Kathleen Celmins, Author at The Free Financial Advisor

Conference Calling: The Nuts and Bolts of What Your Investors Are Looking for

December 7, 2015 by Kathleen Celmins Leave a Comment

conference-calls

The diversity of investment techniques and styles used by investors in Singapore has increased to where the long-term buy-and-hold index investor and the short-term day trader employs complex technical indexes. The most common trait among all investors is that they require more information to make better decisions that eventually benefit your company.

While research papers, latest earnings and news reports are great sources of company information, one overlooked source that requires your special attention is the company conference call. Below is information on what conference calling is, the information it contains, critical components and where you can find conference calling providers on the web.

The Under Belly

During your company’s conference call, analysts and investors have a chance to call over the phone and hear your management team comment on financial results of the recently completed quarter. Many public firms choose to hold four calls annually, usually five weeks after completion of the quarter. These conference calls are known as earnings calls, earnings conference calls or analyst calls. In most cases, they are also made available online as audio streams for a few days after the actual call.

Conventionally, the calls were available only through Wall Street analysts and institutional investors. However, the Internet now offers more and more companies the flexibility of allowing their investors, from Singapore, to listen in on a call.

Conference calls follow the same structure. The call starts with a conference operator introducing your management team, followed by the legal counsel who states the usual legal disclaimers. Emphasis is placed on the fact that the earnings mentioned are forward-looking projections that are expectations and not actual facts.

After the legal disclaimer, your management team welcomes everyone to comment on the firm’s future prospects and performance including the Chief Operating Officer (COO) or Chief Executive Officer (CEO). The company’s developments and performance are discussed during this portion of the call, and it is prudent that everyone listens to the monologue for an insight into the management’s mindset.

The next important item is raw financial data like reported and projected revenues and earnings. The management team will typically summarize your company’s bottom-line performance and augment it with commentary. The information provided in this session is available in press releases.

What Information Will Investors Listen For?

Though the conference call is live, the CEO and CFO discussions at the beginning provide a recap of the company press release. Remember, financial statements are only a snapshot of past company performance. The projections and analysis in the conference call tell the investors how the company is currently fairing and the projections of the management on future performance. Any major performance deviations from previous estimates are details that may be of concern to investors, it is important that the management team offers a commentary to address these concerns. Some investors and analysts believe that focusing on the tone and manner of message delivery will help provide an insight into a company and its future.

After management presentation on company recent performance, the audience is free to ask questions. Many investors and analysts find this to be the most critical part of conference calling since they can pose questions on company performance areas they did not understand for elaboration. This is also the chance for your investors in Singapore and other parts of the world to put your management team in the hot seat.

Individual investors may probably not get to ask personal questions – sometimes there are thousands of people listen in on the call and it may be impossible for your team to answer every one. However, questions asked by analysts are likely to bring forth answers your investors require.

Your conference call should be of high quality to allow investors listen to all analysts’ questions for insight into professional money managers concerns about your company. Investors will listen to the questions carefully and study how the management responds. Analyst questions are not rehearsed or submitted before the call, so this is the chance for investors to see how confidently and candidly you and your management team can back up the company performance under pressure.

More than anything else, conference calls will be used by investors to get a gut fell of your company management. Although investors can read projected earnings in a Singapore financial paper, the numbers will not convey the tone of your voice as the CEO. Your investors will hone in on your management team’s and analysts’ tones. Notice any change in the mood and wonder what caused it. The more calls you have, the more your investors will develop a great sense of distinguishing between a strong management and a weak one.

The Bottom Line

Next time you are on a Blue Jeans conference call with your investors, it is critical that you distinguish between the typical call speak and useful information. Although you provide your investors with a ton of information in your conference calls that is available anywhere, ensure you provide tidbits – especially in the question session – that will help your listeners learn more about their investment in you.

Why You Should Consider Majoring in Electrical Engineering

October 19, 2015 by Kathleen Celmins 1 Comment

True story: I went to film school. I was so convinced that I was destined to be the next Steven Spielberg (he’s even from my hometown!) that I left all practical measures in the rearview mirror at age 18 and went to school at one of the most prestigious film schools in the world at the University of Southern California.

How’d that work out for me, you ask? Aside from the fact that I got to watch a lot of really cool movies and call it “class,” my choice to study film instead of something more technical, like, say, electrical engineering, set me back many years and hundreds of thousands of dollars.

Today I work for a very large technology company. The only way I was able land this job was through a series of complicated and expensive educational choices: after the film degree came the journalism degree. And then when I wanted to switch careers, I went to business school. Look, I like school, but by the time I actually started on my real career, I was 30 years old and two degrees of tuition in.

I was a “creative” hire, meaning somebody brought on board to be an outside-of-the-box thinker at a very linear company. To my credit, I’ve done well in this organization. But frankly, because of my lack of technical know-how, my career opportunities at my company are constrained.

Now, imagine for a moment, if I had simply chosen the engineering route. Considering my eventual landing spot, it’s not impossible I would have gotten a 5-8 year jump on my career at my current company. That’s a much longer runway to build experience, relationships, leadership skills, and much more. Instead of spending my mid-to-late 20’s earning an journalism degree and an MBA, I could have been building my salary, my nest egg, my life.

I look at that version of me and bemoan my lack of foresight. With real engineering skills and knowledge, I would be among the elite tech workers, able to write my ticket at virtually any tech firm. At the very least, I’d be a much more senior contributor at my company, with a higher salary to show for it, and upward prospects yet to come.

Of course, I can’t go back and change my mind. There’s not a lot of use in kicking myself for wanting to be a superstar movie director (and I’m not losing sleep over it). But every once in a while, I do think to myself “what if I had just committed to engineering earlier? Where would my career be today?”

6 Ways to Save Money at Museums

October 12, 2015 by Kathleen Celmins Leave a Comment

Museums are my favorite way to spend a rainy afternoon, especially in a new city I’m visiting. But if you’re not careful, they can take a big chunk out of your travel budget.

Thank goodness you’re careful. Actually, thank goodness you’re here.

Follow my advice and use these six different ways to save money at museums:

1. Consider a CityPass

If you’re going to be in town for awhile, and you want to see and do as much as possible, look into CityPASS. Chances are, if you want to do some touristy things, you can save money purchasing a booklet of tickets to top attractions.

2. Go Early or Late

Check to see if the museum has discounted entry. Sometimes, if you get to the museum in the last hour of the day, entry is free. Sometimes, you can go during the first hour to save money. Chart your museums in advance to see what makes the most sense for you.

3. Become a Member

Becoming an annual member probably only makes sense when you visit a city frequently, not one-off visits. But if the membership fee is typically about 3X the cost of a one-time ticket, consider whether you’ll be back to that city in the next 12 months.

4. Look for Discounts Online

Sites like Groupon, Livingsocial, and Smart Save are excellent places to find discounted entry fees. For example, if you wanted to go to the USS Intrepid museum, with a bit of hunting online, you can easily save 20%.

5. Pay Attention to Emails from Your Credit Card

This is not a reason to sign up for a new credit card, but if you have a Bank of America or Merrill Lynch credit card, look in your email. Several times a year, they offer “museums on US” days and partner with museums all over the country.

6. Remember “Suggested Donation” is Just That… a Suggestion

There’s a difference between entry fees and suggested donations. Pay close attention to the wording. If it says “suggested donation $25,” that means you can pay less. But speak up! The person at the window is supposed to make that suggestion look like more of a rule.

And, really, if none of these work… go to the museum anyway. I spent one magical afternoon at the Detroit Institute of Art several years ago, and tried fruitlessly to find a discount. It was still one of the best afternoons I can remember.

Reasons Even Small Companies Need Video Conferencing

September 30, 2015 by Kathleen Celmins Leave a Comment

video-conferencing

Just because you’re a small business doesn’t mean that you can’t have a lot of the same advantages of big businesses. Even SMBs today can do business internationally, and that means using a lot of the same tools as a multinational. Learn why even small companies need video conferencing, and why you shouldn’t believe the myths.

Sticker Shock

The biggest shocker about videoconferencing is how much it doesn’t cost. Back in the earliest days of videoconferencing, the equipment was expensive, just the same way it was expensive in the mid-90s to buy a new computer. With most mobile phones and tablets having a better capacity than those early computers, why do you think the same doesn’t apply to videoconferencing? The technology has come a very long way from requiring its own server and a dedicated member of the IT department to operate it.

In fact, one of the advantages of Bluejeans videoconferencing is that you can even videoconference from your mobile phone or your tablet. No extra equipment is required, though if you are using videoconferencing frequently you may eventually wish to invest in better lighting, cameras, and sound equipment.

Another Sticker Shock

Do you have any idea how much meetings cost? Verizon white paper hard and soft costs of meetings. For instance, a five-person meeting lasting two hours with four people traveling to attend assigned an approximate cost of 3300 pounds. This includes over 53 hours for preparation and travel. A videoconference means that there are no travel expenses, and prep time is cut to roughly 16 ½ hours. The total cost to have a five-person videoconference comes out to just 1100 pounds.

Redefining Flexibility

Another advantage to using videoconferencing is the ability to have a truly flexible workforce. Whether at home, at the office, or even on a job site the ability to reach someone for a face-to-face conversation is priceless. A recent Gigaom study points out that 87 percent of off-site feel more connected when using videoconferencing, and that cloud-based apps great way engagement and productivity. In addition, cloud-based tools are often easier to use faces, and less expensive than traditional videoconferencing solutions. Off-site workers can join from their desktops, laptops, tablets, or even their smart phones. From the main office to a home office, to a café or airport waiting lounge, the conference can be wherever you are.

Re-engaging the Workforce

According to a Gallup poll, managers handle at least 70 percent of variances in employee engagement. A staggeringly low 13 percent of workers worldwide are engaged and involved in their workplaces and jobs. In the past 12 years, these numbers have made the most boring roller coaster in the world. Part of the problem can be the lack of consistency and absence of communication in which most employees operate. Great managers are consistent and communicate in a highly effective manner. The variation in all of these groups depends almost exclusively on how the workers are managed by their immediate superior and upper management.

By seeking out and giving employees collaborative tools, you’re giving them the chance to engage with each other as well as their immediate superior by getting everyone to work together on their assigned projects. It’s possible that you will see your staff shine, and may also discover if perhaps someone else light make a more effective and less of obstructionist manager. Great managers will create the correct environment for employees to feel trusted and respected, and rely less on office politics and manipulation to keep control of their workgroups.

Even When You’re Little, Think Big

One big mistake that any small business owner can make is not to plan for growth. While you don’t want to get too big of a head, you need to look ahead and reasonably decide how much growth will be ahead of you in the next five years. If you don’t plan to grow, will be like a plant in a too-small pot, so tangled up in your own roots that you can easily choke to death. By making use of inexpensive collaborative tools that are available without much startup cost, you can have much more flexibility than if you invested in heavy and expensive infrastructure that you will not need.

The beauty of cloud-based applications like videoconferencing is that they are far more scalable than the old model of off-the-shelf software and expensive hardware. By learning how to budget wisely you can get your small business on a healthy footing right out of the gate. You can have a custom fit, instead of a one size fits all that fits nobody, and does not fulfill your immediate business needs. These collaborative tools may well be the best thing that your workforce and balance sheet has ever seen.

Become a Financial Expert Step-by-Step

July 15, 2015 by Kathleen Celmins Leave a Comment

answers word on register or hanging folder showing solution concept

Americans are overconfident about their finances, feeling more secure than their actions warrant, according to the latest Financial Literacy Survey conducted by Harris Poll for the National Foundation for Credit Counseling and NerdWallet. While more than nine out of 10 people feel “very” or “somewhat” confident about their most recent financial decision and two out of three give themselves an A or B in financial knowledge, six out of 10 are spending money each month without a budget, an equal amount aren’t able to save or buy a car because of student loans, and more than four in 10 aren’t saving for retirement. Ouch.

Becoming a genuine financial expert means taking a step back and arming yourself with the knowledge to build a solid foundation for investment confidence.

Savings Basics

Knowing how much to save is the most fundamental question in personal finance. While many financial advisers recommend following a rule of thumb such as saving 10 to 20 percent of your budget per month, Forbes recommends developing a customized savings plan based on how much you will need to invest to fund your annual living expenses.

The first step in the Forbes strategy is to estimate how much you’ll need to save up to fund the lifestyle you want given your projected annual expenses, whether your goal is to retire at a traditional age or to achieve financial freedom early. Once you’ve set this goal, calculate how long it would take you to reach it assuming your current savings rate and annual rate of return, and then make any necessary adjustments you need to achieve your goal within your desired time frame. Forbes suggests setting a goal based on the assumption that you’ll be spending 4 percent of your savings per year in retirement, and they provide spreadsheet and calculator tools to help you do the math.

Building Credit

While building your nest egg, it’s also important to build your credit so you can achieve your major purchasing goals. FICO’s consumer myFICO site explains the variables that go into credit scoring, which include your history of repaying debs, amount owed in relation to your income, mix of credit cards and loans, and frequency of submitting credit applications. For a more advanced understanding of credit, consider specialized educational resources. For example, Moody’s Analytics offers a Corporate Credit Ratings Analysis seminar.

Investment Foundations

For most people working in a traditional job, a 401(k) plan should be the foundation of your investment strategy. Daily Finance provides a good overview of 401(k) basics, explaining how you can roll over your money into a new 401(k) or an IRA if you leave your job. For those seeking 401(k) alternatives, NetCredit outlines other fundamental options such as traditional, Roth, and SEP IRAs, annuities, and index funds.

Retirement Planning

Your 401(k) plan or equivalent normally forms one component of a complete investment plan designed to achieve your major financial goals, chief of which should be saving for retirement. A complete retirement income plan should include a diversified mix of withdrawals from an investment portfolio, fixed-income annuities and variable annuities. A financial adviser can help you select a specific investment mix appropriate to your goals, income and risk preference.

If you’re looking for more assistance and want a financial advisor check out these articles to help pick the right one for you

What is the Role of a Financial Advisor?
Afraid To Meet With a Financial Advisor? Here’s How the First Meeting Goes
Hiring a Financial Advisor: Clues from the Receptionist

Global Banks Fined Over $5 Billion… for Currency Rigging!

May 22, 2015 by Kathleen Celmins Leave a Comment

Global Banks Fined Over $5 Billion… for Currency Rigging!

Look, I’ll be the first to admit: I’m no currency expert. In fact, the only time I ever even think about foreign exchanges are when I’m traveling abroad.

But even I noticed that there was a huge currency rigging scandal this week.

Apparently, five huge global banks got caught conspiring to manipulate the price of dollars and Euros to increase profits.

That’s a super shady thing to do, and now they have to pay… big time.

When Banks Pay $5 Billion in Fees, Everyone Loses

One thing I don’t quite understand about this story is, “who loses here?”

I mean, yes, fixing markets for your own benefit is a bad thing to do. We’re looking for the invisible hand to move markets, not the visible strong arm of the biggest banks in the world. It’s just that this is different than Abramoff, who lied to investors and stole money.

Does anyone lose here?

Does anyone win?

I wonder if the $5B in fees is less than the ridiculous profits they made by fixing currency in their favor. And if it is, doesn’t that just teach the banks to keep doing what they’re doing? Maybe they’ll want to use different internet chat rooms so they’re not so easily caught, but even if they are, they still come out ahead, after the fees have been paid.

Does currency rigging affect us all in ways we don’t feel?

That’s my conclusion.

There is money to be made in currency exchanging, even if you’re not a huge bank that has the power to collude and adjust the market in your favor.

In fact, there are plenty of people who make their living on the Foreign Exchange Market (Forex for short).

I haven’t delved into it myself, but if you’re interested, do your homework. Read that Wikipedia page, learn the ins and outs, then use a company like CMC Markets, one of the first companies to provide online forex training, to start dabbling in foreign currencies.

Then come back and tell us about your experience.

5 Ways to Prevent Identity Theft from Happening to You

May 15, 2015 by Kathleen Celmins Leave a Comment

Padlock and stack of credit cards on top of laptop

It’s a sad but true reality: you are still not so safe when it comes to identity theft. In fact, identity theft tops the list of consumer complaints that are reported to the FTC every year.

But what can you do to protect yourself?

Well, actually, you can do a lot of things. They have an awesome list of what to do if it happens to you (don’t panic), but follow this list below to protect yourself from having your identity stolen in the first place:

1. Use a Password Manager

Do not use the same password for everything! Stop doing that! Instead, use a password manager (we like Dashlane), which lets you create a master password, then once you use that, the system will generate very strong passwords for every new account you create. It’s the same (to you) as using the same password everywhere, but it’s far more secure. Hey, at this point, I don’t even know the password to my Twitter account. And that’s the way I like it.

2. Watch Your Mailbox

This is tough, because you’re going to watch your mailbox to see if anything is missing. Are any of your bills going missing? Make sure you sign up for paperless billing for as many places as possible, but keep an eye out on your mailbox, especially if it’s close to the road. Identity thieves can take credit card preapprovals and sign up as you.

3. Closely Monitor Your Bank Activity

Every day, log in to your bank account, and make sure you (or the person who shares your bank account) can identify every charge. The credit card companies are likely to pick up incongruencies like ordering pizza from a city you’ve never been to, but they’re less likely to notice charges made in your own town. The best identity thieves will add small payments here and there, and see if you notice, before going on a shopping spree.

4. Consider A More Secure Way to Pay Online

Instead of your credit card, use something like paysafecard when shopping online. Paysafecard is a reloadable gift card that comes in various denominations, and when you use it to pay online, you don’t have to enter any personal details. It’s like paying cash online, except without the purse snatchers.

5. Check Your Credit Every Year

Even when you slip in your diligence, you should set a calendar reminder to check your credit once a year. Or, better yet, sign up for a free CreditSesame account, which will check your credit, and monitor it monthly, for free.

Getting your identity stolen is a stressful and painful situation that is fun for absolutely nobody (except, of course, the person who stole your identity to eat pizza in Las Vegas at the Bellagio). An ounce of prevention is worth a pound of cure, right?

What my $25,000/year College Tuition Didn’t Teach Me

April 24, 2015 by Kathleen Celmins 1 Comment

It’s been about eight years since I graduated college. I was 22 at the time and excited to start my career. I started off working as a mortgage banker at a local Chicago bank getting paid a small monthly draw and commission.

I know what most of you are thinking. Why would you go straight for commission based job right out of college? The short answer is that real estate has always been my passion. Luckily in college, I was able to save up a little money doing affiliate marketing with online gaming sites. I had very little debt and was living comfortably.

It was about a year down the road after I graduated that I things started to spiral out of control, and before I knew it, I saw my finances spiraling a bit out of control. How did this happen? I knew everything about net present value, gross domestic product, and calculating an internal rate of return. However, one thing I had no clue about was personal finance.

Building and Establishing Credit

Colleges simply don’t put enough emphasis on how important your credit score is. It’s a three digit number that determines how much credit you’re given and will have a huge impact on your future finances. Most students typically have what’s called a “thin file” report. A thin file report means that there aren’t enough trade lines on to provide a FICO score.

The underlying problem with this is that it’s hard to establish a credit score when you can’t obtain it. I established credit by becoming an authorized user on a family member’s account. After a short while, I was able to get a small $500 limit account. I slowly began to build my credit score and my creditors increased my limit over time.

I never knew how important credit was when I was 22 years. It wasn’t until I got into the mortgage industry where I saw the enormous difference in a homeowner’s mortgage rate that a few points could make.

Using Credit Responsibly

We’re all guilty of this. We overextend our credit, and we dig ourselves a hole too deep to climb out of. Having a large credit limit almost gives you a sense of “free money” to use. Your monthly payments are small enough to the point where you think you can afford to keep a large balance. In 2007, credit card companies didn’t need to require the fine prints of “By only paying the minimum payment, it will take you 27 years to pay off your debt.” It wasn’t in those exact words, but you get my drift.

The Credit Card Act of 2009 now requires creditors to show on the statement how long it would take to pay off a balance if the customer only makes the minimum payment, as well as the total interest cost to pay off the entire balance in 36 months. Unfortunately, that wasn’t the case in 2007.

And Then it Went Downhill

A few years later after I got my first credit card, my credit limit went from $500 to $20,000. I had credit card offers coming in my mail every single day. They clearly wanted my business and were offering a nice incentive to sign up (usually a ton of airline miles).

It wasn’t long before I overextended my credit. I found it more difficult to payday my debts and was never able to see real progress.

What exactly do you do in this situation? I couldn’t recall any classroom lectures on how to convince credit card companies to lower your interest rate. It was up to me to do my research and figure it out myself. At the end of the day, I was able to set up a payment arrangement plan with my creditors (similar to that of what credit counseling companies provide).

Personal finance is something that needs to be mandated in schools. No matter how book smart you are, your lack of knowledge in personal finance can make or break your future.

This is a guest post from Kevin Yu, a Senior Associate at Avant and managing editor at ReadyForZero. He also blogs for the Huffington Post and is part of the start-up incubator, Y-Combinator.