Marketing and Consumer Essay

Marketing and Consumer Decision-Making Process Essay

The best way to identify consumers’ particular behavior is by practical implementation or research of the individuals’ buying habits and preferences. One of the methods used by marketers that involves smallest cost, but nevertheless enables one to reach important and vital conclusions on the matter, is going to a local grocery store and recording his or her usual purchasing list, paying special attention to the patterns and brands of behavior. Such procedure will help individual form necessary skills of understanding the complex structure of buyers’ statistical behavior and discrete programs and methods that lead to apprehending of those issues in its core stage.

In other words, practical experience, even the most superficial and simple one, is one of the best training methods because it enables a person to see or grasp the whole picture of important events that take place in positioning, targeting and segmenting of the particular market.

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First, a marketer needs to record the number of various brands that this individual hops through and then an observation should be made, which will include the definition of this man or woman preferences within the selected range. For instance, marketers usually divide all products into 4 groups: 1. Cereals. 2. Sodas. 3. Bread. 4. Ice Cream.

1. There are usually seven different brands of cereals in the regular grocery store that one goes to. Three or four kinds are, as a general rule, well recognized and known by the customers; whereas other two are represented by smaller, “yet to become big” or developing companies that are trying to push their product on the market. This is achieved by offering similar cereals at a lower price (e.g wal- mart brands) or by creating an engaging and bright advertising campaign with the aim of gaining potential consumers who will be prepared to switch to their particular product (cereals in our case).

2. There can be found twelve to fifteen various brands of soda in the local grocery store. Such great diversity is explained by the great popularity of the soft drinks and the corresponding variety that is produced by such companies as PepsiCo and Coca-Cola Company. As it was described above, there are a number (four or five) of less recognized brands that are not as heavily advertised and promoted by the means of mass media or direct public commercialism.

3. One can allocate at east nine eleven various brands of bread in the store. These types are generally represented by simple loaf bread, but there are a couple of croissant- kind of bread and Danish bread on the shelves as well. People are usually less particular about buying a special kind of bread in this country due to the smaller popularity of this product in the common household.

4. Finally, there are sixteen types of ice cream brands in the grocery store Such variety is easily explained by great interest of people in the diary products and ice- cream in peculiar. The diversification is made by companies creating similar products under altered or distinct names in order to make customers believe that they are looking at a totally new brand. In reality, however, these sixteen brands are produced by two or three companies only.

After careful and scrutinized analysis, one can easily reach a conclusion about what specific brands of products he or she is most loyal to. For instance, one is able to determine that he or she usually purchase two similar brands of bread, four types of soda, one kind of bread, and two kinds of ice- cream. A person makes his or her choices according to personal preferences, which, of course, are greatly influenced if not formed by total advertising and promotion of certain brands such as Coca-Cola or Mountain Dew. Finally, an individual tends to seek the most variety in cereals due to the basic simplicity of the rudimentary product that makes typical consumers seek variety in test and packaging.

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Russian Energy Politics Essay

Essay on Russian Energy Politics

In one of the articles under consideration Europe’s Russia Question by Giles Merritt, the secretary-general of Friends of Europe, the problem of Russian-European relations is clearly stated. But the positions and frames of reference of both opponents are quite vague. Europe as well as Russia still misapprehends each other’s actions on the world arena. The correspondent notes that these two forces seem rather aggressive, one of the reasons of it is Russian gas politics. As Dmitri Medvedev was chosen by President Putin to be the chairman of Gazprom, the gas issue turned to appear in a more severe light. Giles Merritt compares Medvedev’s politics with an “emerging stranglehold” (Merritt). It is not a secret that relations between Europe and Russia have been impairing for a definite period of time. Economic and energy issues in particular are being redoubled and in that Cold War as it is sometimes called there exists a considerable risk of undisguised enmity growing. One more burning point is Kosovo. Merritt also considers this point and states: “Early next year most of the European Union’s member nations will recognize the Albanian-majority enclave on Serbia’s southern edge as an independent state. This is certain to enflame… the Kremlin”(Merritt). Some tension may be also noticed in the probability of NATO enlargement, including Georgia into the treaty organization and Russian frustration as it has erratic and unstable relations with its neighbor. So-called “rage” is rising in Russia when it comes to the major strategic issues and its interests cross the European path. Both Europe and Russia are vulnerable to extremism and social, political disorder. They are not quite interested in violence in the Middle East. But their relations are successively worsening and this situation dates back to Russian economic problems when the USSR broke down and European inability or unwillingness to notice Russian power and elasticity.

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The article under consideration Russia Makes First Fuel Shipment to Iran Nuclear Plant by Jim Heintz deals with the problem, which displayed itself as Russia started helping Iran in building of the Bushehr nuclear power plant. America considers these actions of Moscow to be a part of uranium enrichment program. America disapproves of that and the US President commented on the situation concerning this nuclear plant the following way: “If the Iranians accept that uranium for civilian nuclear power, then there is no need for them to learn how to enrich”(Bush). It is officially said that Iran needs this plant only for civilian purposes, but still there are doubts as to its further application. According to Jim Heintz’s article, critics suspend that the nuclear power, which will be produced by the Bushehr nuclear plant, will be used for production of nuclear weapon. Russian officials assure mass media of the fact that they are glad this case is made public for all the fuel is under strict control and, what is more, its safety is guaranteed by the International Atomic Energy Agency. The Foreign Ministry also confirms that there is nothing to worry about as Tehran gave additional written bail, which deals with the Bushehr nuclear power usage for civilian needs only. But President Putin seems to have nothing to do with that he meanwhile informed his political party that surely he is not going to leave politics and as Heintz noticed “the Russia’s age of Putin is far from over”(Heintz). As according to the Constitution of Russia, Putin cannot be its president any longer, it is obvious that he will accept the post of Russia’s prime minister. The correspondent as well as a number of other representatives of this forth power, international mass media, emphasizes Putin’s and the Kremlin’s tight control over the press in Russia. It will make things go the way he expects them to be. Moreover, in November, the seventh in mass media there appeared data concerning Putin’s wish to possess special status. That is why his political party United Russia’s representative Abdul-Khakim Sultygov suggested securing some special status for V. Putin after the elections. He stated that they plan to call the Civil Council of Russia’s Nation and establish the institute of the leader as the main element of Russian power in the year 2008.

As for the article Russian Virtual Politics by Mark Leonard, it also proves Russian aggression and Putin himself as authoritarian regime keeper. Leonard states: “Putin will step down as president in 2008… only to reborn as prime minister on the crest of a wave of victory in December’s parliamentary vote” (Leonard). That is why political observers consider that Russia will turn from a presidential based system to parliamentary in which the head of the government power will prevail. V. Putin’s actions create a certain tension in Russian politics, but he got used to centralization of state power “to notch up a string of victories against enemies of the people” (Leonard). Oligarchs are not willing to lose their power and they are not in a hurry to part with Putin-era. A group of political consultants were called to help the Russian president to transform the nature of Russian politics, the politics, which was called virtual politics. Russian authorities concentrate more on their attitude to world events than on their own actions, they criticize without peculiar reasons for that. Russian authorities tend to proclaim that they develop democracy, but really they consolidate their power by all means. Mark Leonard also gives information about making “fake opposition” (Leonard), he says that the Kremlin has an overall control on the opposition political parties created in Russia; hence, they are no longer an independent opposition but they are under firm pressure of the authorities. In such a way Vladimir Putin has an opportunity to control all the parties of the country remaining under cover. This way he tries to conceal the autocratic regime of Russia and it is pretended that Russia is democratic and not so aggressive as it really is. Some observers say that he rules so that his interests are always the major criterion. Making a conclusion of his exposing article on Russian politics, Mark Leonard points out that nowadays a lot of European governments spend precious time arguing about Russian democracy phenomenon, the majority of which are not sure it exists in this country. But they would better work out in what way this politics can be successfully influenced.

Politics has always been a complicated matter with a number of subtle pitfalls, as interests of different countries cannot help but cross, but still they try to maintain good relations with each other. It is clearly seen that Putin’s regime has definite advantages, for example, improvement of living standard during his being in power. But his popularity among the people is not quite authentic. Russia presents itself as democratic, but in reality it is far from being so. One more evidence to this will be manifested after the presidential elections in Russia in the year 2008. The elections will probably secure the victory of Putin’s successor, that will mean the continuation of Russian political course. “Tempers are rising both in Russia and Europe” (Merritt), and their relations have worsened, because of their unwillingness to accept each other points of view and political course methods. Both the Russian Federation and the rest of the world, closely interacting have not contrived a consistent strategy of relationship. Regarding each others historic backgrounds as well as contemporary situational peculiarities, they should work out a definite and clearly stated frame of reference. This principle should deal with “shared security concerns”(Merritt), it will reduce the shadow problems which may be sharpened in future and lead to inevitable consequences.

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Essay on Goal Setting

Essay on Goal Setting and Reinforcement Theory

In the last couple of decades more and more employers start to be interested not purely in the amount and quality of the output but also in the psychology of the workforce. Today, a manager is willing to obtain the desired results from the employees not only by the old-school means of monetary reward or dismissal possibility. Rather he/she tries to find the appropriate theory that will assist him/her in determining how to motivate employees and through their motivation reach the intended result. In my paper I would like to talk about two theories of this kind: the goal setting theory and the reinforcement theory. In the beginning of the paper I will separately describe the two theories in detail, and in the conclusion I will suggest which theory, in my opinion, is more efficient.

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Goal setting theory was born out of Aristotle’s theory of final causality and was researched further by Edwin A. Locke in the 1960s to understand how goals can influence an individual’s performance. The basic theory behind goal setting is that human behavior is governed and can be influenced by goals and ambition. Today this theory is a subject of much interest of the wide public and managers in particular. This is because first of all the people of today are greedy of money and success that they associate with it, thus they tend to put many goals in front of them, and also because this theory has proven itself to be a great tool for increasing the employee motivation.

As it was already mentioned, the theory considers that in order to direct ourselves we set ourselves goals. According to the theory, these goals must be clear so as to be understood, challenging because when achieving something that was hard to get one feels even better about him/her and finally achievable so we are improbable to fail. We all understand that in practice no matter what kind of personality one has he/she would rather work towards his/her own goals than towards the goals set by other people. Indeed, people do not refuse to work for the achieving of the goals of others, though the less involvement one feels, the less motivated one usually is (Text Book, 222-223).

A vital stage of the goal setting theory is feedback – the concept that has also been very popular in the media for the last couple of decades. Receiving feedback is fundamental for any individual working on any task, because feedback helps us determine whether we are succeeding or whether we need to change direction. If the feedback is given sympathetically and carefully it tends to be a very powerful tool for support and motivation. What this theory regards is ruinous is the negative self-feedback that is at times more harsh than the one from others (Text Book).

Without a shadow of doubt different goals are achieved differently. There are directional goals and accuracy goals. A directional goal is one where we are motivated to arrive at a particular conclusion. Thus, our thinking is narrowed down to the actions that may be useful for achieving the desired outcome. An accuracy goal is one where we are motivated to arrive to the most accurate possible conclusion. Obviously, people would put much more effort in achieving the second kind of goals because the risk of such is much higher than of the first ones. The riskiness of such goals makes them even more attractive, creating an impression that achieving these goals is not made for everyone and not succeeding would be a very big loss. According to the theory, both methods of goal achieving work by influencing our choice of beliefs and decision-making rules (Locke, 388-389).

Reinforcement theory is familiar to everyone. Its main idea can be narrowed to the laconic phrase that “consequences influence behavior”. This means that people would do things in different ways depending of what kind of consequences will come after conducting one or another action. The above is very simple and very realistic. Indeed, we can find managers using reinforcement theory almost in every second company. Moreover, we are exposed to the use of this theory as early as we enter preschool where we are well aware what consequence will come after which actions and manage to avoid the sharp edges (Text Book, p. 225).

There are three basic principles of this theory. These are the rules of consequences. The three rules describe the logical outcomes which typically occur subsequent to consequences. Firstly, the consequences that give rewards, of course, lead to the repetition of the behavior. Secondly, consequences which give punishments decrease a behavior. Finally, consequences which give neither rewards nor punishments put out a behavior. These rules provide a very convenient framework for influencing people, predicating their behavior and using it for the sake of achieving goals. To sum up the information about this theory I must mention that reinforcement theory is a functional theory. That means all of its components are defined by their function – by the way they work, rather than by their structure – how they look. The functional nature of this theory is vital for understanding its existing drawbacks and why sometimes the theory appears to be incorrect (Lindner, 31-32).

It has to be admitted that the theory is a very influential motivation tool, however when comparing it with the goal setting theory on may easily see the drawbacks. To begin with, it is difficult to identify rewards and punishments, meaning that figuring out the best rewards and punishments for every employee or even every group of employees would take a very long time and may not be worth the effort. Secondly, if one chooses to use this theory he/she needs to have control over the reinforcement to insure that no one else may be trying to influence the behavior of the employees. Finally, this theory requires internal changes that might take a long time to implement.

In my opinion, the goal setting theory tends to be a much more successful theory. This theory is of even biggest applicability considering the times we are living in the nature of modern people. With this theory a manager can not only increase the self-esteem of the employees but also, use their high motivation for achieving the goals of the company. The biggest strength of this theory is that it encourages people to believe in themselves, thus it cannot be unsuccessful (Deci, 182 -183).

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Essay on Nomad-Sedentary Conflicts

What Causes Conflict Along the Nomad-Sedentary Frontier

Introduction

Historically, the relations between nomadic and sedentary people were characterized by numerous conflicts and irrevocable antagonism, since nomadic and sedentary cultures were absolutely different. Conflicts between nomadic and sedentary people were a constituent part of the life of these people throughout century from the epoch of Han Chinese opposition to Xiongnu to Ming-Mongols conflicts. The historical evidences prove that conflicts between nomadic and sedentary peoples were regular and it was practically impossible to stop them, though, the conflicts and contradictions did not always result in active military actions. Having different technological development and military power, nomadic and sedentary people could not keep from coming into clashes even if they could not count for the significant military power. The failure of a military operation could be quite harmful, especially if people were not actually prepared for the war. Nevertheless, it did not prevent nomadic and sedentary people from conflicts, which were the natural result of the striking difference between civilizations. The different lifestyle determined the strategy and tactics used by nomadic and sedentary people that lead to the paradoxical situation when more economically and technologically advanced sedentary civilization, having larger human resources should protect its territory from attacks of nomads, which proved the effectiveness of their military organization. The latter was superior compared to that of sedentary people because it provided less numerous nomads, lacking economic resources to attack sedentary people regularly and dominate military until the 18th century.

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The conflicts between nomadic tribes and sedentary China affected relationships between the peoples considerably breeding distrust and disbelief to each other. The military conflicts also contributed to the formation of various biases and stereotypes within each people. Being enemies, nomadic and sedentary peoples naturally attributed all the negative qualities to their opponents. At the same time, these stereotypes and biases stimulated the further conflicts and, in a way, were ideological basis for the conflicts between peoples.

Economic causes of conflicts

The conflicts between nomadic and sedentary peoples were determined by a variety of factors that influenced both peoples. At the same time, economic causes of the conflict were apparently among the most significant factors that contributed to the growing contradictions and tensions between nomadic and sedentary peoples. The development of nomadic economy was absolutely different from the development of the economy of sedentary people, such as Chinese. The major principles of economic life of nomadic and sedentary people differed consistently making their alliance or, at least, peaceful co-existence practically impossible.

First of all, nomadic people traditionally concentrated their attention on the development of cattle which was the major source of food, clothes and other elementary but basic products that they needed in their everyday life. In contrast, sedentary people mainly concentrated on the development of agriculture and since the ancient epochs agriculture was the basis of the economy of sedentary people. For instance, the development of agriculture was one of the major conditions of the economic development and growth of Han China (Ma, 194). The development of contradictions between nomadic and sedentary peoples was inevitable because of such a different ways of the economic development.

The focus of sedentary people on agriculture stimulated the development of cultivation of different plants and gradual improvement and increase of crops. This led to the surplus production of food and other agricultural products that stimulated the growing exchange and, therefore, contributed to the development of trade. Naturally, the development of trade in sedentary civilizations stimulated the formation of cities where people could exchange their products, selling surplus of their crops and acquiring other essential products, including products of artisans.

Moreover, the increasing crops and the improvement of the technology of agricultural production was accompanied by the growth of the population because of the improvement of the quality of life sedentary people naturally grew in number as they could afford better living. In contrast, nomadic people were deprived of such an economic advantage as well-developed agriculture. Instead, they were basically focused on the search of new pastures for their cattle that was the basis of their economy and the main source of food and basic products which permitted nomadic people to survive in steppes. This difference of nomadic economy stimulated them to constantly move throughout huge territories in search of the better pastures. Their economy was predominantly extensive and resulted in the exploitation of the natural resources which could not provide nomadic people with the sufficient amount of fertile pastures where their cattle could stay for a long time. They have to move from one place to another as the pastures became exhausted.

On the one hand, this stimulated nomadic people to high mobility that became one of the major advantages of their armies in wars with sedentary Chinese. For instance, one of the major reasons for the failure of Han Dynasty’s efforts to defeat Xiongnu was the poor logistics and inability of Chinese army to catch up mobile and fast Xiongnu. The latter, instead, successfully used their mobility to attack Chinese army unexpectedly and in situations when they had consistent advantages and could defeat the opponent. Chinese army could not gain success in this military operation because there was “the problem of supplying food across long distances” and “the weather in the northern Xiongnu lands were difficult for Han soldiers” (Ma, 175). As a result, Chinese could not afford a long lasting military campaign while for Xiongnu it was a normal condition and they get used to the life in such climatic conditions while they did not need the food supply such as Chinese needed because they had all the food at hand.

On the other hand, they could not possess a large army because of the scarce resources that could not provide a large number of people with a sufficient amount of food. There was a natural limit that could not be exceeded, otherwise, nomadic people would start starving and slowly die out because of the lack of food. Consequently, nomadic people were highly dependent on the potential of pastures and they needed constantly to move from one pasture to another as the local sources became more and more scarce. Hence, they needed new lands and new pastures that forced them to move into the lands occupied by sedentary people that caused the conflicts between them. The lands of sedentary people were an attractive territory to nomadic tribes at different epochs. Another important reason and probably the most important one, for which nomadic tribes regularly attacked Chinese settlements was the growing economy and wealth of the local population. As agricultural development of sedentary Chinese progressed, they could develop industries that stimulated the development of trade and increased the effectiveness of agriculture due to the use of new tools and technologies of cultivation. The progress of agriculture, the development of trade and industries naturally led to the growing prosperity and accumulation of wealth of sedentary people. On the one hand this wealth became the basis of their power since Chinese could maintain a large army and implement new technological innovations, build fortifications, like the Great Wall, which was particularly fortified during the Ming dynasty (Barfield, 133). Thus, wealth gave them larger opportunities to strengthen their military potential which they needed to protect themselves from attacks of nomads and this need was constant in different epochs from Han dynasty to Ming rule in China. On the other hand, the wealth became the great threat to China because this made the territory of China attracting to nomads who viewed its territories as a source of enrichment.

At the same time, nomads did not only attack Chinese territories but they also affected the trade of China with other countries, especially to the west. For instance, during the Han dynasty, Xiongnu threatened to the Silk Route which was an important source of income for Han dynasty. In response Han dynasty attempted to defeat Xiongnu but mainly in vain, though there were certain successes, such as the successful military operations under the command of Ban Chao, the General Protector of the Han dynasty, who pushed Xiongnu to the West, but after his death they regained their position and still represented a threat to China and its trade.

The securing west frontier and provision of the security of trade became one of the major strategic goals of China in the following epochs. For instance, during Tang dynasty the foreign policy of the dynasty attempted to secure its western frontier. This is why in order to “handle and avoid threat posed by the Turks, the Sui government repaired fortifications and received their tribute and trade missions” (Schafer, 183). The trade and security was one of the major conditions of the economic prosperity of China. This is why Chinese conflicted with nomadic tribes permanently because they threatened to the economic security of China harassing its trade with other countries and attacking its territory, while nomads viewed China as a source of enrichment and they needed Chinese resources because their own resources were scarce.

However, China could not constantly oppose to nomadic tribes effectively because the struggle against nomads needed huge resources and undermined the national economy. On the other hand, nomadic tribes grew in power, which reached its peak during the Mongol Empire, which was probably the greatest threat to China. The Mongol Empire emerged at the epoch when the number of nomads was at its maximum and Mongols attempted to expand their empire by means of invasion but the reason and cause of this invasion was not just a question of enrichment, but it was rather the question of the survival because to maintain a large number of people and huge army Mongols needed new territories, new sources, and more income. In such a situation, sedentary people became the target of Mongols expansion and their “biggest conquest was the total invasion of China in the end” (Howorth, 122).

This historical experience stimulated China to develop new fortification leading to the construction of the Great Wall by Ming dynasty, which still viewed Mongols as “the major threat of barbaric tribes to civilized China” (Barfield, 221), but the major cause of this military fortifications was the threat to the economic stability in the country.

Socio-cultural causes of conflicts

Along with economic causes of conflicts, which were dominating, there were also socio-cultural causes. Sedentary Chinese people often viewed Mongols as “barbaric” and they felt superior in relation to nomads (Barfield, 224). Traditionally, sedentary people had a negative and biased attitude to nomads as the major threat to their life and prosperity. Nomadic tribes had an image of aggressive invaders who could destroy all the achievements of sedentary peoples since during their invasions they estranged all material values that constituted the basis of sedentary civilization. This is why Chinese people in different epoch had the same negative attitude to their nomadic neighbors on the north and west. The fortification of northern and western borders was the result of such a stereotyped view on nomads and the apogee of the fear of Chinese in face of nomads was the Great Wall of China (Waldron, 210).

On the other hand, nomadic peoples rejected the lifestyle of sedentary civilization and they had a scornful attitude to Chinese as well as other sedentary peoples because of their close link to the material values and specific locations. In contrast, nomads valued their freedom most of all and were unwilling to change their philosophy and they unable to comprehend the philosophy of sedentary people.

As a result, both sedentary and nomadic peoples had an extremely negative and scornful view on each other that became the ideological basis for conflicts because the defeat of “barbaric” Mongols was one of the major goals of Chinese rulers, for instance.

Conclusion

Thus, conflicts between nomadic and sedentary peoples were determined by both objective and subjective factors. On the one hand, there were objective economic factors such as the need of nomads in the invasion of new lands to get new pastures and to get new sources for maintenance of their traditional lifestyle, while Chinese attempted to eliminate the threat to the stability of their economy and trade. On the other hand, the permanent conflicts engendered numerous biases creating a negative image of both conflicting parties and these biases were the ideological basis for the conflicts.

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Living Trust vs. Probate Essay

Living Trust vs. Probate: Advatageous/ Disadvantageous

1. Introduction

It is always very painful when somebody dies and thinking about distribution of property and possessions in such a case seems meticulous.

People are spending al their lives in order to accumulate possessions so that their life and life of whom their love and care be more comfortable.

In this paper I will research into aspects of after death property and possessions dispositions and how this could be managed for the maximum benefit and lesser expenses for all involved. I will compare living trust and probate and describe their advantages and disadvantages in different situations.

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2. Living Trust vs. Probate

Even though death is inevitable event in event person’s life, when living he can decide what to do with his or her possessions and property and how to distribute them among potential heirs. There is also the option that upon one’s death the court will decide who will obtain the wealth, but this seems not very promising.

Living trust is generally referred to as the trust that is created during lifetime of the person aiming either to reduce taxation expenses or establish the long-term management of property. The trust usually consists of assets of the Grantor, or the trust creator, that are managed and distributed by a Trustee to Beneficiaries, or person, people or organizations, who are supposed to receive the property that is under the trust. A Living Trust is can be also called a Revocable Trust, during the lifetime of the person he or she can revoke or cancel the trust at any time. But after the death it becomes irrevocable and can no longer be changed.

2.1 Advantages and Disadvantages of the Living Trust

[A] trust that is created by the settlor’s declaration of trust, by his or [A] trust that is created by the settlor’s declaration of trust, by his or her inter vivos transfer to another, or by beneficiary designation or other payment under a life insurance policy, employee benefit or retirement arrangement, or other contract is not rendered testamentary merely because the settlor retains extensive fights such as a beneficial interest for life, powers to revoke and modify the trust, and the right to serve as or control the trustee, or because the trust is funded in whole or in part or comes into existence at or after the death of the settlor, or because the trust is intended to serve as a substitute for a will”.

The important thing is that the revocable trust is a very valuable estate planning tool. But it is not the ‘universal remedy for real estate planning’, as can be frequently marketed. The main argument for the living trust can seem to avoid probate and for some cases it is true, but the advantages of the revocable trust are not limited to that. First of all it is incapacity situation. With a revocable trust, a trustee can be said to manage the financial affairs of the grantor in case he is incapacitated. If there is no such a trustee, the court will be asked to declare the individual incompetent, which is a very embarrassing and costly process. Such procedures can arouse conflicts in the family and result in lasting court battles. A living trust provides the contingency plan to deal with grantor’s inability to manage his assets. With this trust, the person is able to specify in advance whom he wants to manage his possessions and property in the incapacity occurrence.

The second advantage is referred to probate. A living trust eludes the expense and the delay of probate, as it can be expensive especially for the large estates in states where executor and attorney fees are law fixed as the probate estate percentage. Court costs and legal fees can reach up to 10% from the gross value of the estate. On the other side, the cost of establishing of the living trust is not more then 1% of the estate and it can be easily settled in several weeks.

The third advantage is publicity related. A living trust avoids the probate publicity. The grantor can just name beneficiaries in the trust that will be unknown to the public. But there are some exceptions, as in some states the estate tax return is required to be submitted to probate court, even if the probate is not required, and it contains all trust documentary copies. And another two exceptions are when the trustee asked the court for the trust instructions interpretations and when the trustee is sued by any of the decedent’s beneficiaries or creditor.

The forth advantage is related to multistate administration, as the living trust avoids administration in many jurisdictions when assets are held in different states.

The other advantage relates to family disputes. As members of the family that are not beneficiaries are not supposed to be alerted regarding terms of the living trust, faction among members of the decedent’s family is significantly decreased. In this case, all members of the family without exceptions are informed about the terms of a will; probate gives the possibility for the family to argue over the will’s terms. The living trust can be appropriate when the person wants to disinherit some family member without clamor.

In most jurisdictions, the trust is said to be less exposed to challenge on the basis of grantor’s capacity lack, duress or fraud, than a will. Furthermore, in many jurisdictions, when a will is contested, nobody is allowed to access the estate assets until the validity of the will is set. But a trustee commonly is allowed to use assets of the trust in order to defend its validity, producing the supplementary deterrent to trust’s challenges.

Then comes spouse disinheriting. In most states, spouse doesn’t have the choice to choose a statutory share instaead of what is trust provided. Nevertheless, a spouse that is not enough provided for under a will can choose to take against the will and obtain a statutory share. Spouse disinheriting can not be a responsible action, but for those who want to create a living trust can be the best way.

Place of the trust is another advantage. The disposition of the trust is not required to be the same as the domicile of the grantor. Living trust can be established in any state with more favorable laws to the estate planning goals of the grantor. Besides, the grantor can express a wish to empower the trustee to change the citus of the trust in case of necessity. The advantages of this flexibility must be well thought against the value and delay of settling an estate when trust is not situated in the grantor’s state of living. For instance, if the living trust is not situated in the same state where probate of the will is needed, proceedings of the probate can be rather difficult.

And finally the last advantage is related to tax planning. In accordance with Internal Revenue Code section 663(b), the trustee of the living trust can choose to treat any distribution made during the first 65 days of any taxable year of the trust as made on the last day of the preceding taxable year. Such tax planning flexibility cannot be applied to the estate.

Among the disadvantages of the living trust on the first place is cost. Even though this depends from case to case, establishment of the living trust involves legal and other expenses. A trust that is specially designed can cost between $700 and $3,000 or even more, this depends on the size of the estate, as well as on complexity and prevailing attorney fees in the area. Trust funding can also be expensive and lasting process. For instance, services of an attorney are required for any real estate transfer. In the same manner, in case of professional trustee use, his annual fees can reach up to 2% of the total amount of the assets.

Another disadvantage is related to property titling. A person should acknowledge the differences between individual holding of the property and holding it as a living trust trustee. The living trust holds title to property and acts correspondently. Some financial institutions may not provide a mortgage on the property that is owned by the trust, as lender can have some difficulties in selling such a mortgage on the secondary market.

Insurance of the trust property is another unpleasant thing. Some insurance companies may not insure property that is owned by the living trust. For instance, an insurance company may not insure a vehicle that is trust-owned in order to avoid coverage of unknown number of individuals who are in this trust or who are allowed to drive this vehicle.

Living trusts are subject to IRC section 665-668 "throwback rules" and estates are not. Even though income accumulation in the estate as a tax shelter is not the main advantage with current tax rates, itcan become the future factor.

IRC section 267 is also related to trusts: losses are canceled when assets are being distributed to beneficiaries. This is supposed to come into force after the death of the grantor when property is distributed from the living trust to a beneficiary for pecuniary bequest funding.This cannot be applied to estates.

And the last disadvantage refers to the creditors’ claims. With the living trust, there is no deadline for filing claims by creditors; such suits can last for years after the death of the grantor. But in the the case with will, terms are strictly established and there is a deadline. Creditors often have about six months after a will is admitted to probate to current claims.

2.2 Advantages and Disadvantages of Probate

When one hears the word “probate”, he usually imagines the costly and slow court process. But after the thorough investigation it appears that probate is not that bad for many families. Probate is said to be the legal procedure of will validation. It can be determined once and after the death of the person his property is distributed to heirs in accordance with will provisions. So, the person should consider the option of going through probate if the most of his assets avoid probate. A large portion of estate of the person may not fall under the control of his will. Property of this kind includes items owned jointly with survivorship rights, incuding bank accounts, cars and house, or has a definite beneficiary such as retirement plan benefits or life insurance death, annuities and individual retirement accounts.

Then if the person has a small and simple estate, it most probably will slip through probate.6

When creditors are not posing any problems, then probate is the right choice. As I have already mentioned, creditors often must file claims against an estate during the period of six months. Probate will be also a good choice when the heirs are not supposed to fight for the estate in the court.

The person should consider this alternative, if his estate is costs not more then $600,000, as there are no estate taxes in this case. With living trust the person will not be able to avoid income or estate taxes in any way.

And the person should consider avoiding probate in case of owning a large or complex estate. The proper distribution of property that is owned in more than one state, for example, is said to be very complicated procedure under the will. In this case, setting up trusts can appear much cheaper and easier.

This option will not also work if the person wants to avoid publicity, estate taxes are the great concern or the person may wish the professional management of his or her property after his or her death.

3. Conclusion

In the conclusion I would like to summarize that there is no universal answer whether to establish the living trust or probate. In this research paper I described series of situations in which each of the alternative would fit best, and before making the final decision, the person should evaluate his or her possessions and property in accordance with criteria discussed above.

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Essay on Investing

Essay on Investing in Stocks and Bonds

Capital markets, debt instruments, derivative securities, promissory notes, common stock … we hear such terms from day to day and many people consider these to be extremely complicated and beyond their comprehension. However, behind these horrible words there are hidden quite simple and straight-forward things. In this paper I would like to reveal the nature of bond as a basic financial instrument. Besides defining the term bond, I will review the types and issuers of bonds and try to make bonds easier for understanding.

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As many people know the primary elements of capital markets are shares and bonds. Bonds represent debt capital, which is a kind of a loan. The interest (coupon rate) is fixed as a percentage of the principal and is paid annually or semiannually; therefore bonds are considered to be fixed interest instruments in contrast to shares. Although bonds yield lower return than shares, they expose investor to less risk and can be traded in the market as shares and other financial instruments.

As we already stated, bond is repayable over a specified period of time, which is referred to as maturity period. When this period is over the issuer will pay last interest payment to the bondholder and redeem the bond (repay the principal).

The issuer of a bond is the primary distinguishing feature of this financial instrument. Government bonds (both sovereign and local) are believed to be the most secure ones. They are traded in domestic and foreign capital markets to raise finance for some government capital projects. Corporate bonds are more risky and offer higher yield to investor as a premium for accepting such risk. Corporations use bonds as a source of debt capital.

There are many types of bonds that can be issued. The most common types are listed and reviewed below:

- conventional bond (the basic bond type, which has fixed maturity date and fixed coupon rate; other bond types are derivatives from conventional);

- government bond (issued by the government or its agency; e.g. US Treasury bond);

- floating-rate note (the coupon rate of such bond is linked to bank lending rates and therefore varies during the lifecycle of the bond);

- index-linked bond (coupon rate is linked to some finance index like index of commodity prices or inflation);

- zero-coupon bond (it is issued at discount and implies no periodic coupon payments; the interest is realized in the discount (e.g. 10% of the bond price) and is paid on the redemption – bondholder receives 100% of the bond price instead of 90% that were paid for it);

- Eurobond (issued by governments and corporations and traded as international securities);

and many others.

So far we have defined the term bond, discussed it in details and covered issuers and common types of bonds. Apparently, this topic is rather easy and the devil is not so black as he is painted.

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Essay on My Environment

I am a Product of My Environment

The development of each individual is highly dependent on his/her environment. Naturally, I am not an exception and the formation of my personality and my identity was, to a significant extent, influenced by my environment. At the same time, I would like to underline that, in spite of the significant impact of our environment, we are still different that is basically determined by psychological as well as physiological peculiarities of each individual. On the other hand, I can easily identify myself with my community that means that I perceive myself as a member of the particular socio-cultural group, which values I share and which social, moral, and cultural norms I accept and obey to.

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On analyzing my development, I should emphasize the fact that, at different stages of my development, which basically correspond to the stages defined by Vygotsky, the impact of my environment was different. To put it more precisely, it is rather the changes in my environment and its significance for me that influenced my personality but not the extent to which my environment influenced me. What is meant here is the fact that at the beginning, at first stages of my development, my parents played the most important role in my life. In fact, I should admit that I idealized them and I really wanted to be similar to them in my adult life. As I started to attend school my teachers enlarged the circle of meaningful adults that influenced my personal views, beliefs, and behavior. As the matter of fact, it is my parents and my teachers, as well as other adults that set rules and defined my values, standards behavior, etc. until the age of ten.

However, as I entered the adolescent stage, my personal development was consistently affected by physiological changes that occurred to me. At this stage, my peers became significantly more important for me, while my parents as well as teachers had lost their authority. In such a way, being accepted by my peers and gaining their respect practically became the sense of my life at the epoch.

Nevertheless, as I grew older, I have started to search more consistent objectives in my life. Now, I would say that I have started to search myself and my place in this life and in the community I live in. Eventually, I understood that my peers are important but I cannot sacrifice myself for their sake, neither I can change my personality, change my personal beliefs only because they are different from those of my peers. As a result, I started to develop my own set of values, principles, in accordance to which I could live and feel good.

At the same time, I still had and have the need to be useful for other people. In fact, it seems that my life is purposeless if other people do not even notice that I exist in this world. This is why, even at the present moment, I cannot distance from my socio-cultural environment. Even though I understand that I am unique and different from others, but I still remain one of them, a person that has similar philosophy, views, and beliefs as the majority of people that live in the hood.

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