The warranty is a piece of property a person owns and agrees to use as collateral for a loan, which means that if you can not repay the loan, the Bank may take possession of the warranty. The most common types of warranty are vehicles, real estate and cash.

Unsecured loans are considered unsafe because there is nothing to recover in case of default.

Unsecured loans and credit cards allow people to finance all sorts of things. While banks give loans and mortgages as a vehicle specific, unsecured loans and credit cards can be used for vacations, home furnishings, repairs, etc. ..

While these types of loans are considered unsafe because they have no guarantee, in fact are supported by the signature of the borrower (s). This means that the firm if it is in essence the security for the loan.

Signing a credit card or loan is a written agreement to pay the debt plus interest over a period of time. This helps build the monetary value of the signature of the person.

The amount of money that can be borrowed by the firm varies from person to person. Lenders will have many different things account, including financial data, historical and situation of the applicant. Here are some of the things that lenders consider as trying to gauge the purchasing power of the applicant’s signature.

Finance of the past and present.

Credit report and credit qualifications.

Previous and current employment.

Income, income sources and the length of time received.

Apart from the obvious detrimental effects such as having bad credit, a useless signature collectors, the nightmare and headaches credit repair, pay higher interest rates on future loans, etc., Some people still believe they have nothing to lose if you default on your unsecured debt.

While it is true that the Bank can not recover any warranty, tarnishing the company which is the file, so you no longer have any financial value within the industry.

Reporting of delinquent debt obligations to the credit bureaus, possibly demanding a wage attachment and then transfer to a collection agency if it continues to go unpaid. This means back to mom and pop bank for future borrowing needs.

Family and friends do not always lend you money and even if they could be places may be the risk without the benefit of building credit, so they soon realize the importance of unsecured financing.

Finally the time came to take responsibility, pay for and repair any damaged credit, otherwise lenders will still be there even after suspension of payments, however, the terms of the approval may now require signed, payment terms, collateral, shorter , lower loan amounts and credit limits, monthly or annual fees and of course the favorite trick of the lenders in the guide, sky high interest rates.

In case of default and collection after failed attempts of the lending institution will probably sue and that a decision of the Court placed to decorate the salary of a deputy accused of salary that will go directly from the individual’s salary in monthly installments until debt is repaid in full.

Unfortunately for the defendant, ie, the original borrower, the amount owed is now going to be more then the outstanding balance. Reason being is because interest may even have been coming together with late fees each month.

We also will turn worse in high administrative costs and legal amounts of loans the institution made during the legal process.

Needless to say, it is worthwhile to note that the unsecured loan is as important as any other type of loan and that these obligations are quickly becomes much more expensive then most people never imagined.

With a unique loan unsecured types of loans would be available student loans, car loans and real estate loans. That would be all we could half is to go to school, buy a car and drive back and forth to work every day, sounds exciting.

Before you start to see some ratios applicable to our financial situation, we see an example. Suppose a person has real estate valued at two million dollars. Anyone would envy a lot, but before exchanging assets and financial situations may be better to know more about the financial structure of the balance.

Maybe these two million in real estate are encumbered by a million in mortgages. Not necessarily bad, but this would require us to rent and manage to take the flow of debt payments. But a person who holds one million one hundred thousand in real estate and a debt of one hundred thousand will be in a better financial situation since, although their net worth is similar, is not required to do so aggressive management of their heritage. This knowledge is obtained from the ratios.

But ratios are not only covers how much is our net worth, but also help us understand our costs or we are paying the debt. That is, it is not simply knowing a person’s debts, but the capacity to assume them.

Personal Financial Ratios

* (Housing Cost / Income) x100: is the percentage of our income we use to pay our house. Whether it’s rent as if payment of a mortgage is who recommends no more than a third of our net income. Should probably be less if we live in rent as we are not repaying debt to rent.

* (Debt / Equity) x100: It tells us much of what we have is really ours.

* Liquid Assets / Monthly Expenses: It tells us how long we could maintain our current living standards without affecting our revenues and without extra help (eg unemployment benefits or family support.

* (Debt / Revenue) x100: very important because it tells us is our debt many times our annual income. It is a way to mentally know how many years we must work to pay that debt. It has also been used extensively to explain the difficulty of access to housing when changing the debt for the price of housing.

* (Financial income / Total Revenue) x100: It tells us what percentage of our revenues come from our financial activities and teaches us as we depend on our work. At some point we might ask to stop working or leave our work on the other to provide us with more personal satisfaction.

* (Savings / Revenues) x100: show us the savings capacity we have about our income. If it is not enough for our financial goals we have to increase either by increasing income or reducing expenses.

* (Equity / Income per year): It shows how much we have saved about our annual salary. Depending on our ability to save and our successful (or wrong) financial decisions will be better or worse. It also depends on your age and years of working. A good sign is that little by little, step up. However, if we have obtained a very big increase in our revenues may not be very good.

Of course there are many more ratios, but the goal is not to get a bit with the calculator, but we know better our financial situation. Ask the readers “miss some financial ratio? What seems most important?

From the definition we could say then that your financial security depends on continued revenue you generate, day after day, month after month, etc.

But how can you generate income continuously and without interruption? That depends on the income they receive. According to that described in the book The Money Flow Quadrant by Robert Kiyosaki, the types of income you can receive are:

* Earned income. That corresponds to your salary for performing a job or the fees they are paid as an independent (self-employed)

* Passive income. Which corresponds to income from any property or asset you own (a business, investment in real estate or securities, etc.)?

But problems do not end here. As companies in their quest for growth through innovation and increased productivity are able to grow, but the process left in the way companies less innovative, less competitive, with products and services more expensive and of lowerquality that the winning company. The company, the winner, out of the market to the company losing. This process has the name of the process of creative destruction, the new company creates a new process or system and destroys another company. As investors, we will not only be analyzed when there are positive economic cycles, but also in this series the winners of this process of creative destruction.

The same can be applied to real estate investment. First, the cycles have much influence on the real estate cycle. That is, when the economic cycle is positive, the real estate cycle is very positive and vice versa. Therefore, it is vitally important to predict the cycles when it comes to predicting the real estate cycles. Second, the process of creative destruction also occurs in real estate investment. The most innovative and creative investors move to more rustic investors. Let’s see an example to better understand this point. Five years ago began construction in Buenos Aires buildings with what was called amenities, this meant buildings with very interesting additional services such as gyms, sauna, cinema, swimming pool and many more services. These buildings, through which differed from the rest might have a selling price much higher than other buildings.Therefore, were the winners of the process of creative destruction and buildings with no amenities were the losers in the process of creative destruction.

Therefore, the key decision-making process in a capitalist economy:

Detect trends and take advantage of the cycles (economic, stock market, real estate) and within the trend to detect the winners of the process of creative destruction

If we as investors we perform these activities successfully managed to multiply our money in a sustained manner. Of course, it is very easy to say and very difficult. Large global investors have full teams of economists trying to predict these two variables. Ever been achieved and others less so. But this does not mean we have downplay these two facts.

Often simply knowing the rules of the game allows me to make investment decisions much more efficient with our savings.

Other sources indicate that in evaluating an investment or purchase of real estate Donald always wondered:

What’s the worst that can happen?

How I can overcome the worst happen?

Depending on the answer to those two questions Donald decided whether to go or not, there was a time in which Donald Trump thought “invincible” and stopped their purchases carefully evaluate and question the above issues and simply gave way, however at part of his great adventure that has taken most was losing all his money and then return to and become richer than it was now with his daughter Ivanka.

The evaluation questions above are applicable to any type of investment and rely primarily on finding safe as possible, if the worst happen you can not recover and does not pursue other safer investment, a principle has been to seek security and when there are more options is good risk as going forward.