Tuesday, December 11, 2012
There's still time to put a smile on the face of a needy child this Christmas. Toys For Tots collection baskets will be located in all branches through December 14th. Please be generous.
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Super Storm Sandy: Contractors
If you are a regular reader of GCFlash, you will remember Part 1 of this article that was published last week. Part 1 covered common procedures used by insurance companies and banks/mortgage companies for insurance claims. If you haven't read it, you can access the issue on our website.
If you are one of the people whose life was turned upside down by Super Storm Sandy, you may find yourself in the unlucky position of having to hire a contractor. It can be time consuming and confusing. How do you know if the contractor is any good? What should be included in your contract? How long will it take?
Step one should be to ask around. Ask your friends and relatives if they have someone they can recommend. But don't go by recommendation only. Ask the friend or relative if you can see the work the contractor performed. Your idea of a good job and your friend/relative's idea of a good job may be wildly different.
Always ask the contractor for references. And actually check them, too. In addition, you can check with the Office of Consumer Protection in the county where the contractor is located or the Better Business Bureau to see if the contractor has any complaints registered.
Make sure that the contractor you select is registered. New Jersey requires that Home Improvement Contractors be registered with the state and display their registration number on all vehicles, letterhead, estimates, invoices, etc. The prefix "HIC" will appear at the beginning of the registration number.
There are a few exceptions to this rule, however, including licensed plumbers, licensed electricians and contractors who are registered as new home builders. If you have a question about whether or not a contractor is registered, you can check their status online on with the Department of Law and Public Safety's Division of Consumer Affairs.
Checking the registration of your contractor is important because it is illegal for unregistered in-state or out-of-state contractors to work in New Jersey rebuilding damaged homes. If you use an unregistered contractor, you can find yourself without recourse if the work is not completed or if the contractor causes other damage to your home.
Speaking of other damage, you should also obtain proof of insurance for the contractor. A registered home improvement contractor is required to have a minimum of $500,000 of comprehensive liability insurance and worker's compensation insurance. Insurance needs to be in effect at the time of signing the contract.
Be sure to obtain a contract in writing once you have decided on a contractor. In New Jersey, the law requires that the contract contain the scope of the work, the pricing, the materials to be used, the duration of the project, any warranty being provided, and a three-day right of rescission in which you can cancel the contract without penalty. The contract becomes effective and enforceable once you have signed it.
Don't be surprised if the contract calls for a down-payment before work commences. This is not unusual, as the contractor will need to purchase supplies before they can begin. Final payment, however, should not be due until all work is completed, all inspections are passed (if required), and a final certificate of occupancy is issued (if required). In between, there may be multiple payments at specified stages of construction.
Ask the contractor if any of the work will be performed by sub-contractors. You are entitled to know whether or not sub-contractors will be used, what their license numbers are, and whether or not they have insurance. Ask for a list so you know who will be on the job site.
Finally, once work begins, be sure to monitor progress. It is up to you to be sure that the work is performed to your satisfaction and in agreement with the terms of the contract. In an ideal world, no one would ever have issues with their contractors. But if you find yourself dissatisfied with the work performed, or if the contractor does not fulfill the terms of the contract, be sure to document everything and include pictures if you can.
This is especially true if you plan to withhold payment.. In New Jersey, failure to put your reason for withholding payment in writing could cause you to be liable for interest or legal fees under the Prompt Payment Act if the contractor decides to take action. Submit your complaint to your state's Office of Consumer Protection. The Office of Consumer Protection is the primary investigator for consumer complaints.
These are just a few things to consider when hiring a contractor. Much of what I included in this article pertains to New Jersey. If you live in another state, you may want to research your local laws and regulations concerning contractors.
Square Up Small Business
Small business in America is struggling. Not much need to elaborate here. The factors are well-known.
One company is doing their best to change this by revolutionizing the way small businesses service their customers.
Accepting credit cards can be a challenge for a lot of industries, particularly in the service industries. Landscapers, housecleaners, plumbers or childcare workers aren't connected to a credit card terminal in the scope of their job. Several others fall into this same category.
But they're always connected to their cellphone.
Jack Dorsey noticed this. You might recognize his name as co-founder of another little online fad called Twitter.
Mobile payments are now mainstream. Why not accept payments via your smartphone too? Dorsey envisioned an app that would allow just that. A simple clip attached to your smartphone where a vendor could swipe a customer's credit card on the spot.
And he simplified the process as well by charging a flat percentage rate for the fee. Merchants can know their exact profit margin for each transaction.
Those of you who don't need a merchant account may not understand how groundbreaking this truly is. Traditional credit card processors charge an array of fees based on so many variables that the vendor doesn't know what he's earned until after he receives his monthly statement.
Every card you accept is charged according to its type. Rewards and business cards carry a higher fee than a debit card. The fee is lower if you can swipe a card with a good mag strip than if you input the card number from a card that can no longer be read. Apparently it takes more processing power to translate keystrokes. If you have to call in a number for approval because your machine is on the fritz, you'll pay a higher fee yet.
VISA, MasterCard, Discover and American Express all charge their own fee on top of the processor's. You've probably noticed several merchants that do not accept American Express. Their fee is the highest of all card carriers.
Enter Square, where you can not only serve your customers in ways previously unavailable to you but you also know how much it's costing you to do so. The app will record cash transactions, create sales reports and track in-depth analytics.
How popular is Square? Just last month it reached the $10 billion in annualized payment mark, and is used by more than 2 million businesses. Not bad for a concept launched two short years ago.
But wait. Square offers convenience for customers, too. Download Square Wallet, link your credit or debit cards, and forget about cash. Simply say your name at the checkout. Your name and photo will appear on the register, the cashier confirms it's really you, and the sale is complete. Your receipt is stored digitally.
And just in time for the holidays comes Square gift cards. Treat friends or family to a local merchant of your choosing. Select the amount, write a special message and send.
Receive gift cards directly to your Square Wallet and simply say your name to redeem.
The information is stored on Square's servers, not your phone. Your security won't be compromised by a lost phone.
Small businesses face tough challenges in today's workplace. It's good to see such innovation come along to make their existence just a little bit easier.
ASSET ALLOCATION: An investment portfolio that divides assets among major categories.
For the purpose of asset allocation, there are three major asset classes: stocks, bonds and cash. Stocks, which represent a share of ownership in a business, are essential to long-term investment planning because historically, they increase in value.
Traditionally, bonds have been seen as fixed-income producing investments because the interest they pay is typically fixed. Bonds also play an important role in balancing movement in the stock market and in providing a cushion against stock market volatility.
Cash and cash equivalents, such as U.S. Treasury bills and bank certificates of deposit, offer safety and liquidity for money that might be needed within a relatively short time frame.
Since each of these three types of assets responds differently to shifts in the economy and markets, spreading money among stocks, bonds and cash equivalents can help investors ride out market uncertainty.
The terms "asset allocation" and "diversification" are commonly confused. While asset allocation refers to the different asset classes (stocks, bonds and cash), diversification refers to the process of further dividing your investment dollars within each of the three asset classes. Allocating a portion of your investments in each asset class to appropriate subcategories can further reduce risk and enhance return.
Diversification is not just a good strategy; it's a key to successful investing. We all have heard about the bad experiences of putting all our eggs in one basket, so by mixing things up, i.e. diversifying, you can go a long way toward protecting yourself from becoming dependent on any one sector of the market.
How to allocate your assets depends on a number of factors including your financial goals, age, tolerance for risk, current and long-term income needs and even your tax situation. As you move through different stages in your life, your best asset allocation scenario is likely to change. Younger individuals with a longer time horizon should invest a higher proportion in stocks, the best investment for growth.
However, as you get closer to the time when you will need the money you have invested, you should adopt a more conservative strategy and gradually begin reducing the amount invested in stocks and increasing the portion of your investment allocated to bonds and cash. This reallocation may become particularly important as you approach retirement.
Over time, as different asset classes increase or decrease in value with shifting market conditions, the mix of assets in your portfolio may become inconsistent with your planned asset allocation strategy. When that happens, you need to reallocate or rebalance your assets to bring your portfolio back to the proper allocation.
If one asset class has surpassed your planned percentage, you should reinvest the proceeds in a class of assets that has under-performed. For example, if stock prices rise and your portfolio becomes weighted toward stocks, you can return your portfolio to the right mix by selling some stock and increasing your investment in bonds. This method has the added benefit of forcing you to employ a "sell high, buy low" strategy as you take profits out of assets whose prices have gone up and reinvest that money in assets that are cheap.
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