REVIEWED BY ADAM HAYES Updated Jun 25, 2019
What Is a Capital Lease?
A capital lease is a contract entitling a renter to the temporary use of an asset, and such a lease has the economic characteristics of asset ownership for accounting purposes. The capital lease requires a renter to book assets and liabilities associated with the lease if the rental contract meets specific requirements. In essence, a capital lease is considered a purchase of an asset, while an operating lease is handled as a true lease under generally accepted accounting principles(GAAP).
How many thousands in one billion?
It all depends on how you define one billion. In the USA, a billion is obtained by multiplying a million by 1000. In Europe, a billion is obtained by multiplying a million by another million.
So, in the USA the system is as follows:
1000 = one thousand
1000 x 1000 = 1,000,000 = one million
1,000,000 x 1000 = 1,000,000,000 = one billion
1,000,000,000 x 1,000 = 1,000,000,000,000 = one trillion
…and so you get the next nmillion by multiplying the previous by 1000.
In Europe you get one million by elevating 1000 to the power of 2, i.e.,
12 Multi-Million Dollar College Degrees
So it’s time to pick a degree to shoot for in college. One of the first questions that begins to burden our minds is why were going there in the first place. What are we looking for in a future career? Are we in it for the money?
Of course we are! And we’re not just talking a few hundred thousand dollars here. We want millions of dollars, and we want it now. Everybody knows that the secret to all those millions lies in starting a business for yourself. However, here’s some college degrees in multi-million dollar industries that you can use to get that business off the ground.
Okay kids, let’s face it: whether they are being sold legally down the street at the You’ll startout overseeing and maintaining the revenue streams of other wealthy individuals and companies. And while you’re doing this, you’ll be taking notes in your head on how these individuals turn small amounts of money into much more cheddar. Armed with this financial management information, and after a little experience making some others’ wealthy, you’ll know how to do it or yourself.
It won’t matter what the logistics are, because you’ll be able to understand any type of business venture simply based on it’s potential to make money. Keep your costs down and those profits up and the sky is the limit with the knowledge you’ll possess.
3. Mechanical Engineering
Remember the Terminator? Yeah, the Arnold Schwarzenegger series about how we build machines that build machines that take over the world? The company that builds the first Terminators is known as SkyNet; imagine how much money a company like this makes manufacturing robots that kill.
A perfect example of what you could start with that mechanical engineering degree. The basic premise of your education deals heavily with converting energy from one form to another, which in business means huge tasks like constructing transportation systems for large cities and building space shuttles.
Imagine starting the first company that builds the first commercially available consumer space vehicle? Ten bucks says the guys who do have mechanical engineering degrees and ten more dollars says they’ll be pulling a Scrooge McDuck and swimming in loot.
4. Computer Engineering
This really doesn’t need to be discussed. Computers have taken over the world and our lives and are finding their way into ever aspect of them. It started with industrial computing machines and has blown up to include almost every tangible object that we can fit a processor into.
Each and every computer has to be designed and constructed, and that means that someone has to have a computer engineering degree to understand it all. From desktops to cell phones, to cars and robots, computers are essential, and engineers who have that entrepreneurial spirit will create companies that will forever thrive.
It may be a very competitive industry, but that just means that the demand for smaller and faster computers and devices exists and it’s up to you to get out there and become a part of it.
5. Business Leadership
Now, we’ve already discussed how, in order to make those millions or billions of dollars, you pretty much gotta run your own business. What better way to learn how to be the boss man then to graduate college with a business leadership degree?
One of the most important aspects of creating a money making machine is knowing how to properly manage and organize people to get the jobs done and done right. You’re only one man and can’t do it yourself.
Important tactics learned include motivational techniques, team building and organization, and learning about values & principles. Learn how to build that army and then watch it crank out dollar after dollar for all your spending needs.
Most students that take up English as a major do so with the thought of maybe getting a writing gig as a career. While writing for a living can be lucrative, it sure as hell is not going to make you a million bucks, let alone millions (with an “s” folks).
And any student who doesn’t write more than likely ends up teaching in schools making nothing for a living. So where’s the green at? Well it does involve writing, and maybe even some “teaching”, but that’s only if you turn it into a business and get books published. Getting a book on the Ny Times Best seller list will net you some decent change that you’ll continue to make royalties on for the rest of your life.
To make millions, create a “brand” like Steven King and Danielle Steel and crank book after book out over your lifetime. Don’t forget to option your books for movie franchises which will create even more income. Last but not least make sure to merchandise the hell out of the characters you create, Harry Potter style, so you can retire at the earliest age possible.
Although many don’t want to admit it, becoming a lawyer gives you two options: become a lawyer and work for the state and make a decent living. Or, option two is get a degree in law and then start a law firm, or law “business”. Morals and ethics get thrown out the door if you’re in it for money, because the only way you get paid is to sue the pants off of anybody and everybody (and their mothers.)
Specialize in targeting big companies that have to get those pay outs; do it enough times and not only will you reap the financial rewards, you also build your name up. By building your name, you get more high-profile cases thrown at you which in turn means more of a take of the settlement money.
Sometimes you’ll be good enough to represent some big time names and celebrities will pay you through the teeth to make sure you get’em out of a bind. Plus, you’ll meet plenty of friends who will show up to the after party when you get sent to hell.
Do you know what Ugg boots are? Sure you do. Just peak you head out side; you’ll see that every single young female that exists wears these stupid things. Multiply that number by the $200 price tag, and you’ll see why a degree in fashion can make your wallet overflow.
Start a company that creates nonsense fashion trends and you can laugh yourself all the way to the bank. In most developed parts of the world, people are ridiculously obsessed with how they look and that includes what they wear and where they buy it. Materialistic, I know, but what do you care?
You’re out to make a buck just like the next guy, so why don’t you set-up some sweatshops in an undisclosed location that pays your workers $1.00 an hour to make t-shirts that you sell in the states for 60 bucks? You’ll be swooning with models and rock stars in no time.
I have one word for you: fuel. Do oil companies make lots of money? I hear they make a little bit. And why? Because many of the things we use every day need it to work, namely cars. Now that oil’s days are numbered and we look to alternative fuels to use, people are creating companies to help fill the void, which means that a lot of money is about to be made.
Armed with your biotechnology degree, you’ll have the smarts and know-how to help supply that environmental friendly biotech fuel, and your numerous cars and houses will show it off. Other possibilities include working with those pharmaceutical majors to help develop new drugs or supplements, which could also help pay the bills.
Communication is the backbone of any business, and somebody’s gotta provide the means for it to take place. The entertainment industry is a billion dollar industry in itself, but still relies heavily on the players who make it all possible.
Graduate with a degree in telecommunications and you’ll have the power to create and implement systems and products that the world simply cannot live without. As communications technology continues to evolve, and as we broaden our horizons and begin exploring possibilities outside of our own planet, someone’s gotta step up to the plate and provide the technology to take us to the next level. Someday soon we’ll be watching TV on Mars; you could be the one that makes it happen.
11. Real Estate
Buying and selling land has been going on since the dawn of time. Back in the day, land was traded not with money but with thousands of men in the armies that invades other counties, all for the sake of owning it.
Not much has changed these days but instead of using lives we use leverage and money to purchase lands and buildings. And he who owns many lands also owns many dollars, especially when smarts are applied. You’ll gather this wisdom by studying real estate in school, and learn all the tricks of the trade to turn that first duplex into millions of dollars in real estate assets.
Try not to get your panties into a bunch here folks, and don’t deny the fact that the central churches of the world are brining in some serious cash. Study the religions of the world and what they’re all about with a degree in religious studies.
This information you’ll learn, covering the oldest business in the history of civilization, and maybe you’ll be able to conjure up your own one; once it begins to take off, donations will turn you you into one of the richest “saviors” that ever existed. Make sure you get the hottest celebrities around to join your cult, er I mean, religious following, and ride the gravy train all the way to mecca.
Now are you ready to be a baller and throw around some cash? Sure you are. Pick your poison and go make it happen. Remember, you’re not gonna make millions working for somebody else. Pick a degree, soak up as much information as you can, and take your newfound intelligence and build a business model around it. Once you get the machine started, teach it how to run itself so you can collect those greenbacks while everybody else slaves away for chump change. It’ll take a lot of hard work, but at the end of the day as your sinking that put on the 18th hole, it’ll all be worth it.
Human Capital Is Crucial in Private Equity — 3 Keys to Success
Meghan Daniels Axial | August 28, 2018SHARE
For private equity firms, filling out the ranks at portfolio companies with top-notch talent is more crucial than ever.
“The private equity industry is maturing. There’s more competition than ever before, and the margins for error are smaller than they’ve ever been. Getting the people factor right has always been important, but now it’s a requirement,” says Sean Mooney, CEO of BluWave and a 20-year veteran of the private equity industry. “As a result, private equity funds are spending more time on human capital than they ever have before.”
There are a few things to consider when it comes to ensuring that the right people are in the right seats.
For PE professionals, thinking on their feet and acting quickly is key to success. “The art of private equity is not only knowing when’s the right time to buy, when’s the right time to sell, etc., but also when’s the right time to make a people move,” says Mooney.
According to Bain & Company’s 2018 Global Private Equity Report, “Hesitation…can be a major source of value loss, as it too often results in unplanned replacements to course correct for suboptimal performance.” The reasons for this hesitation are understandable. There may be an impulse to let the current leadership team prove themselves post-close, especially since the PE firm has likely developed relationships during the deal process. After months of courting, it can be difficult to shift from “‘wooing’ mode to ‘operator’ mode post-close,” notes Bain.
Their report also found that viewing recently acquired companies through rose-colored glasses is all too common among PE firms. In an analysis of deals that ultimately ran into trouble, private equity’s pre-close management assessments rarely identified red flags (see graph below).
There’s no one right time to flesh out a leadership team or replace key members; the answer will be different with every portfolio company. But the more carefully a fund can scope out a team and think about its future before the deal closes, the better.
“Most private equity funds go into a deal really hoping to be able to keep the existing team in place. Not only is changing horses midstream disruptive, but you also want the people to succeed. But it’s important to keep in mind that there are different people who are good in different sizes and stages of companies. For example, if your goal as a PE firm is to professionalize a business, it may be hard for the founder to cross that chasm from an entrepreneur-run business where they’re less structured and A/B testing every day,” says Mooney. Being realistic about necessary changes in advance makes it easier to move swiftly when the time is right.
Find the Right Tools
Bringing in consultants or implementing assessment frameworks can provide helpful structure when it comes time to make people changes.
“Assessment methodologies range from a high-touch, bespoke process at one end of the spectrum to a fully standardized and automated process at the other,” reports Bain. The former may require a bigger spend upfront as well as dedicated consultants (or in-house experts) to research and conduct interviews, while the latter is often less expensive but should be taken with a grain of salt as it may not be entirely comprehensive or applicable to every business or role. Either way, human judgment remains paramount: “neither [approach] eliminates the need for reference checks to validate assessment findings and lower the risk of a mis-hire,” cautions Bain.
Private equity firm Evolution Capital Partners uses a tool called Kolbe, which measures how people are most comfortable solving problems when they are free to be themselves. Kolbe identifies four different “Action Modes” — Fact Finder, Follow Thru, Quick Start, and Implementor — and three different tiers of each type (high, medium, and low). “What Kolbe wants to see is a balance of people with skills in each of the 12 resulting segments, with the belief that you’ll get to a better answer faster with less energy expended” than if you have individuals who are too similar to one another,” says Jeffrey Kadlic, co-founder and managing partner at Evolution Capital Partners.
Certain Kolbe types tend to work best in certain roles. “We look for certain things as we build teams,” says Kadlic. For example, he finds that controllers or CFOs tend to be high Fact Finder and Follow Thru — signs of a good strategic planner. Evolution Capital uses Kolbe both to evaluate the current team at a company as well as to provide another data point when interviewing new candidates. “We have people submit resumes and take the Kolbe before the interview. The Kolbe is an extra screen.”
Don’t Just Focus on Executives
“Smart private equity people are not just focused on the top three or four executives, like they have been historically. They’re recognizing that they have to enhance training and be aware not only of middle management as well but also how people are being treated further down the line,” says Kadlic.
“Increasingly, new data sources and analytics tools allow suitors to take a much deeper look into an organization than ever before,” reports Bain. They detail one example in which a potential acquirer of an industrials company used web-scraping technology in order to figure out why the company’s sales team was underperforming compared to its competitors. The tool found that “the competitor hired younger, more aggressive sales types who were good at hunting for new opportunities and adept at selling a diverse set of products,” while the target company focused on hiring individuals with deep product knowledge and less extensive sales expertise.
With this insight, the potential acquirer was able to create a clear roadmap for success — “either hiring more aggressive sales specialists or creating an analytics team to generate more and better live leads for the company’s engineers-turned-salespeople.” Without this information, the strategy would likely have been to simply replace the sales executive in charge — which may or may not have solved the problem.
Shifting from outsourced to in-house talent can be an important step for portfolio companies at a certain stage of development. Evolution Capital Partners focuses on investing in small businesses — “companies that may have been around for 15 years and are profitable but haven’t yet taken their business to the next level,” explains Kadlic. Bringing in specialists is crucial for these evolving businesses. In the leadership suite, this may mean bringing on a CTO or CFO, but there are also roles to fill in the middle and lower ranks. For example, “In a regulated industry, bringing on in-house counsel is an important consideration. If the company is using outsourced technology, bringing one or two programmers on board can be a necessary step,” says Kadlic.
Identifying which roles are most critical to a specific company’s success at a given moment in time is crucial but difficult. According to Bain, there are two questions at the heart of this discovery: “How important is the role to the overall value of the business?” and “How much does superior individual performance contribute to success in that role?” Often the roles require customer interaction and quick thinking that can’t be replicated without the right mix of intellect, personality, and experience. According to Bain, the most successful organizations “don’t necessarily have more A-level people, but they are relentless about deploying them in the roles that are critical to the company’s success.”
Understanding the methods
A capital lease is a lease in which the lessor only finances the leased asset, and all other rights of ownership transfer to the lessee. This results in the recordation of the asset as the lessee’s property in its general ledger, as a fixed asset. The lessee can only record the interest portion of a capital lease payment as expense, as opposed to the amount of the entire lease payment in the case of the more common operating lease.
Note: The capital lease concept was replaced in Accounting Standards Update 2016-02 (released in 2016 and in effect as of 2019) with the concept of a finance lease. Consequently, the following discussion is for historical purposes only.
The criteria for a capital lease can be any one of the following four alternatives:
- Ownership. The ownership of the asset is shifted from the lessor to the lessee by the end of the lease period; or
- Bargain purchase option. The lessee can buy the asset from the lessor at the end of the lease term for a below-market price; or
- Lease term. The period of the lease encompasses at least 75% of the useful life of the asset (and the lease is noncancellable during that time); or
- Present value. The present value of the minimum lease payments required under the lease is at least 90% of the fair value of the asset at the inception of the lease.
If a lease agreement contains any one of the preceding four criteria, the lessee records it as a capital lease. Otherwise, the lease is recorded as an operating lease. The recordation of these two types of leases is as follows:
- Capital lease. The present value of all lease payments is considered to be the cost of the asset, which is recorded as a fixed asset, with an offsetting credit to a capital lease liability account. As each monthly lease payment is made to the lessor, the lessee records a combined reduction in the capital lease liability account and a charge to interest expense. The lessee also records a periodic depreciation charge to gradually reduce the carrying amount of the fixed asset in its accounting records.
- Operating lease. Record each lease payment as an expense. There is no other entry.
Given the precise definition of a capital lease, the parties to a lease are usually well aware of the status of their lease arrangement before a lease is signed, and typically write the lease agreement so that the arrangement will be clearly defined as either a capital lease or operating lease.
Equity in Early Education: The Principle
“For a prosperous economic and social future in the United States, all children should have an equitable place at the starting line.”
—A Fair Start: Ensuring All Students Are Ready to Learn, SPREE Working Group Report
Recently we began a series of blog posts that look closely at the report issued by the State Policy and Research for Early Education(SPREE) working group in January 2018 entitled A Fair Start: Ensuring All Students Are Ready to Learn. This report, commissioned by the National Conference of State Legislatures, provides an in-depth assessment of early education in the US and offers approaches to improve the early learning experience for children around the country.
At the heart of the report is the SPREE Framework, a guideline two years in the making that will give policymakers and education leaders new insights and clarity when planning their state-sponsored early learning initiatives. The framework consists of five key principles that the SPREE working group identified as critical components to planning and executing an effective early learning program. In this two-part blog post, we will take a closer look at the first principle, Equity, which lies at the core of the entire framework, and examine why it is so essential to the other principles.
Equity in Education and Life: The Key to Better Outcomes
One of the fundamental insights of the SPREE report is the vital importance of creating an education system that supports and develops all students, regardless of their situation. The sad truth is students in the US face significant disparities in educational opportunity, despite the best efforts of teachers and administrators. In particular, serious gaps exist in providing young children with quality early learning experiences, and this is particularly true for students of color or from low-income situations. Yet a substantial body of research underscores the importance of early learning in helping young children develop and prepare for school.
That is why the SPREE working group chose Equity as the first and core principle of the SPREE Framework. According to the group, equity is the core concept that should form the foundation of any policy discussions around PreK to grade three (P-3) education. The report provides us with a clear definition of equity: “Educational equity is the assurance that every student has access to the resources and educational rigor they need during their education despite race, gender, ethnicity, language, disability, family background or family income.”
An equitable education system helps all students develop the knowledge and skills they need to be engaged and become productive members of society. More importantly, giving all children an equitable start would lead to better economic and social outcomes for individuals, for regions, and for our nation.
Three Strategies for Achieving Equity in Early Education
For each of the five principles identified in the SPREE Framework, the SPREE working group also outlined a number of strategies for accomplishing that principle. These strategies represent actionable steps that, if followed, increase the likelihood of moving toward educational equity.
Let’s take a short overview of the three strategies that are highlighted in the Equity principle. In the followup to this post, “Equity in Education: The Strategies,” we’ll go into more detail.
STRATEGY #1: ADDRESS POVERTY AND THE ECOSYSTEM
One of the fundamental positions of the SPREE working group is the belief that in order to achieve success in early childhood education, education leaders and policy makers must understand and address the varied and complex forces that affect how children learn. The better these challenges are understood and addressed through policy, the more equitable and effective the outcome for those children who need it the most. Read more
STRATEGY #2: INCREASE ACCESS AND REMOVE BARRIERS
One of the keys to equity is removing barriers and increasing access to early childhood education resources that are crucial to mitigating early learning and development gaps. The challenges are many. Parents are often unaware of the many benefits and advantages that early childhood learning provides. Even if they are aware, finding and accessing resources can be problematic and affordability can be an issue. Removing these barriers and creating more access to early learning options can make all the difference in a child’s education. Read more
STRATEGY #3: USE DATA AND REPORTING TO TARGET SERVICES AND SHINE A SPOTLIGHT ON EQUITY
The difference between equality in education and equity in education is subtle yet significant. Where equality aims for equal treatment of all students with access to the similar resources, equity strives for giving each student the resources they need to compete on equal footing. Knowing where each child is in their development and what resources they need to close gaps depends on data, and this is why the third strategy outlined in Principle 1 of the SPREE Framework is so important. Read more
The Importance of Embracing Equity as a Core Value
Each of the three strategies outlined in Principle 1 provides an actionable guideline for achieving equity and addressing the critical economic, social, and global issues that are invariably connected to equity in early learners. The choice of equity as the foundational principle and the heart of the SPREE Framework is noteworthy. Equity is vital to improving school readiness and creating a fair start for early learners, and only when all participants in the education experience embrace equity as a core value – and use it to shape policy and practice – will we see meaningful progress toward those goals.
For a more detailed explanation of each strategy, have a look at “Equity in Education: The Strategies.”
Is the government making money off your student loans?
This is a modal window.Something went wrong during native playback.What $100,000 in student debt feels like
It’s easy to see why the 43 million Americans with student debt get riled up when they hear the government is making money off their loans.
The federal loan program was, after all, created to make college affordable for more Americans.
“That’s probably one of the only things the government shouldn’t make money off — I think it’s terrible that one of the only profit centers we have is student loans,” Donald Trump told The Hill in July.
Hillary Clinton’s campaign website says she will “significantly cut interest rates so the government never profits from college student loans.”
But is the government really making money off of student loans?
Profit or loss?
By one estimate, the federal student loan program could turn a profit of $1.6 billion in 2016, according to the Congressional Budget Office.
That’s not a huge profit when you consider that the program lends out about $100 billion a year. But the CBO also projects that it would keep making money each year over the next decade.
That’s the official calculation that government budget analysts are required — by law — to use when estimating the cost of the federal loan program.
But the CBO itself says there is a better way to calculate the money coming in and out of the loan program, which accounts for the risk that more students will fall behind or default on their loans than originally thought. So while the official estimate goes in the federal budget, the agency publishes both projections.
By that measure, the loan program would result in a loss for Uncle Sam — and not an insignificant amount. It shows the government would lose about $20.6 billion this year, and would continue to lose money over the next decade.
The two estimates are so widely different becausethere’s no way to know the exact cost of loans given out in one year until it’s fully paid off — and that could take 40 years, according to a report from the Government Accountability Office.
That means they have to make guesses about how fast students can pay back the loans, how many will defer payments while they go to grad school or look for work, and how many will default.
The CBO’s favored estimate — the one that predicts a loss — takes into account the risk that those guesses are wrong.
There’s a lot of risk in student loans, said Jason Delisle, an expert on student loan programs and Fellow at the American Enterprise Institute, a conservative think tank. The government offers loans to students at accredited colleges, with very few questions asked. It doesn’t check on your credit score, there’s no collateral, and there’s a 25% default rate, Delisle said.
Undergraduate loans always lose money.
No matter which way you do the math, the loans offered to undergraduate borrowers do not make money for the government. Any profit comes from loans made to graduate students and parents, which charge higher interest rates.
The interest rates on undergrad loans are usually low, plus the government also pays the interest on subsidized loans for some low-income undergraduates while they’re in school.
If you borrow a student loan from the government this year, you’ll be charged a fairly low interest rate.Undergraduates currently pay 3.76%, while graduates pay 5.31% and parents pay 6.31%.
The Obama Administration has tied the interest rate to the 10-year Treasury note, plus a margin, which varies depending on the loan type. That rate is locked in for the lifetime of the loan.
How much money is lost on the undergraduate student loan program? It is expected to lose 3% on money it lends over the next four years, according to Delisle’s report, which is based on CBO data.
But it would earn a 14% profit off the loans for graduate students and parents over the same time period, according to Delisle. (He uses the official calculation method. When accounting for more risk, the CBO finds that government would lose money on all loans except for those that go to parents.)
Are interest rates too high?
The real problem is for those who have already graduated and are struggling to pay down their debt. The government does not currently allow them to refinance their federal loans to the current, lower rate. And interest rates have been much higher in the past — as high as 6.8% for undergraduates who borrowed between 2006 and 2008.
The GAO has tried to find a breakeven point for interest rates, but came to the conclusion that it’s too difficult to determine.
Meanwhile, there are about 8 million Americans currently in default on their federal student loans, according to the Department of Education. They can refinance with a private lender — but only if they qualify, usually by showing high income and good credit. Clinton’s plan would likely allow them to refinance with the federal government.
But interest rates won’t necessarily reduce loan defaults.
It could make loan payments more manageable, but the effect is small, wrote Susan Dynarski, a professor of economics, public policy and education at the University of Michigan.
Cutting the interest rate by about 2% on a $20,000 loan for example, only reduces the monthly payment by $20 if the borrower is paying it off in 10 years, according to her paper.
Tying debt payments to a borrower’s income could be more helpful.
The U.S. does offer income-based repayment plans for those who apply, but it’s not available to everyone. Payments are set at 10% of disposable income from the previous year, which could hurt those borrowers who don’t have steady pay. It also requires the borrower to opt-in by reapplying annually, or every time their income changes, in order to adjust the loan payment.
Some other countries, like England and Australia, have made the income-based program automatic. Payments are taken directly out of your paycheck (like taxes), and automatically adjust if your income changes.
Market Value Of Equity
REVIEWED BY JAMES CHEN Updated Jun 25, 2019
What is Market Value Of Equity?
Market value of equity is the total dollar value of a company’s equity calculated by multiplying the current stock price by total outstanding shares. A company’s market value of equity is therefore always changing as these two input variables change. Market value of equity is a synonym for market capitalization. It is used to measure a company’s size and helps investors diversify their investments across companies of different sizes and different levels of risk.
There’s A Solution