...Article Citation: Mayhew, L., & Smith, D. (2014). Personal Care Savings Bonds: A New Way of Saving Towards Social Care in Later Life. Geneva Papers on Risk & Insurance, 39(4), 668-692. doi:http://dx.doi.org/10.1057/gpp.2014.30 Main Issue of Article: The article “Personal Care Savings Bonds: A New Way of Saving Towards Social Care in Later Life” is an interesting take on a new way to pay for your elderly care after retirement. “Social care” is what most people would associate with long-term care. Personal Care Savings Bonds (PCSBs) go about it in a whole different way. The general idea is to blend a traditional savings bond with the lottery. Combining the practical long-term, safe, savings of a bond with the instant gratification of winning a large cash prize. A very large expenditure of people at the end-stages of life is the cost of their care. These costs often destroy personal savings and drain the assets a person wants to leave to their families all while still costing the government (tax payers) billions of dollars per year. PCSBs would hope to encourage more saving by individuals by introducing a lottery aspect. As with any lottery, a person would buy as many “tickets” as they would like. If their number is chosen, they would win a large cash prize. How PCBSs differ is that the bulk of the money from the ticket would go towards a guaranteed bond. As people buy more and more tickets, the amount in their PCSB account would grow. The administrators...
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...increased by 3, the result is 28. What is the number? 5x + 3 = 28 -3 -3 5x = 25 -------- 5 X = 5 The number is 5. 2. If 4 times the reciprocal of a number is more than 5/2 times the reciprocal of that number, find the number. 4 (1/x) = 3 + (5/2) (1/x) 4/x = 3 + 5/2x 2x (4/x) = 2x (3+5/2x) 8 = 6x + 5 -5 - 5 3 = 6x -------- 6 X = ½ The number is ½. 3. John had $30,000 to invest. He invested part of this money in bonds paying 12% annual simple interest and the rest of the money in a savings account giving 4% annual interest. At the end of the year, he received $2,400 as extra income. How much money did John place in each investment? Bonds = x Savings = 30,000 – x .12x + .04 (30,000 – x) = 2,400 .12x + 1,200 - .04x = 2,400 .08x + 1,200 = 2,400 -1,200 -1,200 .08x = 1,200 ----------------- .08 X = $15,000 (amount put into bonds) 30,000 – 15,000 = $15,000 (amount put into savings) John put $15,000 into bonds and $15,000 into savings. 4. The length of a football field 180 feet more than its width. If the perimeter of the field is 1,060 feet, find the length of the field. 2w + 2 (180 +w) = 1,060 2w + 360 + 2w = 1,060 4w + 360 = 1,060 -360 -360 4w – 700 ------------ 4 w = 175 175 +180 = 355 The length of the field is 355 feet. 5. At a school choir concert, 256 students are standing in rows. If the number of students in each row is equal to the total number of rows,...
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...Japan’s Economic Malaise Three simple models for why Japan’s economy will never grow again Michael Smitka Professor of Economics Washington and Lee University Lexington, VA 24450-0303 MSmitka@wlu.edu Version 2 May 23, 2003 ---------------The first version was entitled Three Simple Models for Undergraduate Economists and was prepared for the ASIANetwork Conference, Furman University, April 11-13, 2003. This paper differs primarily in the introduction and summary, and in the addition of more figures. The core analysis and most of the calculatioins remain the same. Smitka / The End of Growth v2 May 23, 2003 Page 1 I. Introduction I argue below that Japan’s economy will not grow again, and that (with hindsight) this should not be surprising. First, Japan has matured, to the point where its labor force is in decline. Such an economy is unlikely to grow in absolute terms. Second, that maturation occurred in a short span of time, resulting in large structural shifts in the economy. These strained the Japanese financial system past the breaking point, and have stymied efforts at macroeconomic stimulus. I believe, however, that the magnitude of these shifts would have overwhelmed any financial structure. I do not deny that Japan’s financial system exhibited large vulnerabilities, and its macroeconomic policy systematic failures. Again, I believe that these are beside the point. Third, the current structure of Japan’s economy is not sustainable; financial liabilities (bank...
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...You Are Never Too Broke to Save Money - Truth or Fiction? Most articles on how to save money are targeted at people who have at least some disposable income. And although tips on cutting back on expensive holidays and luxury items can be useful, they don't apply to those living from payday to payday. In this article we will provide some tips on how to save funds for those who are still struggling, even though they have cut expenses left, right and centre. Put your salary into a savings account A very good approach to saving money is to have your entire salary deposited into a savings account or an investment account. Do some research and find the best savings account that gives you the highest interest rates. Transfer only the money you need for bills from your savings account to your cheque account. This is a great way to save as there will only be cash in your cheque account for your monthly expenses while the rest of your money generates interest in your savings account. Adopt a "can" and "will" attitude There is a lot of truth in the belief that what we tell ourselves has powerful influence on our actions and ultimately, our realities. Saying "we can't" somehow becomes a self-fulfilling prophecy and we get stuck believing that nothing we do makes any difference. Changing your mindset will change your actions which will ultimately change your circumstances. Remove "I can't" and "I won't" from your repertoire, switch to "I will do whatever it takes to get a handle on your...
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...times where money is now measured in dollars and cents. Money is highlighted as a key commodity needed to function on a daily basis; Some say money is the root of all evil, while others hold the opinion that money brings Happiness. I have a very preservative attitude towards money, I believe in being conservative and saving whatever money you can afford to save. Although I believe in being conservative and saving money, I am not entirely against spending occasionally for leisure. However, when spending for leisure you have to be careful and not spend excessively. Also, I believe in Investing money as long as you can afford to do so. In reference to affording to invest money, you do not have to be wealthy; any one can be an investor, It is key that you exercise good money management skills in order to be successful at this. Money invested is a good thing and can go towards retirement funds, emergency funds, or if you have children, college funds. Over the years, It has become very obvious to me that it is very important to have good money management skills. Two very important events occurred throughout my life and made it clear to me that Managing, and saving money is a necessity. Firstly, in 2010 my first daughter was born and I was not prepared financially because of my failure to save. It was very hard to save and support my daughter financially; it is key that you make preparations ahead of time. Also, in 2012 I set out to go to university in a foreign country where I would...
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...to invest. He invested part of this money in bonds paying 12% annual simple interest and the rest of the money in a savings account giving 4% annual interest. At the end of the year, he received $2,400 as extra income. How much money did John place in each investment? .4x + 12(30000 – x) = 2400 8x/8 = 1200 .04x + 12(30000) - .12x = 2400 x = 1500 .04x + 3600 - .12x = 2400 15000-30000=15000 .12x - .04x + 3600 = 2400 Total invested at .12 = $15,000.00 .08x + 3600 = 2400 At .04= $15,000.000 .08x + 3600 – 3600= 2400 – 3600 15000 x .04 = $600.00 8x = 1200 15000 x .12 = $1,800.00 1,800.00 – 600.00 = $2,400.00 4) The length of a football field is 180 feet more than its width. If the perimeter of the field is 1,060 feet, find the length of the field. x = y + 180 2x + 2y = 1060 x = 175 + 180 2(x+180) + 2y =1060 x = 355 2y + 360 + 2y = 1060 y = (1060 -360) / 4 y = 175 5) At a school choir concert, 256 students are standing in rows. If the number of students in each row is equal to the total number of rows, find the number of students in each row. 256= 162 = total number of students in each row is 16 6) If 6 times a number is decreased by 8, the result is 40. What is the number? 6x – 8 = 40 6x = 48 x = 8 7) Merry had $20,000 to invest. She invested part of this money in bonds paying 10% annual simple interest and the rest...
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...entrepreneurial and managerial skills and technology. FDIs complement the domestic savings in financing the capital formation in the host country. FDIs contribute to the generation of output and employment. The foreign exchange inflow augments the supply of foreign exchange, which is often scarce in the developing countries. In most cases, however, the project being set up with FDI is dependent upon imported plant and machinery, and technology. The foreign exchange -inflow takes care of these import requirements, partially or fully. The direct cost of FDI to the host country comprises remittances made on account of dividends on the equity held abroad, interest on loans or suppliers' credits extended by the foreign investors, royalties and technical fees, for transfer of technology and other services provided by the foreign partner. Unlike foreign borrowings, servicing remittances, viz., dividends in the case of FDI begin after the project starts making profits. However, the servicing burden of FDI builds up very fast, and consumes considerable foreign exchange resources of the host country. Further, these remittances have the tendency to grow over time as the enterprise consolidates and prospers. Thus, the direct impact of FDIs on the host country includes both positive and negative aspects. The favourable impact is by way of generation of output and employment by complementing the domestic savings and bringing in the much-needed entrepreneurial skills and foreign exchange...
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...THE EFFECT OF SAVINGS RATE IN CANADA The impact of savings rate in an economic has become a very conflicting issue in research and among economist all over the world. This may be due to the importance of savings generally to the economic growth and development of any nation. However, the structure of every economy cannot be generalised by a particular economics’ variation because various countries have different social security and pension schemes, and different tax systems, all of which have an effect on disposable income. In addition, the age of a country’s population, the availability and ease of credit, the overall wealth, and cultural and social factors within a country all affect savings rates within a particular country. Therefore, this paper seeks to find the effect of savings in the Canadian economy. Household saving is defined as the difference between a household’s disposable incomes mainly wages received, revenue of the self-employed and net property income and its consumption (expenditures on goods and services). The household savings rate is calculated by dividing household savings by household disposable income. A negative savings rate indicates that a household spends more than it receives as regular income and finances some of the expenditure through credit (increasing debt), through gains arising from the sale of assets (financial or non-financial), or by running down cash and deposits. Since the early-to-mid-1990s, savings rates have been stable in some...
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... One of the major contributors to the same is expected to be the young working population of the country. The working population (15-59 years) of India today largely, approximately 57%, consists of the youth (15-34 years). According to official data, India's labour force, which was 472 million in 2006, was around 526 million in 2011 and is expected to be around 653 million in 2031. In just about 3 years, 25% of the world’s working population will be Indian. Human beings tend to have a higher proportion of consumption in their childhood days, whereas, they save the most in their working years. Thus, the dependency ratio has gone down with the rise in the average savings rate. The saving rate of India has been on an increase since 2003 and currently stands at 33% of the GDP of the nation. The greater savings are expected to fuel higher investment rates contributing to growth of the nation. While the above is the supply side of the story, there are contributions from the demand side as well. The shift in demographics with rise in youth in the nation, there has been a steady rise in disposable income in the hands of individuals. This has led to a change in lifestyle of the individuals leading to growth in demand for consumption of goods to meet more than the basic needs of the individuals. In order to cater to this demand, there has been a drastic rise in consumerism in the country. Today domestic as well as international companies are all flocking to meet the Indian consumer’s...
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...open a pizza parlor in your hometown. You plan to deliver your pizzas in a four mile radius from your shop. Your annual fixed expenses are $54,000. You charge $10 for a pizza and it costs you $6 to make and deliver each pizza. Do not calculate income taxes for the purpose of this exercise. Complete the following problems: 1.Using the contribution-margin approach, what is your break-even point in pizzas? 2.What is the contribution-margin ratio? 3.Compute the break-even sales ratio using the contribution-margin ratio in your calculations. 4.Compute the number of pizzas that must be sold to earn a net profit of $60,000. Part 3: Research Report Research and define the following: A.Define personal saving. Also, differentiate between voluntary and contractual savings. B.What is the European Union (EU)? How...
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...Recession Looms for the U.S. Economy in 2007 z 1 Introduction The recovery that began in November of 2001 is likely to come to an end in 2007. The main factor pushing the economy into recession will be weakness in the housing market. The housing market had been the primary fuel for the recovery until th e last year, as there was an unprecedented run-up in house prices since 1997. With prices now he aded downward, construction and home sales have dropped off by almost 20 percent against year ago levels. Even more importantly, borrowing against home equity, which had been the main factor fue ling consumption growth, will plummet as many homeowners lack any further equity to borrow against. The result will be a downturn in consumption spending, which together with plun ging housing investment, will likely push the economy into recession. The economy will see a subst antial net loss of jobs, with nominal wage growth slowing as the labor market weakens over the course of the year. Overview This recovery has been fueled to a very large exten t by a housing bubble, just as the second half of the nineties cycle was fueled by a stock bubble. Sin ce 1997, average house prices have risen by more than 50 percent, after adjusting for inflation. Hist orically, house prices have moved at approximately the same pace as the overall rate of inflation. 1 This unprecedented run-up has not been associated with extraordinary population or income growth...
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...I. Elements of Business Environment II. Social factors affecting acceptance and rejection of an identified product. III. Texture IV. Texture is a crucial criterion for sensory acceptance and rejection. Certain textures do seem to be universally liked, crispness, for example—perhaps through its association with freshness. Of course, to some extent, we will always prefer textures that are compatible with our dentition, and thus we would not expect infants to like hard foods. Foods that are difficult to manipulate in the mouth—such as soggy foods—are commonly disliked, as are foods that require excessive saliva and effort to swallow, such as dry, tough meat. While food texture is often cited as a reason for rejecting food, for example raw oysters, it is likely that such preferences are also a function of our prior expectations for specific foods. V. Color VI. Food color is also undoubtedly a strong influence on acceptability, but again this is likely to reflect prior expectations. Whether we prefer white (U.S.) or yellow (U.K.) butter depends on what we have eaten in the past. Some colors have been thought to be inappropriate for food. The color blue, for instance, has been suggested as a candidate for a universally inappropriate food color—after all, very few foods are naturally blue. But recent marketing of brightly and "inappropriately" colored foods for children tends to undermine this notion, since the children appear receptive to unusual colors. Removing...
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...Ginny’s Restaurant: An Introduction to Capital Investment Valuation 1) Present Consumption = C0 + C1/(1+0.06)1 Future Consumption = C0*(1+0.06)1 + C1 |Present Consumption (Wealth) |$4,830,188.68 | |Future Consumption |$5,120,000.00 | Virginia’s current wealth is $4.83 million. She can spend and consume that amount today. She can spend and consume $5.12 million one year from today if she consumes nothing today. 2) |Amounts are in Millions | | | | |Investment (today) |Future Cash Flow (end of |Amount Not Invested |Wealth |Percent Return | | |year) | | | | |$1.00 |$1.80 |$3.00 |$4,698,113.21 |17.45% | |$2.00 |$3.30 |$2.00 |$5,113,207.55 |27.83% | |$3.00 |$4.40 |$1.00 |$5,150,943.40 |28.77% | |$4.00 |$5.40 |$0.00 |$5,094,339.62 |27.36% | Wealth = Current Amount of Endowment Remaining + PV of Future Cash Flow of the Investment Virginia should invest $3 million of the initial endowment...
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...000 | $967,000 | Life of equipment | | 7 years | 5 years | Cost per year | | $185,715 | $193,400 | Wages per year* | $1,520,480 | $536,640 | $804,960 | Cost of workers compensation claims** | $436,000 | $32,700 | $207,100 | Total wages and claims | $1,956,480 | $571,404 | 1,015,156 | Savings from current wages and claims*** | | $1,385,076 | $941,324 | *calculated at $43 per person at 2,080 hours per year **calculated at $109,000 per claim ***calculated by deducting alternative wages and claims from current total of wages and claims Recommended Action – Alternative 1 Alternative 1 appears to provide the best course of action. It reduces the workforce to six persons per eight hour shift yet increases productivity per person to 65.33 units compared with the 12.24 units per person currently produced and 32 units per person estimated with Alternative 2. Further, wasted motion is reduced to a mere 1% and pounds lifted to 12 thereby reducing both time wasted and potential workers compensation claims. Therefore, although the initial investment is significant for Alternative 1, these monies are recouped within the first year of implementation because of the savings in unpaid...
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...1.Read the article Asset Price Booms and Current Account Deficits. Explain the basic premise of the article and describe the impact of the real estate and financial asset prices on the U.S. current account deficit. The U.S. stock market experienced pronounced growth preceding the crisis which hit its peak in 2008. This growth coincided with reduced rates of savings (even a negative savings rate at times) as assets were valued highly and used as collateral for additional debt taken on by consumers to purchase additional goods. Those private investors leveraged heavily in the market and feeling perhaps ‘overly’ confident because of the impressive growth and also the rising value of their real estate, were especially vulnerable when the recession hit. Institutional investors such as Fannie Mae and Freddie Mac were induced by the government to issue loans to lesser qualified applicants. This created a massive asset price bubble which culminated in the economic crisis. This recession coincided with jobs losses, sharp declines in real estate values to the point where mortgages went ‘underwater’ (meaning that the value of the real estate was to a certain extent less than remaining amount owed for the property), and a sharp contraction on Wall Street. Paul Bergin, UC-Davis professor and visiting scholar in the Economic Research Department of the Federal Reserve Bank of San Francisco, states that “Rising asset values in the United States permitted households to borrow more easily...
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