Business

Bonding Secrets 163: Financial Statement Fraud

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You know the old adage: “Financial statements don’t kill people, people kill people.”

While it is true that there can be misrepresentation and deception in a financial statement (FS), the document is not inherently wrong, it is the bad intentions of the preparer or the company that are to blame.

As credit analysts, we always review and depend on FS when signing bonds. We know that there may be attempts to mislead our judgment or even outright deception. But the need to evaluate the financial report is unavoidable. It is considered a valuable “management quality report card.”

There are three levels of financial reporting by Certified Public Accounts (CPA):

  1. Compilation: a properly organized report where the numbers have not been verified or evaluated by the CPA
  2. Review – Includes some key item “Review” checks
  3. Audit: This is the highest level and includes the CPA’s statement that they have checked and believe the numbers are correct

The reader of the FS is entitled to certain expectations: A sincere and complete presentation that informs the reader. They have the right to plus what that? Does the reader sometimes wait too?

Let’s consider what the FS actually says and what it doesn’t say…

the balance sheet

This shows assets and liabilities. Describe the dollars in the business (assets) and who owns them (liabilities and stockholders’ equity). You know many of the normal entries: Cash, Accounts Receivable, Accounts Payable, Inventory, Bank Debt, the Equity/Stockholders Equity section, etc.

The balance always has a date, such as 12/31/2017. Shows the status of these accounts in one day. Credit analysts calculate working capital, also known as Net Quick (NQ), which is considered a measure of short-term financial strength. The NQ is found by subtracting current liabilities from current assets. When the bond underwriter has the NQ number, they can be incorporated into the decision making.

What size bonds will be approved for this applicant? How much total capacity can be assigned to them? The NQ figure becomes a reference point that is used for the reminder of the year.

For many analysts, this number has a big effect over the next 12 to 15 months.

Fast-forward one day, to 1/1/2018. “Happy New Year!” and we will check the bank account. Some money has come in! Accounts receivable and cash have changed. Other changes have also occurred and so if we calculate the NQ based on the 1/1 balance sheet, the NQ will probably be different from the 12/31. Again, that’s because the balance sheet shows the status of these accounts ONE DAY. It is always changing!

The reality is that the working capital number is only correct for one day, then it is subject to change. This is not to say that the number is not important or relevant. And certainly decision makers must have reference points and a method for their determinations. It is very important, but so are other elements.

Financial statement fraud

The most common FS fraud is not committed against us by others. It’s the self-delusion we commit by relying too much on these “one-day numbers.” To do so is to miss the big picture!

Insurers love to see a big cash account on that top line (of the balance sheet). But that’s a one day number. Isn’t it even more important to determine the average funds on deposit for the previous six months or year? Many analysts do not ask for this information.

Accounts Receivable and Payable: Here’s another key area where the “one-day number” can easily be given historical perspective. Past A/R and A/P schedules are easy to obtain and provide more than a day’s perspective. These documents are not automatically included in the FS and may not be requested by subscribers.

conclusion

As readers of these papers and analysts, let’s not fool ourselves by relying too heavily on the balance sheet or thinking that it is more than a one-day snapshot. It should be examined and viewed in harmony with other key underwriting factors, such as mid-year financial reports and supporting documents.

In this way, subscribers can make realistic and well-informed decisions.

Digital Marketing

And Old Book, a New Bestseller

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It’s often said it can’t be done…but anything is possible if you have the mindset of a killer salesman. Please note that each book is a product. Whether it’s a new release, an old book, a 50-page story, an 800-page epic, fiction or non-fiction…they all have one thing in common when it comes to Amazon. As far as Amazon search engines are concerned, all these books are just other products and their ID is, from their point of view, just a unique ASIN. It doesn’t matter age, gender, or history. All that matters is how well a certain ASIN will sell.

Many authors have published their works hoping that their books on Amazon will somehow sell, and possibly even appear on Amazon’s top list. Oh, being so confident must be a wonderful thing! With some books having a substantial marketing budget behind them, and others represented by marketing professionals, many self-published books are sadly destined to die out and simply fail. Book quality always matters, but no one can deny that quality alone doesn’t sell books. Professional sales strategy and large advertising budgets make a huge difference in digital sales channels… but a self-published author cannot compete with companies that have been selling books for decades; after all, their skill and knowledge in making a perfectly salable book is the second greatest asset they have. The first is obviously your money. Money buys audiences: it’s a simple law of large numbers, and one we can’t escape.

Sure, you may have read some success stories in the past. Yeah, I know, some self-published authors really did, and it’s pretty impressive that they did. However, the other side of the coin, the sad truth of the matter, is that thousands of other authors failed to make a positive profit margin, while a lucky few managed to make it big with seemingly little effort on their part. One could imagine that Amazon is not only the largest bookstore in the world, but also the largest graveyard for books and the aspirations of authors! A few million books (and it’s not an exaggeration, surprisingly) sit there, resting in limbo, without a single visit for weeks or even months, totally forgotten, marked as a failure, abandoned to disappear. So many potential bestsellers have failed due to the fact that publishing is not an easy task, even though it may seem that way when you consider how slick the publishing process is on platforms like Kindle. With just a few clicks, your book has been published! Wow… And then what?

However, your book might have a chance, provided you adopt the mindset of a marketer and pick up some crucial marketing skills, something I consider a vital element of successful digital sales. Let’s cut through the technical jargon and dive into the thick of things. There are several steps that must be taken before you can participate in listing on Amazon.

The sales strategy is based on data, not on our own subjective perception of what could go well. This is something you will need to keep in mind throughout this process. It’s not romantic, it’s not glamorous… but it’s reality.

In fact, it’s not just about data. In fact, I see three crucial elements for any sales strategy:

Data
Technology
incoming sales

If you’re marketing your book in front of millions of other books, you better have a decent data-driven strategy. When writing a book, authors are fine when it comes to making investments in proofreading and editing. Editing is a must for any author, I wouldn’t disagree with that for a second. Yet how many authors jump at the chance to engage a marketing/sales professional? Very few, actually, even though these people and their skills are also a must. You need data and you need professionals who have access to the right data.

What type of data do we use? Obviously, our main focus is on our competitors. Our data should show the success of books in our specific genre. What is your overall sales rank? How many reviews do they have? What keywords do they use when creating their persuasive sales copy? This has nothing to do with writing, I know, and it’s not necessarily the ‘fun’ part of producing a book for sale. However, this is something that MUST BE DONE BEFORE POSTING. If not, you’re just another fish in the sea…and one that’s quickly being surrounded by sharks!

A smart salesperson is also someone who is technologically savvy. They must be familiar with all those sophisticated marketing tools and techniques and stay up to date on the latest developments in this field. To become familiar with them, an author must therefore acquire some specific knowledge. How do you set up a blog? What is SEO? How do you use social media to sell more books? What about Twitter? Are promotional sites good? Why does a book need a good video?

So many questions, we know. However, you’d better learn the answers yourself if you’re somehow serious about self-publishing, as the answers to these questions will make a big difference in your rankings and sales numbers. The alternative, of course, is to hire a marketing professional, just like you hired your publisher. Publishing is not a process of putting your book on the Amazon shelf. It’s A BUSINESS, and one that requires an entrepreneurial approach.

Another point: what about incoming sales? Can you really focus on your buyer’s needs and goals? How do you sell the way prospects buy? Again, more questions than any serious Amazon seller needs to consider, if you want your product to get anywhere!

Yeah I know, I’m being a bit pushy here… but a seller would understand, trust me. Sales are not something that just happens like a bolt out of the blue. It’s something you need to make happen by using data, technology, and inbound sales methods, with a professional guide to lead you.

So, back to our original question. Can Old Books Become New Best Sellers? Yes, they can, without a doubt. Imagine, for a moment, that your book had a setup that uses all available data and technology to establish a unique customer experience. Imagine your book standing out, even without a hefty ad budget, led by a data-driven sales strategy… not impossible by any means.

I have a real thing for old books. After all, some books just failed to connect with readers, but many books never had a chance to connect. I always say: it’s never a lost game, as long as you believe in your book. If you want to get your book back in the game, have a little faith, because there is no doubt that it really can be done!

How? Following these steps:

Buy a license for professional tools, like KDRocket, to research your competition, ideas, keywords, and categories.
Join a learning/training program on search engine optimization, social media, blogs, and other marketing channels that have proven successful in selling books.
(I might have one for you: Crash Course in SEO for Publishers)
Learn about your customer base; read reviews, join groups, get involved.
Create your own audience, do some self-promotion. Start with a few followers and never get discouraged.

There’s also a secret sauce you can add to your efforts: consistency. Remember, this is a marathon, not a sprint.

Don’t give up your books. Give them the love, care, attention, and professionalism they need, and help them get their message across to readers who are already looking for what you have to share!

Relationship

The art of reading backwards: the magic of palindromes

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Have you ever tried to read words backwards? I tried it once when I was a kid. My name was Ilek. My cat’s name backwards was Niffum, and my favorite food was etalocohc. He was going around saying words that no one else understood. It was like speaking my own language.

But then I came across some very surprising words that stayed the same when I read them backwards. “Daddy” stayed daddy and “mommy” stayed mommy, and even my friend Hannah stayed the same! I didn’t know it then, but I had discovered the cool world of palindromes.

What is a palindrome?

Palindromes stay the same when you read them forwards or backwards. They can be words:

eye

pop

Radar

They can be phrases or sentences:

never even or odd

don’t nod

Was that a cat I saw?

Do geese see God?

They can be numbers:

505

62326

12:21

And some palindromes are even the same forwards, backwards, backwards, and backwards:

108801

call for help

MIDDAY

palindrome magic trick

Here’s a trick you can do to turn almost any number into a palindrome. First, think of a number and write it down:

3241

Then, write that number backwards and add the two:

3241

+ 1423

4664

In some cases, it doesn’t work the first time. When that happens, keep reversing and adding numbers until you get your palindrome:

4972

+ 2794

7766

+6677

14443

+34441

48884

Are you a palindromaniac?

Warning: palindromes can be addictive! Some people start looking for them everywhere and can go a little crazy searching for palindromes.

You may be at risk of being a palindromaniac if:

  • You have friends named Ana, Eve, Izzi, Otto or Bob.
  • Your favorite times of the day are 10:01, 11:11, 5:55, etc.
  • You love kayaking and have always wanted to drive a race car.
  • Your favorite car is a Toyota.

Know more

Fill your palindromania with these books and resources:

for young children: Mom and dad are palindromesby Mark Shulman and Adam McCauley, gold If you were a palindrome, by Michael Dahl. These two fun picture books are a great introduction to the world of palindromes for children.

For older children and adults: Jon Agee is the king of palindrome books as Go hang a salami, I’m a lasagna pigY palindromania. Cartoony line art meets quirky captions for a little fun.

Health Fitness

Life of a bodybuilder: some interesting facts

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Did you know that bodybuilders have to eat more than 1 g of protein per kilo of body weight? Or that they need to eat every 2-3 hours? Did you know that they go to the gym a lot, but you will be surprised how long they stay in the gym and what they do there? I thought I’d write a quick article to shed some light on some things bodybuilders do.

Most people think of bodybuilding or bodybuilding as a brutal sport full of big, dumb, insensitive jerks trying to make up for something and carrying a serious inferiority complex with them. Have you seen the recent hit on bodybuilders by Planet Fitness gym lately? In it they portray anyone with large muscles as dumb dumb. Well, maybe some are like that, but you can say the same for many people from all walks of life.

A bodybuilder has a relentless urge to work his body, sculpt his body if you will, by using resistance training into a work of art. A hard, chiseled body, perfect in shape and symmetry and based on a healthy diet. In fact, a bodybuilding diet is really amazing. It contains a low fat, high protein, complex carbohydrates and tons of vegetables. All foods cooked to perfection without added salt or fat. It may not be the most exciting diet to live on, but it serves them well in the body department.

Common Bodybuilding Myths:

#1 – The bodybuilder goes to the gym all day and almost every day of the week. This is simply not true. Most serious professional bodybuilders and amateurs will hit the gym 3-5 days a week and usually for about an hour to an hour and fifteen minutes at a time if they are training alone. They learned long ago that if you train past this point, the body releases cortisol and only uses your new hard-earned muscle for fuel instead of carbs or fat as it should. Train for an hour, go home… grow up.

#two – All enormous bodybuilders are in the juice. Is not true. With new advances in supplementation and a better general understanding of the body’s functions with regards to muscle growth and fitness, natural athletes have reached new ground in muscle building.

3# – Bodybuilders go to the gym and train their entire body during their workout. It is usually like this; Go to the gym, work out your chest and maybe a part of your arm (be it the biceps or triceps), hit it from every possible angle. Do about 30 sets of exercises in total. Go home. Come back the next day or the next day, do legs, go home, etc. This grows a lot in your muscles.

4#- All that muscle will turn to fat if they stop exercising. Again, not true. First of all, muscle cannot be converted to fat. Fat is fat and muscle is muscle. Also, most bodybuilders keep most of their muscles forever. Once it grows, it stays. Sure they can be made smaller. Muscle may shrink, but you’d be surprised how much is left forever. Normally, just overeating with inactivity will make you fat.

Here are some other facts that are interesting. Your muscle grows while you sleep. Exercising in the gym with heavy lifting will break down the muscle. The bodybuilder goes home and eats properly and then while resting (especially sleeping) the muscles will grow to compensate for the lifting. Another fact that is interesting is that a typical natural bodybuilder will only gain 8 lbs. of muscle in his body each year. Yes, there are some stories of lifters who put on 20 to 30 pounds. a year but firstly that’s not all muscle and secondly some are enhanced bodybuilders and get a little help with a needle. A natural bodybuilder can gain up to 25 or even 30 pounds of muscle in a lifetime of lifting. And believe it or not, this looks like a ton of muscle. Huge, powerful, hard, dense muscles packed into a frame. Think 175 lbs. skinny guy and now he thinks he weighs 205 lbs. or even more if genetics and proper training come into play.

Well, I could go on with this a bit longer, but I thought some of the basic facts would be interesting for someone who hasn’t lifted weights yet. Here’s a tip. Don’t worry about going to the gym getting too big. You’re not going to get as big as Arnold Schwarzenegger just by working out at the gym. If you could, a lot of people would and we’d have like 200 million, rich (bodybuilding) Mr. Olympia running around the planet. It just doesn’t work that way. If you want to start lifting weights, get a trainer or read about it and go for it. You’ll get hard in all the right places and you won’t look like the giants in popular bodybuilding magazines. Trust me.

Legal Law

Pre-Prepared Legal Documents: Why “Canned” Documents Can Get You Canned

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Watching the commercials on television late at night can be a great education for the estate planning attorney. It seems that every channel has a pre-packaged or “canned” mailer of legal documents to “save you the costs of hiring a high-priced attorney”: “Save thousands of dollars with our easy-to-complete form.” (insert type of document: wills, trusts, powers of attorney, deeds, etc.)!” “Easy to use!” “Avoid paying high prices for something you can do at home!” There are always smiling people and “testimonials” from “customers” who say the forms came with step-by-step instructions and were very easy to use.

To think that the planning, creation and execution of the most important documents in the life of any individual could be so simple!

If only it were so.

This is a classic case of “if it sounds too good to be true, it usually is.” American capitalism is a wonderful thing — and as a small business owner I certainly appreciate the freedom Americans have to make a living — but it’s not so wonderful if it hurts the consumer who spends their hard-earned money on computer programs or training documents that ultimately won’t do the job.

I have had several clients come to me with pre-prepared documents that were either completely invalid, didn’t do what they were supposed to do, or required a lot of legal work afterwards to clean up the mess they got the client into. Some were wills, some were trusts, some were corporate documents, and some were contracts. In each case, the customer ended up paying more, sometimes much more – for me to clean up the mess.

Lawyers don’t spend four years in college and another three years in law school so they can fill out canned forms from an online website or an office supply store. Most legal documents, especially those that people need for their daily lives, require accuracy and formality to be legally valid. And they must carefully follow the laws of the state in which they will be used. Wills must contain very specific language and be executed with extreme precision to be recognized by the courts. One false step and a will is invalid. This is particularly important because you cannot make a will again after you have passed away. And that’s not what you want for your heirs.

The same goes for writes, which must also succeed or they are invalid. Imagine thinking you’ve transferred, or worse yet, He received — property, only to discover that the document is not worth the paper it is written on? Contracts are another type of document that people feel they can write themselves or use “canned” documents without knowing the requirements of the particular area of ​​law or the law of that state. I can’t tell you how many times one of my red-faced client’s previous penny-pinching blunders led to lengthy and expensive litigation.

Is it really worth saving between $750.00 and $1,500.00, depending on the type of document, to have legal documents that may not be valid? While it may be tempting to use pre-prepared legal documents to save a bit, using them is a classic case of being “unintelligent and dumb.” I always tell my clients, “Pay me now or pay me later. If you pay me now it will cost you less than if you have to pay me later to clean up the mess.”

Only a member of the Bar in your state is authorized and competent to prepare these important life documents for you. Seek the right advice and be prepared to pay a reasonable price now for expert advice and labor to avoid a costly problem later.

Lifestyle Fashion

Exciting Benefits of a Tarot Card Reading

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I always feel very honored when someone comes to me for a reading and especially when someone who has already had a reading with me has been recommended to me. I can see how important it is for that person to feel comfortable and at ease. I can guarantee that when most people first come to me they say ‘you’re not going to say anything bad to me, are you?’ or ‘I’m so nervous’ I find this quite disconcerting.

Perhaps they would feel the same if they went to a counseling session and it reveals to me that they have a pessimistic view of their lives. I know they’re not skeptical because they wouldn’t waste their time and money on something they don’t believe in, but I often see that they don’t believe in themselves.

My favorite deck of cards is ‘Tarot of Ye Olde Path’, these are the cards I started with and no matter how many different tarot decks I buy they always guide me back to these cards. These cards are arranged in four rows and represent “past”, “emotions”, “now” and “future” and using the universal language of cards, I can mention some interesting things about them.

The last line clarifies what has gone before and this is often where the customer looks for the tissues. It’s up to them if they want to confirm or rule out what I see, but I know this will trigger a healing process. Their own healing system will kick in and get the wheel turning so they can be free to move on with their lives.

The current line will tell you who is around you now, what you intend to do, how you interact, and what is possible as a result of the here and now. I can explain to them how they got to where they are and what they need to know before moving on. This is invaluable to them because they often have ideas in the back of their heads that then come to the fore.

Once they see that their ideas are realistic and achievable as confirmed in the psychic reading, they know they can move on. There is an element of excitement as you begin to prepare in your mind the next steps you need to take to get where you need to be. I explain how I got my information. I show them the images that stand out from the cards and how this relates to the spread order and the symbolism behind the cards.

The line of the future is always of great interest after all that is what you have come to know about your future. I like to show you the fundamental cards in the line of the past and how they relate to your future. An example of this could be that they were born into poverty, yet they showed determination and knew that they could create a better life. I can see perhaps a negative financial card on the last line but a very positive one on the future line.

It is good to get a reading as it determines where you came from, where you are and where you are going. You have so much power over your own destiny that it is not just in the hands of the guides, spirits, spirit guides and angels, it is all within you. It may surprise you that you are the author and creator of your own destiny to some extent. You are the one with the ‘free will’ to use the power of the mind to change anything that comes up in the reading that you don’t like. Arguably then, sometimes the readings provide warnings that if you take a certain course of action then something might happen, but you are open to change after you have been warned.

Pets

Top Ten New Year’s Resolutions: Why Not Include Your Dog?

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As we ditch that last bit of Christmas candy and move into a new year filled with new potential and new beginnings, I can’t help but wonder how many of our typical New Year’s resolutions can have a dual purpose that includes our dogs.

According to a USA.gov survey, the top 10 New Year’s resolutions range from managing stress to losing weight. So, as a dog trainer who is always looking for win-win situations, I can’t help but wonder how many of the most popular New Year’s resolutions can be redesigned in ways that benefit us as well as our dogs. We all know that a family with a well behaved dog is a happy family in general.

So let’s take a look at the 10 most popular resolutions:

  1. Get fit
  2. Save money
  3. Manage stress
  4. Volunteer to help others
  5. Give up smoking
  6. lose weight
  7. Take a trip
  8. drink less alcohol
  9. Manage debt
  10. get a better education

Now let’s take a look at how these resolutions can be modified in a way that benefits both dogs and humans:

  1. Get fit – It seems easier to stick to a workout routine when you have a workout partner who keeps you honest. If your New Year’s resolution is to exercise twenty minutes a day, why not create an exercise program that your dog can join you in? It’s the ultimate win/win situation. You exercise and your dog gets a chance to burn off some excess energy…and you get a chance to bond. Exercising with your dog is not only good for both bodies, it’s good for both souls.
  2. Save money – Store-bought treats can be very expensive and packed with condoms. Instead of paying too much money for a bag of too few treats, why not break out that dehydrator you had a couple of birthdays ago and use it to make your own dog jerky? The next time you and your family have leftover meat that you were planning to throw away, I recommend cutting the leftovers into small, treat-sized bites and drying them in the dehydrator. Not only will you reduce food waste, but you’ll also be able to stock up on some inexpensive, preservative-free dog treats. If you don’t have a dehydrator, it’s not a problem. You can still use your leftover meat… just be sure to put your goodie bag full of goodies in the fridge to keep them fresh.
  3. Manage stress – I’ve been training dogs long enough to know that a misbehaving or poorly trained dog can put a lot of pressure on a family. So make this the year you enroll your dog in a basic obedience class to kick-start those skills. If your problems go beyond basic obedience training, I recommend getting help at home to get your puppy’s bad habits under control once and for all. Wouldn’t it be nice to have the dog you’ve always dreamed of and finally have that stress gone?
  4. Volunteer to help others – If you are in the market to add a dog to your family, consider adopting a dog from your local shelter. There are many great dogs that need good homes.
  5. Give up smoking – Anyone who has tried to fight tobacco addiction knows that one of the hardest parts of quitting smoking is figuring out how to manage those cravings when common triggers occur. Redirecting is something we do with dogs all the time. When puppies chew on something they shouldn’t, we redirect them to an appropriate toy until it becomes a learned and acceptable habit. We renew them. Well, that works with people too. So the next time you have that trigger cup of coffee in the morning, reach for your dog and the leash instead of a cigarette. Your dog will appreciate going for a walk and you’ll get a little boost from the natural chemicals that exercise produces. He will get a buzz from working out instead of smoking.
  6. Lose weight – The only thing better than living a long and healthy life is living a long and healthy life with your loved ones. When you find yourself deciding where to take your weekly Saturday walk, why not find a dog-friendly spot for your dog to tag along? Both of you will get a good workout while having a good chance to bond. When you get home, your dog will be nice and placid, so you’ll have a chance to try on those smaller pants.
  7. Take a trip – Many people can’t take the vacation they’ve always wanted because they don’t feel comfortable leaving their dog. Today, there are many hotels that allow dogs, as long as the dog is a good canine citizen. Make this the year you train your dog to the point where passing the Canine Good Citizen test is easy so you can finally book that trip and include your dog.
  8. drink less alcohol – When you have a better behaved and more satisfied canine companion, you will find that you will need fewer spirits as life will be more enjoyable and less stressful. (ok, this could be a stretch).
  9. Manage debt – If your dog is on commercial dog food, consider putting him on a more natural diet. While food may be a bit more expensive than your dog’s current diet, the money you’ll save on additional vet visits and possible medications will more than offset those costs.
  10. get a better educationNo – Getting your puppy to integrate correctly into the dynamics of your home will give you more free time to achieve the biggest goals in life. By giving your dog the training, exercise, and diet upgrades he’s been putting on the back burner, he’ll finally be able to finish that Ph.D. program. Who knew that training your dog could be a big step in catapulting your life to the next milestone?

Now that you can see how these changes are possible, make a plan to incorporate them as permanent lifestyle changes. You and your dog will see the benefits, both long term and short term.

Happy New Year!

Chad Culp with http://www.ThrivingCanine.com/blog

Real Estate

A small group of renters may be doubling their multi-family utility costs

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Find out what you can do about it

When utilities are included in the rent of an apartment complex, some tenants are naturally going to consume more than others. High utility users, even if they represent a small group of tenants, can substantially increase costs. Since these cost increases are effectively hidden in rent, residents who use utilities responsibly subsidize those who don’t.

So a question to consider is how much do high users increase utility expenses? Does it make financial sense for a landlord to include utilities or bill tenants directly? If a homeowner decides to leave the included utilities model, what options are available?

The Challenge of a Master Metered Multifamily Complex

A landlord is more likely to include utilities in the rent when their multi-family complex has a master meter for water, gas, or electricity. The drawback of a master metered community is that there is no way of knowing how much of a given utility each resident is using.

If I’m one of those residents who runs the heat all the time, lets a broken toilet valve leak without reporting it, or leaves the air conditioner on even when I’m not home, it’s my neighbors who pay most of the bill. The usual feedback loop linking the amount I pay with the amount I consume is missing. Without this feedback loop, you are more likely to consume carelessly.

As we are about to see, Careless or abusive consumption can increase multi-family utility expenses by up to 70%!

The Ruby Example

Assume you own a complex of 150 units, each apartment has two bedrooms, and the property has a natural gas master meter. The complex uses 7,500 ccfs of gas during heating months and the rate is $1.00/ccf. If you were to use a ratio utility billing system or RUBS method to determine each resident’s approximate usage, it would be 50 ccfs.

Assuming the monthly rent is $750, $50 would be allocated to the expense of gasoline. (See Example 1 in the Supplementary Information section at the end of this article.)

Moderately high users and their influence on public service expenses

Let’s consider a different case where 10% of the tenants (15 households) use 200% more gas than the average. Total gas usage for the property remains at 7,500 ccfs. Average gas users (135 households) use 41.7 ccfs each and moderately high users use 125 ccfs each. The gas portion of the rent should have been $41.70 but the residents actually paid $50. High users generated an increase in rent of $8.33, a 20% increase in the portion allocated to gas spending. (See Example 2.)

High users may be increasing utility expenses by 70%!

Now let’s look at the case where 10% of residents are really heavy users and consume 700% more gas than average. (While this may seem like an overestimate, many experts believe high utility users will consume at this level or more when not paying for services outright.) This high usage can be the result of: running the heat continuously, leaving windows open when the heat is on, or undetected maintenance issues.

In this scenario, average gas users consume 29.4 ccfs each and high users consume 235.3 ccfs each. The gas portion of the rent should have been $29.40, but the residents actually paid $50. High users increased rent by $20.59, a 70% increase in the portion allocated to gas spending. (See Example 3.)

Heavy users didn’t actually double total gasoline spending, but they were pretty close. Our group was also relatively small: only 10% of the residents. Imagine the effect if a higher percentage of tenants were high users.

“Utilities included” are not as attractive to tenants

If the landlord in our example had billed utilities separately, he could charge $700 for rent and the gas bill would be $29 to $50. The lower rent is clearly more attractive to tenants. Unbundling of utilities would also encourage the community to use gas more responsibly, lowering everyone’s overall housing costs.

Transition away from “included utilities” through sub-metering

There are two very effective ways to separate utilities from the rental fee and bill tenants directly. The first, utility sub-metering, offers the greatest benefit to renters and homeowners. Where your multi-family residence’s water lines, electrical disconnect panels, gas lines, or central heating system support it, you can install a wireless sub-metering system. The submeters measure the individual consumption of each resident and the data is used for billing.

Submetering Serves Homeowners and Renters

Submetering helps homeowners by increasing net operating income (NOI) and property values. It protects them from paying for residents’ excessive usage or losing money when utility prices rise unexpectedly. Metering provides useful data that can be analyzed for maintenance issues, leaks, and other issues, ultimately saving the owner and tenants money. This data can also demonstrate how energy efficient your property is compared to others.

Submetering is the best and fairest way to bill tenants for their utility usage. It has been repeatedly shown to reduce utility consumption by 15-35%, known as the ‘conservation effect’. Tenants not only benefit financially when they conserve, they are no longer responsible for their neighbors’ spending habits.

The “conservation effect” in action

Suppose you decide to undermeter your property and the conservation effect causes consumption to drop by 35%. In our example, the use of the property would decrease from 7,500 to 4,875 ccfs. This would reduce the average resident’s gas bill from $50 to $32.50, generating a notable savings of $17.50 per month. (See Example 4.)

Sub-metering pays for itself quickly

A wireless heat metering system for a 150-unit complex with central radiation heating can cost $30,000. Although submetering systems generate a return on investment (ROI) in less than 12 to 18 months, the initial expense is a concern for many homeowners.

To minimize out-of-pocket expenses, some owners finance equipment through a leasing company. In other cases, a nominal fee for the metering system is included in each resident’s monthly bill. Since undermetering is a benefit to both tenants and owners, it follows that both must share the expense.

In an ideal world, federal and state agencies would recognize the powerful effect that undermetering has on conserving scarce resources and offer rebates and affordable financing vehicles to homeowners. This strategy would accelerate the implementation of sub-metering systems in the millions of existing multi-family residences, greatly reducing utility consumption.

“Rubbing” your way to a higher NOI

The second approach to separating utilities from rent is to bill tenants using a RUBS method. Based on apartment size, number of occupants, or some other factor, landlords split utility costs among all residents. When gas is “rubbed”, apartment square footage is the most commonly used metric.

It has also been shown that the implementation of a RUBS system generates a conservation effect. A research study conducted by the National Apartment Association (NAA) and the National Multiple Dwelling Council (NHMC) reviewed 32 properties in three states and found that RUBS generated a reduction in water consumption of 6-22%. Although it is a minor conservation effect, it is still an improvement over the situation when utilities are included in the rent.

The benefit of RUBS to tenants is that by conserving, reporting maintenance issues quickly, and minimizing waste, they can lower their utility bills. Owners benefit because RUBS does not require a cash investment. In addition, RUBS makes landlords not financially responsible for the utility consumption behaviors of their tenants.

The main disadvantage of RUBS is that high utility users still do not pay the full price of their excessive use. However, compared to “utilities included”, it is a marked improvement and one of the smartest and fastest ways for a homeowner to improve their bottom line.

Summary

Multi-family residences that include utilities can allow a small group of large users to significantly increase utility costs and rents. To avoid this, landlords can separate utilities from rent by installing a utility sub-metering system or by using RUBS to bill residents directly. Resident billing creates a financial incentive for residents to use utilities wisely, increases homeowners’ profits, and saves money for all parties.

-Final-

Additional Information

Example 1

  • Total monthly gas usage for the property = 7,500 ccfs.
  • Gas rate = $1.00/ccf.
  • Total gas cost = 7,500 ccfs. x $1.00 = $7,500
  • Average resident bill = $7,500 / 150 units = $50

Example 2

  • Average user consumption = 41.67 ccfs per household.
  • High user consumption = 125 ccfs per household.
  • The average users gas bill should have been = $41.67; residents actually paid $50
  • Average users paid a “penalty” of = ($50 – $41.67) / $41.67 = 20% increase.

Example 3

  • Average user consumption = 29.4 ccfs per household.
  • High user consumption = 235.3 ccfs per household.
  • Average users gas bill should have been = $29.41; they paid $5
  • Average users paid a fine = ($50 – $29.41) / $29.41 = 70% increase.

Example 4

  • Total monthly gas usage for the property = 7,500 ccfs
  • Adjusted Usage (35% reduction after submetering) = 7,500 – (7,500.35) = 4,875 ccfs
  • Average Resident Bill = $4,875 / 150 = $32.50
Sports

Miami Style Cinema: Movies set in the Magic City

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Miami might not be like Los Angeles or New York, cities where movies are continually being shot on every street corner. But, Miami has certainly had its fair share of filming. Maybe it was chosen for the plot of the movie and maybe it was chosen for its location (it’s hard to shoot a beach scene in Nebraska). Whatever the reason, Miami’s presence in the movies has led other Florida cities to come over and shyly ask for an autograph. The following is a short list of film moments born in Miami:

From Justin to Kelly: How Miami surpassed every other city in America for the rites in this movie is beyond me. Seriously, the bidding war for this must have been right up there with the bidding at the Olympics or the Super Bowl. A film featuring american idol first winner and finalist, From Justin to Kelly it was enough to make anyone go from nausea to vomiting. Yeah, seriously, it was that bad. It would provide a lengthy discussion of the plot, but there really wasn’t one. Suffice it to say, the story line involved little more than singing and flapping limbs to the same choreographed routine…although, in one scene, they did dance with towels. That, in a word, was magical.

there’s something about mary: One of the funniest movies to ever hit the screen, this movie featured Cameron Diaz as Mary, a girl that men were willing to go to great lengths to impress. These great lengths included stalking, espionage, spoofing, and giving a fake British accent. Ben Stiller plays Ted, a clumsy but likeable man in love with Mary; a man who wants to impress her but seems a little less psychotic than the rest of the boys. A definite sleeper hit, this movie had unforgettable scenes, complete with laugh-out-loud moments. He also made us look at hair gel differently forever.

Scarface: At one point during the 1980s, almost every teenager had a poster for this movie on their bedroom wall. It is a story about Tony Montana, played by Al Pacino, who arrives in Florida as a Cuban refugee. After becoming a gangster as a result of the cocaine boom of the 1980s, he rises to the top of Miami’s organized crime world, only to fall back. Originally released with little enthusiasm, Scarface It has since become a cult classic and one of the most recognizable films ever made; He has left moviegoers forever considering him one of his little friends.

bad boys: The movie that left us all wondering what “you’re going to do when they come for you.” bad boys features Martin Lawrence and Will Smith as two detectives on the Miami police force. After $120 million worth of drugs is stolen, the two detectives are given the choice of getting the drugs back or losing their jobs. They bicker and bicker with each other, but their love for each other is also genuine, leading to comparisons of this duo to those of lethal weapon Y Starsky and Hutch. Although this movie is over the top, as police dramas tend to be, it is entertaining, fast-paced, and the action is hard to pass up. This film spawned a sequel, which was also shot in Miami.

any sunday: One of the most action-packed football movies, any sunday includes a star-studded cast of actors and professional athletes. With a portion of the film shot in Miami, the Orange Bowl stadium was disguised as the home field of a fictional football team, the Miami Sharks. Al Pacino plays an intense trainer, while Cameron Diaz plays an owner, and a not very nice one. The football movie differs a lot from the moving ones like Rudy Prayed The replacements. Instead, it shows the inner workings and politics involved in managing a professional team.

Tours Travel

Child Custody Lawyer – Adoption Lawyer – California Divorce Lawyer

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Each state has its own regulations regarding family law, and each jurisdiction has its own set of regulations. State laws determine custody rights, spousal support, divorce, and even non-marriage issues such as guardianship, emancipation, and adoption. Attorneys who specialize in family law must have a thorough understanding of the particular statutes of the parties involved. When it comes time to face a life-changing situation, such as a divorce, adoption, or child custody battle, it is extremely important to seek the guidance and experience of a qualified family law attorney in your area.

Adoption:

The adoption of a child is one of the most common forms of adoption today. Children of single parents can be adopted when two people marry and ensure joint power and participation of both spouses in the lives of their children. It is unfortunate, but sometimes insurance policies and inheritance issues are not honored unless a legal connection between stepchildren and stepparents is recognized. Adoption is essentially a way to ensure financial and legal protection for all the children in a family.

Divorce:

A divorce is an important and final step in a relationship that needs to be addressed. Important factors such as financial, medical and emotional implications make this process very difficult. Studies have shown that long-term physical, mental, and social health can deteriorate after a couple divorces. Children are usually the most affected by divorce as their young minds are not as well adjusted as those of adults.

Child Custody:

Since both parents often want to maximize the time they spend with the child, child custody battles can sometimes become very heated. These battles can take a heavy physical, emotional, and financial toll on both parents and children. It is very important that all parents facing a child custody decision prepare for the case so that the personal cost is kept to a minimum and the safety of their child is assured and protected.

If you need help resolving a family problem, you should contact an experienced and dedicated family attorney who will work to protect your legal rights. It is going to be a difficult period of time, but the guidance of an expert attorney will see you through it. Contact a family attorney today.