E-LOAN to Offer FHA Loans

The financial services company known as E-LOAN is offering FHA loans as a reaction to the tightening credit market.

Officials with E-LOAN say, "Unfortunately, we are seeing an unprecedented number of homeowners being forced to foreclosure on their homes because they cannot afford their newly adjusted mortgage interest rates. For many, the flexible guidelines and competitive rates of these FHA mortgage loans will mean the difference between losing their homes and being able to keep their piece of the American dream fully alive."

FHA loans are becoming more popular in the wake of tightening credit standards and declining home values. With FHA loans, down payments can be as low as 3%. In addition, down payments can be gifts from a relative. With FHA loans, borrowers can refinance from high adjustable rate loans and lock into low, fixed-rate loans. The loans are also federally insured and are particularly appropriate for 1st-time borrowers.

As E-LOAN officials have stated, "This is a great loan product for the millions of buyers out there struggling to find a way to buy their first home - especially in today's ever-tightening credit markets. It is also ideal for borrowers with adjustable-rate mortgages that are getting ready to reset into a higher rate."

E-LOAN calls itself a "nationwide financial services company dedicated to providing consumers with a simple, easy and open way to obtain mortgage, auto loans, home equity loans, and online savings and certificate of deposit accounts."

Since it began in 1997, E-LOAN has gained a reputation for improving lending in innovative ways. Studies indicate that E-LOAN ranks as one of the top 20 most trusted companies for privacy in America today. Since it began, E-LOAN has funded more than $32 billion in mortgage and consumer loans.

Meanwhile, industry experts say they don't expect the troubled housing market to turn around until the middle of this year.



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Higher interest rates hurt E-Loan 3Q

Higher interest rates will put a crimp in E-Loan's (Nasdaq: EELN) third quarter results, the company said Thursday.
E-Loan, an online mortgage originator, said third quarter sales will be roughly $4.7 million to $5 million with pro forma loss of 34 - 35 cents a share. According to First Call, analysts were expecting a loss of 29 cents a share.
The company, which went public in June, said higher interest rates pummeled its refinancing revenue. E-Loan's mortgage refinancing volume fell about 38 percent in the quarter. Third quarter mortgage-related revenue was also hurt by its ability to process loans purchased in the secondary market. E-Loan is trying to increase its number of purchased loans to boost revenue. Typically, it passes loans on to other lenders.
E-Loan's funding of purchase loans increased 163 percent from the second quarter, growing from 18 percent of total second quarter originations to 50 percent of total originations in the third quarter. Officials said purchased loans make revenue more predictable.
"These capacity issues did not affect our ability to serve customers," said CEO Chris Larsen, on an analyst conference call. Larsen said the inability to process the loans meant E-Loan's interest rate locks expired. The company has hired more employees to compensate. The company maintained that capacity problems were a "one-time issue."
The sequential third quarter revenue growth is bleak for E-Loan considering the third quarter includes $300,000 to $400,000 in revenue from CarFinance.com, which was acquired Sept. 17. Revenue from the second quarter will be about flat. In the second quarter, E-Loan reported sales of $4.6 million and a pro forma loss of 30 cents a share. In the third quarter of 1998, E-Loan reported sales of $2.1 million and a loss of 11 cents a share.
Nevertheless, E-Loan implied it was doing better than its industry peers. The company said mortgage applications increased 35 percent in a quarter where rising interest rates caused a 24 percent decline in industry-wide mortgage applications.
To lessen its exposure to interest rate risks, E-Loan said it is diversifying with CarFinance.com and forging alliances to offer credit cards and home equity loans. The goal is to fulfill "all consumer debt needs online," the company said.


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ELoan Mortgage Bails on the Subprime Borrower

ELoan Mortgage bailed out on the subprime market about a year ago. Back then ELoan Mortgage was the first of many lenders to turn their backs on the subprime borrower.

As I predicted a few posts back, the bruised credit borrower would be left out in the cold the minute the big boys figured out the subprime loans they pushed so feverishly just 18 months ago are ticking time bombs ready to explode.

ELoan Mortgage subprime lending division showed a $39 million loss. This lead to the retirement of the wholesale operations President, Cameron E. Williams.

Like ELoan Mortgage, Mortgage Lenders Network of Connecticut also closed their bad credit wholesale operation so abruptly as to leave borrowers in the lurch for loans already approved. (see comments below)

On a personal note, a real estate agent friend of mine recently corroborated this ever increasing problem when 3 out of 4 of her closings were stalled while the buyer’s mortgage broker scrambled to find another lender after the first one bailed for the exact same reasons.

If you are a consumer needing a bad credit loan, or you’re in one of these loans now requiring a refinance to avoid increasing rates, you’ve probably already missed the boat.

A word to the wise…

Of course, their A paper lending division is still up and running as their TV commercials never stop!
ELoan Mortgage whose slogan is “Radically Simple” has widespread TV ad campaigns touting no cost loans. This review of them here would have to be negative since that right there puts them in the dog house with me. Perpetuating the idea mortgages are free sends a mixed message and does no one any good.

Of course, if you’ve read any Mortgage Insider articles on no cost loans you know the only way they can deliver on that message is to charge higher rates…much higher. You would also know that since ELoan Mortgage is a bank they will never have to disclose the “extra” profit they make over and above covering the closing costs.

I’ll conclude my ELoan Mortgage review by saying they are also owned by a Puerto Rican mega-bank called Popular, Inc. I don’t know about you but I’m not sure I’d want private financial information sitting off-shore.

Some thoughts about ELoan Mortgage to ponder before submitting a “Radically Simple” online loan application!


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Popular, Inc. Reports Financial Results for the Quarter and Nine Months Ended September 30, 2009

Popular, Inc.
("the Corporation") (Nasdaq: BPOP) reported a net loss of $125.0 million for
the quarter ended September 30, 2009, compared with a net loss of
$183.2 million for the quarter ended June 30, 2009, and a net loss of
$668.5 million for the quarter ended September 30, 2008. For the nine months
ended September 30, 2009, the Corporation's net loss totaled $360.7 million,
compared to a net loss of $541.0 million for the same period in 2008.
    Refer to the accompanying Exhibit A - Financial Summary for "per common
share" information and key performance ratios. Also, refer to Exhibit B for
credit quality information and to Exhibit C for summarized income statement
information by reportable segment. As indicated in previous filings, in 2008,
the Corporation discontinued the operations of its U.S. mainland-based
subsidiary Popular Financial Holdings ("PFH"), and thus the results of PFH are
presented as part of "Loss from discontinued operations, net of income tax" in
Exhibit A.
    "Third-quarter results still reflect the effects of a deepening recession
and rising unemployment in Puerto Rico. The island's residential construction
market remains stagnant with low absorption rates, requiring a high level of
provisioning," said Richard L. Carrion, Chairman of the Board and Chief
Executive Officer of Popular, Inc.
    Carrion continued, "While some U.S. economic indicators have shown some
improvement, our consumer and mortgage portfolios are still feeling the impact
of job losses on the U.S. mainland. We expect these economic trends,
particularly in Puerto Rico, to continue for the foreseeable future. We
continue to work on improving our U.S. franchise and maintaining our dominant
position in Puerto Rico for the turn of the cycle."
    During the third quarter of 2009, the Corporation took steps to increase
its capital position that resulted in total additions of $1.4 billion to Tier
1 common equity.
    On August 25, 2009, the Corporation completed the settlement of its
previously announced Exchange Offer to issue up to 390 million shares of its
common stock in exchange for its Series A and Series B preferred stock and for
its trust preferred securities. As part of the Exchange Offer, the Corporation
issued over 357 million new shares of common stock for a total of over 639
million common shares outstanding. This Exchange Offer resulted in an increase
in common stockholders' equity of $919.1 million, resulting from the exchange
of Series A and Series B preferred stock and trust preferred securities into
common stock. This included newly issued common stock and surplus of $608.4
million and a favorable impact to accumulated deficit of $310.7 million,
including $80.3 million in gains on the extinguishment of trust preferred
securities recorded in the consolidated statement of operations for the
quarter ended September 30, 2009.
    Also, as announced on August 10, 2009, the Corporation agreed with the
U.S. Treasury to exchange all $935 million of its outstanding shares of Series
C preferred stock of the Corporation for $935 million of newly issued trust
preferred securities (the "New Trust Preferred Securities"). The New Trust
Preferred Securities have a distribution rate of 5% until December 5, 2013 and
9% thereafter (which is the same as the dividend rate on the previously
outstanding Series C preferred stock). The transaction with the U.S. Treasury
settled on August 24, 2009. The particular exchange with the U.S. Treasury
resulted in a favorable impact to accumulated deficit of $485.3 million
resulting from the excess of (1) the carrying amount of the securities
surrendered (the Series C preferred stock) over (2) the fair value of the
consideration exchanged (the New Trust Preferred Securities).
    The Corporation's Tier 1 common equity to risk-weighted assets ratio
increased from 2.45% as of June 30, 2009 to 6.88% as of September 30, 2009 as
a result of the transactions described above. See "Reconciliation of Non-GAAP
Financial Measure" for a reconciliation of Tier 1 common equity to common
stockholders' equity and a discussion of our use of this non-GAAP financial
measure in this press release.


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Current Citibank CD Rates

Citibank is offering one of the best CD rates available these days for a 5-year certificate of deposit. The current annual percentgage rate is 3.44 percent and the current annual percentage yield is 3.50 percent. The minimum opening deposit is $500.

Find current CD rates in your zip code by using our CD rate search engine here. Current CD Rates

Other banks that come close to Citibank’s 5-year certificate of deposit rate include E-Loan, their 5-year certificate of deposit yield is at 3.40 percent and Ally Bank, their 5-year CD yield is currently at 3.30 percent.

Citibank’s 4-year certificate of deposit rate is currently at 2.71 percent with and annual percentage yield of 2.75 percent. Discover Bank is offering a 4-year certificate of deposit rate of 3.06 percent and an annual percentage yield of 3.10 percent.

Citibank’s 3-year certificate of deposit rate is currently at 2.23 percent with an annual percentage yield of 2.25 percent. Their 2-year certificate of deposit rate is at 1.73 percent with an annual percentage yield of 1.75 percent.

One-year certificate of deposit rates are at 1.49 percent with an annual percentgage yield of 1.50 percent. Current online savings account rates are higher than Citibank’s one-year CD rates so they might be a better option for you considering interest rates will start heading higher by early next year.

Citibank also has competitive mortgage rates, their current advertisted 30-year fixed mortgage rate is 5.125 percent with 0.75 discount points.


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Top 45 Mistakes Made When Seeking a Loan

1. Not investigating all your options: This is probably the biggest mistake in all domains, not only in finance. Many people use credit unions for loans, while others find good deals from their local banks. The key is to investigate all potential lending options, and by by this I mean ALL. I remember I used to read about every information related to this, including internet reviews for a whole year before taking the decision! Several sites, such as LendingTree. com, E-Loan. com and Amortization-Tools. com will help you make financing comparisons and calculate the best loan you can afford.

2. Not using an mortgage loan calculator: Not using an mortgage loan calculator with amortization schedule table to see exactly how you stand and what you can afford could be again one of the biggest mistakes you ever did, and believe me, I'm not saying that just because I own this website.

3. Making verbal agreements: If you're asked to sign a document containing instructions contrary to your verbal agreements, don't! The written contract will override the verbal contract.

4. Signing documents without reading them: Whenever possible, review in advance the documents you'll be signing. (Even though some specifics of your transaction may not be known early in the transaction, the documents you'll sign are standard forms and are available for review. ) It's unlikely that you'll have sufficient time to read all the documents during the closing appointment.

5. Failing to negotiate the loan: Be careful not to fail the negotiation of the prepayment penalty or a proper interest rate lock. Never believe the lenders when they say that there are some standards and you can not negotiate. Remember, always try to negotiate! You will give them a lot of money, so they will be happy to negotiate if they see you are about to go to another company.

6. Not determining what you can comfortably afford: Unlike a home mortgage, in which people look long and hard at what they will be able to pay over the next 10 to 30 years, car buyers do not always take such payments into careful consideration. "It is only for three years" is a familiar excuse for not evaluating the impact of such payments on your budget. Before taking any kind of loan, you need to consider how much money you can put down, and how much you can afford to pay on a monthly basis.

7. Accepting the first offer: Again, some people are very wrong by trusting the first loan officer interviewed. Be sure to shop around.

8. Believing 100% in internet reviews about mortgage companies: Believing 100% in internet reviews about mortgage companies is a also a big mistake because some of these reviews are paid articles by some mortgage companies. Be sure to believe only in you and in your calculations not only in what others say.

9. Not checking to see if your loan has a prepayment penalty clause: If you are getting a "NO FEE" home-equity loan, chances are that it has a hefty prepayment penalty clause. This can be very important if you are planning to sell your house or refinance in the next 3-5 years.

10. Getting too large a credit line: When you get too large a credit line, you can get turned down for other loans, because some lenders calculate your payments based on the available credit and not just the used credit. Having a large equity line indicates a large potential payment, which makes it difficult to qualify for loans. Note: this argument holds even if your equity line has a zero balance.

11. Not understanding the difference between an equity loan and an equity line: An equity loan is closed––i. e. you get all your money up front and then make fixed payments on that loan, until you pay it off. An equity line is open––i. e. you can get an initial advance against the line and then reuse the line as often as your want during the period that the line is open. Most equity lines are accessed through a checkbook or a credit card. On equity lines, you only pay interest on the outstanding balance. Use an equity loan when you need all the money up front––e. g. home improvement, debt consolidation. Use an equity line if you have an ongoing need for money or need the money for a future event––e. g. you need to pay for your child's college tuition in three years.

12. Not checking the life cap on your equity line: Many credit lines have life caps of 18%. Be prepared to pay payments at higher interest levels if rates move upwards.

13. Going by rate alone: The rate is only part of the equation. You need to know how much you'll be putting down and the terms of the loan before making a decision.

14. Choosing subjectively by your emotions: Make sure that you have done your research up front, and you know which loan you want and how much you are prepared to pay.

15. Not reviewing your credit ratings first: You should access your credit report and know what your FICO score is. This way you'll know exactly what the dealer is looking at, so that he or she cannot tell you your number is lower than it actually is. Additionally, if there are any errors, you can inquire about them beforehand.

16. Being quick to accept the dealership financing offer: Dealerships typically offer higher rates because they buy financing from banks and other sources, and raise the rate to make a profit. Shop around.

17. Focusing on payments over price: If you are focused more on low monthly payments than on the value of the car, home or mortgage, you may be paying more in the end. Know the overall value you need and consider the APR, terms, and length of the loan.

18. Not being able to walk away: Once you begin negotiating, especially at a dealership, you are not obliged to stay. If you do not like the offer or the manner in which the negotiations are headed, walk away.

19. Getting a loan from your local bank without shopping around: Many consumers get their equity line from the bank that they have a checking account with. Use your bank, but shop around first.
20. Not getting a good-faith estimate of closing costs: Your mortgage company is required to provide you with a written good-faith estimate of closing costs within 3 working days of receiving the application.

21. Not taking the shortest term loan you can afford: You'll always want to pay off the loan in the shortest time period you can afford. While the monthly payment will be higher in the short term, the interest payment will be lower. But, be very careful not the do it to short, as you wont be able to pay the monthly payment.

22. Not reviewing your credit report: By reviewing your report and FICO score in advance, you can make an effort to improve your credit rating if necessary or have any errors corrected.

23. Not getting pre-approved: This is the first step toward securing a mortgage and buying a home. Without preapproval, you do not know how much you will qualify for in a mortgage loan and what you can afford to spend.

24. Not shopping around: There are many sources of mortgage loans. It is a mistake to go to the one that is most convenient or that was recommended by a friend without checking the rates and terms offered elsewhere.

25. Shopping by interest rate alone: The lowest rates do not always mean the best mortgage loan. For example, you can get a low rate on an adjustable mortgage that becomes a significantly higher rate later on. You may also find that the lender is charging various fees that other lenders do not charge. There is also the question of whether you will be asked to pay discount points. You need to compare the overall package and not just the rate.

26. Not understanding the terminology: You need to know the difference between fixed and adjustable loans, what closing costs are, and what various other key terms are before seeking a mortgage loan. Web sites and books about attaining a mortgage loan can help with the terminology.

27. Mismanaging your credit cards: Prior to loan shopping you want to make a concerted effort to have your credit card balances paid off on time and in full. You also do not want to be opening and closing various credit card accounts. Plan in advance and have three or four credit cards at the most.

28. Not having the right mortgage broker: You want a mortgage broker that is in tune with what you are seeking. In addition, if the broker works with several investors, you have more options than if he or she works with just one.

29. Not knowing how much you have available to put down: You cannot look for a mortgage loan unless you know how much you need. To do so you should first determine how much money you have available for the down payment.

30. Not assessing your monthly expenses: A mortgage will mean paying a monthly amount on top of your current monthly expenses. You need to determine how much you can comfortably afford to pay without dipping into funds necessary for other living expenses. Mortgage calculators are readily available on Web sites to help you determine how much a mortgage loan, with interest, will cost you on a monthly basis. Also factor in property taxes.

31. Neglecting to consider closing costs: There are always closing costs when buying a house, such as escrow, title, and loan-related fees. This will vary from lender to lender and across different regions. Remember to account for closing costs.

32. Assuming that your home equity loan is tax deductible: In some instances, your home-equity loan is NOT tax deductible. This may be the case if you make too much and fall into the AMT trap, or if you have pulled out more than $100,000 cash from your home. Do not depend on your mortgage company regarding this matter––check with an accountant or CPA.

33. Assume your initial quoted rate will be your ending rate quote: Lenders often have some other excuse to change your original deal. For example, rate lock with the cave at all monies will be refunded if the appraisal comes in too low. Make sure you get some guarantees.

34. Assuming that a home-equity is always cheaper than a car loan or a credit card: A credit card at 6. 9% is cheaper than a credit line at 12%, even after the tax deduction. To compare rates, compute the effective rate of your home-equity loan, with the rate on a credit card or auto loan. Effective rate = rate * (1 - tax bracket) Example : If the rate of the home-equity loan is 12% and your tax bracket is 30%, your effective rate is : 12% * (1-0. 3) = 12%*0. 7 = 8. 4% If your credit card is higher than 8. 4%, then the equity loan is cheaper, otherwise it is not. Besides the interest rate, you may also want to compare monthly payments and other terms of the loan.

35. Getting a home-equity line of credit if you plan to refinance in the near future: Many mortgage companies look at the combined loan amounts (i. e. the first loan plus the second) even when they are refinancing the first mortgage. If you plan on refinancing your first, check with your mortgage company if getting a second will cause your refinance to get turned down.

36. Getting a home-equity line to pay off your credit cards if your spending is out of control: When you pay off your credit cards with your equity line, don't put your house on the line by going out and charging up those credit cards again! If you can't manage the plastic, tear it up!

37. Thinking that renting it doesn't worth: If you can rent cheaper while saving money to buy your first home or car, it's not necessarily an unwise decision.

38. Paying unnecessary lender add-ons: for mortgage life insurance, credit insurance or other expensive but unnecessary lender add-ons

39. Paying for something free: Paying hundreds of dollars to have a company set-up a bi-weekly mortgage payment plan, which is something the borrower can generally do at no cost.

40. Not gathering all of the required paperwork: Check all the applications and documents for accuracy. Mistakes in your paperwork might result in delay or denial, so be sure to proofread everything you do before applying for a loan.

41. Choosing a lender just because they have the lowest rate: While the rate is important, consider the total cost of your loan including the APR , loan fees, discount and origination points. When receiving a quote from a lender or broker, insist that the discount points (charged by the lender to reduce the interest rate) be distinguished from origination points (charged for services rendered in originating the loan). The cost of the mortgage, however, shouldn't be your only criterion. Have confidence that the company you select is reputable and will deliver the loan with the terms and costs they promised. If in the final hours of the transaction you determine that the lender has suddenly increased their profit margin at your expense, you won't have time to start again with a different lender. Ask family and friends for referrals. Interview prospective mortgage companies.

42. Not receiving a Good Faith Estimate: Within three business days after the broker or lender receives your loan application, you must receive a written statement of fees associated with the transaction. This is both the law and the best way to determine what you'll pay for your loan. Bring the Good Faith Estimate (GFE) with you when you sign loan documents. You should not be expected to pay fees which are substantially different from those contained in your GFE.

43. Not getting a rate lock in writing: When a mortgage company tells you they have locked your rate, get a written statement detailing the interest rate, the length of the rate lock, and program details. Get it signed!

44. Not providing documents to your mortgage company in a timely manner: When your mortgage company asks you for additional documents, provide them immediately. They are doing what's necessary to get your loan approved and closed. Delays in providing documents can result in costly delays.

45. Getting a second mortgage before you refinance your first mortgage: Many mortgage companies look at the combined loan amounts (i. e. , the first loan plus the second) when refinancing the first mortgage. If you plan on refinancing your first loan, check with your Loan Officer to find out if getting a second will cause your refinance transaction to be turned down. You may wonder why did I chose 45 mistakes and not a round number like 50? Well, I could easily invent 5 mistakes to make it 50, like some of those ho make lists do, but, instead of just making a beautiful title out of it, I preferred to keep the quality intact. So, the conclusion is: Shop around, Shop around, Shop around! "Think twice, do it once!"

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Popular Commences Exchange Offer to Issue up to 390 Million Shares of Common Stock in Exchange for Any and All Issued and Outstanding Shares of Its Series A Preferred Stock and Series B Preferred Stock and Issued and Outstanding Trust Preferred Securities

SAN JUAN, Puerto Rico, June 29 /PRNewswire-FirstCall/ -- Popular, Inc. (the "Corporation") (Nasdaq: BPOP) today announced that it has commenced an offer to issue up to 390 million shares of its Common Stock in exchange for its Series A Preferred Stock and Series B Preferred Stock and for the Trust Preferred Securities referred to below (the "Exchange Offer").
In connection with the Exchange Offer, for each share of Series A Preferred Stock, share of Series B Preferred Stock or Trust Preferred Security accepted in accordance with the terms of the Exchange Offer, the Corporation will issue a number of its shares of Common Stock equal to the Exchange Value, set forth in the table below, divided by the "Relevant Price". The "Relevant Price" will be equal to the greater of (1) the average Volume Weighted Average Price, or "VWAP," of a share of our Common Stock during the five-trading day period ending on the second business day immediately preceding the expiration date of the Exchange Offer (which we currently expect to be July 24, 2009, unless the Exchange Offer is extended), determined as described in the preliminary prospectus for the Exchange Offer and (2) the "Minimum Share Price" of $2.50 per share of the Corporation's Common Stock. The expiration date for the Exchange Offer is July 28, 2009, unless the Corporation extends the Exchange Offer or terminates it early.

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An overview of Home Mortgage Loan Rates

These days’ real estate prices are going high and on contrary to this rate of interest for Home Mortgage Loans are going low because of cut throat competition in market. Everybody wants to tempt borrowers and they do this by lowering the interest rates, sometimes by making loans accessible for bad credit holders also. In a nut shell they do not leave a single stone unturned to please the borrowers.
Home Mortgage Loan Rates play crucial role while choosing a loan. Many things depend on the interest rate of the loan like the cost of property, monthly installments etc. People want to take loan for as lower interest rates as much as they can so that they can save a bit of money. They must do so because buying a house is life long process as these loans are long-term loans i.e. for 10 to 30 years.
On the basis of rates home mortgage loans are divided into two types- Fixed rate loans and adjustable rate loans (ARMs). Rate of interest remains same for entire life of the loan for fixed rate loans and for ARMs it keeps varying. Rate of interest for Home mortgage Loans vary according to economic index. With economic index margin is added to the rate which actually is the lender’s profit. A small difference in rate can lead you to save significant amount of money.
Rate of interest for borrowers also vary according to type of Home mortgage Loan they are borrowing. For instance, interest rates for adjustable rate mortgage loans in starting five years are very low but after five years it increases significantly. To find best suitable loan, you need to study about all the types of Home Mortgage Loans. You also need to search the interest rates of different loan lending companies with their terms and conditions.
For instance E-loan is offering loans at 5.8% while countrywide is offering at 6.1% but with different programs leading you to get benefits in different ways. To find a best suitable loan for you, you should shop around and collect the quotes from several loan lending companies. For this you do not have to go anywhere, you can do it at your home on internet.
Find low Home Mortgage Loan Rates but do not get trapped into tempting offers of false lenders who may trap you and lead you to loss. Better search well about the loan lending company and then apply for Home Mortgage Loan. Do not do anything in haste because haste makes waste.


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Professional liability Insurance – covering professionals from sudden financial claims

What if one fine day, a client of yours sues you a good sum, accusing you of professional negligence? What if your patients cry medical malpractice by you? How good are you prepared for such situations? Well, if you are not quite prepared for such unexpected situations- wouldn’t you want yourself to be prepared for such situations? Professional liability insurance is your bet in this endeavour!

You might be the best in your profession or may be an epitome of prudence when it comes to doing your job! But, to err is human and the ‘err’ here doesn’t just mean an error on your part! It even includes misunderstandings and of course, slightest of negligence.

What is professional liability insurance?
Professional liability insurance is a protection cover to professional practitioners such as lawyers, doctors, consultants, architects, businessmen etc from possible financial claims made by their clients or customers or patients on account of error or negligence committed while performing the duty. Professional liability insurance is also known as professional indemnity insurance.

The coverage has its primary focus on error or omission of the services or products sold/offered; performance failure on a professional front; and the resultant financial loss to the client. Further, the insurance provides an additional coverage for breach of intellectual property or breach of confidentiality/ warranty, personal injury, violation of terms like exceeding the cost of contract and so on.
In the business domain, the negligence claims are encountered quite often. The services offered, for example, particular software can be relegated by the client as a product of low quality and you may be held responsible. In this and such similar cases, professional liability insurance can come to your great help! Why just businessmen? Even doctors are susceptible to negligence claims by patients; or for that matter, even architects and lawyers (the law hits them too!) are not left far behind.
Professional liability insurance coverage is a must for every professional practitioner! Make sure you continue it all along, since the policy covers only those incidents that occur when the same is active.

Finance, Credit, Investments - Economical Categories. Modern Interpretation

Scientific works in the theories of finances and credit, according to the specification of the research object, are characterized to be many-sided and many-leveled.

The definition of totality of the economical relations formed in the process of formation, distribution and usage of finances, as money sources is widely spread. For example, in “the general theory of finances” there are two definitions of finances:

1)            “…Finances reflect economical relations, formation of the funds of money sources, in the process of distribution and redistribution of national receipts according to the distribution and usage”. This definition is given relatively to the conditions of Capitalism, when cash-commodity relations gain universal character;

2)            “Finances represent the formation of centralized ad decentralized money sources, economical relations relatively with the distribution and usage, which serve for fulfillment of the state functions and obligations and also provision of the conditions of the widened further production”. This definition is brought without showing the environment of its action. We share partly such explanation of finances and think expedient to make some specification.

First, finances overcome the bounds of distribution and redistribution service of the national income, though it is a basic foundation of finances. Also, formation and usage of the depreciation fund which is the part of financial domain, belongs not to the distribution and redistribution of the national income (of newly formed value during a year), but to the distribution of already developed value.

This latest first appears to be a part of value of main industrial funds, later it is moved to the cost price of a ready product (that is to the value too) and after its realization, and it is set the depression fund. Its source is taken into account before hand as a depression kind in the consistence of the ready products cost price.

Second, main goal of finances is much wider then “fulfillment of the state functions and obligations and provision of conditions for the widened further production”. Finances exist on the state level and also on the manufactures and branches’ level too, and in such conditions, when the most part of the manufactures are not state.

V. M. Rodionova has a different position about this subject: “real formation of the financial resources begins on the stage of distribution, when the value is realized and concrete economical forms of the realized value are separated from the consistence of the profit”. V. M. Rodionova makes an accent of finances, as distributing relations, when D. S. Moliakov underlines industrial foundation of finances. Though both of them give quite substantiate discussion of finances, as a system of formation, distribution and usage of the funds of money sources, that comes out of the following definition of the finances: “financial cash relations, which forms in the process of distribution and redistribution of the partial value of the national wealth and total social product, is related with the subjects of the economy and formation and usage of the state cash incomes and savings in the widened further production, in the material stimulation of the workers for satisfaction of the society social and other requests”.

In the manuals of the political economy we meet with the following definitions of finances:

“Finances of the socialistic state represent economical (cash) relations, with the help of which, in the way of planned distribution of the incomes and savings the funds of money sources of the state and socialistic manufactures are formed for guaranteeing the growth of the production, rising the material and cultural level of the people and for satisfying other general society requests”.

“The system of creation and usage of necessary funds of cash resources for guarantying socialistic widened further production represent exactly the finances of the socialistic society. And the totality of economical relations arisen between state, manufactures and organizations, branches, regions and separate citizen according to the movement of cash funds make financial relations”.

As we’ve seen, definitions of finances made by financiers and political economists do not differ greatly.

In every discussed position there are:

1)      expression of essence and phenomenon in the definition of finances;

2)      the definition of finances, as the system of the creation and usage of funds of cash sources on the level of phenomenon.

3)      Distribution of finances as social product and the value of national income, definition of the distributions planned character, main goals of the economy and economical relations, for servicing of which it is used.

If refuse the preposition “socialistic” in the definition of finances, we may say, that it still keeps actuality. We meet with such traditional definitions of finances, without an adjective “socialistic”, in the modern economical literature. We may give such an elucidation: “finances represent cash resources of production and usage, also cash relations appeared in the process of distributing values of formed economical product and national wealth for formation and further production of the cash incomes and savings of the economical subjects and state, rewarding of the workers and satisfaction of the social requests”.  in this elucidation of finances like D. S. Moliakov and V. M. Rodionov’s definitions, following the traditional inheritance, we meet with the widening of the financial foundation. They concern “distribution and redistribution of the value of created economical product, also the partial distribution of the value of national wealth”. This latest is very actual, relatively to the process of privatization and the transition to privacy and is periodically used in practice in different countries, for example, Great Britain and France.

“Finances – are cash sources, financial resources, their creation and movement, distribution and redistribution, usage, also economical relations, which are conditioned by intercalculations between the economical subjects, movement of cash sources, money circulation and usage”.

“Finances are the system of economical relations, which are connected with firm creation, distribution and usage of financial resources”.We meet with absolutely innovational definitions of finances in Z. Body and R. Merton’s basis manuals. “Finance – it is the science about how the people lead spending `the deficit cash resources and incomes in the definite period of time. The financial decisions are characterized by the expenses and incomes which are 1) separated in time, and 2) as a rule, it is impossible to take them into account beforehand neither by those who get decisions nor any other person”. “Financial theory consists of numbers of the conceptions… which learns systematically the subjects of distribution of the cash resources relatively to the time factor; it also considers quantitative models, with the help of which the estimation, putting into practice and realization of the alternative variants of every financial decisions take place”.

These basic conceptions and quantitative models are used at every level of getting financial decisions, but in the latest definition of finances, we meet with the following doctrine of the financial foundation: main function of the finances is in the satisfaction of the people’s requests; the subjects of economical activities of any kind (firms, also state organs of every level) are directed towards fulfilling this basic function.

For the goals of our monograph, it is important to compare well-known definitions about finances, credit and investment, to decide how and how much it is possible to integrate the finances, investments and credit into the one total part.

Some researcher thing that credit is the consisting part of finances, if it is discussed from the position of essence and category. The other, more numerous group proves, that an economical category of credit exists parallel to the economical category of finances, by which it underlines impossibility of the credit’s existence in the consistence of finances.

N. K. Kuchukova underlined the independence of the category of credit and notes that it is only its “characteristic feature the turned movement of the value, which is not related with transmission of the loan opportunities together with the owners’ rights”.

N. D. Barkovski replies that functioning of money created an economical basis for apportioning finances and credit as an independent category and gave rise to the credit and financial relations. He noticed the Gnoseological roots of science in money and credit, as the science about finances has business with the research of such economical relations, which lean upon cash flow and credit.

Let’s discuss the most spread definitions of credit. in the modern publications credit appeared to be “luckier”, then finances. For example, we meet with the following definition of credit in the finance-economical dictionary: “credit is the loan in the form of cash and commodity with the conditions of returning, usually, by paying percent. Credit represents a form of movement of the loan capital and expresses economical relations between the creditor and borrower”.

This is the traditional definition of credit. In the earlier dictionary of the economy we read: “credit is the system of economical relations, which is formed while the transmission of cash and material means into the temporal usage, as a rule under the conditions of returning and paying percent”.

In the manual of the political economy published under reduction of V. A. Medvedev the following definition is given: “credit, as an economical category, expresses the created relations between the society, labour collective and workers during formation and usage of the loan funds, under the terms of paying present and returning, during transmission of sources for the temporal usage and accumulation”.Credit is discussed in the following way in the earlier education-methodological manuals of political economy: “credit is the system of money relations, which is created in the process of using and mobilization of temporarily free cash means of the state budget, unions, manufactures, organizations and population. Credit has an objective character. It is used for providing widened further production of the state and other needs. Credit differs from finances by the returning character, while financing of manufactures and organizations by the state is fulfilled without this condition”.

We meet with the following definition if “the course of economy”: “credit is an economical category, which represents relations, while the separate industrial organizations or persons transmit money means to each-other for temporal usage under the conditions of returning. Creation of credit is conditioned by a historical process of fulfilling the economical and money relations, the form of which is the money relation”.

Following scientists give slightly different definitions of credit:

“Credit – is a loan in the form of money or commodity, which is given to the borrower by a creditor under the conditions of returning and paying the percentage rate by the borrower”.

Credit is giving the temporally free money sources or commodity as a debt for the defined terms by the price of fixed percentage. Thus, a credit is the loan in the form of money or commodity. In the process of this loan’s movement, a definite relations are formed between a creditor (the loan is given by a juridical of physical person, who gives certain cash as a debt) and the debtor.

Combining every definition named above, we come to an idea, that credit is giving money capital of commodity as a debt, for certain terms and material provision under the price of firm percentage rate. It expresses definite economical relations between the participants of the process of capital formation. Necessity of the credit relations is conditioned, from one side, by gathering solid quantity of temporarily free money sources, and from the second side, existence of requests of them.

Though, at the same time we must distinguish two resembling concepts: loan and credit. Loan is characterized by:

·         Here, the discussion may touch upon transmission of money and also things form one side (loaner) to another (borrower): a)under the owning of the borrower and, at the same time, b) under the conditions of returning same amount or same quantity and quality of the things;

·         The loaning of money may bear no interest;

·         Any person may take part in it.

With the difference with loan, credit, which is somehow a private occasion of the loan, represents:

·         One side (loaner) gives to the second one (borrower) only money, and _ for temporal usage;

·         It may not bear no interest (if the assignment doesn’t foresee something);

·         In it creditor is not any person, but a credit organization (at the first place, banks).

So, a credit is the bank credit. To our mind, it is not correct to use “credit” and “loan” as the synonyms.

Banking crediting is the union of relations between bank (as a creditor) and its borrower. These relations touch upon:

a)      Giving a certain amount of money to the borrower for definite purpose (though, we meet with the so-called free credits, aims and objects of crediting are not appointed in the assignment);

b)      Its opportune returning;

c)      Getting percentage rate from the borrower for using the sources under his/her disposal.

The essential foundation of the credit essence and its important element is existence of trust between the two sides (in Latin “credo”, from which comes the word “credit”, means “trust”).

From the position of circulation of money forms (in the abstraction, historical process of formation economical relations and social budget and banking systems expressed by them) comparing different definitions of finances and credit, the paradox conclusion appears: credit is the private occasion of finances. And truly, from the position of movement of the money forms, finances represent the process of formation and usage of the funds of cash means. Very often such movements are fulfilled without returning, but sometimes, it is possible to give loans from the budget for the investment projects of other needs. Also, when a manufacture or corporations use their cash funds and we mean the finances of industrial subject, such usage may be realized as inside the manufacture or corporation (there is no subject about returning or not returning of the usage), so gratis under conditions of returning. This latest is called commercial form because of transmitting the sources to others, but even in this occasion, it is the element of financial system of the manufacture and corporation.

From the point of cash means movement, main character of credit is the process of formation and usage of the funds of cash means under the conditions of returning and, as a rule, taking the value-percentage. If gating the credit value doesn’t take place (even in the exceptional occasions), according to the movement form, credit becomes a private occasion of finances, as from the net financial funds (consequently from the state budget) the loans which bear no interests may be used. If gating credit value takes place, by the appearance form, credit is discussed to be financial modification.

From the historical point of view, finances (especially in the sort of the state budget) and credit (beginning with usury, later commercial and banking) were developing differently for considering credit to be the part of finances. Though, from the genetic-historical point of view, previous loaners, before giving loan, needed gathering the permanent capital not returning, that is the net financial foundation. The banks analogously needed concentration of the important own capital for influxing the consumers’ means and for getting higher percentage rate under the conditions of returning. Herewith, exactly on the financial basis, in the sort of financial fund (which later partially becomes loan fund) part of the bank capital appears to be the reservation (insurance) part of the fund, which by nature is financial and not loan. So notwithstanding the essential distinctions between finances and credit form the genetic-historical point of view, credit appears to be formed from finances and represent their modification.

From the essential position of expressing economical relations of finances and credit, we meet with cardinal distinctions between these two categories. Which mostly expressed by the distinction of the movement forms notwithstanding they are returnable or not. Finances express relations in the aspects of distribution and redistribution of social product and part of the national wealth. Credit expresses distribution of the appropriate value only in the section of percentage given for loan, while according to the loan itself, a only a temporal distribution of money sources takes place.

Herewith, there is a lot of common between the finances and credit as from the essential point of view, so according to the form of movement. At the same time, there is a significant distinction between finances and credit as in the essence, so in the form too. According to this, there must be a kind of generally economical category, which will consider finances and credit as a total unity, and in the bounds of this category itself, the separation of the specific essence of the finances and credit would take place.

Funding of the cash means is common to the researched economical categories. It takes place in any separate system of finances and credit, which have been touched upon during the analyses of defining finances and credit. Word combination “funding of the cash sources (fund formation)” reflects and defines exactly essence and form of economical category of more general character, those of finances and credit categories. Though in the in economical texts and practice, it is very uncomfortable to use a termini, which consists of three words. Also, “unloading” with an information hardens greatly its influxing into the circulation even in the conditions of its strict substantiation and thoroughness.

In the discussing context we consider:

1)      wide and narrow understanding of economical category of the finances;

2)      discussing finances in narrow understanding under general traditional meaning;

3)      discussing finances, as funding of the cash means, in wide understanding, which concerns finances – in narrow meaning and credit – in complete meaning.

Termini “funding” and its equivalent “fund formation” are used by us as the purposeful structuring of cash means, which is based on two poles – accumulation of money sources (gathering) and its usage for definite purpose in the way of financing and crediting.

We have established a new termini – “finance-investment sphere” (FIS). Analyses about interrelation of finances and credit made by us give us an opportunity of proving, that in the given termini, the word “financial” is used with the meaning of funding cash sources, its purposeful structuring. In this process we consider at the same time financial, credit and investments’ economical categories.

Let’s sum up middle results of discussing new concept – “finance-investment sphere” and discuss its investment consisting parts.

The concept “investments” was brought into the native economical science from the West. In the Soviet economical science they for a long time used in the place “investments” the termini “capital placement”, which expressed the usage of the industrial factors in the sphere of real industrial activities during realization of capital projects. From one glance, this termini in its concept is identical to the “investments”, consequently it is possible to use them as synonyms. Though the termini “investments” and “investing” have the advantage towards the termini “capital placement” from linguistic and philological points of view, because they are expressed with one word. This is not only economical and comfortable in the process of working with the termini “investment” itself, but also it gives an opportunity of termini formation. More concretely: “investment process”, “investment domain”, “finance-investment sphere” – all these termini are much more acceptable.

Changing native economical termini with foreign ones is purposeful, if it really matters (by keeping parallel usage of the native termini for the inheritance). Though we must not change native economical termini into foreign ones all together, when by ordinal traditional language easy to explain private and narrow concrete processes and elements get their own termini. The “movement” of these termini is approved in the narrow professional bounds, but their “spitting out” into the economical science may turn economical language into the tangled slang.

Let’s discuss termini – “investment” and “capital placement’s” usage in the economical literature.

Investments are placement of funds into the main and circulation capital for the purpose of getting profit. “Investments in material assets – are the placements of funds into the mobile and real estate (land, buildings, furniture and so on). Investments in financial assets are the placements of funds into the securities bank accounts and other financial instruments”.

We don’t meet with the termini “investments” in the earlier economical dictionary, but we meet the combined termini “investment policy” – the union of the industrial decisions, which guarantee main directions of the capital investments, the activities of their concentration in the determinant suburbs, on which the reaching of planned rates of development of the society production is depended, balancing and effectiveness, getting more and more production and profit of the national income for every lost Ruble”. For today, in the most actual definitions, the capital investments are bounded only by financial means, when not only financial, but also the investment of natural, material-technical and informational resources takes place. Labour resources take an actual place in the investment process. They themselves fulfill this or that investment process.

A positive side of the discussed definitions is that they connect investment policy and capital placements (investments):

-          economical development according to the key directions to the concentration;

-          providing high rates of economical growth;

-          raising an economical effectiveness, which is expressed:

a)      by growing the throw off of the production and national income for every lost Ruble;

b)      by fulfilling the branch structure of the investments;

c)      by improving their technological structure;

d)     by optimization of their further production structure.

Compared with such definition of the investments (capital placement) the definition of investments in the dictionary attaching the “Economics” seems to be unimproved: “investments  - the expenses of gathering production and industrial means and increasing material reserve”. In this definition current expenses (production expenses) are mixed with the investment (capital) expense. Also, not the investment expenses but (though the investments are followed by the appropriate expenses) exactly advancing. It differs from the expenses by that the means (means) are put by returning the advanced values, also, under the conditions of growth, to which the concept-advanced capital is corresponding. the advancing may be realized in the money, natural-material and informational forms.

Except the termini “investments”, there are two more termini related with the investment. They are shown below.

“Human capital investment” – any activity provided for rising the workers labour productivity (in the way of growing their qualification and developing their abilities); at the expenses of improving the workers’ education, health and raising the mobility of the working forces”. It is very useful to use the mentioned termini, though it needs one correction: the human capital investments do not concern only workers, but also the servants, representatives of every kind of labour.

“Investment commodity, capital goods – a capital.”

In the official manuals of political economy of the reformation time the capital investments are discussed as “expenses for creating new main funds and widening, reconstruction and renewing the active ones”. In this definition the investments (capital placements) during separation of the forms (types) of further production of the main funds are bounded only by main funds (without increases of the circulation funds and insurance reserves): a) creating new ones; b) widening; c) reconstruction; d) renewing. Also, the concept of the industrial gathering appears, at the expenses of widening of basic, circulation funds and also insurance reserves takes place”.

You’ll meet below the definitions of investments from “the course of economy”: the investments are called “placements of fund into the basic capital (basic means of production), reserves, also other economical objects and processes, which request long-termed influxing of material and cash means. “According to the division of capital into physical and money forms, the investments too must be divided into material and cash investments”.

They apportion investment commodity, to which belong industrial and nonindustrial building objects, vehicles purposed for changing or widened technical park and the furniture, increasing reserves and others.

“They call the total investments of production an investment product, which is directed towards keeping and increasing the basic capital (basic means) and reserve. Total investments consist of two parts. One of them is called the depreciation; it represents important investment resources for compensation of renewal till the level of before industrial usage, wearing out and repairing of the basic means. Second consisting part of the total investments is represented by net investments – capital investments for the purpose of increasing basic means”. Depreciation is not a compensation resource of wearing the basic funds out, but it is the purposeful financial source of such resources.

Human capital investment is “a specific kind of investments, mostly in education and health protection”.

“Real investments are the investments in the economical branches and also, they are kinds of economical activities, which provide influxing the increases of real capital, that is increasing material values of the industrial means”. We can agree with such definition with one specification that material and nonmaterial values too belong to the real capital (wealth), consequently science-researching experimental-construction results, various information, education of he workers and others. Such service as organization of the excitable games, also the service of redistribution social wealth from one private person to another (except charity).

“financial investments represent placement of funds into the shares, obligations, promissory notes, other securities and instruments. Such investments, of course, do not give increases of the real material capital, but they help getting profit, consequently at the expenses of changing the course of the securities in the time of speculation, or distinguishing the course in different places of sell and purchasing”. We share wholly such definition, hence it follows that financial investments (if it is not followed by real investments as a result) do not increase real material wealth and real nonmaterial wealth. According to this context, the expression below is very important: “we must distinguish financial investments, which represent placement of the funds in the ways of selling and purchasing the securities for the purpose of getting profit and financial investments, which become cash and real, moved to real physical capital.”

In the “economical course” quoted before long and short-termed investments are separated. Recognizing the existence of the bounds between them, the authors ascribe short-termed investments to “one month or more” investments. If we get such conditioned criteria, that we can call the investments which overcome the terms of some months, long-termed ones, which is very doubtful and we don’t agree with it. A long-termed character of the fund placement is a significant feature of the investments (short-term doesn’t combine with the concept of investments). Principally, it would be better to point out quick compensative, middle termed compensative and long-termed compensative investments:

-          less then 6 months – quick compensative;

-          from 6 months up to the year and a half – middle termed compensative;

-          more then the year and a half – long termed compensative.

We stopped at the definition of the investments in the capital work “economical course” for the special purpose, as, in it the author tried to discuss the concept of investments systemically and quite completely, herewith the book is published just now.

We’ll return to the discussion the definition economical category of “investments” in different publications in the following chapter. The definitions given here are quite enough for having a notion of the level of lighting up the given category in the economical literature.

What conclusions may be made according the definition of the mentioned economical category in the published works, except the made notions and specifications?

There is quite deeply, concretely and thoroughly defined the concept of “investments”, different definitions in the economical literature; but mostly in every works about the investments discussed by us until now, there is not opened the essence of investments as an economical category. In every monograph, even if it has a title investment, as an economical category, there is given only the definition, concept of investments. But, as the Academician Vasil Chantladze explains, “a concept is a discussion, which proves something about the distinguishing feature of the researched object. A concept out of much essential characteristic features represents only one, and essential in it is only - definition”.

But the categories are much wider; it is “a key, the most fundamental concept of every science”. Economical categories theoretically represent real, objectively existed productive relations. A category is the defining of occasions of existed characters, connections, relations of the objective world. Generally, any educational process is fulfilled by the categories, which give opportunities for dividing the processes and occasions semantically, for expressing the definitions of a subject and realize their specific peculiarities and economical relations of a material world.

Our goal is exactly to substantiate investments – as an economical category and also, as a financial category in the narrow understanding.

Here we apply for another manual thesis made by the academician Vasil Chantladze: “every financial relation is an economical one and every financial category is and economical one, but not every economical relation and economical category is financial relation and financial category”.

In the process of defining the investments, it is important to take in mind the sides of resources, expenses and incomes, because investment, from one side, is the result of the manufacture’s activity, and, from another one, - a part of income, which, in this case, is not used for usage.

Another occasion: it is advisable to discuss investments in two aspects: as a category of reserve and flow, which will reflect exactly the connection between “placement of funds” and “investments”.

As we’ve mentioned above, not long ago, in the well-known Soviet literature the concepts of “the placement of funds” and “investments” were accepted to be the synonyms and concerned to be investment of sources for further production of the main funds and formation of the turnover funds. We meet with such understanding of the concept of “investment” (here, they separate three types of the investment expenses: investments in the basic capital of investments, investments in the house building and investments in the reserves) in the modern economical publications and it is mostly used on the macro level during a statistical analyze of economical processes. In this concrete occasion investment is the category of reserve.

According to the aspect of flow the investments may be discussed in the process of analyzing industrial activity, when it is necessary to learn the variety of the economical relations related with the investments’ further production and formation, sources, objects and subjects, that is on the micro level.

Main distinguishing criteria of different methods of approach towards the concept of “investment” the aspect of prolonging of measuring this showing. Is it possible or not to measure the investment showing separate from the term factor (the norm of gathering, the volume of capital property, the reserves of production and so on). If it is possible, then it is the category of reserve, and if it is not, then it is measured in the section of time and belongs to the category of flow.

Thus, investment, as an economical category, is quite consuming concept. It concerns the elements defining the regularities of function and regulation of the investment domain, privately:

First, resources and values put into the industrial activity. Here, investments may be realized in the following ways:

1.      mobile and real estates (buildings, constructions, furniture and other material values);

2.      cash sources, purposeful bank accounts, credits, shares and other long-termed securities;

3.      owners rights according to the author’s rights, licenses, Now-How, experience and other intellectual values;

4.      the rights for using land and other natural resources, also other owners rights.

Notwithstanding any forms, investments are results of capital gathering. Leading investments – regularity of gathering defines its volume and dynamics and, generally, whole investment activity.

Second, the incomes ruling volume and dynamics of the resource investment. Herewith, we must underline the circumstance, that the process of getting profit, the regularity of its creation, isn’t a constant of the concept “investment”. The factors of production (also the conditions of exploitation of capital values) and selling (market conjuncture), also the process of capital gathering is the leading and important condition only for the investment formation. Though, we underline again, that the process of getting and distributing the income is a significant component of the investment activity.

The transformation of investments makes the basis for the investment activity, which concern the following circles: resources – investment (expense) – capital property – income. The practice of realization such circles of the investments transformation is exactly the investment activity (investing). The investment activity, except the investments itself, concern motivation and stimulation of the capital gathering, relations of capital gathering and ruling, also, totality of the defined level of profitability on the capital and the goals of capital growth.

According to the mentioned above, in the definitions of the investment as economical category sometimes the needed exactness and clearness is not felt, some categories of the wealth are represented tightly enough. For example, real prosperity is bounded only by material estimation. This leads us to the unvalued investment resources in the era of transformation industrial society into the investment one; also to the recognition of yet uninvolved valuable scientific researches in the production, securities turned into speculation objects, and unreal property in the consistence of one and the same parts; to there equalization. On the basis of the made analyses, we can cite a wide definition of the investments together with the leading categories.

Investment resources – are values, invested into this or that project in this or that kind for the purpose of getting profit beginning with material ones, finished with cash.

Kinds of the prosperity are equal to the kinds of the investment resources and is divided into real and cash, consequently into financial resources.

Real investment resources concern all kinds:

-          natural resources;

-          labour resources;

-          material resources, the usage of which is possible in the economical development (buildings, constructions, vehicles and furniture, transport and communication means and so on;

-          investment resources (in the widest understanding, that is from scientific-research and experimental-construction works, till the education potential of the society and till all kinds of gathering useful information, written about every possible, that is typing and electronic bearer).

Cash, consequently financial resources concern every cash means for usage in this way in definite conditions or directed in the sort of investments.

Cash means (resources) turn into the financial resources in the case of structuring of funds of purposeful destination foreseen for investments of this or that kind.

After defining investment resources we can make wide definition of the investments as economical category.

Investments – are the placements of real, financial and intellectual resources into the projects, the fulfillment of which leads us to getting the increases from real wealth, in the material and informational forms. It is followed by a cash (financial) prosperity or its increases (at the expenses of the distribution of the cash means).

As an economical category, investments express economical relations, which are created in the ways of using and formation of the investment resources between the participants of the investment process for the purpose of improving and widening of the enterprise.

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