Diposting oleh
Deni Aryanto
Investing money can tricky if you don't know where to begin. How many times have you thought, "If I only had the money that it takes to invest?" Or, what about, "I would invest my money wisely if only I had extra money to invest." Well, I can attest to having these thoughts about money and investing far too many times. I was working hard and living paycheck to paycheck. I worried about having enough money to pay my bills let alone money to invest in stocks, invest in money market accounts or invest in real estate. I was further sinking myself into an endless pit were money woes would continue to swallow me under. I needed help and I needed it quick. My prayers were answered when I was put in touch with an investment guru and strategic money manager who would show me the best ways to invest money. He would show me what I was doing wrong and how I could change my habits in order to have a little, if not a lot, of money to invest. He would also show me what are the best investment opportunities out there for me. From his knowledge, I now wish to share with you, what you can do to make sure that you don't end up in an endless cycle of money coming in and money going out. I wish to equip you with the beginning tools to use what you have now to get what you want in your future.
Baca Juga Program Investasi Paling Di Rekomendasikan
Many are afraid of the future and some are not afraid at all. If you are on either side of the spectrum it is time to change. Whether you have a goal to invest money in real estate, a business or the stock market, if you aren't doing so you need to invest money somewhere either yourself or with the help of an expert looking for him via some job search web site. I have learned that you can't be afraid of the future, but you can't live your life like the future will take care of itself. You have to plan; there is no getting around it. The key is in knowing how to plan.
First Step: Itemize Your Spending
One of the first things that my finance guru taught me is seeing is that seeing is believing. You have to know where your money is going in order to know how to utilize it better. After looking at my spending, I have to say the only wise thing I had been investing in was my college education. This leads me to say this, if you have any debt it should be from your investments into education. Learning more will allow you to attain more and nothing negative can come from that. So, side note, make sure you keep a steady fund going for educational growth for yourself and/or your children. Now, after looking at what my day-to-day spending looked like, I was able to cut back on the unnecessary "investments" I was making to places like Coffee Bean and Tea Leaf and McDonald's. I was making their big businesses richer, while my pockets were getting emptier. Other areas that I found to be unnecessary "investments" were high priced cell phone coverages and luxuries like cable television. My finance guru told me that instead of wanting to watch cable TV, I should want to try to invest money to purchase stock in cable TV. This way, I would be making money off of all those that could actually afford to watch it.
The next step going along with itemizing my spending was to allocate a certain amount of cash to pay to my investment fund.
Next Step: Knowing What to Invest Money In After you have figured out your expenses and got a handle on your cash in order to save for investing, you have to know what to invest in. If you don't have an expert to guide you, make use of the Internet. There are a lot of good Websites that will provide you with valuable information on making small investments, Web investments, investments in stocks or investments in real estate. One Website that I find valuable is www.entreprenuer.com. Also, log onto MSN or CNN and take a look at their financial pages. A lot of companies or other Websites will have advertisements that could be beneficial to where you are currently in the investing game. Whether you choose to invest money in a business or real estate, you have to remember what your limit is. Start small and increase over time. Remember, you don't want to bite off more than you can chew.
As for myself, I chose to invest money in a small franchise business so that I didn't have to do the legwork myself. I also let my guru pick out a few stocks that I could take a hand in. If you are employed, you can always take a hand at the stock market by investing in your company and increasing the amount or scale of your mutual funds. Also, don't be afraid to find out how to invest money online. If you need assistance try a site like www.gobignetwork.com. Finally: Set a Goal and Meet It
Once you decide to invest money in any area, it is important to set financial goal and meet it! That's why it is important to plan and know what you can and cannot do. You can always add onto your goals once previous set goals are met.
Diposting oleh
Deni Aryanto
Invest money now spend money later. Investing is essential to making money. You have to invest money to make money. Whatever your motto may be the idea to invest money is larger now more then ever and continues to grow more and more each year. The demand for knowledge on how to invest money and what investment ideas make the most sense is in such a high demand today that cable television now has channels 100% dedicated to investing. Also, if you went to a bookstore 20 years ago looking for books on how to invest money you might find a couple dozen. Now, you will find hundreds. The point is that investing is now part of our lives. If you want to own a house on Newport Beach, your name is not Tom Cruise or Kobe Bryant and you are not doing executive job search in some of the world-known companies, you need to know how to invest money wisely.
The great thing about investing in today's world is that there are many avenues available for people to invest money. The most common known areas to invest money are stocks, bonds, mutual funds, real estate, and e-commerce. Everybody plans to invest money in the stock market and for good reason because the stock market is a great way to make money. Millions of people have made millions of dollars in the stock market. However, millions of people have also lost millions of dollars in the stock market. The stock market is the poster child for high risk, high reward investing. That is why if you plan to invest money in the stock market, it is of great importance that you do your research on any company you have interest in investing in. There are no guarantees with the stock market nor are there any ways of completely knowing if the market is going to crash. That is what makes investing in the stock market a high risk. However, the stock market is the quickest way to make big money. In no other investment can you buy 20,000 shares at $1 per share and in 1 week watch the cost per share go up to $10 and new you have profited $180,000. That is your high reward for investing your money in the stock market.
Baca Juga Program Investasi Paling Di Rekomendasikan
The stock market may be the most common area people actually invest but real estate is the most common area people WANT to invest. People want to invest in real estate because it is a much safer investment then the stock market and still has the potential to be highly profitable. The reason that real estate is a safer way to invest money is because the real estate market does not fluctuate as often or as extreme as the stock market. Also, the real market typically does not fluctuate down. History has shown that real estate values are usually on the rise, especially in big markets such as California, New York, and Florida. Due to this, over time your investment could be worth hundreds of thousands of dollars. Also, most people have more knowledge about real estate then stocks making them feel more confident about their investment strategies. The reasons more people invest money in stocks rather then real estate is simple; you don't need nearly as much capital to buy stock and more importantly, there is an unlimited amount of stock and only so much real estate.
Another great aspect of investing in today's world is that you don't need large amounts of liquid capital to invest in something. Although, the more money you invest the higher your return will be, assuming the investment makes a profit. If the investment flops then you're lucky you did not have much to invest. However, it is still great to be able to invest money without having much. A great way to invest with little money is through Dividend Reinvestment Plans (DRPS), also know as Drips, and Direct Stock Purchase Plans (DSPS). These plans allow you to buy stock directly from the company without having to deal with brokers and the high commissions they may charge. Most companies that offer these plans allow the investor to invest as low as $20 each time and the investor is not required to purchase a full share each time a contribution is made. While you have to keep great tax records due to the frequent amount of purchases, these plans are a safe way to get involved in investing and make money over time. If those plans are not fitting and you have a few hundred dollars available you can invest in index funds, which usually get an 11% return each year. Either way, these programs are a great way to invest little money with little risk and still be able to see extra income, all while giving you the opportunity to become familiar with the world of investing.
Invest money now spend money later. Investing is essential to making money. You have to invest money to make money. No matter how you put it the pathway to financial freedom is led by investing. You don't have to invest all your money in one area and you don't have to invest all your money. Just invest something somewhere. The age of investing is here to stay. No more will the days of living solely on your paycheck be acceptable. Not unless your paycheck is signed by the New York Yankees.
Why Should I Invest?
Welcome to Investing Basics! If you've found your way here, chances are you've either got some money socked away or you're planning to do so. But first things first. Why is investing a smart idea?
Simply put, you want to invest in order to create wealth. It's relatively painless, and the rewards are plentiful. By investing in the stock market, you'll have a lot more money for things like retirement, education, recreation -- or you could pass on your riches to the next generation so that you become your family's Most Cherished Ancestor. Whether you're starting from scratch or have a few thousand dollars saved, Investing Basics will help get you going on the road to financial (and Foolish!) well-being.
Know your goals
What are you saving for? Retirement? College for the kids? A new speaker system complete with woofers and tweeters? An exotic animal menagerie complete with Chihuahuas (woofers) and canaries (tweeters)? A retirement villa in the sun-baked hills of Tuscany?
Say you take $2,000 of your savings and put it into the stock market. If your money returned 10% a year (the S&P 500's historical average), two grand would be worth $34,898.80 after 30 years. That might not get you the perfect retirement home, but it'll at least give you a down payment.
Maybe you don't have $2,000 burning a hole in your bank account, but perhaps you can afford to invest your lunch money. Brown-bag your lunch and sock away just $4 a day, 250 days a year. It's not a lot, but if you're in your early 20s, you've got the investor's best ally on your side -- time. If you invest $1,000 once a year in an investment that averages a 10% annual return -- the average annual stock market return since 1926 -- it'll grow to more than $1 million after 46 years, which is right around the time you'll be ready to retire.
Of course, as you get older and more financially stable, you should be able to put away more to invest. Upping the ante to just $166 a month -- which is probably less than lunch money plus what you pay for cable TV -- would put you at the million-dollar mark in just 39 years.
The power of compounding
The table below shows you how a single investment of $100 will grow at various rates of return. Five percent is about what you might get from a certificate of deposit (CD) or with a government bond over time, 10% is about the historical average stock market return, and 15% is what you might get if you decide to learn how to pick your own stocks and take advantage of some of our lessons in advanced investing techniques.
Growing At
Year
5%
10%
15%
20%
1
$100
$100
$100
$100
5
$128
$161
$201
$249
10
$163
$259
$405
$619
15
$208
$418
$814
$1,541
25
$339
$1,083
$3,292
$9,540
Why is the difference between a few percentage points of return so massive after long periods of time? You are witnessing the miracle of compounding. When your investment gains (returns) begin to earn money, and then those returns start to earn money, your investment can mushroom very quickly. Extend the time period or raise the rate of return, and your results increase exponentially. For instance, if you start young, say at 15 years of age, note how quickly a single $100 investment grows, especially in the later years.
Growing At
Age
5%
10%
15%
20%
15
$100
$100
$100
$100
20
$128
$161
$201
$249
25
$163
$259
$405
$619
30
$208
$418
$814
$1,541
40
$339
$1,083
$3,292
$9,540
50
$552
$2,810
$13,318
$59,067
60
$899
$7,298
$53,877
$365,726
65
$1,147
$11,739
$108,366
$910,044
Looking at it another way, let's compare two teenagers and their lifetime savings habits. Bianca baby-sits a lot and spends most of her spare time reading. She saves $1,000 a year starting when she's 15 and invests it in the stock market for 10 years earning 12% per year on average. After 10 years, she comes out of her shell, stops adding money to her nest egg, and spends every penny she earns club hopping and on trips to Cancun. But she keeps her nest egg in the market.
Compare her account to that of her friend Patrice, who squandered her early paychecks on youthful indiscretions. At age 40 Patrice gets a wake-up call when her parents retire on nothing but Social Security. She starts vigorously socking away $10,000 every year for the next 25 years. Guess who has more at age 65? That's right, Bianca. (You figured it was a setup, didn't you?) Her 10 years of saving $1,000 per year (just $10,000 total -- the same amount Patrice put away in just one year) netted her $1.8 million by age 65. Patrice, on the other hand, scrimped for 25 years to invest a quarter million dollars out of her own pocket and ended up with just under $1.5 million. Neither will be going to the poorhouse, but you see our point: Bianca's baby-sitting money grew for 50 years, twice as long as Patrice's, and Bianca barely missed it.
(It's almost not fair to mention this, but if Bianca put her money in a Roth IRA, that whole $1.8 million would be tax-free. On the other hand, Patrice couldn't put her full $10,000 in a Roth, so Patrice will pay capital gains tax on a good deal of her gains.)
The power of compounding is the single most important reason for you to start investing right now. Every day you are invested is a day that your money is working for you, helping to ensure a financially secure and stable future.
Common pitfalls to avoid
Before you race off through the rest of Investing Basics, there are some cautionary points to consider before you proceed. These are common mistakes many people make when considering what to do about investing.
Doing nothing. There is no guarantee that the market will go up the first day, month, or even year that you invest in it. But there is one guarantee: Doing nothing at all will not provide for a comfortable retirement.
Starting late. Postponing your investing career is second only to not investing at all on the list of investment sins. You already know that the earlier you start the better off you are. (Take another look at the compound return example we gave above.) If you're already past those formative twenties (you don't look a day over 32 to us), we'll reword this first pitfall to read: "Not starting now."
Investing before paying down credit card debt. If you have money in your savings account and you have revolving debt on your credit card, pay it off. Many credit cards have an annual interest rate of 15% or more. Let's say you have $5,000 to invest, but you also have $5,000 debt on your credit cards with an average annual interest rate of 18%. It doesn't take an astrophysicist to figure out that you're going to have to get an 18% return after you pay taxes just to break even on that $5,000. Pay the debt off first, then think about investing.
Investing for the short term. Only invest money for the short term that you're actually going to need in the short term. Invest money in the stock market that you won't need for at least three years, and preferably five years or longer. If you'll need your cash next year for a down payment on a house or for the family Caribbean cruise, use one of the shorter term and safer havens for your cash, such as money market funds or CDs.
Turning down free money. You'd never turn down a dollar if it was offered with no strings attached. That's what you're doing if your company offers a 401(k) or similar retirement savings plan with an employer match and you're not participating. Take advantage of all tax-advantaged, employer-matched savings programs.
Playing it safe. If you're young, most of your investing dollars should be in the stock market. You have enough time to weather any dips in the market and to reap the rewards of long-term gains. Although you may want to transition into bonds later in life as you depend on your investments for income, stocks should make up a large portion of the portfolio of every investor.
Playing it scary. Not every investment is for everyone. Even if you're a daredevil, you shouldn't pour all of your money into something that could end up going down the drain.
Viewing collectibles or lottery tickets as investments. If old comic books, Barbie dolls, and abandoned exercise equipment could be used to fund retirements, do you think the stock market would exist? Probably not. Don't make the mistake of thinking your jewelry, those Beanie Babies, or the lottery will provide for you in your latter years.
Trading in and out of the market. We believe the best approach to investing is the long-term one. Pick your investments well and you'll reap greater rewards over the long term than you had ever dreamed possible. Trade in and out of the market and you'll be saddled with fees that chip away at your returns, and you'll potentially miss out on gains that long-term investors enjoy with much less effort.
Congratulations! You've made it through the first part of Investing Basics. (Bet you didn't even break a sweat.) You've witnessed the power of compounding and you understand how some common pitfalls can ruin even the healthiest investing plan. Now, let's turn to the various ways you can start investing.
Diposting oleh
Deni Aryanto
This article is about Entrepreneurship, Real-Life
In a forum thread called “Why do so many people hate on Dave Ramsey?“, Rush complained that Ramsey’s advice is too conservative. Squished18 replied by saying: “You’re advising me to invest my $100K ‘at 10%’. Where am I going to invest my money? There are ZERO investments that will guarantee me a 10% return.” The following was Rush’s response.
Baca Juga Program Investasi Paling Di Rekomendasikan
You asked the million-dollar question: “Where am I going to invest my money [to realize at least 10%]?” Obviously no one can answer that question. What we can do is try and then measure the results. If the results indicate that 10% were achieved, then you’ve answered your question. It seems that most people who talk about “investing” and returns automatically develop visions of the stock market, mutual funds, CDs, and the like. In reality there are many opportunities around us that will return much more than a paltry 10%. Unfortunately, there is no “canned” answer. I can give you examples.
Baca Juga Invest Money
Everything about earning returns boils down to buying low and selling high. To realize a return, one must first spend cash and then one must redeem for cash. If you buy a stock, you spend $1,000 and wait a certain amount of time and then sell the stock. Same with mutual funds. Same with any other type of investment you can imagine. The “stock market” requires very little participation on your part. You make the purchase and pretty much wait. However, if you think outside the market, you’ll find plenty of scenarios in which you can buy low and sell high and you’ll be directly responsible for the return.
What you buy low and sell high depends greatly on you and your life experiences. For example:
Joe Blow has a niece with a 2000 Ford Taurus she wants to sell for $4,000. Joe also know someone at his church who is looking for a good car for their son. Joe buys the Taurus for $4,000 and sells it to his friend for $4,600. That investment activity took 3 days and returned 1,500% APY. That’s one-thousand-five-hundred percent interest. Joe knows cars and he had a good idea that the Taurus would make a good investment. Yes, there was a risk involved, but Joe is a car guy which minimized the risk. I’m not a car guy and don’t mess with flipping cars because I don’t have the needed knowledge and experience with cars. I have my own niches.
Plenty of folks can buy a $100,000 house at a sheriff’s sale and sell it the following month for $107,000 - it happens daily. This scenario yields an 84% return. EIGHTY FOUR PERCENT RETURN!!!
I know pinball machines. When I see one at a garage sale or listed in the paper, I know what price I need to buy it at to sell at a great return. My friend is an antique aficionado and he goes to estate sales and grabs up stuff throughout the house that I wouldn’t touch. He’ll drop $5,000 on a Friday morning and after a week on eBay he’ll have $10,000. A nice little 5,200% APY.
A friend goes to Dunkin’ Donuts every morning. The clerk there knows my friend by name and they regularly visit when it’s not too busy. One morning the clerk was telling my friend that their dough mixer was on it’s last leg. My friend found a suitable mixer for $6,000 and sold it to the owner of the doughnut shop for $9,000 and even included a 60 day warranty. That was nice 18,250% APY deal and all he did was eat some doughnuts each morning.
How about renting residential real estate? Take $20,000 as a down payment and buy a $100,000 duplex. For merely $20,000 you’ll own all the income, deductions, appreciation, and other intangibles that $100,000 generates. That $20,000 can often easily kick off $2,000 per year in cash (10% APY), but you also get to lower your tax bill (let’s say $600 or 3% APY), get appreciation of the property (15% APY against your $20k), and you get the equity accumulation as your tenants pay off the mortgage (2% APY which grows yearly). One can easily realize a 30% APY in cash and cash equivalents by diving into landlording.
Another friend works for a big company. That company buys 1,000 Dell laptop computers every two years. Normally the retired laptops were sold to a laptop broker. My friend now buys them every two years and pays more for them than the broker did. He makes more than a years salary flipping laptops on eBay. All because he works where he does and took the initiative (and risk) to make a sweeter deal for his employer.
There was a convenience store in a small town that was owned by a husband and wife team. Their marriage went bad and a judge forced them to work different shifts. He would steal money, she would steal money. Soon they could no longer afford to put gasoline in the tanks. The store inventory dwindled. The store soon become filthy and local residents learned to hate the place. A look at the county records told the whole story. A call to the attorneys handling the divorce revealed that the store was in receivership and ordered sold by a third attorney. A call to the third attorney revealed the store could be had at a great price. The deal was made. The store was remodeled, renamed, and reopened to incredible fanfare and profits. Being a local resident and watching the couple’s purchase and subsequent demise and dilapidation of the store set the wheels in motion for a great investment.
You see, there are plenty of opportunities around us outside of our regular jobs. Telling you how to make these fantastic returns is not possible because I don’t know your skills, knowledge, geography, financial situation, or even your daily routine. Joe knows cars. Steve knows antiques. I know pinball machines. Someone else simply eats doughnuts. Jack knows his employer sells 1,000 laptops every couple of years. What is certain is that if you look for these opportunities and act on them you can easily beat the 10% expected market return.
Notice that in none of my scenarios do you have to quit your day job nor do you have to spend an inordinate amount of time to achieve these results. Most people will not act on these opportunities for fear of failure. I suppose their risk tolerance is too low. But if you load up on retirement mutual funds and put the rest of your money into paying off your home mortgage, you won’t be in a position to seize a deal when it does come up.
Rush isn’t saying that you shouldn’t invest in mutual funds or pay down your mortgage; he’s advising that you keep some of your money liquid so that you can seize opportunities. In essence, he’s encouraging diversification. His ideas aren’t “get rich quick” schemes. They’re examples of the creative thinking that can lead to extra income.
This article is about Entrepreneurship, Real-Life
In a forum thread called “Why do so many people hate on Dave Ramsey?“, Rush complained that Ramsey’s advice is too conservative. Squished18 replied by saying: “You’re advising me to invest my $100K ‘at 10%’. Where am I going to invest my money? There are ZERO investments that will guarantee me a 10% return.” The following was Rush’s response.
You asked the million-dollar question: “Where am I going to invest my money [to realize at least 10%]?” Obviously no one can answer that question. What we can do is try and then measure the results. If the results indicate that 10% were achieved, then you’ve answered your question. It seems that most people who talk about “investing” and returns automatically develop visions of the stock market, mutual funds, CDs, and the like. In reality there are many opportunities around us that will return much more than a paltry 10%. Unfortunately, there is no “canned” answer. I can give you examples.
Everything about earning returns boils down to buying low and selling high. To realize a return, one must first spend cash and then one must redeem for cash. If you buy a stock, you spend $1,000 and wait a certain amount of time and then sell the stock. Same with mutual funds. Same with any other type of investment you can imagine. The “stock market” requires very little participation on your part. You make the purchase and pretty much wait. However, if you think outside the market, you’ll find plenty of scenarios in which you can buy low and sell high and you’ll be directly responsible for the return.
What you buy low and sell high depends greatly on you and your life experiences. For example:
Joe Blow has a niece with a 2000 Ford Taurus she wants to sell for $4,000. Joe also know someone at his church who is looking for a good car for their son. Joe buys the Taurus for $4,000 and sells it to his friend for $4,600. That investment activity took 3 days and returned 1,500% APY. That’s one-thousand-five-hundred percent interest. Joe knows cars and he had a good idea that the Taurus would make a good investment. Yes, there was a risk involved, but Joe is a car guy which minimized the risk. I’m not a car guy and don’t mess with flipping cars because I don’t have the needed knowledge and experience with cars. I have my own niches.
Plenty of folks can buy a $100,000 house at a sheriff’s sale and sell it the following month for $107,000 - it happens daily. This scenario yields an 84% return. EIGHTY FOUR PERCENT RETURN!!!
I know pinball machines. When I see one at a garage sale or listed in the paper, I know what price I need to buy it at to sell at a great return. My friend is an antique aficionado and he goes to estate sales and grabs up stuff throughout the house that I wouldn’t touch. He’ll drop $5,000 on a Friday morning and after a week on eBay he’ll have $10,000. A nice little 5,200% APY.
A friend goes to Dunkin’ Donuts every morning. The clerk there knows my friend by name and they regularly visit when it’s not too busy. One morning the clerk was telling my friend that their dough mixer was on it’s last leg. My friend found a suitable mixer for $6,000 and sold it to the owner of the doughnut shop for $9,000 and even included a 60 day warranty. That was nice 18,250% APY deal and all he did was eat some doughnuts each morning.
How about renting residential real estate? Take $20,000 as a down payment and buy a $100,000 duplex. For merely $20,000 you’ll own all the income, deductions, appreciation, and other intangibles that $100,000 generates. That $20,000 can often easily kick off $2,000 per year in cash (10% APY), but you also get to lower your tax bill (let’s say $600 or 3% APY), get appreciation of the property (15% APY against your $20k), and you get the equity accumulation as your tenants pay off the mortgage (2% APY which grows yearly). One can easily realize a 30% APY in cash and cash equivalents by diving into landlording.
Another friend works for a big company. That company buys 1,000 Dell laptop computers every two years. Normally the retired laptops were sold to a laptop broker. My friend now buys them every two years and pays more for them than the broker did. He makes more than a years salary flipping laptops on eBay. All because he works where he does and took the initiative (and risk) to make a sweeter deal for his employer.
There was a convenience store in a small town that was owned by a husband and wife team. Their marriage went bad and a judge forced them to work different shifts. He would steal money, she would steal money. Soon they could no longer afford to put gasoline in the tanks. The store inventory dwindled. The store soon become filthy and local residents learned to hate the place. A look at the county records told the whole story. A call to the attorneys handling the divorce revealed that the store was in receivership and ordered sold by a third attorney. A call to the third attorney revealed the store could be had at a great price. The deal was made. The store was remodeled, renamed, and reopened to incredible fanfare and profits. Being a local resident and watching the couple’s purchase and subsequent demise and dilapidation of the store set the wheels in motion for a great investment.
You see, there are plenty of opportunities around us outside of our regular jobs. Telling you how to make these fantastic returns is not possible because I don’t know your skills, knowledge, geography, financial situation, or even your daily routine. Joe knows cars. Steve knows antiques. I know pinball machines. Someone else simply eats doughnuts. Jack knows his employer sells 1,000 laptops every couple of years. What is certain is that if you look for these opportunities and act on them you can easily beat the 10% expected market return.
Notice that in none of my scenarios do you have to quit your day job nor do you have to spend an inordinate amount of time to achieve these results. Most people will not act on these opportunities for fear of failure. I suppose their risk tolerance is too low. But if you load up on retirement mutual funds and put the rest of your money into paying off your home mortgage, you won’t be in a position to seize a deal when it does come up.
Rush isn’t saying that you shouldn’t invest in mutual funds or pay down your mortgage; he’s advising that you keep some of your money liquid so that you can seize opportunities. In essence, he’s encouraging diversification. His ideas aren’t “get rich quick” schemes. They’re examples of the creative thinking that can lead to extra income.
Money Investing for Beginners | Best Ways to Invest Money
The Main Educational Ideas of my Beginner Money Investing site helps train yourself to put money aside, commit money to earn a financial return as well as the Best Ways to Invest Money? Is committing money to earn a financial return the same as playing for money? It must have crossed your mind if you had committed some money every month to acquire shares of any major company during four or five years previous to filing its bankruptcy. Having tried to take some business risks cost you an arm and a leg, but if you had given it a second thought you would have committed your money to a savings account earning a 1,3 or 2,3 annual percent during that time period. Still, during that lapse of time, the Dow Jones Industrial Average scale had raised 100% its price. Middle class property house prices had raised between 6% and 8% in that same time. Certificates gained around 6% per year. Could your possibilities to succeed be higher if you were playing at some casino or race? You may either come out naked or you may triple your cash.
Committing money in certificates, shares and/or properties is not similar to playing for money, even when shares, certificates and property prices fluctuate suddenly. Keeping money aside at home is not the same either. Contrasting ideas come from the following: Putting money aside is to keep your money worth the same when not being used. On the other hand, committing money for profit has to do with risking. Depending on where you put your cash, that is to say what kind of business, you’ll get more or less turnovers. To invest is to put money in the financial market or in real estate to increase its future value. Committing your money includes shares, bonds, real estate, options, and future contracts; savings is usually done through a bank savings account.
Speculating is putting money in a place in which opportunities to get a financial return in blue through a determined period of time are just minimum. With this investment probabilities of getting back some money over a long period of time are really high. Therefore, we can assure that investing and speculating are not the same; moreover, speculating is more related to gambling in which odds are against the individual that decides to invest. The risk of loosing in future contract investments area extremely high. For each dollar earned from commercializing future contracts you loose another one. Then, why are there who invest en speculative values? The answer is very simple. If investments work as one hopes or expects, the investors will count with a substantial turnover.
Having success in investments requires knowledge about values and stocks in which one is investing as well as the risks that those values carry. Investment opportunities are very broad and the abundant information that exists in the internet may help you get more knowledge about those investment opportunities that you feel you can carry on. The negative part that comes along with the internet is that the use of such a simple and quick that you can make investing mistakes much more easily. Without having to talk about your investing ideas to your agent o financial broker, you could end investing in low return shares and bonds, but with a higher risk of loosing it all. Advice about investments are spread freely and easily through internet. But you should take into account that no advice is free. If you had followed the advice of a research analyst having to do with which shares to buy or sell for the 2000-2002 period you would have lost most of the capital you invested. Many analysts recommended the buying of shares and stocks with very little information about those values, and only because the prices had dropped to a very low level. For example, selling shares and stocks suggestions over: Enron, WorldCom, and Global Crossing came only when they were already near to file for bankruptcy.
By understanding how to build a investing portfolio you could keep safe against any potential loss such as those shares and stocks coming from the mentioned companies and corporations.
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Deni Aryanto
Private Mortgage Investment takes two primary forms: Fractional Investment and Mortgage Fund Investment.
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===Fractional investment===
This is the traditional method for investors to extend loans to borrowers. A limited number of investors (in California, 10) secure a loan made to a borrower by placing their names on a First (or Second or Third) Deed of Trust on the borrower’s property. Monthly payments are made to a servicing agent, who then distributes the payments pro rata to the individual investors.
Fractionals provide the benefits of simplicity and transparency. Each individual investor reviews each prospective loan prior to making a decision to invest. On the downside, “building” each loan investor-by-investor takes time, detracting from one of Private Money’s key advantages: speed.
By its nature, the investment is not diversified for individual investors. The investment is made entirely to a single borrower, usually on a single property. In the event the borrower fails to make monthly interest payments, the income flow to the investors stops. If the borrower defaults on the loan, this income flow will cease completely. Investment principal and interest will be recaptured only after the loan is renegotiated, or the property securing the loan is foreclosed upon and sold.
Further, investors holding larger percentage interests in a fractionalized loan may maintain greater control within the transaction the other, smaller investors. In the event that additional investment funds are required in order to prepare a foreclosed-upon property for sale, investors must come up with these additional funds.
===Mortgage Fund Investment===
Mortgage Funds (also, “Mortgage Pools”) resemble equity mutual funds, funds comprised of a wide selection of stocks. Investors deposit money in a fund: The fund is managed by mortgage brokers or mortgage bankers certified by the State. Money within the fund is lent to borrowers and is secured by First (or Second or Third) Deeds of Trust naming the FUND as the holder, rather than individual investors.
By purchasing shares in a mortgage fund, and as interest is earned from monthly mortgage payments, the fund generates income.
There are approximately 100 mortgage funds in California. All are closed-end, meaning the number of investors and amount of investment dollars are capped. Many are closed: They are not accepting new investors.
Investor yields are similar to those obtained through fractional investment. The primary difference lies in diversification. Risk is spread across a portfolio of loans, not centered on a single loan as with fractionals. Risk is spread across the entire pool of borrowers, and different types of properties, in different locations.
As a result, in the event of a late pay or default, there could be minimal – or no – impact on investors’ yield. Reserve accounts established by the fund and by its manager would compensate for any shortfall.
Another difference in funds is liquidity. If an investor in a fractional wishes to cash in his position, he must either be replaced with another investor, or he must wait for the loan to be paid off by the borrower. Because many private money loans take the form of short term bridge loans lasting less than a year, this waiting period is generally limited.
Mortgage funds, however, generally offer rapid –sometimes, immediate—repayment of principal. This is possible because a) Funds have reserve accounts in place for this purpose; b) Funds are generally oversubscribed, with more investors wanting into the fund than those wanting out.
The third difference is control. The situation is analogous in the equity world to investors selecting individual stocks in which to invest, vs. investing in a mutual fund. Whereas fractional investors make the investment decision on each property themselves, fund investors delegate this duty to the fund managers.
Other features:
Fund participants enjoy 365 day investments – they aren’t sidelined between loan opportunities
Less paperwork
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Deni Aryanto
Banyak sekali jenis Investasi di luar sana, mulai dari deposito, investasi real estate, Reksadana, Obligasi, Future Tradding, Stock Index, Saham, Property, Dll..
Dana / Modal untuk beberapa jenis Investasi diatas sangatlah besar, mungkin hanya kalangan menengah keatas saja yang bisa mengikuti jenis investasi tersebut
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