Category Archives: Finance

How to Get a Finance Job With No Experience

Finance is one such industry which is difficult to get into, especially for undergraduates and people switching from some other industry to finance. This happens because such candidates lack experience, which is considered as a key factor by finance companies for hiring new employees. Several resumes reach the interviewer’s desk, but only the candidates who either display reasonable work experience or have something exclusive, are called for the interview. It is during the interview, when a candidate without any work experience can create an impression on the interviewer, to get into the industry. Experts often get several questions from candidates who are interested in making a career in finance. Here is what they recommend.
Tips to Get a Finance Job Without any Experience
Build a Strong Resume

A candidate’s resume is responsible for creating the first impression on the interviewer. Hence, a strong resume with no typos, proper formatting, and accurate information must be built. Candidates who are unable to build a good resume must not hesitate from taking the help of professional resume builders. With a perfect resume, the candidate’s chances of being shortlisted for the interview are highly increased.

Take up Internships

Candidates lacking full-time experience in finance face difficulty in obtaining jobs. Generally, only entry-level positions are open to such candidates. As most of the entry-level positions do not require experience, the number of candidates with no knowledge of the work involved will be substantially high. To stand apart from the group, candidates can gain some work-related knowledge by taking up internships in finance companies. Internship will help the candidate understand how the industry works, what are the various departments involved, and how the work flows through these departments to finally meet customer demands. When interviewers come to know that a particular candidate is well aware of the functioning of the industry, his chances of getting selected are more as compared to others.
Work for Different Internship Programs

Diversifying areas of internship helps the candidate in gaining perspective of different functions in the finance industry. For example, equity trading, bonds, portfolio management, commodity trading etc., are all individual areas of the finance industry, and each of them has a different kind of work involved. Working in different areas during internship can give a clear picture to the candidate and make the choice of a field easy in the huge finance industry. This will also be a plus point for being selected in the interview, as it will reflect the candidate’s knowledge in various areas and his dedication towards the industry.

The Prime Causes of Crowding Out Effect in Economics

Great Recession
During the great recession of 2007, government deficits had increased a lot, since the government had to incur huge public spending for the masses. However, the ultimate result was that it did impact the business sector, and they ended up being crowded out. Thus, government spending does have a negative side too, though it has been overlooked.
The dictionary meaning of the term ‘crowding out’ is thrusting out, or forcing out of a small place. However, in economics, the crowding out effect is an interesting phenomenon that deals with the government spending. Government deficit is a situation when the government ends up spending more than the borrowing. What does the government do when it is short of money? Simply mint money? Of course, not! Money circulation is not so easy, and the government cannot start printing money simply as per its wishes and whims. Too much circulation of money will not lead to an increase in the value of the goods or services, but will certainly increase the inflation rate in the economy.
Why does ‘Crowding Out’ occur?

To reduce the deficits, the government again borrows from the market. Since the fiscal policies of the government impact the economy on a much larger scale, it does affect the private sector of the market. Due to the increase in government borrowing, the demand for investments in the market increases. Automatically, the price of funds increases. It implies that this increases the rate of interest in the market.

Hence, increased interest rates in the market again have an impact on the private sector. The private entrepreneurs cannot borrow much, once the interest rate of loan funds increases. In this case, they may stop or curb their growth or expansion plans. Thus, the government sucks up or absorbs the money circulation in the market, thereby creating a crowding out effect in the market.

Interest rates and borrowings have an inverse relationship. Once the interest rates increase, the borrowings decrease and vice versa. The government can create a crowding out effect in many ways.
Issuing government bonds in the market

The government borrows from the market, by issuing bonds and securities. Other than that, there are compulsory savings in the form of pension funds and other security benefits. When such bonds are circulated in the market, people tend to invest in them due to their high credit rating as compared to the private sector. Thus, much also depends on the mentality of the investors. If they prefer to have risk-less investments, most of them will divert their savings to the government.

Lower Interest Rate on a Credit Card

There are some solutions that can be used to lower the rate of interest on a credit card. ‘Interest’ or the cost of credit that is incurred, as a result of borrowing, can be calculated before the credit card is taken. It can also be managed after the credit card has been issued. ‘Interest’ rate on a credit card, basically includes all the credit card processing costs, APRs (Annual percentage rate), late fees, membership fees, and service charges.
In theory, the best way to get a lower interest rate is to have a good credit report. If one has a good credit report, it acts as an advantage, and credit card companies issue cards with lower interest rates. However, apart from a good credit report, a low-interest credit card is given to a select class of working people, such as military servicemen or people with disabilities. Different companies offer special concessions to frequent fliers, or those who have low-interest business credit cards. There are also several other ways to reduce credit card debt that you might incur. For example, checking the facilities of differential APRs. When a credit card holder spends on items of necessity such as food and clothing, the APR that is charged is small and negligible. You can also avail bankruptcy credit cards or student credit cards, as the APR and fees of such cards is less and the credit limit is more. Thus, the interest rate on a credit card also depends on the purpose. When you have a good credit report, you also have the advantage of negotiating the interest rates with the company. Another option is to have a secured credit card. The plus point is that, this card has a better credit limit and lesser APRs on some purchases.
In order to hunt for ways to cut credit card debt, you will have to review the credit card agreement. This agreement has different clauses, such as introductory APR, which is by default 0% for first 6 months in most cases. Then you will have an APR that is applicable for purchases; this amount is usually variable. Credit card companies state the upper and lower limits of the APR, for example, 9.22% to 16.50%. Apart from the APR, a discount is assured that can go as high as 10% to 15%, if you purchase from specified brand stores. Moreover, you will have an APR for balance transfers, one APR for cash advances, and another one for overdraft facilities. The key is to read the agreement and all possible details about the card on the company’s website.

Giffen’s Goods With Appropriate Examples

Before we begin with discussing Giffen’s paradox and proceed to look at what goods and items come under the purview of this paradox, let us first have a brief refresher of the law of demand. According to the law of demand, with everything else remaining constant, the demand for a particular good increases with a decrease in its price and decreases with an increase in its price. As such, there is an inverse relationship between the price of a product and the quantity demanded.

Demand for a product is, therefore, a function of its price and this relation can be mathematically depicted as:

Qx = f(Px)

Where, x is the product, Qx is the quantity demanded of the product and Px is the price of the product. Giffen’s paradox constitute of those phenomena or demand scenarios that violate the law of demand and various examples of Giffen goods act as exceptions to the law of demand.

What are Giffen Goods?
A Giffen good, as stated above, is that product or good that defies the law of demand in terms of the relationship between its price and quantity of demand. This particular economic paradox was propounded by Scottish economist, Sir Robert Giffen (after whom it’s named). According to this paradox, which Sir Robert Giffen arrived at after observing the purchasing tendency of the poor Victorian subjects, the demand for a particular good tends to increase even when its price increases. Sir Robert Giffen had observed that when the price of necessary staple goods
such as bread, food grain, vegetables, etc., rose, the poorer sections of the Victorian society, who relied heavily on these basic staple items, gave up on purchasing other goods and concentrated all their purchasing power on procuring the necessary staples. This kept the demand for these good high despite an increase in their price.

Conversely, when the prices of these staples go down, the consumer would, out of the consumer’s surplus (the price he has always paid and is ready to pay for the good minus the decreased price) difference that has occurred due to the price plunge, prefer to buy less of the staples and more of superior substitutes for consumption.
There are some pre-conditions so as to explain the Giffen’s paradox:

The goods taken should be inferior goods.
There should be no close substitute.
The goods should cover substantial percentage of the income of the buyer, but not so much that the buyer can’t buy any other normal good.

Credit card minimums are legal or not

Credit Card Minimum
It is common to come across handwritten signs and printouts requiring credit card users to buy things worth a minimum of USD 10 in order to have their cards accepted by retailers. However, some customers simply get offended and decide against making a purchase the moment they are asked to spend more than they originally planned for.

Credit card networks unanimously prohibited retail and business organizations from setting any minimums for credit card users until 2010. The objective behind disallowing minimums was to make credit cards as acceptable and easily accessible as cash. However, the restriction imposed on minimum purchases by merchants, set the credit card apart and alienated customers further.

Congress was asked to look into the matter by a coalition of small business owners and retailers, who wanted to legalize the imposition of minimum purchases for credit card users. Their contention being, that the retailer incurred expenses by accepting cards for small transactions. The smaller the purchase of a customer, the more unprofitable it would be for the retailer to accept the credit card. Since, every time a credit card is swiped, the flat fee as well as a part of the customer’s total is deducted from the retailer’s share. So, the retailer gets a lesser percentage as compared to what the customer is spending, because while the issuing bank subtracts an interchange fee, the acquirer deducts a discount fee for every transaction.

This point stands true for small retail and business owners, who do not enjoy a big profit margin, and thus, cannot afford to incur further expenses while accepting credit cards for low purchases, which can be easily paid in cash instead.

Is Credit Card Minimum Legal?
While it is understandable that the customer wouldn’t be too happy to buy more than he bargained for, the fact of the matter is that, the merchant is well within his rights to set a minimum amount. This familiar notice behind cash registers is valid, and has been sanctioned under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which explicitly states on page 698 of the Act that:

”(A) IN GENERAL.-A payment card network shall not, directly or through any agent, processor, or licensed member of the network, by contract, requirement, condition, penalty, or otherwise, inhibit the ability-
”(i) of any person to set a minimum dollar value for the acceptance by that person of credit cards, to the extent that –
”(I) such minimum dollar value does not differentiate between issuers or between payment card networks; and
”(II) such minimum dollar value does not exceed $10.00;…”

The Dodd-Frank Act was signed into law in July 2010, and has since then allowed the Federal Reserve to monitor and increase the minimum payment, if needed. The Act made it legal for retailers to set the aforementioned minimum purchase from credit card transactions, as long as it did not exceed USD 10.00.

Finance Budgeting

Need for Financial Budgeting
The need for budgeting arises because of the fact that you are responsible towards yourself. Responsibility towards oneself means, a constant struggle for the better. Thus, the need for personal financial planning is to fulfill the self-actualization need for improvement.

Monthly Financial Budgeting
Make a chart of income and expenditure, which you make all through the month. Based on this you will be able to make successive budgets. Here’s a chart that you can follow.
Net Income
Expenses At Home
Home Repairs
Home Improvements
Natural Gas and Oil
Child Support
Health and Fitness
Other Loans
Contingency Fund
Balancing Figure (Difference of income and expenditure)
Once you fill in the details for this chart, you will get a complete picture of what you are earning and how much of it you are spending. Based on this chart, you can make the estimated budget and the actual details will follow as the month progresses.

Yearly Budgets
Now that you have the monthly assessment, of income and expenditure, multiply it by 12 and you will get the yearly account. Yearly budgets will give you targets of the income you need to earn to sustain the lifestyle of your choice. Getting into the habit of following the chart will give every detail of every penny spent.

What Personal Financial Budgeting Does?
Finance and budgeting go hand in hand. You may get ample of finances, but if you don’t have a budget, they will all go haywire. Budgeting will get you into the habit of saving your money for the rainy day. Living from paycheck-to-paycheck will consequently change to living with wise decisions. Budgeting will employ your each dollar for better returns. Most importantly, it will give you a breathing room in case you decide to take some time out from work.

Double Benefits
Summer is here and you want to take a vacation to an exotic destination. Of course, it isn’t possible with meager travel budget to vacation anywhere else other than your couch! Saving an amount will help you create a fund for both the rainy day and the happy days.

The habit of making personal finances budget, should be started early in life. Beginning to plan while you are at college will make you an expert at managing your own finances by the time you begin to earn your money. Financial planning will alleviate problems during the big days of your life, such as marriage. It will give you an edge over the others in planning the wedding budgets for the ceremony, the way you always wanted. So before you get your next paycheck, tie the financial knot for a happy ending!

Economic Problems That Hamper the Growth

The economic challenges and problems prevalent in today’s world revolve around several dynamic aspects of society. The academia of economics, as well as its material behavior, is based around man, society, and institutions. The theories that are used to solve financial problems are usually true, but not always. The faster we grasp the fact that economics is an art that revolves around man, the sooner we will be able to have financial peace. Another truth that we need to accept is that hardships or challenges are always going to be present.

What is an Economic Problem?

In a broad sense, an economic problem can be defined as an abnormal and irrational or irrelevant behavior by socio-economic units and market components. There are innumerable causes for this. Though there is no scale that measures the level of abnormal behavior, a financial problem is said to have arisen when the abnormal behavior by economic components tend to affect several institutions.

In this discussion, market components signify 3 major constituents of the market, namely, demand, supply, and price. Though the magnitude of all the three components is small, it plays a highly influential role at a macro level. The term institute defines individuals, organizations, companies, government, governing bodies, and any unit which is capable of conducting economic activity.

There are several definitions that elaborate upon this term. However, the simplest definition that is accepted world wide is that ‘a problem is an abnormality in economic institutions or constituents that in the view of society at large has a negative influence on earning and spending’. Rise in the price of gas by 1 cent is not an economic problem, but a rise by USD 10 is stated to be one.

Classical and neo-classical economists and also their school of though, have presented a very practical explanation of the challenges facing any economy. Human wants are unlimited. However, the volume of available resources that is used to fulfill them is very limited. Even the alternatives that are present are limited. This combination of limited resources and unlimited demands results into problems. This approach is often termed as the scarcity approach. Thus, when you try to find the solution, you will have to focus on unlimited wants and limited resources.
List of Economic Challenges

Here is a small list of economic problems, which is not totally complete and academic arguments to some elements in the list are welcome.
Anti-competitive behavior, laws, and practices
Mass bankruptcy filings and insolvency
Economic bubbles and mass business failure
Child labor and improper child welfare development
Commercial crimes and intentional or planned corporate offenses

Credit cards are a necessity or a luxury

Recently, I tried to mend my shopaholic ways by trying out the ‘100 days shopping ban’ challenge. This meant that I would not shop for anything except for the basic necessities for a 100 days, starting from a certain date. One weekend, I decided that the best thing to do was to hit a mall but carry no cash in order to refrain from spending.

As I was window shopping, my eyes dilated when I saw the ‘perfect pair of shoes’ on the display. This made way for a short-term memory loss and I completely forgot about the challenge. My frugal side tried to stop me from splurging on the pair as it would only mean adding to my self-proclaimed museum of shoes. But my shopaholic side encouraged me to go weak in the knees just this one single time. But I wasn’t carrying any cash. So making a purchase was impossible. Just then, it dawned upon me that I did have the ‘power’ to own the shoes after all. I frantically searched my handbag and got hold of a shiny object which would save the day, and help me pamper myself with some retail therapy. Yes, it was my best shopping pal – my credit card.

Most of us would have at some point in time, used our credit cards to buy stuff which we didn’t really need. Using a credit card always feels good till your eyes pop out at the end of the month when the long bill with an alarming figure reaches you. While some consider credit cards to be an outright extravagance, there are others who think that they are a necessary evil. So, are credit cards a necessity or a luxury?
Credit Cards as a Necessity
If you are traveling to a distant place, carrying your credit card instead of cash will be beneficial for you. If you lose your credit card, you can block it immediately before someone else misuses it. Moreover, a credit card helps you to acquire something or make the payment for it even when you do not have cash in hand. This is important in today’s times when the threat of having your cash stolen looms large.

Expense Tracking

If you pay for your transactions in cash, you may not be maintaining a record of the same. Just imagine how difficult it would be for you to keep a track of all your expenditures at the end of the month or for tax purposes. Imagine running from pillar to post trying to get hold of all the receipts at the end of the year. This is when your credit card statement’s year-end summary will help you track all your records.

Losing a wallet is a crushing experience

Your wallet contains a plethora of information about you, from your cards and license, to your cash. Losing it means losing all that it contained, and that puts you in grave danger, because you run the risk of identity theft. You need to be aware what needs to be done in such a case to protect yourself from things like credit car fraud, identity theft, etc. Once you get over the initial shock of losing a wallet, it’s time to think clearly. Do not panic (easier said than done, I agree). Think of ways to amend the situation. Here’s how.

Dealing with the Loss of Your Wallet
Once you are sure the wallet is not on you, hunt for it. Try to remember where you last used it, where you were when you last used it, what did you use it for, etc. Rake your brains and see if you recall where you put it back once you finished using it. Then look for it again in those places.
If you are sure you have lost it, call the place you last visited with your wallet. Most public places like shopping malls have a lost-and-found center, so chances are if they have come across the wallet, it might have been deposited at some such center. You will need to identify yourself on the phone with some sort of ID.
If you own a debit card, call your bank and report the loss immediately. A debit card in the hands of strangers is an extremely risky proposition. You must report the loss within two business days, this ensures that you will not be charged anything more than $50 for unauthorized use. If you delay it further, the liability goes up to $500. Contact the bank’s fraud department and report that the debit card has been stolen/lost.
Call the credit card company without further delay to minimize the chances of credit card fraud. Cancel all credit cards. The maximum liability you will face is $50, even if the card is used before you have even reported that it’s stolen or missing. Bear in mind though, if you have an outstanding balance on your credit card, canceling it is not a very good idea, as it can hamper your credit score. In such a case, specifically inform the credit card company that the card is lost. Most card companies have rules and regulations in place to deal with such a scenario. You can instead request for a new account number.

The gold standard has been one of the most important monetary

During the current recession, different theories have been put forward to suggest the decline of the US economy. Some researchers attributed abandoning of the gold standard as one of the factors for economic instability. Since then, a lot of people want to know what this stands for. Although it is no longer in use today, the influence that it had on the world economy cannot be neglected. It is a system in which the monetary unit of a country is expressed as a fixed weight of gold. There was an agreement by several countries that they would value their currencies in such a way that it could buy the exact amount of gold that they held. For example, if a country had X units of gold reserves, then it could mint only a specific amount of currency equivalent to the value of those units. The Gold Standard Act was passed in 1900 and it established the metal as a monetary exchange all over the world. Richard Nixon ended the convertibility of currency into gold some 40 years ago, and today the measure is known as the ‘Nixon Shock’. A lot of thinkers, to this date, are critical of this decision and question his legal right to end this system. Today, most of the economies work on the floating exchange system.


Since the historic times, gold was always looked upon as a precious metal and people were well aware of its properties. It was used as a form of currency by various civilizations, but with time, some changes were made to the way it was exchanged.
Gold Specie Standard: This monetary system is one of the oldest in the world. It was based on the actual gold coins of different denominations. In the US, it was adopted in 1873, with the American Gold Eagle as its unit. Gold coins were available in various denominations namely USD 50, USD 25, USD 10, and USD 5.
Gold Exchange Standard: In this type of monetary system, the currency used was not made up of gold, but it had a value equivalent to that of the metal. It was widely used in the late 19th century, and continued till the beginning of the 20th century. In this system, coins made of silver and other metals were used in circulation, but the government guaranteed an exchange rate that was equivalent to the value of gold coins.
Gold Bullion Standard: This was the final standard that was used before the gold standard was completely abandoned. In this system, the government started selling gold bullion on demand at a fixed price. International trade caused a lot of bullion to be shipped out of countries like Britain, France, etc., and this standard was also abandoned by the 1930s.