How Capital and Reserve Requirements Work in Banking

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By Phin Upham


Banks are some of the most regulated institutions in America, and much of that is done to help mitigate risk on the part of both the borrower and lender. As we saw in the 2007 financial crisis, banks who were deemed “too big to fail” presented some of the riskiest propositions. Often, as was the case after 2007, banks are required to up their capital reserves in order to help reduce that risk.

The aim of this kind of regulation is to ensure a firm is managed responsibly. When capital reserves are raised, it’s typically done to protect the bank and its customers. However, it also serves the important function of alleviating some of the burden placed by the cost of deposit insurance. Since the government is liable for that, it’s a good way to help put some distance between risk and the taxpayer who would pay for it.

Financial firms typically express these numbers as economic capital, which helps to represent the amount of risk a bank can take on to ensure that it will function under a failing system.

The most comprehensive accords used in the regulation of reserve requirements are the Basel Accords, named after the city in Switzerland where the accords were drafted. We are currently on Bazel III, which is scheduled to be phased out between now and 2019.

It’s important to note that regulation of this type has to be carefully balanced to ensure the opposite doesn’t happen. Capital regulations are meant to keep banks whole. Today, we are seeing some of those regulations contributing to the dissolution of larger companies to pave way for several smaller entities.

Phin Upham is an investor from NYC and SF. You may contact Phin on his Phin Upham website or Facebook page.

The 5 best money management advice for newlyweds

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Once the wedding and the honeymoon period is over, newlyweds have face living together as a couple. Some couples may follow their own way of managing their finances, which may go against your spouse’s. This can cause a lot of friction between couples, which can then lead to lies and overspending. Money management done as a couple creates a level of trust and security that can strengthen a marriage.

Start talking

Start talking about finances before you get married. talk about how much your earnings are, how much debt you have accumulated, how much you spend and what you spend on in a month.


What are your goals

Make sure you and your spouse discuss your financial goals for the future. This involves subjects like changing your career, retirement, savings, investments and starting a family. For example if you want to purchase your own home in 5 years, let your spouse know that you would like to work towards this goal.

Bank accounts

Will you maintain your individual bank accounts or create a joint account or both?. If you opt for maintaining individual accounts, you may find that expenses cannot be easily tracked. Many successful couples work with individual and joint accounts. Usually the joint account is used for common household utilities and big ticket items that will be used by both parties.

Create an emergency fund

It’s important to have an emergency fund that can be used for unexpected expenses, for example family illness, loss of job or a home repair. Make sure you discuss how much you would like to put away and how much each individual is expected to invest relative to their income.

Senator William Roth’s IRA Plan

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By Phin Upham


Many of the retirement plans currently put into action involve something called a Roth IRA. The Roth IRA is a unique savings vessel that gives Americans the opportunity to contribute their after-tax spending toward their retirement savings plan. This was a major change from the traditional IRA, which allowed savings, but not tax-free withdrawals.

The bottom line for many Americans is that saving is quite difficult. Most brick and mortar banks offer a paltry return on savings accounts, and taxes will cripple whatever small earnings those lower-income Americans might get through traditional means. The Roth IRA provides an important vessel with some strict limitations. Direct contributions may be withdrawn tax-free at any point in time. Rollover can also be withdrawn, provided the account owner is at least 59 ½ years of age. A Roth IRA’s assets can also be passed down to heirs. There are numerous tax advantages that come with a Roth IRA as well.

However, Roth IRA funds cannot be used as loan collateral. Eligibility for contribution also phases out after certain financial limits are met. Congress can also change the rules regarding tax-free withdrawals, which puts some of those savings accounts at significant risk depending on the state of the national deficit.

The sponsor of the bill was the late Delaware Senator William Roth, who championed the bill. Firs introduced in 1989 as the Packwood-Roth Plan, it was initially referred to as an IRA Plus. The limit of $2,000 was proposed.

Eight years later, Senator Roth championed the new bill as part of the Taxpayer Relief Act of 1997.

Phin Upham is an investor from NYC and SF. You may contact Phin on his Phin Upham website or LinkedIn page.

3 Credit Card Budgeting Tips to Abide By

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Most people give you very different answers when you ask them how they use their credit cards.

Also, it’s common that a number of them will admit that they have trouble managing their accounts apart from debt.

Here are 3 credit card budgeting tips to abide by:

1: Avoid spending more than you have

Credit cards are usually a line of credit that is offered to customers. In other words, money that they do not have. Yet it is this that is the root cause of debt. So, keep the amount of the outstanding balance below your available funds. This will help you to pay it off fully and on time. This way, your credit card becomes a method of payment and nothing more. Best part: you will never incur interest and debt as a result.


2: Check balances regularly

To make purchases, credit cards offer the best security and convenience. Given how easy it is to use a credit card, people often lose track of their spending. This is why they are shocked when the monthly statement arrives. While it was not possible to check your balance until the monthly statement came, now you should be able to do this using your online account. Smartphone apps are also provided for your to check your transactions easily too. The reason why you should check your balance is because you’ll know how much you are spending too.

3: Pay off your balance early and often

If you are already in debt, then make your payments as early as possible. This will reduce your charges because it is calculated based on your average monthly balance. Apart from this, you can also make a couple of payments every month if you wish. This will work out for you if you are receive a pay check every two weeks.

The History of the US Mint

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By Samuel Phineas Upham

The United States Mint is responsible for the creation and circulation of currency in the country. Congress created the Mint when it passed the Coinage Act of 1792. Prior to, currency was different from state to state, so it was difficult to assess value. Congress opened the first Mint in Philadelphia in 1792 in a building that became known as “Ye Olde Mint”.

Of course, legitimate currency needed some kind of mark that would identify it as such. Early coins were marked with the name of the facility in which they were produced, so one could quickly identify the origin of the coin and verify it as authentic.

The mintmark was ditched in favor of metal coins during the 60s, but silver was the preferred metal for a long time. Nickels were originally made of nickel, but a shortage during World War II made it more feasible to mix the recipe with some silver. The result was a blending of the old and the new. One can tell whether a nickel falls into this category by observing the back of the coin. Above the picture of Monticello, a “P” designates the origin as Philadelphia. If the date corresponds with World War II, the coin may be authentic.

The main purpose of the mint was to convert gold deposits into coinage, occasionally in the form of gold coins.

Margaret Kelly became the first female director of the mint in 1911, which also made her the highest paid woman on government payroll at that point.

About the Author: Samuel Phineas Upham is an investor at a family office/ hedgefund, where he focuses on special situation illiquid investing. Before this position, Phin Upham was working at Morgan Stanley in the Media and Telecom group. You may contact Phin on his Samuel Phineas Upham website or LinkedIn.

The Perks of Hiring a Construction Consultant

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Construction ConsultantWritten by: Lyle Charles

Construction claims are known to be complicated. Not only that but when you involve the legal system and skip the settlement process, things can only get more stressful. Construction consulting services help relieve the stress and pressure that is placed on you when dealing with a claim. Here are some common reasons why you should hire an expert.

When lawyers handle the claim, it’s most likely going to be littered with verbiage that can be hard to grasp. Many times you will see a lawyer write claims that only other lawyers with experience would understand. This essentially keeps you out of the loop and can lead to misjudging the gravity of the situation. A simple mistake can cost you time and money. Construction consultants guide you through the claim and help you understand the ins and outs of it.

The standards of the construction industry change due to the fast-paced business environment surrounding it. Don’t get left behind and make the wrong decisions. Claims consultants will help suggest the right courses of action to make for each type of claim.

Negotiations are vital in a successful claim. There are times where the claim won’t even make to court saving you the stress of stalling a project. The best resolution will come from the best negotiations.

A deep analysis of your case is also recommended to understand the needs and volatility of the claim. Seeking out construction consulting will give you peace of mind as you won’t have to make decisions that could affect the outcome by yourself.

3 Ways to Protect Your Finances For Retirement

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If you want to live comfortably during retirement, it takes wise choices, a frugal attitude and hard work to get there.

Yet there’s a danger: there’s a tendency to be vulnerable to scams, poor judgment or advisers when you reach retirement age too.

In fact, according to Allianz, fraud victims at the age of 65 and above lost an average of $30,000 every year. Of course, one in 10 lost more than $100,000.

Here are 3 ways to protect your finances while ensuring this doesn’t happen:

1: Keep Investments Simple

If you have a number of 401(k)s or IRAs, consolidate them so that you can monitor them easily. Another option would be to replace stocks and bonds with mutual funds or exchange-traded funds that will need little or no attention. Better still, keep only two credit cards – one for daily use and the other for automatic payments.

2: Have a Backup

If you have a backup person, you’ll be able to spot missteps or bad advice sooner rather than later. Set up alerts with financial institutions so as to keep you abreast of unusually large transfers. You can use an app such as Mint to see daily activity. Of course, if you cognitive issues, then give your financial advisers and doctors the permission to contact your backup.

3: Create an Investment Policy Statement

Doing this will help you to keep your finances on track. This statement should contain information such as how you will preserve capital, what kind of securities you will hold and how much of your portfolio will be allocated to safe and risky assets. One big benefit from this document is that it will help you resist sales pitches that will make you stray away from the investment strategy.

Key Aspects to Financial Technology

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Financial technology is a relatively new field, but the market has grown substantially since 2008. The market is so big, in fact, that nearly 40% of the workforce in London is employed with a fintech firm of some form. Here are some of the key aspects of that industry that have allowed for that exponential growth.


One of the major problems banks have is that they are often too large to handle the smaller transactions that a growing majority of the population needs. Short term loans are a good example. It would cost a bank too much to underwrite a short term loan, especially if they had to deal with thousands or hundreds of thousands. Startups that are equipped to serve P2P lending are better able to service that underbanked portion of the population.


Data fuels much of this growth, especially as we gather more data about the savings habits of people at various income levels. Banks need this data to improve their services, and companies are developing with the sole purpose of crunching this data.


Regulation will also come into play at some point, and, to a certain extent, has already become a factor. One big example has to do with how much cash banks need to keep on hand. New requirements outlined in Dodd Frank have made it harder for banks to lend. That’s created opportunity for startups, but that same legislation can also hamper innovation depending on how it’s used.

Bio: Firoz Patel is the former CEO of AlertPay Inc., and successfully brokered its acquisition by the UK-based MH Pillars. Read an article about Payza here to learn more.

3 Ways to Break Out Of The Paycheck-to-Paycheck Cycle

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There are a number of reasons why people might be living from paycheck. This could either be because of situations out of their control or even due to poor financial choices.

No matter what, it’s hardly an enjoyable way to live because of the pressure that comes with it. Here are 3 ways to break out of the paycheck-to-paycheck cycle:

1: Write Down Your Expenses

Sometimes the problem is not overspending but just not spending the money you already make wisely. In fact, earning more money might not be necessary to cover this perceived deficit. So, take some time out of each payday to decide how that money will be spent. Make sure you list all the upcoming bills and according to the date. A simple Post-It note should suffice.

2: Reduce Spending From Your Budget

If you already have a written budget and have nothing left after your bills, then it’s time to reduce your expenses. In other words, one should be as frugal as possible. At least, this is up until your debt is gone. Even if after you’re in the green, make sure you’re careful with your spending. Look over the internet for a number of ways by which you can live frugally.

3: Look for new ways to increase your incoming cash

The other way by which you can stop living from paycheck-to-paycheck is by increasing your incoming earnings. There are a number of ways by which you can do this. You can look for a second job, apply for a promotion, sell stuff on eBay or even go back to college for a better job.

Tips on Managing Risk in Construction Projects

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The due diligence performed during construction claim analysis is the same kind that should be performed before the project starts. Performing these basic checks will help avoid risk altogether. Even though some risk is unavoidable, accidents do happen after all, you can safely manage most risky situations with the proper checks and balances in place.

Perform Risk Assessment

Hire neutral construction advisory services to review everything, from plans to scheduling, and look for consistency. Construction projects will involve multiple contracts between many companies, and specific mentions of both payment and timing will be important in the event of a dispute. Careful contract preparation is a crucial part of the pre-planning phase and ensures everyone knows the work they are required to do to get paid.

Document Everything

Another key concern, especially in smaller outfits, is documentation. Documentation saves one’s legal life so-to-speak. It may be a good idea to acquire insurance to cover parts of the project as well. It’s also helpful to have an independent party review any existing contracts for outdated language. It’s common for companies to use forms that are sometimes years old without having updated any of the legal language until a dispute occurs. Even if the law is on your side, make sure the work contract reflects that.

Allocate Risk Appropriately

Upon review of the project, just before ground can be broken, it’s helpful to designate certain parties and responsibilities to help allocate risk. The designer, for example, should only be responsible for design-related projects. This helps put power in the hands of those best positioned to use it for the benefit of the project.

Bio: Lyle Charles Consulting helps construction firms manage risk through claims analysis and mediation. For more information on construction project management, search for Lyle Charles.