How Commercial Banks Create Credit or Money

By creating credits we mean the process whereby commercial banks, make it possible for more deposits to be made through loan and this process of creating credits is also called creation of money or money creation. By granting loans to their customers, commercial banks increase the purchasing power of the borrower and also increase the volume of money in circulation. Commercial banks use current account as basis of creating credit or money. However, it is not possible for one commercial bank to create credit or money. For credit or money to be created, the entire banking system, will have to be involved.

Commercial banks are required by law to keep certain percentage of their deposits with them. This percentage kept with them is known as Cash ratio or Liquidity ratio or Cash reserve. This is done in order to protect customer’s deposits and prevent bank crisis. This percentage of cash ratio banks will keep is fixed by the central bank, and varies from one country to another. Assuming the central bank fixes 10% as the cash ratio, it then means that for every deposit a bank receives, 10% of the deposit must be kept in the bank while the remaining 90% can be given out as a loan or overdraft by the bank. This 10% cash ratio is kept or reserved with the bank in order for the bank to meet up with customer’s withdrawals. There are other methods by which commercial banks generate credit, for example the death of a customer, by government policies, by the sale of receipts and treasury bills, and also by selling shares to customers and the entire public.

Source by Eze Ezenwa

Five Natural Supplements to Reduce Stress and Boost Your Energy

Are you tired of feeling tired? Tired of waking up tired? Tired of slogging it out all day at work and tired when you go to bed?

Lack of energy and vitality lowers your ability to cope with the many demands on your time. When you are stressed, your body has to work extra hard to maintain balance and keep your body functioning at an optimum level.

Stress depletes your natural reserves. Have you noticed that when you are tired and low, you tend to snack and binge on fast foods, drink copious cups of coffee and lack the motivation to exercise? Negative, self talk rules your life and no matter how hard you try, you find it hard to motivate yourself to do something positive.

You just feel totally zapped and struggle to make it through the day.

When you feel like this, what can you do to boost your energy and make you feel alive and connected again?

One way to get into the groove and get your mojo back is eating well.

If you wish to improve your energy, then you need to include certain foods in your diet, especially those that boost your metabolism and give you a steady flow of energy throughout your day.

A diet rich in raw and whole foods, fruits, vegetables, herbal teas, grains, nuts and sprouts provides your body with the range of nutrients, minerals and vitamins it needs to sustain you throughout your day.

However, the pace of life and/or poor dietary habits means it is hard for you to eat healthily and well.

Natural supplements offer you a chance to enhance the quality of your diet and can help you manage your stress levels as well as boost your energy levels. Combined with a healthy diet, lots of regular exercise and a supportive relationship, natural supplements offer you a natural and gentle energy boost.

The seven natural supplements listed below have a beneficial effect on brain function and boost physical energy. If you are new to herbal supplements, always seek the advice of a qualified herbalist or naturopath to ensure you use supplements that are ideal for your particular constitution.

1. Evening Primrose Oil – this is helpful for a range of inflammatory conditions such as arthritis and eczema, but its greatest benefit is in the relief of premenstrual syndrome. Evening primrose oil is a rich source of gamma linolenic acid (GLA) or as it is more commonly known as, fatty acid. As such it is able to be converted by the body into prostaglandin. Prostaglandins are powerful natural anti-inflammatories which also improve blood flow through the smallest capillaries.

2. Spirulina – Spirulina can be cultivated or farmed micro-algae. It has one of the highest protein contents of all natural foods. It contains 60 percent complete protein (meat consists of only about 20 – 25 percent complete protein). Spirulina is packed with iron, calcium, fibre, vitamin C and amino acids. Spirulina helps to manage blood sugar levels and cravings. It helps the body to detox and as it is so nutritious gives you a natural energy boost.

3. Echinacea – Echinacea contains elements (polysaccharides, betaine, alkalides and echinolone) that stimulates and supports your immune system by activating the white blood cells to fight infection and trigger the use of natural killer cells and anti-bodies. Echinacea gives your immune system a natural energy boost. It is anti-fungal, anti-viral and anti-bacterial and can be used to treat colds, tonsillitis and skin ulcers.

4. Guarana – Traditionally used by the Brazilian rain forest Indians; this plant has been used for thousands of years as a tonic, stimulant and as an aid to boost vitality. Guarana increases energy, reduces stress and improves mood and performance. Critics claim this is due to the small caffeine content in guarana. However, the type of caffeine present is approximately 35 mg. and has a totally different effect on the body. Guarana is rich in natural fats, which means it gives a slow-release of energy, its slow absorption rate is ideal to boost and maintain vitality throughout the day.

5. Cat’s Claw – is one of the best immune boosters. It is a powerful antiviral antioxidant.

As you can see, under the guidance of either a herbal specialist or naturopath, nature offers you a selection of easy to use herbal supplements to give your body a gentle energy boost and to reduce and manage stress.

Source by Ntathu Allen

What TN Home Buyers Need to Know About THDA Loans

Some of the best loan programs in TN are right under our noses, and THDA loans (TN Housing Development Agency) are one of them. A few reasons why there isn’t a ton of press about these great loans is because 1) not all TN lenders can do them, 2) THDA loans tend to be smaller loan sizes (on average) and coupled with the limitation on allowable fees, many loan officers who could do them choose not to, and 3) many loan officers do not offer them because they believe that THDA loans are a lot harder to get closed, which is not true at all as long as they know the program guidelines. For brevity’s sake, this article will provide an overview for the THDA program rather than detail each of the 3 loans THDA offers (Great Rate, Great Advantage, and Great Start).

The THDA loan programs were designed to offer help to low to moderate income buyers in TN seeking to purchase an affordable home. Here are the main things to know about THDA loans:

  • these loans can be used only for primary residences in TN from one to four units
  • the loans are always 30 year terms with fixed rates.
  • the borrower must qualify for an FHA, USDA Rural Development, or VA loan program before the loan can “become” a THDA subsidized loan program. The vast majority of THDA loans are FHA, since FHA loans have the broadest in eligibility requirements. Minimum credit score for any THDA loan is 620 as of right now.
  • THDA loans can effectively make FHA loans near-100% or 100% financing when combined with available THDA grant money, a “community” 2nd mortgage program like The Housing Fund, or THDA’s “Stimulus” 2nd mortgage program.
  • THDA loans are made generally to first time buyers (including people who haven’t owned a home in 3 years); the exception to this rule is when a buyer is purchasing in a “targeted” county; for example, middle TN “targeted” counties include Cannon, Clay, Dekalb, Franklin, Giles, Grundy, Hickman, Houston, Jackson, Lawrence, Lincoln, Macon, Marion, Maury, Stewart, Trousdale, Van Buren, Wayne, and White.
  • THDA essentially sets its own subsidized or below-market rates, which are dependent on how much grant assistance one might need. There are 3 basic loan types: Great Rate (0% assistance), Great Advantage (2% assistance), and Great Start ( 4% assistance)
  • since THDA loans are intended for “modest” homes, properties must meet eligibility requirements; for example, the sales price cannot exceed the county’s limit. There are only 2 limits in the whole state of TN- either $226,100 or $200,160 (these limits are actually fairly liberal by TN’s standards). The counties which have the higher limit are the following counties: Cannon, Cheatham, Davidson, Dickson, Hickman, Macon, Robertson, Rutherford, Smith, Sumner, Trousdale, Williamson, and Wilson. All other counties in TN fall under the lower limit.
  • the household income of the borrower(s) cannot exceed the median income limit for the county, based on the number of persons in the household; for example, in Davidson County (Nashville), for a 1-2 person household, the total household income limit is $64,900 right now. For a 3+ person household, the limit is $74,635. The lowest limit in TN is $54,500 for 1-2 persons and $62,675 for a 3+ person household.
  • THDA loans limit origination fees to 1% and discount points to.25%, which simply protects the buyer from getting overcharged. And since all THDA rates are the same regardless of the lender used, the main things a borrower needs to do is to make sure they feel the loan officer knows this program well, and that they feel comfortable working with that person.
  • a homebuyer education class is strongly encouraged on the Great Rate program, and required for the Great Advantage and Great Start programs; this class (if applicable) must be completed prior to the purchase, and must be done in-person. It only makes sense for these subsidized loan programs that borrowers know what they are getting into, how to budget, etc. The last thing THDA wants is for a borrower to lose their home.
  • all THDA loans are subject to a federal recapture tax provision if the purchased home is sold within the first 9 years. This tax sounds much worse than it is, though. A very small percentage of people have to worry about this, and even if they do, it’s typically because their income or home value have gone up a good bit since the purchase. That’s certainly not a bad thing!

THDA loans are a great way for first time buyers in TN in get into a home with little to nothing down, with a low interest rate and reasonable payment. Just knowing some of the basics of the program will hopefully help you know if you might be a good candidate for a THDA loan before you even speak with a lender.

Source by Brian Randall Smith

Creativity, Innovation and Entrepreneurship

Part of the romanticism of entrepreneurship is the thought that entrepreneurs are creative, innovative, go-getters, risk takers, driven. All of that implies a high self-esteem and determination. In reality, having a clear understanding of creativity, innovation and entrepreneurship allows managers of institutions and corporations, as well as individual, manage each area differently to get the best results.

People like creativity simply because it is fun. We reconnect with the pure pleasure of getting something that did not exist before. When we create we forget our problems, we are just being, the child comes out, we connect with ourselves and it simply feels good. Our energy pours from the inside to the outside and leaves our imprint, the object of our creation becomes an extended part of ourselves. Creativity also lives in a time and purpose vacuum. The worst enemy of creativity is a good idea.

People like innovation because it implies progress. When we innovate, we have a structure. Innovation becomes change. To change we need the reference, the constraints, the structure, the present, what is there. When we do things differently, we are also creating, but we create with a purpose, fun stops until we reach our goal. Thus, innovation has less power as a self-expression than creativity.

Then we come to the field of entrepreneurship, one of my favorite topics. Entrepreneurship is more about creating wealth than it is about creating a company. It is closely linked to creativity, entrepreneurs MUST have something NEW to offer. It is related to innovation, entrepreneurs MUST find new ways of getting in the market, making something new, doing things differently.

When we check most new businesses, they are me-too’s, and most so-called entrepreneurs are people who have bought themselves a job. They don’t create, innovate or add wealth. They shift what exists to a different person.

Entrepreneurship then is the process of exploring how to add value to others in a new or different way. Entrepreneurs capture that value in the form of wealth, and then that wealth with others: clients, users, employees, suppliers, community, governments, etc. To understand that being creative and being innovative is not enough and to be aware that there is a maximized value waiting to be discovered or created, is what entrepreneurs do best when they plan, then they take action, and finally, they evolve.

It is not a matter of luck as most people link entrepreneurship with creativity and innovation. If you don’t have anything, you create. If you have an unwanted present, you innovate. If you want to create wealth, you give that creation or innovation, the best chance. You don’t need money to create wealth, you need creativity and innovation.

It is by thinking and taking action, by consciously discovering where the creations or innovations have the highest perceived value that entrepreneurs build their wealth… and by doing so, create prosperity beyond themselves. It is not about becoming rich but building wealth.

Without the notion of creating wealth, creativity and innovation can’t find a place in the market. To be able to distinguish where the highest value is, who is the ideal customer or client is to bring prosperity to our communities, and to act upon that thought, is what entrepreneurs thrive at.

There are many tools and methods that capture how entrepreneurs create wealth. It is not an art, or a science. It is the conscious effort of making the best of a product or a service, to find those who value it best, and capture that value, what lies inside the entrepreneur.

Creating wealth escapes the obvious, and creates new valued propositions. Sometimes we use innovation to improve what is there, but most likely, the best results come from a free, playful, fun exercise of creating wealth. Whatever you do to create wealth will improve your skills and build up that wealthing muscle. Even if you compose a song in tribute to your wealth when you are showering!

Here is to your wealth and joy,

Source by Alicia Castillo

Get All Negatives "Legally" Removed From Your Credit Report

Two or three negative items on your credit report can lower your score from a respectable 780 score to a below average of 580. The difference between a 780 score and a 580 score could easily cost you an extra $500 to $3,000 or more each month in higher monthly payments. A low credit score could prevent you from getting hired or getting the promotion you are counting on. You now have a legal way to fight back against Experian, Trans Union and Equifax from putting these negative items on your credit report.

Federal Law requires all 3 Credit Bureaus to have “verifiable proof” of every account on file before they can report anything on that account. If they do not have the “verifiable proof” required when you request it from them then the law requires them to remove all of the negative items on that account from your report. It doesn’t matter if the reported item is correct or not. Before they can report the item on your report they have to have the verifiable proof on file.

The dirty little secret is that all 3 credit bureaus don’t have the “verifiable proof” on file that Federal Law requires them to have. What this means is that the Credit Bureaus are not complying with the law unless you force them to. To force the credit bureaus to comply with the law you have to send them a letter asking them to provide you with copies of the original documents used to set up the account showing your signature on it. The truth is, the original creditor might have this document on file but the Credit Bureaus never have it in their files. They don’t keep files! It is too costly for them to keep this documentation on file considering that up until now very few people know about the law that they do not comply with. If you request proof from them they will at best ask the original creditor to provide you with the document. That is not good enough. If they don’t have the proof in their files then the law requires them to remove the items that they are reporting on that account from your report.

You can get any type of negative credit item removed no matter how bad, how many or how recent. That includes foreclosures, bankruptcy, late payments, charge-offs, judgments, repos and collections. All of them can be removed.

Once removed these items can not be put back on. The law also states that once an item is removed or changed it cannot be re-reported without the credit bureau getting a fine of $1,000 per item for reporting information when the credit reporting agency knows they do not have verifiable documentation. It’s the law.

Bad Credit increases the cost of your car insurance and your home insurance. It increases your mortgage interest rates which means that your monthly mortgage payments will be hundreds of dollars higher each month. Your car payment will be $100-$400 or more higher each month when you have a low credit score.

It is even worse for some people. A low credit score will prevent some people from maintaining their required security clearance or their professional license which means that they may lose their means to earn a living. A low credit score may also prevent you from getting a job promotion or even from getting hired in the first place.

The bottom line is, Credit Bureaus get paid millions of dollars a year from creditors to report negatives on your report but there is a Federal Law that you can use to stop them from doing this. By doing it you will be getting a fresh new start. You can get rid of all those high interest loans and you will never get turned down again.

Source by Thomas Mathews

Is Socialism the Answer to the Global Economic Crisis?

With the Global Economic Crisis that rocked the world, some of the socialist leaders in the world are claiming it was the “blue eyed white devils” and their capitalism that caused it. This is pretty hilarious, but I kid you not, this is indeed what Hugo Chavez said in a speech in Venezuela and in another one to his Socialist/Communist Club ALBA. He called for all of South and Central America to embrace Socialism and everything would be fixed once and for all.

So, then is Hugo Chavez correct? “Is Socialism the Answer to the Global Crisis?” asks one of my economic paper readers. The answer is; absolutely 100% no. In fact, socialism was actually one of the causes of this great economic crisis, and let me explain. Indeed, it was Socialism type policies and intervention in capitalistic markets which caused the economic housing bubble.

This is because we allowed folks who could not afford loans the ability to take out loans for large homes without having to prove their income. We made laws and rules to make it difficult for banks deny loans, and there were members of the Senate and House, which allowed Fannie Mae and Freddie Mac to take extremely high risks. All this was backed by the taxpayer.

Had those things not happened, along with perhaps Elliot Spitzer’s mistake of forcing Hank Greenberg out of his own company that he built, AIG, our global economic crisis and bubble probably would’ve never happened. Elliot Spitzer if you’ll recall, was not only a Democrat, but also an Ivy League lawyer whose opponents said had socialist tendencies.

Socialism is not the answer for global economics, and the more socialist policies interfere with capitalism, the worse things will get. One only has to read Ayn Rand’s “Atlas Shrugged” to see how the story ends, if our global economic policies are based on socialism. Please consider all this.

Source by Lance Winslow

Types and Examples of Leasing

Leasing is an old method of financing which is now gaining popularity almost in whole world. Legally, the lease contract is not a sale of the object, but rather a sale of the usufruct (the right to use the object) for a specified period of time. Under it, there are two parties one is the owner or lessor of the asset and other is the lessee or the party that takes the asset on lease. The lessee takes the asset for use for a specified period of time and makes rental payments. The ownership of the asset rests with the lessor but it is in the possession of lessee and right of use is also transferred to lessee.

It has following are different types. The two basic types of leasing are: Finance Lease and Operating Lease. These are explained below:

(1) Finance Lease: Under finance lease all risks and rewards of ownership of asset are transferred to lessee. The ownership or title may or may not be transferred. A finance lease is somewhat like a hire purchase agreement. Under finance lease the lessee after paying agreed number of installments, is entitled to exercise an option to become the owner of asset.

Example:

Suppose the AB company takes a new automobile on lease for three year. Also assume that at the end of three years the AB company will be called to take the ownership of vehicle at no extra cost. Here not only the vehicle is taken on lease but also the AB company is using the lease agreement as a means of financing the automobile. This type is called capital lease or finance lease.

(2) Operating Lease: According to International Accounting Standard (IAS-17) the operating lease is one which is not a finance lease. Under operating lease, the lessor gives the right to lessee to use the asset or property for a specified period of time, but risks and rewards of ownership are retained by the lesser.

Example:

Let up suppose that MY enterprises owns a complete 6th floor in Eden Tower, a multi story building. Further assume that MY enterprises gives some rooms of this floor on lease to XY corporation.

Now if the value of this building increase due to good business activity then the lessor i.e., MY enterprises can take the benefit of this increase by either selling out the rooms or by increasing the rental amount. On the other hand if the building decreases in value than also the MY enterprises will be the sufferer of loss. This type of leasing is called operating lease.

Besides these two main types, some other types of leasing are explained below:

(3) Sale and Lease Back: Under sale and lease back agreement, an asset is first sold to the financial institution. The sale is made at the genuine market value. After that the asset is taken back on a lease. This type of leasing is advantageous for those companies which do not want to show high debt balances in their financial statement.

(4) Capital Lease: This type of leasing is governed by the financial standard board which is not applicable in Pakistan. Under this type, when lessee acquires an asset on lease, he simultaneously recognizes it as a liability in the financial statement.

(5) Leveraged Lease: This type of leasing involves three parties including a lender, a lessor and a lessee. The lender and lessor join hands to accumulate funds to buy the asset. The asset purchased is then given on the lease to lessee. The lessee makes periodic payments to the lessor who in turn makes payment to the lender.

(6) Cross Border Leasing: It means to operate lease agreement in other countries. Such type of leasing is very difficult in present circumstances. The reasons being that different accounting treatments, tax charges and incidental criteria prevail in foreign countries. Also the tax rules differ from country to country. So a big problem arises as how to present such lease agreement in financial statement.

However, as with recent developments the accounting treatments are being made similar for each items all-around the world by International Accounting Standards and it is hoped that cross border leasing will rapidly flourish in near future.

Source by Arfan Ul Haq

Common Crimes in Society

The state of Nevada, like all the other states within the country, considers breaking the law to be a serious offense. In situations where people have been caught running afoul of the laws of the state, the services of an attorney are often required in order to provide them with effective representation in court. The nature of the attorney used will depend on the type of the crime committed. For people who are responsible or have been victim of acts of domestic abuse, a Las Vegas domestic abuse lawyer might be required. Hiring a Las Vegas domestic violence lawyer ensures that people are able to have their rights as a citizen upheld within the state. Alongside cases of domestic abuse, there are other crimes which are common with the state. A few of these include.

o Charges related to Drug use and control: The use and trafficking of drugs within the state of Nevada is rather high. It is therefore hardly surprising to learn that the state does not frown kindly on people who have been caught breaking this law. In the event of a drug related charge, the services of a criminal attorney from within the state will be required. The most severe of these types of charges are found amongst individuals who have been charged with producing and marketing banned substances. Such cases can often result in long jail terms if the victim is convicted.

o Driving Under the Influence: Drunk driving is one of the leading causes of road accidents and deaths within the state. DUI attorneys therefore work overtime representing the many citizens of the state who have been charged with this serious crime. Most DUI charges inevitably results in the suspension of the driver’s license. If the charged individual is found convicted, he/she faces the possible options of paying a fine, spending some time in jail, engaging in community service or doing all three. The presence of a DUI conviction in a person’s record will also go a long way in harming a person’s credit ratings and social credibility.

o Incidences related to Violence: Assault and Battery are not just limited to occurrences within the home. They also are known to occur on the street. In the state of Nevada, instances where people have been charged with acts of violence will require the attention of a criminal attorney. These acts might be singular in occurrence or related to some other criminal charge-i.e. assault during a robbery. The defense of people who have been charged with such crimes is an especially important one as the results of the case will go a long way in determining the course of the person’s life thereafter.

There are many other instances where attorneys might be required. In the end, what is of significant importance is that only attorneys with credible experience, education qualification and customer history should be hired? Although, the price of an attorney’s services often plays an important role in the decision of which attorney people eventually hire, it is vital that people do not sacrifice quality attorney’s services for cheaper rates.

Source by Connor R Sullivan

Management of Risk – An Art or a Science?

BUSINESS RISK is a term that explains the difference between the expectation of return on investment and actual realization. In CAPITAL BUDGETING, several alternatives of investments are examined before taking an investment decision and only then the Managing Director of the firm along with financial executives gear up for investing in a project that is sound and feasible. Even then the project may not become viable and may not work to our expectations owing to the fluctuations in the economic environment.

So, the million dollar question arises, Whether to invest and if invested, will it fetch me profit? See, you cannot have the cake and eat it too. Risk factor prevails in all kinds of environment and we try to over react in a business arena since it involves huge investments. But remember, MONEY WILL MULTIPLY IF YOU MANIPULATE IT WITH CARE.

Business firms commit large sums of money each year for capital expenditure. It is therefore essential that a careful FINANCIAL APPRAISAL of each and every project which involves large investments is carried out before acceptance or execution of the project. These capital budgeting decisions generally fall under the consideration of highest level of management.

Factors of risk to be considered before investing:

  • Time value of money
  • Pay back period
  • Rate of return on investment(ROI)
  • Uncertainties in the market
  • Cost of debt
  • Cost of equity
  • Cost of retained earnings

Factors to be monitored after investing:

  • Maximising profit after taxes
  • Maximising earnings per share
  • Maintaining the share prices
  • Issue of dividends
  • Ensuring management control
  • Financial structuring

Cost of capital refers to the opportunity cost of the funds to the firm i. e., the return to the firm had it invested these funds elsewhere. Thinking businessmen like RATAN TATA, DHIRUBHAI AMBANI and the like have also mastered the art of capturing the market by INNOVATIVE THINKING THAT PROVES GOOD TO THE MASSES.

While making the decisions regarding investment and financing, the Finance Manager seeks to achieve the right balance between risk and return. If the firm borrows heavily to finance its operations, then the surplus generated out of operations should be sufficient to “SERVICE THE DEBT” in the form of interest and principal payments. Th e surplus would be greatly reduced to the owners as there would be heavy Debt Servicing. If things do not work out as planned, the situation becomes worse, as the firm will not be in a position to meet its obligations and is even exposed to the “DANGER OF INSOLVENCY“.

Considering all these factors, we have to come to the conclusion that FINANCIAL MANAGEMENT is like the BACKBONE of a business firm and WORKING CAPITAL MANAGEMENT will be the blood flow infused into the body. Risks arise ONLY IF WE MISMANAGE, otherwise in a business everything goes as planned and I feel that luck does not favor anybody who is poor in planning and not ready to work hard.

Source by Shyamala Sankaranarayanan

Is Competition a Destructive Force in Society?

Everything comes with positive and negative sides, especially if we talk about competition. On one hand, it brings plenty of hopes and advantages, while on the negative approach, it conveys ruinous jealously and gaucherie. Most people believe that competition makes their life more challenging and tricky.

One of my classmates at schooling level was often confused that why other students race with him in academics. He was an above-average student, who used to attain good marks and attention of teachers with the help of his brilliancy and knowledge, but he never was the topper in the class. I firmly believed that he was the most intelligent student of the class. Even after this, he never managed to get overgenerous marks, as he never believed in competition, in competing with other students. This approach never let him achieve what he wanted, because he never competed with anyone, as he believed that he would get whatever is in his mind, with the help of his knowledge and experience. Though, he succeeded initially in his career, but later on, his entrants, at his workplace, were blessed (or let us call it ‘cursed’) with competitive mindset, who were ready to take over his profile. They competed with him, which my friend never liked. So he started moving to new organizations and this is the sole reason behind the instability in his life. However, I still believe that he is going to get a great life ahead, but he needs to originate his competitive creature from his deep inside.

Why People Think Competition is Destructive

When I spoke to my friend about his non-competitive approach, he told me, “I hate jealously, where a person is ready to the cut the throat of others just for the sake of his betterment.”

Well, jealously is the only bad thing about competition. Otherwise, it is something, which has evolved the human race, from trees to mars. Without competition, the society would not have progressed to this height.

Why Competition is the Necessity

I strongly believe that – for a better environment and lifestyle, competition is necessary in the society. There are eight billion people on the planet. Without competing with others, you can not achieve what you want, as there are thousands of other people, who also desire to achieve the same. You can capture the scene of competition at schools, workplaces, markets, economy, and businesses, and even in your family. In the following snippets of the article, I have described some of the positive impacts of competition on our society – you can not keep away from these affirmative factors.

End of monopoly – It is a consumer-driven market, where monopoly is the greatest nuisance. When there is only one market player, there occurs domination, in which, the seller sets (hikes) the price of its poor-quality goods and services. If there will be other players, as well, in the market, there will be a healthy competition, which will pull down the exceedingly high prices. It will be beneficial for the society to have access to low-priced (and good-quality) goods and services.

Innovation – Due to antagonism, manufacturers will enforcedly prepare innovative products in order to earn their unique identity in the market. For instance, it was the competition (between US and Russia), which piloted the human space exploration program in the decade of 1960s. Additionally, competition also encourages political leaders to work in their constituencies.

Growth and Development – Competition promotes the growth and development of the nation and society. When hoping for a sustainable economy, finance minister lays the foundation of growth and development programs for the nation. This plan is made to take over the economy of some other the nation.

Source by Shailendra Verma