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Jamaica’s $5,000 Bill!
Scotia DBG Assistant Vice President of Projects and Strategic
by: Ryan Blake
BUSINESS LOUNGE
Planning, Johan Heaven gives his thoughts “Another bill again”…. The refrain of this popular reggae song has taken on new meaning in light of the Government’s plan to issue a 5000 dollar denomination of Jamaican currency this year. The announcement has caused some trepidation among the citizens of Jamaica who are fearful that this is a sign that the country is in far worse shape than was thought. Traditionally the issuance of higher denominations of a country’s currency is a sign that the value of the currency is declining usually because of high inflation rates and at the most extreme, hyperinflation. In order to get some perspective on the issue, Your Money sought the opinion of Scotia DBG’s Assistant Vice President of Projects and Strategic Planning, Johan Heaven.
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this time. YM: Is this new bill a direct indicator of the very poor health of our economy at this time? JH: The economy IS in a bad state, I wouldn’t say it is in dire straits but it is certainly bad enough to warrant the issuance of the new bill. The fundamentals, dollar devaluation, inflation etc are under pressure and the new denomination is a direct result of that. Inflation had been double digits over the past couple of years and high single digits the years before that. The thousand Scotia DBG’s Assistant Vice Presdollars is purchas- ident of Projects and Strategic Planning, Johan Heaven. ing less and less and the amount of bills that are being carried by individuals has increased. YM: The public seems to be almost unanimously against the bill; do you think that this is a result of the average man not being fully aware of our situation? JH: I could see how it looks bad to the average man, it might look like the dollar is devaluing to a point that it is worthless but from the present figures I think it is a necessary step. YM: Do you think the recession caused this move or did it simply speed up the process? JH: Jamaica was heading down this road, as you can see our dollar has devalued by 25% over the past year and a lot of that can be attributed to the recession
YM: Do you think the issuance of a 5000 denomination is necessary at this time? JH: The central bank has reported in its findings that the number of $1000 bills that are presently in circulation is quite a bit above the ideal level that they would like. In light of that I would say that it is indeed necessary to go ahead with a new denomination at
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YM: Are there any positives regarding the introducing of this note? JH: It will definitely cut down on the number of notes needed to carry out large transactions, efficiency will increase, and money will mover through the system at a much faster rate.
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10 Smart Steps to: Learn about investing
Provided by: Financially S.M.A.R.T. Services
Question: I try read articles in the newspa- 7. What is the primary market? This is the market pers that talk about investments, but I don’t understand a lot of the jargon that is used. What are some of the basic things I need to know about investing?
where new securities are created and offered for sale to the public for the first time. Money is passed directly between the issuing agency and the investor.
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you study, comprehend and apply the basic concepts. Here are some important terms that can help you to understand the world of investing:
What is the secondary market? This is where previously issued securities are traded among investors. It allows investors to get cash in exchange for
1. What is investing? Investing is when you com-
mit money to a project or endeavour and expect to make a profit. You can invest in business ventures, real estate, physical products, or lending money.
2. What is an investment instrument? This is any
item that is bought with the intention for it to increase in value in the future, when it can be sold at a higher price, and/or provide an income stream. securities bought in the primary market.
3. Where can you invest? Most investments are
bought in financial markets. A financial market is a mechanism that facilitates the organised buying and selling (trading) of financial instruments.
4. What is a security? This is an investment
instrument with a financial value that represents an investor’s claim over real assets or a future income stream. What is legally classified as a security is dependent on a country’s regulatory structure.
5. How are securities classified? Debt securities
entitle the owner to principal and interest payments from the issuer of the security; and equity securities entitle the holder to part ownership in the issuing entity, and a claim on part of its assets and earnings. Securities can be further classified into different asset classes based on their common features.
6. What is the securities market? This is the loca-
tion where investors can buy securities from the entities that create and issue them. Securities can also be traded among investors as well.
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9. What is an exchange? This is a mutual orga-
nization or corporation that provides facilities for persons to trade financial instruments. An exchange may be a physical location where traders meet, or a virtual location where electronic trading occurs without the parties being present.
10. What is over-the-counter (OTC) trading? This
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trading is done directly between two parties who agree on the terms of the contract. Transactions are usually done over the telephone or electronic network, as there is no central organized trading place. Financially S.M.A.R.T. Services is Jamaica’s number one source for practical, down-to-earth and independent answers for all questions relating to personal finance. Get more money smart advice at www.financiallysmartonline.com. Email advice@financiallysmartonline.com with comments or questions.
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MONEY $MART...
Answer: Investing is not difficult to do, once 8.
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by: Cherryl Hanson Simpson
I
n today’s increasingly virtual world, it is possible to run an enterprise from practically any location. Business owners can communicate with their customers, suppliers and the world at large, by simply clicking a computer mouse or a Blackberry keypad. Technological advancements and industry changes have given many entrepreneurs the option to operate from home. Breaking free of the traditional brickand-mortar office can have many advantages for a business owner. Benefits of a home base Firstly, recurring costs such as rent and utilities can be significantly reduced. In fact, if you operate out of your home, a portion of your household expenses can be attributed to the business and are allowable deductions for tax purposes. Lower operating costs can help you to be more competitive in pricing your product or service. You can actually get more done at home by cutting out the time normally spent in commuting to the office. Even better, think of all the money you can save on gasoline and other transportation expenses! A home office allows you to select your own work schedule, so that you can be more productive in the times that best suit you. To decide if a home based business is right for you, ask yourself this basic question: “Will my clients ever need to come into my office to see me?” Is the answer is a definite ‘no’ then go right ahead and set up shop in the comfort of your own home. Although becoming a stay-at-home entrepreneur might seem like the right move, here are some other important points to consider before you take that step: 1.
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Can you create the right work environment? Remember that the entrepre-
neurial life requires you to initially work harder than you did at your nine-to-five. If you have attentioncraving children, or noisy/nosy neighbours, you might find that you’re not able to concentrate on building your business. 2. Do you have enough space to work? Although you might start off with the dining table doubling as your office desk, you might soon realise its limitations for work purposes. Eventually you’ll begin to crave the order that storage containers and filing cabinets can bring. 3. Are you disciplined enough to work from home? Let’s face it; you have to be extraordinarily focused to ignore the temptation of the television when you’re at home. Add the refuge of the refrigerator and the bliss of your bed to the list of home-based distractions that can destroy the urge to work. 4. Does a home office suitE your business image? Although your clients may never visit, the address on your business card can leave clues. People may think you’re a small time operator if you work from home; so as your business grows, it may become necessary to leave the home office behind.
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Cherryl is a financial consultant and coach, and founder of Financially S.M.A.R.T. Services. See more of her work at www.financiallysmartonline. com. Email Cherryl at advice@financiallysmartonline. com. Please add this address to your email address book in order to ensure you receive a response.
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AN ENTREPRENEUR’S LIFE
The Stay-At-Home Entrepreneur
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Credits Publisher eZines Limited Managing Director Tyrone Wilson Your Money Reporters Andre’ Burnett Ryan Blake Kenartur Mitchell Jr. Latoya Hutchinson Columnist Cherryl Hanson Simpson Financially S.M.A.R.T Services Design and Layout Omar Phinn Subscription subscription@yourmoneyezine.com Editorial editor@yourmoneyezine.com Your Money eZine is a product of eZines Limited, and is distributed via e-mail and other online sources such as Facebook. To subscribe FREE, log onto www.yourmoneyezine.com today or email to subscription@yourmoneyezine.com Advertising advertising@yourmoneyezine.com
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