What determines the wealth of a person, the money the person has or the assets?



  Peter Mbalula - Cape Town

Posted: October 20 2012

NDBS Answers:


Wealth of a person is measured against what the person owns both in liquid assets, meaning any accessible money or assets that can be sold to get money.  The other measure is value of possessions; these are items that cannot be exchanged quickly for cash.  Also the debts one has can be used as the more debts one has that may affect the entire wealth since debts are on arranged payments and creditors can apply for liquidation if they are not paid as per agreement, and if the person is owed that is still counted in the personal wealth is the money is recoverable.  If a person owns a company the assets in the name of the company as not counted as personal wealth.





  Is Quid Pro Quo type of contract worth entering into? 

NewdiscoveryBS Reader

Posted: October 19 2012

NDBS Answers:


This is a Latin phrase meaning "something for something". This term is used mostly in business circle where company A enters into agreement with company B whereby A provide services or goods to B in return for goods or services that will benefit either party.  The risk in this kind of arrangement you may not quantify the exact value of the goods you are receiving or service versus the service or goods you are providing.   Win-win situation is seldom.



  How does a country get into current account deficit? 

NewdiscoveryBS Reader

Posted: October 19 2012

NDBS Answers:


The country gets into current account deficit when it imports more than it can export.  By importing more than exporting makes that country a debtor to the other countries than a supplier.  It absorbs through consumption, investment and government spending without producing much.  That country ends up relying much on direct investment, bond and portfolio investment.  But if the country is able to invest abroad and produce more than it is importing and export what it produces that becomes current account surplus, however current account deficit may encourage productivity in a country that is still finding its feet economically  in a short term and attract direct foreign investment also but should not be left unchecked as it may grow wider and make country indebted and become a continuous borrower.                


  Can I run two companies on one business account to minimise bank charges as a small business operator? 

Amelia - UK

Posted: October 18 2012

NDBS Answers:


Amelia, firstly once you have two companies you are no longer a small player, it means you have bigger approach in doing business. So consider yourself a big player. 

The trick here is you are not having one business account for two companies but for one company because for you to open the account the bank will need details of one company.  To minimize cost rather open one account as a business account and for other company as business Savings account which other banks do allow.  There was value in having business account before as you would get cheque book but we are now living in electronic world whereby the difference now could be having an overdraft with business account.  Having separate accounts assists you in tracking every cent you spend and every cent that comes in for each business you have.  On the other hand you can always upgrade the savings to business account when business profit allows.




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