the switch from GAAP to IFRS in the near future ("GAAP vs IFRS"). If the US were to switch to the IFRS method, it wouldn't necessarily be the toughest switch to make, at least for accountants, since accountants are already trained to use IFRS, although many other factors will be affected by the change. IFRS is set up through a principle-based system, which means accountants who use this system must follow the objectives for fair and proper reporting of financial data set forth by them. The IFRS allows businesses across the globe to easily communicate their financial reports to one another. The concept of going concern is the assumption that an asset(s) will remain in the company for the future, but the accountant defers recognition of expenses to a later period in order to use the asset(s) in the most effective way possible. This is a very useful way of lowering expense that is used consistently in IFRS, but is rarely used in GAAP. These ways show just how useful IFRS is in connecting the world internationally through business.

The rule-based accounting system accountants adhere to, GAAP, was originally created by the Amercan Insititue of Certified Public Accountants (AICPA) and the Securities and Exchange Commission (SEC). New rules and regulations have been added by the Finacial Accounting Standards Board (FASB) in 1973, but in 2008, the FASB looked at every rule and regulations and condensed the procedures of GAAP to approximately 90 topics. The use of first in, first out (FIFO) and weighted-cost average, are used to evaluate inventory in both IFRS and GAAP, but the last in, last out (LIFO) method is used only in GAAP, which can be used to benefit companies. Although no matter what inventory evaluation used, expenses and profit will be recorded the same, but inventory and cost of goods sold could drastically differ when using LIFO compared to the rest. US companies use LIFO for tax purposes, producing a higher cost of goods sold which lowers taxable income compared to FIFO. Also, GAAP separates their reports for business and non-business entities, while there is no distinction between the two for IFRS.

While GAAP and IFRS are different in many ways, by taking a closer look, it shows the similarities in the two. Both systems provide a range of important information to creditors, investors, and financial analysts in an appropriate, comparable, and most importantly, reliable way. A very useful similarity is the use of footnotes on financial statements, providing valuable information and performance quality for analysts to use in analyzing and comparing companies. All financial statements, balance sheet, retained earnings, and cash flows statement, are used similarly in both systems, such as how both balance sheets are required to list assets as either current or noncurrent.