Tips for fine wine investment

By Bill Weston

Approaching wine as an investment is a practice which can pay off in many ways. There are few investments that can be enjoyed with a fine meal when your money is doing well. A wine investment is something that has many dimensions to consider as you become more heavily involved with the industry and is not something to be taken lightly.

It’s a practice that requires knowledge, patience, and a discerning palette. As a consumer, it’s important to understand what actually makes a wine valuable as it’s not simply the age of the bottle or the region from which it was imported and depends upon the intricacies of the actual wine market. 

Image attribution: SmartPhotoStock; free license

To judge the quality of a wine specifically as a wine investment you must begin by looking at several key factors. The vineyard from which the wine came from and the skill of the winemaker are very important factors as well as the genetics of the vine that produces the grapes.

However, as the vine ages, the number grapes it will produce lessens and the availability of the raw material affects the value of the wine itself. The skill and reputation of the winemaker responsible for the vineyard can also play a key role in the fluctuation of the wine price.

A fine wine investment is not a totally apolitical atmosphere and wine investment can seriously impact the exports of any region. For this reason, there are constant attempts made to justify the superiority of any particular region's products over another.

There is the taste of the wine itself versus the weight of the name actually placed on the bottle and sorting through the factors leaves one bottom line: price. This is the universal determination of quality as the scarcity of a wine does not impact its flavour, but it does impact its price tag.

It’s also important to recognise that not all wines improve with age and it does have an upper age limit when it comes to taste. Judging the position of a wine on its arch of maturity can only be done through tastings and the wine press usually takes it upon themselves to conduct these tastings and distribute the information.

The close monitoring of a specific release will be the source which collectors depend on to determine the price that they are willing to pay. Once in the market, receiving a return on your fine wine investment is typically done through auction and these auctions play a large role in controlling the fluctuation in price of collector grade wines.

About the author: Bill Weston writes on a number of subjects including fine wine investments. You can find out more about investing in fine wine at http://www.boltonsinvestments.com/

Financial news: 02/26/2013

• MarketWatch: The Dollar Index recently hit a six month high
• Bloomberg: Fed budget cuts to cost .4% in GDP growth
• CNN: Economy benefits from indebted individuals per data 
• Fox: U.S. checking accounts reach 54 yr high of $902 billion
• MN: Recession a real risk of fed spending cuts per governors 
• BI: Increased equity market valuation defies bearish analysis
• ZH: Monetary policy is misguiding investor economic reasoning
• BBC: After 2.5 yr low against dollar, U.K. pound falls further
• Reuters: Italian markets feel sting of national election results
• AP: German Central Bank advocates French austerity
• CNBC: Japan's economy likely to feature monetary easing

Are accounts receivable an asset to a business?

US-PDGov

By Adella Fitzroy

Ask any accountant where accounts receivable are held in the financial realm and they will tell you that they are assets, something that benefits a company's financial health. Unfortunately, what some people would consider a benefit might end up being so. The trouble with accounts receivable is that they are a promise to pay for goods or services that have been sold to a customer. So what happens to accounts receivable that are not paid by the customer?

In many cases, accounts receivable can be beneficial to the company who carries them. They are, after all, a promise to pay for goods and services received. In some cases, however, that's as far as they go. Financial failure, malicious intent, and other factors result in debtors to a company failing to make good on their accounts. On the positive side, a company that carries a reasonable amount in accounts receivable can value itself higher using these accounts as an asset on their books.

The usual course of action, after collection efforts fail, is to write a bad account receivable off as a bad debt. Other times, another company might buy a company's accounts receivable as a benefit to them, in which case the selling company is relieved of the burden of the money that is owed.

Some creditor companies turn accounts receivable over to a collection agency or similar company in order to collect payment. Sometimes this is successful, but short of success this course of action often results in more debts that is incurred by the company holding the accounts receivable. Still other firms choose to take their debtors to court, which again can result in a settlement of the amount owed, but can also result in more costs, or even the bankruptcy filing of the debtor, in which case the money is often never recovered.

Another problem that presents itself when a debtor fails to make good on their account is that the company that is carrying the account receivable continues to spend time and money on maintaining the account despite not receiving the benefit of the money that is owed.

Perhaps one of the biggest problems with the failure to collect on an account receiving is that even though work was performed or goods were delivered, and money was not received to compensate for the time and materials rendered, that time and those materials used in the engagement of the goods sold were still paid for by the creditor company, which again fails to receive benefit and goes into arrears for the product and/or labor involved.

The solution used by many companies is to not offer credit. For this reason certain sales might not be made, and either client companies will either wait until they can purchase with cash or they might even go to a company that will accept their credit. The chance of this happening is up to the potential creditor. Only time and a history of results will determine the best policy for the credit company in the long run.

About the author: Adella Fitzroy is a small-business owner who received funding and financial advice from EBF Group Ltd. She found that the advice she accumulated and received from the company was important in helping her review the progress and profit of her company.

Financial news: 02/25/2013

• MN: Billionaires including Warren Buffett are selling stocks
• Bloomberg: Living cost $10,000 extra for a coffin buyer
• CNBC: Dollar value to rise on spending cuts and new tax
• Option Queen: Low interest rates do not limit effects of payroll tax
• Fox: Congress to hear FRB Chairman testimony this week
• BI: Yahoo  tradition of telecommuting frowned upon by new CEO
• ZH: High gas prices are putting downward pressure on stocks
• BBC: U.K. credit rating downgraded to Aa1 by Moody's
• Reuters: Tens of thousands of Spaniards protest austerity again
• AP: Italian election could backtrack economic progress
• CNN: Eurozone GDP to contract .3% in '13 after -.6% in '12

Pros and cons of timeshare investing

US-PDGov

By Andrew Donaldson

It is difficult for the current generation to appreciate that the concept of regular vacations to nice resort areas is a relatively new experience for the average family. Although the wealthy and upper class have always found a way to enjoy their time off, it wasn’t until the 1950s that the opportunity to take regular vacations became commonplace for the working class. As more people began to travel on vacation in the post-war years, hotel chains began to spring up along the highways. An increasing number of resorts followed as popular destinations.

With the number of vacationers growing into the millions, developers offered them the opportunity to gain control over the costs of their trips and stays at nice locations. This concept is based on the idea of fractional ownership, or what is known as timeshare.

In its simplest form, timeshare is an arrangement where several people own and share the use of a specific property. The property is divided into time intervals, usually periods of one or two weeks, and the members of the ownership group use their allotted interval for vacation. When the term timeshare first became widely used, it almost always referred to a home or residence in a vacation area. Today, the concept is adapted to a range of properties, including camping areas, boats, and even airplanes. Any property that has a high cost can be made affordable with fractional ownership programs.

Since most timeshares are a part of a larger development, there is almost always a third-party management company that controls the available intervals of time. The timeshare market has experienced phenomenal growth, and there are now national companies that manage timeshare intervals. With companies like Resorts International, timeshare owners can even swap their times between other properties for a small fee.

Good news and bad news

The timeshare concept is a very practical way for families to make quality vacations more affordable. Because prices for stays in desirable areas always increase, the ability to control that cost through ownership is often a chance to save money over the long term. In fact, many people have made attractive returns on their investment. They achieve this in two ways. First, they rent their weeks out to someone else at rates that generate a profit. Secondly, some timeshare interests appreciate enough that they can be sold at attractive levels above the original cost.

The downside of timeshare results from the same factors that affect any idea that gains rapid popularity. Many developers rushed into the market and created properties that were poorly planned and constructed. They often used high-pressure tactics to sell these properties to uneducated consumers. The result has been a black mark on the industry for many consumers who have lost money on properties worth far less than the purchase price.

Another factor that many people fail to consider or plan for is the ongoing management and maintenance fees that come with every timeshare interest. These costs are usually assessed monthly to all owners on a pro rata basis. Without good management, these fees are burdensome and have a negative effect on the economics of a timeshare.

Many people are attracted to timeshares in other countries. These, too, can be attractive investments. However, they come with their own set of risks and legal issues. It is important to thoroughly understand all aspects of owning a foreign timeshare interest.

With careful and educated shopping, a timeshare can make a great investment for profit and fun. With so many options, it is possible to find many good properties from which to choose.

About the author: This article was written by Andrew Donaldson, a passionate financial guru who loves writing articles across the web to share his knowledge. He writes this on behalf of Wordwide Accom, your number one choice for finding a holiday home, especially in Italy where WWA inspects every Rome apartment on their site. So make sure to check them out when going to Rome!

Project management tips from the world's greatest project managers

There are many challenges that come with project management from managing a budget, adapting to changes, keeping on schedule, to leading a team. For this reason, there are large skill gaps between the average project manager and a great one. The best project managers do things far differently and have specialized knowledge that enables them to be superhumanly effective. Here are some collected tips from the world’s greatest project managers.

Steve Jobs

Steve Jobs was known to be one of the greatest project managers in the tech world. Rather than try to separate parts of a project into individual departments, he created an environment that was collaborative. Everyone could keep up with every aspect of the project however detached the departments were in the roles they played.

Jobs’ process integrated all the departments, resulting in many benefits. One of these benefits was that everybody that worked for Apple understood how the company worked on a deep level. That meant that the customer service knew how to deal with technical problems, the marketing department understood how the software worked, etc. This is part of the reason why Apple has built such a large following.

Bill Gates

Bill Gates shared many of his project management philosophies in a Ted Talk which can be seen in this URL: http://www.ted.com/talks/lang/en/bill_gates.html. One of the standout ideas is defining metrics and milestones to track the progress of a project. The concept is simple and is something that many great project managers use.

Here are some of the other gems you can take away from this talk:

- He starts with the results and identifies all the possible projects that can lead to the results. He compares all of them and goes with the one that can create the most impact towards the goal.

- He looks at what’s feasible in terms of scale and budget. After defining the limitations, he creates a plan for execution.

- He knows that projects change all the time. That’s why he remains flexible in the projects and plans for changes.

Richard Branson

Richard Branson’s Virgin brand is composed of 150 different companies and over 20,000 employees. His favorite advice for managing his businesses and projects has always been to hire smart. Richard Branson has admitted he start his projects by hiring people smarter than him. He carefully evaluates the people he hires and delegates everything to talented individuals, only keeping track when needed.

The lesson here is that you can’t do it all alone. Many project managers have a hard time passing off big responsibilities to others. The key to pulling it off and being able to trust somebody else is to know your team. Find the talented individual that can carry out important tasks and delegate so that you can focus on the bigger picture.

The one common thing that the world’s greatest project managers have in common is mindset. They have strong beliefs in how things should be organized and how they should operate. This all comes from experience and experimentation. Every project manager should manage a project according to his or her philosophy, but keep an open mind for learning, growing, adapting, and experimenting.

About the author: Sally writes for Milestone UK who specialise in Primavera courses and Oracle training in the UK, to learn more about their enterprise solutions.

5 of history's most infamous cases of insider trading

By Peter Wendt

Ever since there was profit to be made investing in businesses, insider trading has lurked beneath the surface, favoring those with the right connections. Regulations against these practices placed greater scrutiny on those exploiting their positions, but that does not stop unscrupulous individuals from trying to slip under the radar. The following are five of the most famous cases of insider trading in history.

 

William Duer

William Duer orchestrated the first high-profile case of insider tading in United States history. An influential figure during the Revolutionary War era, he became the secretary to the Board of the Treasury under Alexander Hamilton. Duer had no moral scruples when it came to using his power to gain insight into the market, and he kept his contacts even after he went into private speculation. He invested in several banks for a number of clients before a brief panic in the industry ruined both his finances and his credibility. The actions of Duer eventually led to the establishment of Wall Street.

 

Albert H. Wiggin

The great stock market crash of 1929 exposed the seedy underbelly of a world bloated by falsehoods and expectations. Perhaps no single man was so vilified by the public as Albert H. Wiggin, the head of Chase National Bank. Investigations revealed that Wiggin had short sold over 40,000 shares of his own bank, meaning he made about $4 million off intentionally poor business practices, a strategy that was legal at the time.

 

R. Foster Winans

Unlike the other members of this list, R. Foster Winans was not a powerful executive or government figure. Instead, he wrote a column for The Wall Street Journal titled "Heard on the Street." Winans analyzed a different stock every week, and his opinions were so respected that he often directly influenced that stock's performance. Realizing this, he started accepting bribes to reveal his findings early. A court later ruled that his actions were illegal, despite some questions.

 

Raj Rajaratnam

Raj Rajaratnam was the billionaire founder of the Galleon Group hedge fund firm. He began receiving insider information from former schoolmates in a number of large corporations, standing to make an estimated $60 million from the illegal sharing. Rajatnam was arrested in 2009 and sentenced to 11 years of jail in 2011, the longest sentence ever given for insider trading, and also fined $150 million.

 

Martha Stewart

Few criminal cases reached such notoriety as that of famed homemaking expert Martha Stewart. Stewart built an empire on wholesome cooking, cleaning and decorating, but she also amassed a considerable fortune through savvy investing. In 2001, however, she raised eyebrows by selling 4,000 shares of a company one day before its shares dropped as the result of an FDA decision. It was later revealed that her broker had ties to the company's CEO and advised her to make the sale. Stewart spent several months in jail for her crimes.

Peter Wendt is a writer & researcher living in Austin, Texas. If you've been harmed by insider trading, or if you've been accused of insider trading yourself, Wendt recommends visiting Austin business attorney, John McDuff. 

Financial news: 02/22/2013

• Bloomberg: CFPB warns banks over discrimination via rates
• FRB: NY Fed is authorized to trade international currencies
• NYT: Identity theft for unauthorized new accounts increased
• CNBC: As many as 75% of consumers to spend less per NRF
• MW: Pope's pension is $10 less than max. U.S. Social Security
• AP: Investors sold uncertain monetary policy after market high
• CNN: U.I. to shrink 9.4% & meat costs to rise with sequester
• Fox: Coca-Cola BoD has approved a 10% dividend increase
• Reuters: U.S. & E.U. economies still weak per economic data
• BI: Financial Advisers lose $51 million lawsuit to crime writer
• BBC: The ECB owns $188.64 bln in Italian & Spanish bonds

California's state revenue is heavily reliant on tax liens

By Tax Relief Systems

The governor of California is making a bet that the rich will grow and become richer. As all financial markets have been doing well, this particular state helps finance its treasury via profits gained from individual income taxes.

Those income taxes where liens are used are forecasted to yield approximately 62.7% of the total fund revenue within Governor Brown's budget plan for the succeeding financial year of the state. This was slightly higher than the 62.4% fund plan shown in the previous year. California's Franchise Tax Board claims its annual tax gap from delinquent income tax is $10 billion dollars.

In 2010, almost 3 of every 4 dollars of California's revenue came from individual income taxes. These taxes were from the leading 10% of income earners who have IRS liens on properties. This statement is based on information from the state's tax agency. The leading 1% of the income earners gave 40.9% of the revenue of the state from the personal wage taxes in the year 2010. It was lower than the 48.1% prior the recession of the year 2007 to 2009.

California's high reliance on personal salary taxes is a more volatile funding source than sales. Property taxes also echo the disaster throughout the financial crisis. Brown who was nominated in 2010 proposed the lean budget of the state in the earlier part of this month. The budget plan would be for the following fiscal year.

Brown plans to restrain expenditures to sway the budget up to a modest surplus for the upcoming financial year. The plan he endorses faces some risks from insecurity all over the financial recovery, health care fees and the national budget.

His new budget plan cited the risks within the financial markets. The changes on the income rate of the relatively small amount of tax payers who use IRS liens could have a substantial effect on the state's revenue. To be specific, the capital gains salary is focused on the high profit earners. It could fluctuate at a substantial amount every year.

A particular example of volatility would be the revised income target for the remaining May’s rocky IPO for the Menlo Park. It was California-based Facebook that declined at 1.3 billion dollars from 1.9 billion dollars. The plan of Brown predicts the bump within the revenue coming from the tax increase in November.

The measure formed the new tax rates that range from 10.3% to 12.3% for incomes between 250, 000 to 1 million dollars. Incomes in excess of $1 million will be subject for a surcharge to raise funds for psychological health services.

The famous demographer Joel Kotkin said the fabulous wealth of Californians was cause for the tax increase. However, there is a doubt that there will be sustained income gains. Kotkin also said  he knows the affluent residents of the state who can earn more than 250,000 dollars from properties with IRS liens are sorting out the ways on how they can minimize the tax liabilities.

About the author: Do you need help with your IRS Liens? TaxReliefSystems.net is a great source for help.

Big hitters wary of investing in agriculture

By Jürgen Siemer

Heavy hitters have lost appetite for investing in agriculture. As reported by The Financial Times on 27 January 2013, agriculture -- an industry worth an estimated tenth of total global economic output, with enough demand to drive a projected 70 per cent increase in production by 2050 -- has recently seen a turnaround with investors loosing appetite for entering the sector.

While still appealing to some investors, investing in agriculture has become more of a risky venture for those who take into account the fickle weather, political risk and quixotic governments, which can all have a negative impact on returns. According to the FT, since the beginning of the global financial crisis those factors have triggered a turnaround from earlier years when appetite for investing in agriculture was on the rise, with high-profile financial companies and big names in the investment world entering the sector.

“The last big industrialisation”

The FT quotes Richard Ferguson, director of agricultural consultant Masdar Farming, as saying that agriculture is “the last big industrialisation”. According to Ferguson, this is a process which will take between 20 and 30 years and will consist ofsmaller farms consolidating to form bigger corporate entities. Giving examples of this transformation of the global agricultural sector, Ferguson cited some of today’s big listed groups such asRussia’s Cherkizovo(LON:CHE) and UK-based Black Earth Farming (STO:BEF-SDB), which were formed on the basis of buying individual shares of blocks of land from hundreds of peasants.

Investors seek new routes to investing in agriculture

Analysts explain the decline of investment in agriculture with another factor of concern to prospective investors -- many view this sector as small-scale and localised, where single projects are risky. Based on this concern, new investment opportunities are being sought and investors are exploring ways of making farming more investable, such as by increasing scale or diversity to mitigate risk. An increasing number of investors are tapping agricultural growth via technology and equipment producers in the industry, buying shares in publically-traded companies such as German tractor maker John Deere (FRA:DEE) or Switzerland-based seed supplier Syngenta (VTX:SYNN).

Yet some analysts disagree

And while most estimates point toa trend of accelerating concerns over investing in agriculture and a decline in ventures in the sector, some analysts believe that agriculture is still an appealing and lucrative investment option.

About the author: Jürgen Siemer, senior analyst at Sustainable Asset Management, told the FT: “Prices for land are going up, so investment in agriculture and the value chain is becoming more attractive and there is much more profit to be made.” For more information on the topic visit click here. 

Financial news: 02/21/2013

• AP: DoD to furlough up to 800,000 civilian employees
• CNBC: Harvad & Penn billionaires are worth $317 bln
• Fox: Fiscal reform puts mutual fund tax benefits at risk
• BI: Wise home buyers obtain more than one loan GFE
• DOL: Jobless claims 2/16 362K ↑20 K; avrg 360.75K ↑8K
• NAHB: New home construction fell 8.5% in January
• ZH: College tuition costs rise via subsidy driven demand
• CNN: U.K. Pound expected to drop via monetary policy
• Bloomberg: EU officials favor higher bank liquidity ratio
• Reuters: Bulgaria's government has fallen after austerity
• BBC: Japanese yr over yr trade deficit up 10% in Jan.

Will the U.S. Dollar remain the go-to global currency?

US-PDGov

By Vida Denning

According to the Wall Street Journal, of all the big eight currencies, the U.S. Dollar is the reserve currency used worldwide by all banks. All international banks have up to 60% U.S. Dollars making up their hard cash in bank reserve currency.

There is a belief that even though the U.S Federal government still backs U.S. debt and the economy backs the Dollar itself, the world economy should not rest entirely easy.

The general consensus is that between budget deficits and the monetary expansion policy, the varnish of the USD has dulled a bit. So the question is; will the USD remain the go-to trading currency for the next half a millennia?

USD History

For many years the U.S government has always tied the USD to a metal except for the Civil War period. However after the war, for the following years, the Dollar was tied to gold, which was the fundamental financial structure for the States, and other currencies relying on the solidity of the USD.

The famous 1933 stock market crash caused the Great Depression which saw 11,000 banks of 25,000 go under. The Federal Reserve was unable to effectively co-ordinate the demand for money with the actually reserved amount thanks to the extremely high demands for cash. The States couldn’t simply make more money because it would flow out of the country, and be converted into other world currencies. It would lower interest rates and it would not be synonymous with the outflow of gold.

It was during the Depression that the tie between the gold standard and the USD was replaced with quasi-gold, making this applicable only to international transactions. Through the years this standard has been maintained, but now there is huge concern about the States’ inability to reasonably service its own debt, which puts the Dollar in a precarious position as the go-to currency for worldwide investors.

Currently investors and global governments are losing faith in the United States ability to manage its budget deficit which is currently sitting at $1.1 trillion, and the U.S. Congress continue to each budget deficit, which means the national debt is rising and people are losing faith and looking to other currencies to be the go-to currency. There is speculation that the Euro will be next in line to the currency throne.

As the EU has survived its darkest hours in terms of several countries being forced to implement austerity measures, the strategy has worked and many are climbing out of the financial hole. This serves to show that the Euro is being considered amongst the strongest of all currencies to be the next favoured global trading currency.

About the author: Vida Denning is a prolific freelance writer with a Forex account, and a keen interest in the details of the big eight trading currencies.

Best and worst cities for job growth in 2013

Image attribution: Morgue File; Source; Non-exlusive royalty free license

By Jessica Bosari

As Americans emerge from the long recession, it is as if we are awakening from a long hibernation. We are hungry. There still aren’t enough jobs to go around, but 2013 promises significant growth in some areas. The number of new jobs is increasing, but the competition remains fierce, even for minimum wage jobs. Skilled and professional workers face markets that are even more competitive.

Westward Ho!!

Location is everything during the slow growth that has not spread to all areas equally. It seems that traveling west may make sense for many. Six out of seven of the top cities for new job openings are in the Western United States. Some of the fastest growing areas are in Arizona. Tucson, Phoenix, Scottsdale and Mesa Arizona are all enjoying up to 20 percent increase in job creation and Phoenix is expected to continue job growth at a rate of 8-10 percent for the next five years.

Washington

Seattle, Washington will also have a 16 percent increase in jobs in 2012. Unfortunately, the prosperity has not spread to Spokane where growth is at a dead standstill. These kinds of mixed results are common for many states. Some cities may be among the best while nearby cities are among the worst. Growth after the recession is still sporadic and painfully slow.

Some states missed the recession

In Salt Lake City, they say, “What recession?” Utah boasts of an unemployment rate of only 5.2 percent overall. Salt Lake City is growing and offering 18 percent more jobs in 2013. North Dakota also remains unaware there is a problem. They are maintaining a very low unemployment rate of 3.2. There may not be a lot of highly specialized jobs, but everything there remains very stable. South Dakota, Montana, Nebraska, Wyoming and Oklahoma also have unemployment rates of around 5 percent or less. Tulsa anticipates a 16 percent increase in jobs in 2013. This is definitely a promising region.

California here we come!

California is recovering quickly, not only are available jobs up by 19 percent in San Francisco, but there are more skilled and professional positions open. The pay scale is much higher in California. Beware though, cost of living, housing costs and property tax rates are among the highest in the country as well. If you are looking at Sunny California, consider San Francisco as a top choice. The Silicon Valley is seeking techies again as well. San Jose, Sunnyvale, Santa Clara are good options for code heads, developers and the electronically inclined. Vallejo California is currently offering top pay for registered nurses, electricians and bus drivers.

Bigger and better in Texas

Business is good in Texas, with 260,800 new jobs added in 2012. The trend is expected to grow throughout 2013, with new jobs and a surge in profitable enterprises. El Paso, Austen and Round Neck, Texas are experiencing a job growth rate of around 17 percent, while San Antonio Texas will grow 16 percent more jobs this year.

Nevada still down

Unfortunately, Nevada still holds some of the worst hit areas including Paradise and Las Vegas. Nevada now has an unemployment rate of 10.2. That is the highest in the U.S.A. Things seem to be improving a bit though. A decrease in unemployment of .6 percent in December marked the first gain in many years, but it’s still no place to look for a job. There aren’t nearly enough, even for the locals.

For East coast jobs, try sunny Florida

Florida is the brightest spot on the Eastern Sea board. Cape Coral and Fort Myers report their first quarter outlook for jobs to be the best in the nation with 23 percent more jobs in the area. Lake Winter Haven’s more modest 14 percent increase is still impressive compared to the rest of the recession stricken South. Unfortunately, Jacksonville Florida, further north, is not enjoying the same success. Jacksonville scored as the fifth worst city for seeking a job. Their hiring is down by one full percent.

The South still suffering

Only Ohio and Nevada are more affected by the recession than the Southern States, but there are still a few bright spots in an otherwise dark picture. While all the Southern States are over the national average for unemployment, A few Cities like Charlotte, Gastonia and Concord, North Carolina, Columbia, South Carolina, Birmingham and Hoover, Alabama and even New Orléans are expecting a job growth rate of 14 to 16 percent. These are a few bright spots in the otherwise crushing economic stagnation that is still controlling the South.

The struggling North

New York City, Long Island and Northern New Jersey project only 1 percent job growth in 2013. Wages are high, but so is the cost of living, and there are very few new jobs to be had. The market is extremely competitive in all fields. Only those with impressive resumes and incredible luck need apply.

Long recession still striking Ohio and Pennsylvania

Ohio and Pennsylvania are still going through trials. The recession certainly began in Ohio. While the rest of the country was enjoying the prosperity of the Clinton years, the people of Ohio were already suffering one of the worst jobless rates since the 1930s. After about 15 years of severe unemployment in Ohio, and some areas of Pennsylvania, recovery is slowly reaching the area.

Even now, Youngstown, Warren and Boardman are struggling along and hoping for 1 percent more jobs this year. Cincinnati, Scranton, Wilkes and Barre are hoping to grow by a modest 2 percent. Norwalk, Bridgeport and Stamford Connecticut may be the best of the lot with 3 percent more jobs. Allentown, Bethlehem, Easton and Dayton expect a slightly heartier 4 percent increase. This growth may offer some relief for at least some of the resident unemployed. Unemployment rates are already dropping but they still have a long way to go for a full recovery.

Northern stars

There are a few bright spots in the north though. Boston, Cambridge and Quincy Massachusetts expect 14 percent more jobs in 2013. Sheboygan, Wisconsin offers some great opportunities for insurance sales and mechanical engineers. Sioux City, Iowa is now offering top pay for physical therapists and software developers. Washington D.C. is ranking near the top for good pay.

About the author: Jessica Bosari writes about topics important to the manufacturing industry for power generators supplier, Allight.

Financial news: 02/20/2013

• MN: Nobel economist says U.S. is not the land of opportunity
• BI: Discount retailers are worried about  less consumer spending 
• BBC: Pending federal cuts are unfair & ill conceived per President
• MW: New tax to affect couples with income above $400K 
• CNBC: Deficit committee chairs label fiscal policy dysfunctional
• NAHB: Majority of home builders less confident per index
• CNN: Top 1% of income earners are still below 2007 averages
• Fox: Health insurance stocks fell on possibility of lower rates
• Reuters: European regulation puts Google at risk of losing $1 bln
• Bloomberg: A European heist has stolen $50 million in diamonds
• Zero Hedge: Global asset growth is no longer growing

Recommended locations to hide your wall safe

By Harvey Brodach

A wall safe is the best place to hide your valuables where burglars cannot find them. You have a right to protect items that have a financial or sentimental value, but it is not easy to do. The hardest part of installing a wall safe is choosing a location that is hard for a burglar to find. Gangster movies often show a safe hidden by a painting in the living room, so forget about that idea. Burglars have seen the movies also.

Most burglars look in your bedroom and your closets, so you need to avoid putting a safe there. Choose a location that is a work space, a child’s room or one that is hidden by your sofa. You can outsmart a burglar when you choose an unusual location for your wall safe.

Laundry room options

Your laundry room is a perfect place to hide a wall safe. A room that is usually untidy has several spots that do not draw attention. Look around your laundry for ordinary objects that can hide your safe:

• clothes hamper
• drying rack
• stack of clean clothes

Your child’s bedroom

Burglars usually focus on private spaces like your master bedroom. A child’s bedroom is probably a distance away from there, and it is not likely to draw a burglar’s attention. Objects that provide cover for a wall safe include these:

• A poster
• A chest of drawers
• Shelves full of toys or books

Your living room

A burglar probably has to walk through your living room to get to your bedroom, but you can safely hide a safe there. A sofa is the largest object in most living rooms, but it does not attract attention as a camouflage. Most burglars work alone and cannot move heavy furniture, making a spot behind a sofa an excellent choice. If you have to open the safe often, you may prefer to put your safe in another location.

In the garage

An electric panel has the appearance of an ordinary item in a garage. You can get one from your home improvement store and use it as a disguise to conceal a safe. It has the advantage of providing easy access that does not require you to move furniture or shelves.

Future plan

A safe in the floor is one of the most impossible locations for burglars to find. When you build a new home, arrange for the contractor to create a space in the slab that can hold a safe.

Try to avoid sharing your ideas for concealment with your friends at the bowling alley or the ball park. You never know who may overhear your confidential conversation. By keeping the location of your safe a secret, you can make it nearly impossible for a burglar to steal your valuable possessions.

About the author: Harvey Brodach is the owner of Global Safe Corporation for many years. We invite you to visit and learn about safe products at our website.

Image licensing: 

1. Author owned
2. Royalty Free or iStock source 

How to stay safe while Internet shopping

US-PDGov

By Thomas Lively

Internet shopping has had a big impact on many people’s lives. Busy families no longer have to fight the crowds in shopping centres or worry that meetings have run on and the shops will be shut; those with disabilities no longer have to rely on others to make simple day-to-day purchases, etc. The fact is that anyone who has a computer and an internet connection can buy pretty much everything they need at the click of a button, while still in their pajamas at any time of the day or night. But it is important to remember a few simple rules to make sure that you stay safe while internet shopping.

In an ideal world we would all stick to online merchants that we already know and trust, but with so many online stores competing for our business we can often find that a particular web shop that we have never used or heard of before is offering the best deal. Before you say ‘to hell with it’ and click the checkout button, take a moment to check out the company first. Look at the guarantees that they offer and what their return policy is. Put their name into consumer websites and see what information you can find on them. You may also find information and reviews on forums so they are worth a quick read too. Remember if in any doubt purchase your goods from someone else.

If you are happy with the company and want to continue your internet shopping, proceed to checkout and you will come to the payment screen. Before you input your credit or debit card details take a look at the screen for a moment to see how secure it is. The first thing to look for is the URL, which can be found at the very top and will always begin with https:// if you then see SSL then you can be assured that no one else can see the information that you enter other than the merchant that you are using for your internet shopping. SSL stands for “Secure Socket Layer” and means that the webpage is highly secured and safe to use. If you don’t find SSL then have a look at the bottom of the screen and see if you can spot a closed padlock or a key. Both of these also indicate that you are safe to continue.

Always use a credit or debit card that offers you coverage for purchases. Internet shopping should be covered in exactly the same way as if you were buying something from a store. It may be a good idea to check your card issuer’s policy before you make a purchase to ensure that you are fully covered, just in case. If you are unsure or do not like the idea of entering your card details then consider opening an account with payment gateways such as PayPal or GooglePay. These companies are governed by banking rules and they hold your information on your behalf. When you are internet shopping just pick that you want to pay by whoever you have an account with when you get to the checkout screen and they will complete the transaction on your behalf without the seller seeing any of your banking information.

About the author: Thomas Lively specializes in helping people protect their credit card and personal information while internet shopping (in Sweden we use the word internethandel).

Financial news: 02/19/2013

• CG: Record high February gas prices due to regional refinery maintenance
• CNBC: U.S. economy to contract Q1-Q2 '13, unemployment to exceed 8%
• CNN: Furloughs await federal workforce if sequester goes unaverted
• Option Queen: Consumer spending cutbacks are driving M&A activity
• NYT: Employers biased against long-term unemployment per consultants
• Business Insider: Wall St. bonuses fell 36% in 2012 per eFinancial careers
• Bloomberg: Recollateralization of covered bonds a risk per investment firms
• AP: BBC journalists strike before 30% of jobs are eliminated
• Reuters: High valued Euro has ECB concerned about economic growth
• MN: Use of European crisis funding  by German banks fell by 33% in Jan.
• BBC: Loose Japanese monetary policy weakens Yen & spurs stock prices
• ZH: Japanese Yen is 80% stronger than 1971 and high despite devaluation

In defense of charity administrative costs

US-PDGov

By Sam Wright

When you give money to charity you want to think it’s doing the absolute best good it possibly can. If you give money to a charity fighting third world poverty you want that money to pay for wells being dug and schools being built. If you give money to cancer research you want that money to be spent on microscopes and lab coats and whatever else it is cancer cure doctors are looking for.

So it feels a bit rich when, after talking to the nice lady with the clip board who stopped you in the town centre last weekend, you find the charity you’ve given your credit card details to is using your money to pay for office equipment and spreadsheets. However, as with most things, it’s all a bit more complicated than that.

The figures you see might be deceptive

If a charity’s administrative costs are displayed as a percent of the fair market value of donated items it can actually create a false picture of how that money is being spent. A great example of this can be found at The Super Bowl. Obviously, every year, only one team can actually win the Super Bowl. But short of setting up a really quick production line at the stadium, or fixing the games, companies have no way of knowing which team will win, and so have to produce “We won the Super Bowl!” T-shirts for both teams.

Then, the “We won” T-shirts for the losing team are donated to charity. One such charity, World Vision, reported admin costs of $1.82 per shirt. These shirts were supposed to be put on sale for $20, but being for the losing team, their market value is probably closer to $5. So, are the admin costs 26% of the cost of donated items, or 8.3%? Either figure tells a different story.

A charity is still a business

Yes, okay, businesses exist to make money just so that the people who run them can become rich and sing evil rap songs at muppets. But charities also need to make money, they just want use that money for good, instead of evil.

Charities know that you don’t want your money being spent on administrative costs, but the trouble is this can lead to them cutting corners. Is that really what you want? Admin is the part of the machine that keeps everything else running. A few screw ups in the paperwork and you could see much more serious consequences later down the line.

As with any business, if you’re able to spend more you’re more likely to get a better product. A well run administrative department means that other parts of the charity are going to work better and more efficiently than they otherwise would do. Paid full-time admin staff are going to do a better job than unpaid volunteers no matter how dedicated they are.

The big picture

This isn’t to say that there aren’t charities who are being inefficient with their spending or that third sector organisations couldn’t use the money they receive in more effective ways. But judging a charity based purely on one number is to miss out on the larger picture. The real measure of a charity is in the impact they have on their chosen area. How much good are they actually doing?

By the same token, do you need to give your money to large charity in order for it to do good? If you look around locally you’ll find there are all sorts of smaller charity jobs and community organisations that could really use your help. You can only get to spend any given sum of money once, so make sure you’re fully informed before you do so.

About the author: Sam Wright is a freelance writer who covers issues affecting charities and small businesses.

Presidents Day: Financial news

US-PDGov

• Reuters: Tax refunds being stolen nationwide via identity theft 
• CNBC: Future FRB tightening adding to gold price reversal
• CNN: Soros Fund Mngmnt. has sold $130 mln of gold ETF
• Bloomberg: Medicare Pard D deductible to lower 4.6% in '14
• Fox: Hackers target food industry as other corps raise security
• NYT: Lure of low taxes fails to trigger mass tax migration
• MN: Fiscal cuts to "markedly" effect economy per Greenspan
• BI: Put writing places volatility trader in options supply seat
• Zero Hedge: G20 is in denial about currency manipulation
• AP: Demonstrators across Spain protest repossession law
• BBC: G20 economies are targeting corporate tax strategy

What claims adjustors look for when assessing insurance liability

US-PDGov

Insurance claims adjustment is a process of determining how much compensation a policy holder is entitled to via contractual terms. A publication from the University of Northern Iowa describes the claims function as existing to “fulfill the insurer's promises to its policyholders...” and in “establishing an insurer's relationship to its policyholders.” Legally and on paper, the insurance claim process is designed and supposed to be fair, in practice this is not necessarily always the case. Nevertheless, the following things claims adjustors look for should help in arriving at an equitable solution.  

Background

The U.S. Department of Labor states claims adjustors include claimant background information when an examining the viability of a claim. This helps confirm identity and determine the possibility of fraudulent intent. For example, adjustors have access to criminal history if any, and previously filed claims. Convictions and patterns in previous claims are indicators of how the claimant might be approaching the claim being examined. 

Testimony

Testimonies, witness statements and recorded event details are also sought by claims adjustors because they help corroborate the factuality of the claim, and any embellishments of truth that influence the outcome of the claim. Furthermore, according to A.M. Best, interviews are accepted practice for acquiring testimonial statements. When inconsistencies between recollection of events occurs it is the claim adjustors responsibility to find the most likely occurrence. Physical evidence, police reports and other official documentation also assist in verifying claims. 

Cost

Cost is an important factor in the claims adjustment process. Since cost affects the price of both insurance policies and profitability of the insurer, unreasonable claims in particular are closely reviewed. To illustrate, in the State of Rhode Island, claims adjusters may lawfully seek the opinion of a damage appraiser in order to justify their evaluation. However, according to Donna Freedman of MSN Money, claims adjusters are also known for using manipulative statements to seek out early settlement and lower their costs.

Regulation

Numerous state and federal regulations exist that claims examiners must abide by. If the cost to the insurance company is considered worthwhile, adjustors may or may not be encouraged to objectively undervalue a claim at the expense of the state or legal system. For instance, in California, the Office of Risk and Insurance Management or ORIM adjudicates disputed claims adjustment for the purpose of obtaining settlement out of court. This settlement process follows different rules than the claims adjustment process, however state expenses such as these are avoided via effective regulation that protect both the state coffers and consumers. 

Despite regulations that protect consumers, the claims adjustment process is still a for-profit venture. This means ensuring complete customer indemnification, satisfaction and compensation is quite possibly not a priority over insurer objectives. Gray areas of actual damage costs, interpretation of legal terminology, and misuse of a system that is better known to insurers than the insured is realistic to expect at some level. For this reason, there is an important element of consumer awareness that should help the insured better handle their insurance claims and potentially yield a more accurately approved insurance claim.

What would a world with no money be like?

 

Image attribution: Frank Kovalchek; CC BY-S.A. 2.0 

By Paula Whately

“Money, so they say, is the root of all evil today,” sang Pink Floyd’s Dave Gilmour back in 1973. Little did the Ancient Mesopotamians know when they introduced the idea of currency to the world around 5,000 years ago that their revolutionary idea would go on to transform the planet in such a profound way. What’s more, given what humankind has achieved by moving massive amounts of money around – the scientific discoveries, the medical advances, the mind-blowing technological developments – it kind of seems a bit ungrateful to those Assyrian and Babylonian pioneers of old to suggest that maybe we’d be better off without money, and that it’s time to start imagining a future where goods and services are exchanged in a different way.

In a world dominated by competition for resources and defined by massive economic inequality, it’s certainly appealing to think there might be a better way of doing things and that hunger and poverty might one day become things of the past. But thinking about how an alternative economic system would work in practice isn’t that simple.

A New World economy

Maybe they got it right in Star Trek, where the good old United Federation of Planets began shifting to a ‘New World Economy’ in the 22nd century, money becomes an outmoded concept and Fort Knox is turned into a museum of the primitive capitalist ways of the society of old. But this New World Economy was only possible in Star Trek because they had, in their Replicators, a technology for synthesising whatever material goods they need. Whether you’re a lowly warp drive engineer or a high-ranking Starfleet diplomat, you have equal access to food, clothes and novelty key rings. Additionally, automation has become so widespread that there is no longer any need to pay for labour. That leaves citizens free to focus on bettering themselves and improving the lot of their fellow humans, instead of worrying about the relentless accumulation of wealth.

With the advent of 3D printing, replicator-style technology might not be as far away as we thought, but for now it’s fair to say we can’t really compare our current society to the inter-planetary civilisation imagined in Star Trek. But that certainly hasn’t stopped figures at the very highest level from thinking about and discussing what the world might be like without money as we know it today.

A barter economy

Sir Mervyn King (Governor of the Bank of England and possible Trekkie) has said that there is “no reason” that producers and consumers couldn’t exchange products and services directly through “essentially a massive barter economy.” According to King, “all it requires is some commonly used unit of account and adequate computing power to make sure all transactions could be settled immediately. People would pay each other electronically, without the payment being routed through anything that we would currently recognize as a bank. Central banks in their present form would no longer exist – nor would money.”

So we just need to come up with a unit of value and then figure out exchange rates for every single one of the trillions of different products and services that people might want to exchange? Cool. I’m sure someone could make an app for that. But is it simply the question of computing power that stands in the way of a transition to a barter economy?

Not according to ex-Microsoft engineer Balaji Viswanathan, who points out what he describes as the ‘indivisibility problem’; imagine you sold all your mushrooms for a pair of socks, and then decided you wanted to buy some bread. Would you be able to split the pair of socks in order to get the bread? No, you wouldn’t, you hippy fool! What were you thinking swapping all those lovely mushrooms for a rubbish pair of socks? Other criticisms include the problem with individuals storing wealth for use in future transactions (as many of the products being exchanged will be perishable, meaning they don’t necessarily retain their value over time), and the fact that there’s no easy way of arranging unsecured or secured loans of other forms of credit.

Collaborative consumption

As things stand, it’s hard to see how the world would function without conventional currency, but that doesn’t mean you can’t start doing some small scale bartering in your own day to day life. Are you awesome at baking? Then why not offer to bake a delicious cake for the landlord at your local pub in exchange for a few pints of the good stuff? Do you have a skill that people value? Then see what they can offer you in return for your time and expertise. Just ‘cause you have a job and occasionally shop at Tesco doesn’t mean you have to be a total slave to money; people are definitely embracing the idea of bartering, skill-swapping, and what Rachel Botsman calls ‘collaborative consumption’, so now’s the time to get in on the action.

About the author: Paula Whately is a freelance writer who has been writing about financial issues such as secured loans and credit ever since the recession began.

Financial news: 02/15/2013

• BI: Weak intraday technicals indicate fund induced group selling
• ZH: Economics, central banks & logistics make  trading impossible
• Bloomberg: Charity tax deductions at risk from possible legislation
• NYT: Auto makers face worst European sales market in 20 yrs
• CNN: Air mile benefits at risk from U.S. Air/American merger
• AP: Buffet/Heinz deal is the largest ever in the food industry
• CNBC: California foreclosures ↓ via punitive banking law
• Fox: Banks & funds dislike Europe's financial transaction tax
• BBC: The Eurozone's economy contracted .6% in Q4, 2012
• Reuters: Euro ↓,  econ. data points to possible monetary easing

The 3 biggest implications of new tax laws in 2013

 Image attribution: J3net; CC BY 2.0

By Emma Underwood

There are changes on the 2013 1040 form that will affect the amount of federal income tax many people pay this year. Just about every taxpayer will be affected one way or another by these changes to the tax codes.

What specifically are those changes, and who will be affected the most by each individual change?

1. Payroll taxes:

Most working people took home less money in January 2013 than they did in December 2012, even if they were earning the same amount of money. That's because Congress allowed the payroll tax holiday to expire.

The Social Security tax withdrawn from paychecks has traditionally been 6.2 percent. In December 2010, however, Congress enacted a two percent payroll deduction. There is some political controversy over whether or not this cut was intended to be temporary. Most Democrats argue that the payroll reduction was a temporary measure; some Republicans argue otherwise. Be that as it may, the entire 6.2 percent is now being withheld, and the Social Security wage ceiling has been raised to $113,700.

Additionally, high earners will see a raise in the amount of Medicare tax withheld from their paychecks. For people earning more than $200,000 a year, an additional 0.9 percent will be withheld.

Finally, self-employed individuals who have been paying a self-employment tax of 10.4 percent since 2010 will see their self-employment taxes rise back up to 12.4 percent in 2013.

2. Higher capital gains taxes for higher earners:

Gains from the sale of assets held for one year or less will no longer qualify for long-term capital gains tax treatment.

For single individuals who earn $400,000 a year or more, and for married couples filing jointly who earn $450,000 a year or more, capital gains taxes will now be 20 percent instead of 15 percent.

This may have a visible effect on the purchases and sales of stocks and other financial assets. Higher taxes means less money to invest in the stock market and other investment opportunities, which in turn means less opportunity to benefit from asset appreciation.

Additionally, households with adjusted gross incomes of $200,000 (single filer) or $250,000 (joint filer) are now subject to the 3.8 percent surtax that was passed in 2010 as part of the new health care legislation. This could conceivably drive capital gains taxes for some individuals up to a rate of 23.8 percent.

The new tax bracket for individuals earning $400,000 or more, and couples filing jointly earning $450,000 or more, is now 39.6 percent, up from 35 percent. However, this will not affect people filing their 2012 taxes.

3. Changes in deductions and exemptions:

Congress also enacted a great many changes in the ways that deductions operate. People at the high end of the earning spectrum will no longer be allowed to take all their itemized deductions. Those cut off points are $250,000 for single individuals, $275,000 for individuals filing as heads of households, and $300,000 for married couples filing jointly.

The itemized deductions that are subject to this phase-out include:

• Charitable contributions
• Job-related expenses
• Other taxes
• Interest (but not investment interest)

The rules for calculating the new rates for itemized deductions as they are being phased out are very complicated. Higher income earners will also be hit by a reduction in the personal exemption to which they hitherto have been entitled.

About the author: Emma Underwood is an economist and guest author at How Do I Become A..., where she contributed to the online How Do I Become An Economist guide.

Two high-yield Canadian stocks that could takeoff in 2013

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By Roger Conrad

The appeal of Canadian stocks’ dividends is as great in 2013 as it was in 2012 and the world’s highest payouts are arguably even more attractive now that sudden US austerity and a major recession are off the table. If 2013 turns out to be a turning point in the global recovery, the energy and high-yield groups will produce the biggest winners.

Two companies that I’m particularly bullish on are Ag Growth International Inc (TSX: AFN, OTC: AGGZF) and Atlantic Power Corp (TSX: ATP, NYSE: AT). Both companies have been dramatically expanding their businesses in recent years.

Ag Growth’s annual sales have surged by better than a third the past three years, as it’s taken its grain-handling equipment business global.

Atlantic Power’s revenue is up 120 percent over that same time, thanks to a series of acquisitions of power plants operating in wholesale markets under long-term contracts.

Each company stumbled a bit in 2012. Ag Growth’s US sales were down 20 percent in the third quarter from year-earlier levels due to reduced harvests from an historic drought. Dry conditions are expected to extend in many parts of the country, which accounted for roughly 60 percent of 2012 sales, through at least the first quarter 2013.

Atlantic Power, meanwhile, has been unable to renew contracts set to expire in July and December for the power sold by two natural gas-fired plants in Florida. Last month management announced it would take a USD50 million charge to fourth-quarter 2012 earnings to reflect the impairment of those plants.

The move won’t directly affect cash flow and the ability to pay dividends. But it reaffirms management’s warning that it will face “substantial decreases” in returns from the plants, which it will have to replace by adding new assets. But both companies remain well on track to continue growing their businesses and building shareholder wealth in the process.

Ag Growth's sales outside of North America, for example, actually now exceed its sales in Canada. And with improved profitability selling to agricultural centers in Russia and Ukraine, the company is well on its way toward reaching 30 percent of sales from international sources.

Going global limits Ag Growth’s exposure to adverse weather conditions in North America, which inhibit harvests and, consequently, demand for grain-handling equipment. But the company is also growing its worldwide distribution network to meet high-capacity demand more cheaply, even as it enjoys more repeat sales and relies less on what it calls “transactional business.”

The result is Ag Growth’s sales are far more resilient overall than they were just a few years ago, when a severe drought in the US could have crushed them. Coupled with extremely conservative balance-sheet management, that’s strong protection for the dividend despite the past year’s adverse weather event and its temporary negative impact on distributable cash flows.

As for Atlantic Power, a steep loss of revenue from the Florida plants starting in the third quarter isn’t what management had hoped for. But neither was it unexpected, given recent years’ weakness in wholesale power markets. In fact management has been preparing against it the past several years. Atlantic Power’s acquisition last year of the former Capital Power LP, for example, more than doubled both generating capacity and revenue. That dramatically reduced the Florida plants’ share of overall profits.

In December 2012, the company achieved two additional milestones. First, it closed the previously announced acquisition of Ridgeline Energy, the renewable power assets of Veolia Environment SA (France: VIE, NYSE: VE) in North America. The USD88 million purchase adds 150 megawatts of operating wind power capacity as well as a development pipeline of 20 wind and solar projects totaling 1,000 megawatts of potential capacity.

The latter became a lot more valuable earlier this year, as Congress extended the wind power tax credit for another year. Meanwhile, management has also announced its Canadian Hills wind project in Oklahoma became fully operational Dec. 22, 2012, on time and within budget. The plant is now selling power under a 20-year contract to OG&E Energy Corp (NYSE: OGE).

Getting Canadian Hills running by the end of 2012 was no longer critical once the wind credits won another year of life. But completing the largest project in the company’s history does demonstrate Atlantic Power’s proficiency as a wind power developer, which is very promising for the continued development of the Ridgeline project pipeline. And the more scale the company achieves in this area the easier its expansion efforts are likely to become.

Financing has been challenging for expanding companies since early 2012. Here too, however, Atlantic Power has demonstrated success, closing a CAD101 million convertible bond offering last month to fund the Ridgeline purchase. That security doesn’t mature until Dec. 31, 2019, and carries a competitive annual interest rate of 6 percent. The company has now also fully repaid the USD272 million construction loan used to finance completion of Canadian Hills, using tax equity funds mostly drawn from a consortium of four institutional equity investors. The total cost of that 300 megawatt project was USD470 million.

Canadian Hills is expected to generate USD16 million to USD19 million in annual cash flows through the end of 2020, with “higher amounts” for the remaining 12 years of the OG&E contract. Expectations for Ridgeline, meanwhile, are for operations to generate an additional USD9 million to USD12 million in cash flow starting in 2013, with more thereafter as the new project pipeline is developed.

In addition, the biomass-fueled Piedmont project is set to come on stream in the first quarter of 2013, while the company’s 50 percent interest in the Orlando project will be producing additional megawatts in 2014. That adds up to USD38 million to USD47 million in new cash flow. It also increases the average life of Atlantic’s power plants’ sales contracts to 9.9 years, insulating profits from likely continued weakness in wholesale electricity prices the next few years.

That closes a substantial portion of the gap left by the loss of cash flow from expired Florida plant contracts. It’s also worth noting that these plants’ debt fully amortizes when their contracts end, so they’ll be unencumbered assets and therefore easier to sell, as management has indicated is its preference. The company is also selling its Path 15 transmission line in California.

Atlantic Power plans to invest CAD300 million to CAD400 million a year of equity capital in transactions utilizing roughly 50 percent debt. That adds up to CAD600 million to CAD800 million in new assets every year in renewable and gas-fired power plants, all secured by long-term contracts. As CEO Barry Welch noted during Atlantic Power’s third-quarter conference call, “We’re confident in our ability to sustain the current dividend level.” In fact the more assets are expanded the more room the company has to increase its payout.

That’s also what I expect to see at Ag Growth, as it expands global revenue over time. Moreover, neither company has any debt coming due before mid-2014, ensuring financial flexibility. What can go wrong at these companies? Even a full-on recession in North America wouldn’t immediately hit their profitability. Both companies actually raised dividends in 2008, as they were able to continue building cash flows in their respective niches despite the chaos around them.

Sluggish economic growth would keep downward pressure on wholesale electricity prices in 2013, making it difficult for Atlantic Power to re-contract the Florida plants. But after taking a USD50 million writeoff in the fourth quarter, the worst is already in the numbers.

Renewable energy contracts, meanwhile, enjoy favorable terms by law. And the Ridgeline acquisition gives the company considerable opportunity for expansion. Rather, the primary risk at Atlantic Power is if management fails to execute on its expansion plans. The delay in the startup of the Piedmont plant into 2013 won’t critically affect cash flow going forward. But it did raise the payout ratio in 2012 and demonstrates clearly the risks involved with construction.

A rise in interest rates could also make it more difficult for Atlantic Power to follow through on project expansion plans by increasing the cost of borrowing. Meaningfully higher rates, however, aren’t likely unless there is a revival of economic growth, which in turn would improve cash flow at the company’s operating projects as well as potential selling prices for assets like Path 15.

Ensuring the company is following through on its expansion plans is my primary concern whenever I study numbers and new developments at Atlantic. And it’s true there are more moving parts at this company than, say, at fellow power company Innergex Renewable Energy Inc (TSX: INE, OTC: INGXF). At this point, however, Atlantic Power is succeeding both in growing its business and returning substantial cash to shareholders. The strategy has provoked skepticism from more conventionally minded analysts, particularly in Canada. But so long as it does succeed, it will reliably build wealth over time.

As for Ag Growth, business would suffer from a sharp drop in prices of agricultural commodities, should that convince farmers to do less planting. Given the growing appetite of Asians and demand for ethanol, however, that doesn’t appear a likely development anytime soon.

Weather conditions are always a threat to derail profits in a given quarter or even fiscal year. But here too the impact is always temporary and likely to be reversed the next year. Even an attempt by the Canada Revenue Agency to collect back taxes resulting from the company’s corporate conversion wouldn’t affect cash flow enough to endanger dividends.

Rather, as with Atlantic Power, the greatest threat to Ag Growth’s dividends lies with management’s effectiveness growing the business. That’s why we have to continue looking at the numbers every quarter. But at least here in February Ag Growth looks like a great candidate for a big capital gain in 2013 as it continues to measure up to the challenges. See my free report for more of my favorite Canadian income investments for 2013.

About the author: Roger Conrad writes a weekly column on dividend investing for Investing Daily.