Thursday, May 31, 2012
Wednesday, May 30, 2012
Trading Card Market Financial Patterns
If you spend enough time in any business industry, financial patterns begin to emerge and become apparent. The longer you are in the industry the more patterns you will see develop. Making sense of investing patterns in the trading card industry is easy, if you pay attention to a few key mitigating factors, such as the popularity era of the sport you collect, the manufacturing quantities produced of the brand of cards you collect, and the historic market increases and decreases in the years you collect. Understanding these three factors when purchasing and selling your precious cardboard gold, may help move your fun collectable hobby into a potential investment opportunity.
Why do we collect trading cards? Hopefully, for the fun and fulfillment it brings to our lives. Therefore, collecting needs to be fun and needs to stay fun. Over-analyzing the investment possibilities may take away from that enjoyment. However, if done in balance, it is possible to achieve both an entertaining hobby and add an additional investment to one's portfolio.
"How popular was the sport in the era I am collecting?" Understanding how to answer this question before buying or selling your cards allows you to understand the first financial pattern of collecting trading cards. For example, let's use the nineteen fifties' and nineteen sixties' basketball era to help understand sports popularity era though trading card patterns. In the nineteen fifties, there was only one major manufacturer of basketball cards who produced cards and only one year in ten that they produced them...Topps, in 1957/58. Since the baseball card era of the nineteen fifties had more than one manufacturer, and baseball cards were produced for each of the ten years in that decade, we can surmise from this that basketball in the nineteen fifties was not as popular as baseball. If we move into the nineteen sixties era, we find the same scenario with basketball cards, as compared to baseball cards. Again, there was only one major manufacturer for that decade for basketball, Topps, and they only produced basketball cards for two years, 1968/69 and 1969/70. This can be compared to baseball cards, which again, had two major manufacturers producing trading cards for each of the ten years in that decade.
Trading card manufacturers do not release production numbers the majority of the time; however, understanding these popularity era trends, a collector can obtain enough information to make educated decisions when determining prices to be paid in buying or selling their cards. From our vintage basketball example, we can come to the conclusion that the production numbers printed of basketball cards would be much less than those of baseball, directly due to calculations of supply and demand that manufacturers use when determining how many of a product they want to produce. This moves us into our second financial market pattern that works in conjunction with sports popularity. What are the manufacturing quantities produced for the cards you are collecting?
How can we convert the knowledge we obtained, from understanding sport popularity and the manufacturing quantities produced, into our decision making process used when purchasing and selling sports cards as an investment? In our example of collecting basketball vintage cards, we understand without having production numbers from the manufacturer, that there should be far fewer basketball cards produced from earlier eras because the sport was not as popular compared to baseball. This is due to the lack of companies that produced basketball cards over the years. We can also conclude that since basketball card manufacturers' production numbers are lower for these eras, that the quantities for high-grade basketball cards should be much lower, also due to the lack of interest in basketball trading card collecting during those eras. If the future interest of basketball trading cards increases, and new collectors move into vintage trading cards, the demand should supersede the supply. If you understand how markets work, it becomes evident that price increases need to occur in order to offset the demands need of lower supply availability.
Understanding historic market increases and decreases in the sport trading card industry can also be used in your investment strategy when purchasing and selling trading cards. To keep this concept simple, investors should do one thing: buy low and sell high. Trading cards is a market, the same as any other market in the general sense. When more people are selling than buying, a true investor is buying. And when more people are buying than selling, a true investor is selling. Markets go up and down, and investors are aware of these trends and take advantage when increasing or decreasing their inventories. Let's take baseball card eras as an example. In the nineteen eighties, baseball cards was at a market peak for vintage nineteen fifties' and nineteen sixties' era baseball cards. Most collectors were targeting vintage cards from those two eras. The 1970's trading cards were not popular but there was slow movement because of the few savvy investors that were capitalizing on a weak era. The athletes in the nineteen seventies' era were at the end of their careers and the stars had not yet been inducted into the Hall of Fame. The nineteen seventies were weak and weak prices were a result. Looking back now, it's clear that savvy investors, who looked uneducated at the time by buying the nineteen seventies' baseball cards, are now known as the market bulls. And looking back now, trading cards from the nineteen seventies' era are very strong, even with the manufacturers' increase in the production numbers due to sport popularity. Enough time has passed and now those nineteen seventies' cards have moved into vintage status, and the demands are now superseding the supplies once again. Knowing if an era in sports cards is strong or weak helps all investors make buying and selling decisions in the sports collectable card market.
All three market financial patterns, the popularity era of the sport you collect, the manufacturing quantities produced of the brand of cards you collect, and the historic market increases and decreases in the years you collect, can help any collector advance into a potential collectable investor. Keeping your hobby fun is an important factor when buying or selling your sports cards, but keeping your eye on trends in the market while you are having fun, will make your dollar go much farther. Keeping financial patterns in mind while doing your card buying and selling will help you balance your hobby as well as your bank account. Bringing balance into your life takes time and patience, but in the end... it can become very rewarding.
About The Author
Billy May is an avid collector and owner of Cardsone Trading Cards ( http://cardsone.com/ ) If you have questions about collectables investing, or trading send an email to rsales@cardsone.com
Tuesday, May 29, 2012
UK's Leading Wine Investment Companies
Touted as one of the world's most desired investments that is not subject to taxation, fine wines have enjoyed a substantial rise in demand throughout the world over the past three decades and the UK is a key player in that market. The excellent wines selected by top wine investment firms in the UK have proven to be both a safe investment as well as a very profitable one. And to increase their value even more, as the demand for these selected wines grows the supply diminishes, which in turn makes the wine investment accrue value. Over the years the market has shown that the finite supply of fine wines produced each year lags behind the growing demand of those wines for investment or for drinking pleasure. Wines for investment have stood their ground amongst the most traditional investment schemes and even in an economic turndown, they have retained their value. Unlike many investments, fine wine is a tangible asset that should be considered as a strong addition to a financial portfolio. It is a precious bottled commodity waiting in storage until it is sold to the highest bidder. But while in storage, the wine continues to improve and accordingly, with fewer bottles left in storage the price and quality continues to rise. UK wine investors have an excellent array of wine merchants to assist with advice and trading through while taking advantage of the tax-free status of their investment.
Bordeaux as an Investment
Bordeaux wines have an excellent track record as being high quality wines that carry a low risk for investment. As an example, a bottle of 1982 Lafite Rothschild wine skyrocketed from a value of £2,600 in the year 2000 to a current selling price of £25,500. While this is an outstanding example, it is true that returns on the most sought after wines consistently reach at least 30% annually. The wines from Bordeaux are divided into five categories, with the first growths being the most sought-after category. The remaining categories represent the super second growths and the third, fourth and fifth growth wines. Some of Bordeaux's top red wines are Haut Brion, Latour, Lafite Rothschild, Margaux and Mouton Rothschild. Although the wine can be consumed immediately, first growth wines require a minimum of 15-20 years to reach their full maturity, so careful storage in a bonded warehouse is an important consideration.
UK Top Wine Merchants
Wine merchants represent the top producing wine houses and provide all the information and services required for making a solid investment. There are a number of good merchants who are well established and come with a reputable track record for supplying high quality vintage, storage in a safe and bonded warehouse, managing the insurance and brokering the resale. The London based Bordeaux Wine Company is an independent brokerage firm that specializes in bottles of first growth Bordeaux coming from the top estates in France. The company, which has been trading wine for ten years, it carefully selects and buys choice wines through international auctions and lists them for sale online. The Bordeaux Wine Company is staffed with knowledgeable wine experts who guide investors through the entire process, from selecting the correct portfolio addition to managing the storage details, also well as advising when to sell. A major shareholder and partner in the firm, Frederick Achom, is a successful investment specialist who follows the international trends in the wine industry and uses his in-depth knowledge of the market to promote the addition of wine to investment portfolio managers, wealth managers, private bankers, hedge fund managers and asset management groups. Frederick Achom is also the chairman of Rosemont Group of Companies, a private entrepreneurial corporate investment firm with investments from wine to property to entertainment. Another leading UK broker is Premier Cru Fine Wine Investments Ltd, who also tailor personal portfolios to include the addition of fine wines. The company provides full management over the portfolio, provides detailed and updated valuations and distributes newsletters detailing current trends. As a full service company, it recommends storage facilities in a UK bonded warehouse that is customs controlled and ensures records of personal ownership. The UK Fine Wine Investments Ltd also specializes in first growths from Bordeaux and offers top quality tailored services through its team of brokers who analyze the market and make appropriate recommendations. Berry Bros, Albany Vintners, Wilkinson Vintners, Justerini and Brooks, Corney and Barrow and Farr Vintners are considered to be in the higher echelons of the wine trade and are amongst the most reputable and well established wine merchants in the UK.
Thomas Heler is based in the United Kingdom and is a writer and wine connoisseur. A wine investor himself, he likes writing about fine wine investment. An example of his writing can be found at Bordeaux Wine Company - Fine Wine Experts.
Monday, May 28, 2012
Sunday, May 27, 2012
Correcting Bad Habits in Spread Betting
There is no risk-proof kind of investment in the world of spread betting and other financial trading or transactions. However, this mindset shall not be used as an excuse for people to think that they can do whatever they want to do without thinking about it at all over and over again. Well, there are so many people and traders out there who are willing to take the risk because they believe that if they do not take the risk, they will not gain at all. While this can be true, it does not necessarily mean that investors need to be reluctant. As a matter of fact, what it means by saying "no risk, no glory" is that you may enter the market fearlessly as long as you have calculated the risks involved to the transaction.
On the other side of the road, there are also some investors who are very much afraid to take even a little risk. This is because they want to make sure that their every move will result to a gain for them. Well, for most veteran investors in the field of spread betting, this is not how the financial realm actually works. Yes, it is good to be cautious and careful, but it no longer healthy to be too wary up to the exaggerated point that you are no longer taking a risk at all. This habit is actually equally bad compared to the first one mentioned above. This is also because you cannot enjoy the game if you are playing in an inch by inch level only. You will not also feel the growth and development of your business if you will be in this case.
Hence, there are few things that any new or old investor can do in order to overcome or correct these bad habits. These are about diversification of the investment portfolio while the other one has something to do with risk management tools application.
On the one hand, diversifying your investment portfolio is actually one of the most basic and essential things that any investor must do in order to protect profits, gains and the investment itself. At the first glance, it may sound or look easy. However, the implementation of this strategy is a bit tedious. This is because there are some qualifications that you need to take note in order to fully accomplish the diversification of your portfolio. For example, when it comes to spread betting, it may mean putting a position on completely unrelated assets or instrument. This requires the investor to investigate if their underlying assets are not associated or related in any way with the asset being traded upon
On the other hand, the application of the proper and appropriate risk management strategies is very essential as well when it comes to spread betting. Among the most common types of the tools that can be utilized are the stop losses orders or the limit orders. In a general sense, these are the strategies that let the investors to enter or exit the market when the price level desired has been reached already.
Be sure to study a top Guide to Spread Betting before you leap in. You will also want to view Spread Betting Frequently Asked Questions for a better feel on this derivative.
Saturday, May 26, 2012
Carbon Investments
The state of current investments available on the traditional market is not very stimulating for those wanting to make a decent return whilst not having to take a massive risk. Now more than ever, with the rising cost of living we need our money working harder. More and more investors are turning to alternative projects to create the returns that the traditional market can simply no longer make. The Carbon Market is the fastest growing market in the world. Set to outperform anything in the traditional investment market, a carbon credit investment is the most lucrative investment available on the retail market.
The introduction of the Carbon Tax on 1st July 2012 has affected far more than the big emitters it is established to tax. Carbon Credits are a tangible asset. There are therefore many profitable, safe and ethical investments to aid people on getting involved in the 'Carbon Rush'.
In descriptive terms; a carbon credit is representative of one metric tonne of greenhouse gas emissions removed from the atmosphere; thus offsetting carbon emissions. Growing trees in the Gippsland area of Victoria, Capital Alternatives and their Project Developers are generating carbon credits from fully accredited bio-diverse woodland. These Carbon Credits are classed as 'personal property' in law meaning their value is protected. Those smart investors who have the foresight to acquire them can sell them on to the big emitters for returns which dwarf more 'traditional investments' in the current financial climate.
Although the Carbon Credit market is global, Australian investors have a unique and rare opportunity which is cause for celebration because there is no escape for big emitters. Qantas has recently announced an increase in prices in an effort to combat the cost in offsetting their emissions. These credits can't be made out of thin air and need to created, and this is where the opportunity lies.
There is no escaping the fact that carbon credits are going to make those in the know very happy and very wealthy, the demand is enormous whilst the supply is limited. Capital Alternatives have rare opportunities for retail investors to become involved in the Australian Carbon Credits market by creating these highly sought-after credits while the price is still fixed at $23 until 1st July 2015 when the price floats.
With such high returns and guaranteed exits, this prospect will be quickly taken up by those wanting to take advantage of this unique and very lucrative market.
For a free report on an ethical, safe and highly lucrative carbon market which is available for a limited time visit http://www.capitalalternatives.co/au/lau.
Friday, May 25, 2012
Building a Passive Income
What is the process of building passive income, and how to be financially free? The starting point varies according to the profile of an investor and of an investment itself. Some rich investors begin with a careful study of the factors that may affect their investments. Others begin by familiarizing themselves about everything. However, most of us begin with nothing even a capital. So, the less money we have, the longer the process of building passive income will be.
For an average person, building passive income should start from saving money. Saving money is very simple but it is hard to do for it requires patience and discipline. This is the best way to start the process of building passive income. Some people prefer to borrow money in order to invest. As time goes by, they will realize that it is not they who are earning passive income but the creditors are, instead. Credit is actually good especially for business expansion. But anyway, very few creditors lend to beginning investors.
In order to save money, we should reduce our daily expenses by identifying things which we can do without. Sometimes, we can't help spending because it is important. But again, it depends on us how important these things are. We must set our priorities and set aside less important ones. For those who are really serious about building passive income, no set of plans are needed as their mindset is strong. They believe that saving money is not a physical movement of coins from one place to another but a game against themselves. If they spend, they will lose. If they save, they will win.
Having saved enough money, you will then think of where to put your money in. Assuming you don't know what to do with your money, you would look for someone to help you answer all your questions in mind. Make sure that you will not do everything that he will say. It is better to make some research on your own. You might get bombarded with a lot of information that can confuse you. Don't forget to filter it and be objective. The safest thing to do is to know the basic of the investment you may try.
The next step in the process of building passive income is the selection of investment. If your choice is to invest in stock market, you have to call a broker. A broker is a third party company that helps investors look for sellers when investors buy. And it is also the one that helps investors look for buyers when investors sell. Brokers charge a transaction fee after a single trade. Before you trade, the broker will ask you to open a trading account. You need to sign a contract and deposit the required minimum amount to open an account with the broker. Of course, you can deposit more than the minimum. Once deposited, your money is ready to be used when you start trading. Your payment for your stock purchased is credited to your trading account. Sometimes, it is also possible to purchase stocks without opening a trading account. In this scenario, you could use your checking account to pay for your stock purchase directly after the transaction. In the advent of technology, it is no longer difficult for any broker to facilitate the trades. Using a trading platform, investors can have access to live transactions. Trading platform is a software device used for trading stock market and the like. It also acts as a broker. A broker's role nowadays is to stand as a guarantor to your trades. It means that its name is used for trading on your behalf.
Let us assume now that you have already opened a trading account and all the necessary trading tools have already been provided by your broker. You can now select a company to invest in. This stage in the process of building passive income is the most important stage because your future income depends on the company to be selected. Intensive research is needed in this stage. It is recommended you read the company's fundamentals. Such information is provided in the platform that a broker will offer you.
In stock selection, you could find a lot of good performing stocks. Since you are building passive income, the first thing you have to consider is the company's dividend. A company that has a regularly attractive dividend is also known as income stock. Income stocks are considered safe. In reality, nobody can tell you whether or not a company is an income stock. But you can recognize it by yourself if your research focuses on dividend.
Dividend is simply a company's profit. Usually, it is distributed to shareholders every year. It has two types. One is called cash dividend; the other, stock. Cash dividend is expressed in checks. It is directly issued to shareholders. On the other hand, stock dividend is expressed in stock certificate. However, this is not directly issued to shareholders. Stock dividend is added to your total number of shares. It does not make your pocket full at the moment. But it expands your investment. Whether a dividend is cash or stock is voted and decided in a stockholders meeting. You may also attend a stockholders meeting because your shares entitle you to vote in it. So if you wish to receive cash dividend, you may vote for it.
Not all investors are the same. Some prefer regular investment growth. Others prefer cash. If you prefer only cash dividend, you may choose another type of stock that can give only cash periodically. There are two types of stocks: secondary stocks and preferred stocks. A secondary stock is exactly the one mentioned above. A preferred stock is different in the sense that it does not entitle you to vote and to attend a stockholders meeting. But it is so called because preferred stockholders are given priority in the distribution of dividends. Moreover, preferred stocks give you fixed income regardless of company's performance. It is issued in fixed percentage like 10% or 15%. The percentage is your guaranteed dividend. Aside from that, the dividend is only cash. So, a preferred stock works like bonds and notes. Both have pros and cons. It does not necessarily mean that preferred stocks are better than secondary stocks. In fact, dividend in secondary stocks, though sometimes much lower, can be a lot higher depending on the performance.
Investing in stock market is just among the many options to start building passive income. Stock investing could be a good starting point to learn some more. It is basic and it is the most common. Once you gain experience, you can try a more sophisticated one. You may jump to mutual funds afterward or may try to trade currencies or even futures.
The easiest option to start building passive income is through savings. When we save money, we can go to a bank any time we want to deposit. We just open an account and deposit our money. After that, we let our money earn the interest. That's it. But remember, the easiest it takes, the least we can get.
Therefore, it is better to try what is proven and not what is easy. There is no easy way to success. We have to take everything one at a time. Building passive income is not done overnight. Sometimes, our expectation is not realized, and so we change our plans. But never change the rules of the game. There are the things which must be the first and there are things which must be the last. So, it is not actually important to narrow you're your options. What is important is to be financially free. How to be financially free is to start building passive income. Now!
Michael F. Anyayahan is a freelance forex trader and writer. To learn more about investing, visit: http://www.forexuniverse.yolasite.com/
Thursday, May 24, 2012
Wednesday, May 23, 2012
Tuesday, May 22, 2012
Top 6 Business and Investing Predictions for 2012
Ok, so I know most websites and magazines normally release this information in December, but I'm a little late to the party. I would say that if I could bet on a football game after watching the first 6 minutes, I would definitely win a lot more, so listen up:
1. The Economy Will Continue to Get Better - Although many of us don't feel like it, things have gotten A LOT better since it felt like the world was going to end in the fall of 2008. If you don't remember, check out my Cornell classmate's Andrew Sorkin's book "Too Big to Fail" or cheat and watch the HBO movie. We were at a point where Americans were prepared to take their money out of their savings accounts and were questioning whether the FDIC only insuring up to $100,000 was enough. Since Obama took office there has been an increase in the Dow Jones Industrial average. It is up 4,771 points to last Friday's close of 12,720 as his fourth year begins. I AM NOT saying that it is because of the president or our government per se, I'm just stating a fact and I think it will continue to trend upward this year.
2. Gold, Silver, and Stocks Will Be Bullish - I know that sophisticated investors will point out that there is usually an inverse relationship between commodities and stocks. I could easily see a lack of recovery belief pushing gold to reach a peak between $1800-2000 and silver around $70-80 an ounce. In the meantime, the market will be led by the Facebook IPO this year. I am a huge believer that the internet will thrust business growth like we have not seen since the Industrial Revolution in the 1800's. The same way that improved roads, canals and railways made it easier to link businesses and people, the internet has created a true global economy. The entire world will continue to get wired in which will spur economic growth.
3. Banks Will Continue to Be Reluctant to Lend to Small Businesses - With the Fed being forced to keep rates low, banks will be unable or unwilling to lend at lower rates. The good news for businesses is that I know a lot of people are sitting on a lot of cash these days, still nervous about investing it into anything. There will be a lot of money in the private sector to raise if entrepreneurs know the right people or if business/investors begin utilizing angel investing sites such as Gust. I like the idea that small business success can be shared between entrepreneurs and their investors.
4. E-tailers Will Continue to Chip Away at Traditional Businesses - In 2011 online businesses hammered into "brick and mortar" companies' profits and this trend will definitely continue. One of my favorite parts of Aaron Sorkin's movie The Social Network was:
'Sean Parker: I brought down the record companies with Napster.Eduardo Saverin: Uh, sorry. You didn't bring down the record companies. They won.
Sean Parker: In court?
Eduardo Saverin: Yeah.
Sean Parker: Do you want to buy a Tower Records, Eduardo?'
The internet truly evens the playing field among businesses. It is true that a kid in his dorm room can take down some of the most powerful companies in the world and Napster proved it.
5. My Name is Bond - In 2012, interest rates look to stay low thus there will not be a ton of plays with them, EXCEPT ONE: Tax-Free Municipal Bonds. Generally when the media is scaring you away from something, it is time to get in. I believe with all of the scary headlines about California going Bankrupt and local municipalities drowning in debt that this is one asset class that is undervalued. I figure that by investing in them, you can expect to see a 5-6% return...tax free!
6. Mobile Continues to Blow Up -When I think about how quickly I see the computer/internet world changing, I can't help but think of myself as a kid with a black and white TV along with a corded phone that had no call-waiting... and I'm not that old! Kids being born now may not even see a desktop computer in their life time. With the genius of Steve Jobs making a push on smart phones and tablets, marketing to these devices will be paramount in 2012.
Well that's it ladies and gentlemen. I fully intend to remind you how brilliant I am at the end of the year, so make sure to take action on these tidbits that I fed you... did I really just say that?
For the past 13 years I have been an entrepreneur investing and being active in real estate projects, private businesses, consulting, and small-cap public companies. I have made a living by making investments in different areas that I have felt would yield me the best return on my investment as well as utilizing investors to have projects come to fruition. I often have friends of mine ask me for advice on buying their first home, where I think the next business opportunity will be, and even how to get started. I have written endless business plans and am what some would construe as a "deal junkie". I love coming up with new ideas, putting a plan together and putting the pieces together to execute them. We are still in a recession and I felt that this would be an excellent time to give my two cents to whoever wants to listen. I have started a blog for business and investing called Money Catapult so Google it and check it out.
Monday, May 21, 2012
Consumer Price Index (CPI) And Investing
CONSUMER PRICE INDEX (CPI)
Who can benefit?
Everyone. An understanding of the CPI is important for measuring how well your investments really are performing, the amount of investment funds you will require to maintain your lifestyle in the long-term and how government benefits will increase over time.
What is it?
The CPI is a measure of inflation. A basket of goods and services is measured by a government department on a periodic basis. Most countries measure their inflation rate. In America it is theUS Bureau of Labor Statistics which is a monthly update while in Australia theAustralian Bureau of Statistics takes a survey every three months.
This basket of goods may include diverse items such as the cost of a loaf of bread, petrol, car registration and train fares. The difference in the total prices results in the rate of inflation or the change in the index. The rate is usually positive although short-term negative movements have occurred.
An example is useful. Let's say the current basket of goods have an index value of 221. A year later the index is measured to be 233. The rate of inflation over this one year period is (233 - 221) / 221 = 12 / 221 = 5.43%. A rate of inflation over a one month period will of course be a much smaller figure, however this figure is usually given as an annualised rate to show the trend in inflation.
The basket of goods being measured will change over time to make it relevant. For example, the price of buggy whips and horse feed may have been important in 1920 but would not be included in the CPI of 2012.
What are the benefits?
The CPI may be used as a benchmark for the performance of your investments or the required performance to maintain your standard of living. If your income is not keeping pace with inflation then you will be unable to maintain your standard of living. Therefore an investment after taxation must return at least the CPI or your asset is losing real value.
Some investments, such as the income from an annuity, may be tied to the CPI so your standard of living is maintained. Other investments state their performance goal as a measure of CPI, say CPI plus 3%.
It is important to note that some investments do better than others during high inflation as compared to low inflation. Other investments do better when inflation is falling while some outperform when inflation is rising. For example, interest rates usually follow the inflation trend. As inflation falls bonds usually outperform, but under perform when inflation rises.
Example The "rule of 72" is an easy way to determine how long (in years) a rate of inflation will cause prices to double. The number 72 is divided by the annual inflation rate. For example if inflation is 7%, prices will double every 72/7 = 7.2 years. It also works to show how soon a given rate of return will cause your investment to double in value.
Any downside?
The CPI is a basket of goods, which may have little relation to how you actually spend your money. Therefore, your personal inflation index may be far different from the official rate.
Benchmarking your investment against the CPI in isolation may be misleading. For example, the capital growth of your investment property may have outperformed the CPI by say 2% long-term. If the return increases to 4% above the CPI you may think that you are doing well. However if similar properties have outperformed by 10% during the same time period you have actually done poorly.
This is an amended excerpt from Financial Planning A to Z, to be published in late 2012. Refer my website www.barrylizmore.com.au for more details. Articles of a similar nature will be posted at the start of each week.
Sunday, May 20, 2012
Understanding Alternative Investment Options
Investors who could not afford to risk investing in the volatile stock and bonds market often took recourse to alternative investment. An investment that is not done in one of the three conventional types of stocks, bonds and cash is called alternative investment. Unlike conventional sources, this is mainly done by institutionalized investors and companies. This is mainly because they were considered to be risky and complex. Liquidity too was considered to be a problem. Even today, small investors are kept out of the purview of some alternative investment options like hedge funds. Here are a few options that are commonly available for all types of investors:
Real estate investments: This market caused a major economic recession. But even in the worst periods of the housing slump, real estate was a good option for those who were ready to play it safe. The shortsighted investors who blindly followed the trend lost heavily. The best thing about investing in real estate is that the benefit is twofold. Besides capital growth, there is also a continuous source of income through rents. Even in 2012, there are positive reports to indicate that the housing market is sure to see an upward trend. However, it is important to choose a good real estate investment broker to guide you with your investment option.
Metals: Gold has been a common investment source for alternative investors. The price of gold seems to be northward bound for more than 10 years. Not to be left behind other metals like silver, paladin, platinum too have seen growth. But they haven't always been as good an option as gold or real estate. For instance, the price of silver saw an upward trend until mid 2011. In fact, the price of silver even touched $50 an ounce. But then it crashed hard and a lot of people who blindly stocked up on silver found it hard to liquidate their asset.
Agriculture: As the world struggles to feed a burgeoning population, agriculture remains a wonderful opportunity for long term gains. There are reports that indicate that by 2050, the world would need to produce 70 percent more to feed a population of about 9 billion people. As the elderly say, when you are hungry, all the wealth is wasted without a morsel of food.
Timber: Governments all over the world are trying to crackdown on illegal supply of timber. There has also been an increasing demand for strong home grown timber. All these factors make timber a good alternative investment opportunity.
The author of this article writes about different alternative investment opportunities and also advises readers on self direct IRA.
Saturday, May 19, 2012
BPO Industry and the Phase of Recession
The recent global economic meltdown unrelentingly shattered mammoth conglomerates, distinguished corporations and illustrious industries. The shockwaves had a minifying effect on a number of businesses shrinking them to mere rubbles. Across the globe, the thunderous tornado took billions and billions of investments, fumed certified billionaires into millionaires and millions lost their jobs. In short, this monster avenged almost everyone holding cash and some social status.
However, the Business Process Outsourcing (BPO) industry treated the crisis in a different fashion. During the early days of the infamous recession, many thought that the industry will not only escape the wrath of the unfolding economic catastrophe but would actually benefit from it. "The current economic meltdown in the United States and other developed countries is likely to benefit the Indian BPO industry as it would compel more companies in these markets to look at outsourcing as a way to cut costs and enhance efficiencies," said Samir Chopra, President of the Business Process Industry Association of India (BPIAI), in December 2008.
A number of blogs argued that the economic collapse was prevalent only in the 'core states' and that the BPO industry stood a good chance to obtain maximum out of the 'milking cow'. Interestingly, the argument seemed right when always highly-indexed juggernauts like GE, Microsoft and American Express took their tails to the outsourcing hub, India. Some of the outsourcing companies in third world countries did indeed made humongous profits. According to a report by India Times on August 19th, 2009, IT companies were actually looking at BPO to soften recession impact. Then a survey conducted by BPOVoice.com in November later that year, revealed that "the industry took undue advantage of the recession with profitable companies also cutting expenses and annual appraisals." However, a large number of respondents felt that the BPO business has all the necessary potential to amass profit many folds higher provided the top management is more organized and accountable. A recently published detailed study by the renowned research firm, Gartner, evaluates the impact of recession on BPO and its future. The report estimates outsourcing to grow five folds in the next year.
After the deck of recession is over, many are calling it 'a recession proof industry'. Some have found that outsourcing has expanded at an exponential rate. For example, US $270 million Indian BPO industry in 2007 had swollen to over a billion dollar industry in 2010. On the other hand, another research suggests that the unprecedented growth of the Indian BPO industry will continue, predicting it to be a US $29 billion industry in 2013.
In the light of the above mentioned researches, reports and findings, it is safe to say that the original anticipations about the impact of economic meltdown on BPOs were wrong. Wrong in a sense, that the industry has benefited from it a lot more. There is not a shade of any doubt that the global economic crisis had a reverse effect on outsourcing making the massive growth of the industry possible which was unlikely to happen without the recession.
The writer can be followed on Twitter and added on LinkedIn.
Friday, May 18, 2012
Thursday, May 17, 2012
7 Simple Tips For Investing Success
Wouldn't it be great to have great Investing Success without any risk, I certainly think so, although the simple reality with investing is that there is a risk. However with a plan, knowledge and in time experience this risk can be minimised and the overall outcome is a very effective means of achieving your financial goals. The type of plan to adopt is really dependent on what suits you best, you may like to have an aggressive strategy with possible greater returns and more risk, or maybe a less aggressive strategy with lesser returns and lower risk, or even anywhere in between. Also you may like to have investments that mostly look after themselves and only require attention every now and again, or you may prefer to be more involved in your investments and know exactly what your money is doing all the time. There is no real perfect plan or any real secret to investing however these simple tips may assist in your investing success.
Tip 1: Set Motivating Goals
Goal setting is a very effective when investing, it provides the means to set a target for yourself, gives you direction and is helpful in motivating you to do the things to achieve your desired result. Setting motivating goals is completely dependent on personal preference, you may be motivated by the goal of returning enough money from your investments to buy a luxury yacht or you may be motivated by the goal of having 20 investment properties in your portfolio. There is no right or wrong goal as long as it gives you direction, gives you something to aim for and motivates you, then you're on the right track.
Tip 2: Do your Homework
With the potential risk involved with any type of investment, doing your homework is an essential process. You wouldn't go to a car yard with no particular car in mind and purchase the first one you see, you would do your homework first wouldn't you. For example you would have some criteria set out and you may be looking for a car that is reliable, performs well, appeals to you, basically a car that just ticks all the right boxes. The same goes with investing, you would most likely not get the best result by investing in the first shares you come across or the first property that you inspect. For the stock market, doing your homework may involve searching news articles or press releases for a particular company you have an interest in and checking the history of the stock price. While for a property you may do a check on the surrounding suburb, find out the previous sale price, get building and pests inspections done on it. There are countless things you can do to ensure that you are making a wise investment decision, make sure you do your homework and you'll do better than most.
Tip 3: Invest Regularly
Investing is not a get rich quick scheme to be truly successful at investing you need to do it regularly. The best chance to acquire measurable wealth lies in developing the habit of adding to your investments regularly and putting the money where it can do the most for you. You can put $10,000 into a share account returning an average of 20% per year, and if you take all of that return out every year in ten years time you may have earned $2,000 every year but you'll still have only $10,000 in that account minus account keeping fees and the loss in inflation, tax etc., giving a total net worth of $30,000. However if you reinvested that $2,000 every year, in ten years time you'll have a total net worth of about $62,000. That's $62,000 in your share account now with the potential to earn you $12,400/year at 20%, as opposed to the $2,000 you would still be earning with the other scenario. Now this may not included potential losses in either case, but the idea is to highlight to you the benefit of regularly fuelling your investments?
Tip 4: Keep an Investment Diary
Keeping a record of your investments can be a great learning tool to determine the strategies which work best for you and can be an insight into why an investment worked so well or why it didn't work so well. Having the right information which you can always look back on will lead to wiser investments in the future, therefore minimising risks, increasing the potential returns and thus greater investing success. Information that may be helpful to keep a record of includes:
The research done to find the investment
The investments you turned away and why you turned them away
Why you chose the particular investment
The plan you had in place prior to making the investment
In the case of an investment property you may take note of the agents used, renovations done and renovation contractors used.
In the case of a share market investment you may take note of the stop loss margin, profit margin and stop profit loss margin used and whether they can be adjusted to reduce risk and increase potential profit.
Tip 5: Diversify
Diversity is in old old wooden ship, joking (Anchorman reference for those that haven't seen it), diversifying your investments in an effective means of managing your risk and increasing returns. The type of diversification strategy should be dependent upon your age, income and investment goals. For example, if you were young and just beginning you investments you have the opportunity to have more increased risk and may benefit from putting your assets into stocks that have long-term potential, and stocks with greater risk and potential returns. While if you were approaching retirement you may benefit more from shifting your assets into income producing investments such as bonds or utility stocks. Your diversification strategy could involve setting up a portfolio consisting of equal parts of different investment vehicles such as, bonds, local stocks, foreign stocks, and real estate. Once a year, you could then adjust each vehicle to maintain the same asset distribution by taking the gains in your winning investments and spreading them amongst your losing investments.
Tip 6: Have a Plan and Stick to it
The journey to investing success can have many distractions and obstacles that can lead you off course, the way in which to overcome these and maintain the right path is to have a plan and stick to it. Whether it starts off being extremely basic with just basic goals, milestones, strategies etc. the idea is to know where you're going and work out what is required to get there, once you get more involved you will be adjust and fine tune your plan to be more effective. For example your goal may be to own 5 investment properties in 5 years time, you may work out that in order to achieve your goal you need to work an extra 5 hrs of overtime a week, cut back on some expenses and get training or obtain the knowledge to learn how to go about it effectively, this would be your plan. Your milestones may be to ensure you have at least one investment property every year. Now if it so happens that you miss one of your milestones it's not the end. You just simply need to go through your records work out why you didn't achieve your milestone and re-adjust your plan accordingly. If you do achieve your milestone this doesn't mean there is no room for improvement, although you should reward yourself, let yourself know that you're doing well and rewards are a great motivator as well.
Tip 7: Manage your Risk
You can effectively manage your risk by following the above mentioned tips such as doing your homework, having a plan and sticking to it, and diversifying. Additionally risk can be managed by first identifying what your risk are, the most common risk with investing is obviously losing your money. What is it however that causes you to loose your money? Just for example with stock market investing there is a risk of a stock doing the opposite of what you indeed it to do or you selling to early and losing potential profit, with property investing the risk are that the value of the property won't increase as intended or you may not be able to rent it out. Once you've identified what are the potential factors that can cause you to lose money in a given investment you can begin to work out a plan to manage the identified risk. Strategies to manage your risk could be to avoid the risk altogether and look for something else, try and reduce the risk or simply accept the risk. Whatever your plan may be just ensure that the risk is monitored and constantly look for ways in which to minimise the risk.
Conclusion
In summary investing success may be obtained by using a combination of the above mentioned tips, however don't limit yourself to these, it is a constant learning process, no investor out there knows everything there is to know about investing. Find what best works for you then just get out their have a go and achieve your investing success.
Visit Absolute Wealth Education For your Free Wealth Ebook and DVD © 2008
Arren Vidal
Investor | Business Owner | Entrepreneur
The Best Investment For Most Folks
The best investment for most folks is mutual funds. Investing money in these investor-friendly funds is the way to go for those who need help with money management and don't really know how to invest in stocks or bonds on their own. Mutual fund investing is a great way to start investing, and a good way to invest money for your future. Trust me; you don't need to be a rocket scientist or brain surgeon to invest money here.
If you are afraid to invest money because you feel you don't really know much about how to invest ... relax. You are in the majority. Most people know little about money management and investing. That's the point of mutual fund investing. These investment packages are designed for the majority of the population who find investing money as comfortable as biting their tongue.
If you want to invest money and watch it grow, invest in a few different types of mutual funds. I've written numerous articles on the subject of mutual fund investing, and as a financial planner I recommended mutual funds to hundreds (or thousands) of my clients. Why? Because they are the best investment for most people who want to make more money than they can at the bank, at an acceptable level of risk.
Let's get real basic and look at the advantages of mutual fund investing. No matter what you read some places, the disadvantages are few and far between if you go with one of the major mutual fund companies (I've listed my favorites in previous articles).
Professional money management and diversification are the BIG mutual fund advantage. What do you pay for this? Not that much if you invest money in one of the major no-load fund families like Vanguard, Fidelity or T.Rowe Price.
You can start investing with as little as a few hundred or a few thousand dollars.
Investing money in mutual funds is quite simple. You invest a dollar amount and the professional money management people who run the fund make all of the investment decisions for you. This is how to invest the simple and easy way.
Basically, you can invest in stocks, bonds and safe money market securities by investing money in mutual funds. That's all the choices you need. You can pick and choose which stock funds, bond funds and money market funds to invest money in.
Or, if you don't feel comfortable picking the different types of funds you can start investing with funds that invest in a combination of all three of the above investment categories (balanced funds). Now your only investment decision is how conservative or aggressive you want to be.
For years the investment of choice for most investors has been mutual funds. They are, in my opinion, still the best investment for most people.
There's a big difference between saving and investing money. If you need a cash reserve and total safety keep some money in the bank. If you want to invest money and make it grow, go with mutual fund investing. For most of the people most of the time, mutual funds are the best investment.
A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.
Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com
Wednesday, May 16, 2012
Why Invest In Property? 5 Crucial Factors For Financial Freedom
Property Investing For Wealth Creation
Property Investing For Your Retirement Fund
Property Investing For Your Security
Why property is the I.D.E.A.L investment
You want to invest for your future but don't know which asset class (shares, property or business) to invest your hard earned dollars into?
This is a question that is posed to us time and again. There are benefits and risks when investing in any asset class however we have personally
found that investing in residential property has given us a great return on our investment with the least amount of risk. You can invest in
property even when you have little or no equity, don't own your own home and have lots of bad debt.
We call property the I.D.E.A.L investment because it provides:
Income
Depreciation
Equity
Appreciation
Leverage
All of the above are critical factors that the rich use so successfully to build their wealth and which you can also use to build your wealth.
Let us explain further why property has been the I.D.E.A.L investment class.
Income - investing in property has allowed us the opportunity to earn additional income on a regular basis through the collection of rent on the property(s).
We use the rent to help pay off the monthly mortgage payments and/or expenses associated with the investment property(s). This along with other benefits allows
us to live a comfortable lifestyle while continuing on with our successful wealth creation strategies.
Our long term strategy is to pay down the mortgages and then use the rental income as disposable income to live off.
Depreciation - another form of income that property investing provides us is tax deductions in the form of depreciation allowances. The Australian Taxation
Office allows property investors to depreciate the value of their investment properties and claim the amounts as tax deductions against the income. Maximum
depreciation benefits can generally be achieved from new properties however renovated older properties can also provide significant depreciation benefits.
When we started investing in property, our strategy included purchasing brand new properties with high levels of depreciation so that we could utilize the
tax benefits to sustain the investment property while it grew in value. Depreciation schedules can be obtained from registered Quality Surveyors while your
accountant should be consulted for tax deductibility of the items on the schedule.
Equity - is why we invest in property. Equity can be defined as the amount that a property has increased in value over time for example, if you buy a property
for $300k and after some time it grows in value to $400k then the difference ($100k) is simply termed equity. Equity is great because you don't have to work
hard to get it, it just happens over the course of time, even when you sleep. To accelerate your wealth creation the increased equity can then be taken out
and used as deposit(s) to purchase additional investment properties. This is basically how many of the well known and successful property investors built their
portfolios.
As our properties grow in value, we use the equity to purchase more and more properties. Equity grew quicker as we purchased more properties which in turn
accelerated our capacity to purchase more properties. Each time a property grew in value, we would revalue the property and draw down the available equity to
purchase the next opportunity. Some of our properties have grown by 30% yet had we tried to save this amount of money while working in the "rat race", we would
never have been able to buy more than one property. Equity has given us the power to buy multiple properties in a very short time frame and grow our net wealth.
Appreciation - property values increase and decrease just like any other investment vehicle however when you look at property over the longer term, it generally
always increases in value and therefore provides low risk investing. We prefer property for this reason and put simply, people need somewhere to live. We have
approximately 120k people migrating into this great country each year and the size of our family units are reducing hence the requirement for more properties for
people to live in is on the increase. When looking to buy an investment property we look for areas that are experiencing population growth or are expected to grow
in the longer term. Population growth helps to ensure that there is demand for property and following the supply and demand principal, appreciation in property
prices is highest in areas of greatest demand. Our genuine wealth has come from our many properties appreciating in value over time.
Leverage - in property investing terms can be defined as the ability to do more with less. Leverage is by far the most powerful feature in property investing and
has got to be one of the many wonders of the world. Without it we would still be trying to buy our first investment property. Leverage has allowed us to maximize
what we have and to create serious wealth. Borrowing more on an investment property than what you paid for it is what leveraging is all about. How great is that.
You can use someone else's money i.e. the banks to grow your wealth. Banks will lend you up to 80% of the value of the property and in some cases, borrow more at
competitive interest rates. Property allows more borrowing capacity than any other investment class because the banks view it as low risk.
Put more simply you are required to put in less of your own money up front when investing in property than you would if you were investing in any other investment
class. This means that you will be able grow your portfolio much quicker because you will need less of your own money than you would with other asset classes. If
you can at least double the return on what it costs you to own an investment property then you are ahead of the game and on your way to creating serious wealth.
The more that you can borrow at 7.5% interest that is returning 15%, the wealthier you will get.
How many other investment classes provide this many compounding benefits. For us property is the I.D.E.A.L investment class. We don't know of any other investment
class that provides us with an income while at the same time allowing us to depreciate the assets' value while at the same time watching the asset appreciate in value.
Appreciation of the asset increases the equity which in turn allows us to gain maximum leverage by borrowing to purchase more property. Repeating the cycle again and
again and again creates wealth at an ever increasing rate, how good is that.
Happy Investing
Paul Tooze
http://www.PropertyBooks.com.au
A leading resource for property investors
Paul Tooze is the CEO of PropertyBooks.com.au, a leading supplier of property investing related books,CDs, DVDs and software and InvestorLinks.com.au a web site to provide links to great investing web sites.
An avid investor himself with experience with renovating, off the plan builds and other areas of property investing.
Tuesday, May 15, 2012
Four Investing Mistakes You Should Keep Away From
Investing as early as possible is very advisable. Having investments gives you an opportunity to accumulate more wealth. There are various ways where you can put your money. You can invest in stocks, real estate, mutual funds, bonds and other financial instruments. There are kinds of investments where profit is really big. However, not all investments are perfect. There are instances of investing mistakes you will encounter. As much as possible you should be careful about your investment strategies. Even experienced investors made mistakes. So, if you want to start investing for your future, you must avoid mistakes. Of course, it is inevitable to make mistakes but at least you can avoid it.
If you have enough knowledge, you will be able to handle all your investments well. Investing is not always a success. You will also deal with failures especially if you're just starting. One of the common investing mistakes is untimely investments. Before you should contemplate on investing, you should be aware of your resources. Make sure you have excess money in your account. Your basic needs must not suffer because of your investing decisions. Some people invest money even though they still have lots of outstanding debts. The very purpose of having investment is sufficiency of resources. If you're still not ready, then don't do it.
You should clear all your debts before deciding to have your first investment. Part also of the investing mistakes is not doing a research on particular investment. For example, some people will just put their money in mutual funds because they heard success stories. Don't you ever do that- it's different for every investors. It's all right to invest in profitable investment but make sure to have a particular knowledge about it. If you want to invest in real estate, you should be aware of the real estate industry. Determine the ways on how you can gain profit in your investment.
Another mistake you can avoid is looking for fast results. Always remember that investing is like gambling. You will never know what will happen to your investment. If the universe will conspire to your favor, then you'll be lucky. Not all investment leads to profits. There are times when your investment strategy will not work out. Investments mistakes also constitute lack of diversification. It's not advisable to stick with one investment only. If you have already invested in real estate, try other kinds of investments. You can either invest in stocks, bonds and others. There are high risks investments which gives you big profits.
Remember the rule of financial leverage. If you will hit the jackpot, you'll be lucky. But if you're in the losing side, you'll incur extreme losses. It's better to have diversified investments. Make sure not to put all your money in just one trade. Try to diversify as much as possible. Lastly, investing mistakes include not paying attention to investments. Some investors often lose their interest. They are just interested at first then the next time, they don't follow up anymore. The best thing to do is to keep updates on your investments. Investing is really healthy on your financial resources.
It will increase your wealth and create abundance in your life. Just make sure to invest wisely.
The author of this article Rick Goldfeller is an underground Financial Analyst who has been successfully running campaigns for several wealthy clients. Rick finally decided to go public and share his knowledge and experience through his website http://www.finanzine.com. You can sign up for his free newsletter and join his coaching program.
Young Investors Simple Stock Investment Strategy
Harness the power of your investments by starting to invest young. There are simple stock market investment vehicles that will allow the inexperienced investor to achieve solid, long-term, returns without having to be a stock market expert.
Importance of Investing Young. It is essential that you start investing young; if you don't your actually losing money and missing out on the most important thing young investors have in their favor 'compounding interest'.
Each year that you have money and are not investing you're losing about 3% of its value due to inflation. So after 10 year of sitting on $100 cash it could be worth less than $75. What's more, by investing young you benefit because the money you made from your investments - make you more money. Making money from money you've already earned from your investments is known as 'compounding interest'. This powerful force can make you a millionaire well before retirement age with saving as little as $70 per month.
Now that you know you need to invest; how do you start? The stock market offers a great place for young investors to get their money working for them; the good news is that you don't need to have a ton of money to start. Plus, with the investment vehicle discussed in this article, you don't need to be a stock market expert to begin.
What's the solution? An ideal investment for young and inexperienced investors is to get on the road to financial independence are low-cost broad market index investments. Warren Buffet states, "A very low-cost index is going to beat a majority of the amateur-managed money or professionally-managed money." Reduced risk, solid returns and it one of the simplest investments you could make. An added bonus is that it takes only minimal knowledge and about 60 minutes to start getting your money working for you.
What's a broad market index? A broad market index is a group of stocks that you can purchase as one. It allows young investors to buy a collection of top performing stocks that mimic the performance of the entire stock market. Since these index funds allow you to earn returns similar to the overall performance of the market it greatly reduces the risk. This is an advantage to the beginning investor since it is safer than investing in a single stock or some mutual funds; plus there is a history of double digit returns.
Broad based index investments may not sound like something you know; however if you ever watch the news chances are you have heard of this investment. -The Dow Jones Industrial Average index contains 30 top industrial stocks. -The Standard & Poor's 500 contains 500 of a variety of different stocks. -The NASDAQ 100 contains 100 stocks that are mostly in the financial and technology sector.
When you invest in a broad based market index you actually own a small piece of each individual stock. For instance, when you invest in the S&P 500 broad market index, you're buying a piece of all 500 stocks in that index. So for each S&P index share that you own your actually own 1/500th of companies like: American Express, Google, Ford, Nordstrom, Home Depot, Staples and Yahoo to name a few.
For those young investors that don't want to stay glued to their computer all day broad based market indexes are great solution. Since this investment matches the overall return of the market if you believe over the long-term the stock market will continue to rise in value this could be a good investment. If history were an indicator of future performance, it would be clear that over time, you would generate solid returns. The key benefits associated with broad market index investing are:
1) Higher Returns - According to Standard & Poor's, less than 30% of managed funds in 2006 beat broad market index investing. What's more over the last ten years the average person that invested in broad based index funds has beaten the returns of most mutual fund investors.
2) Added Diversification - Diversification lowers risk. If you invest in one individual stock and bad news comes out on the company you could loose a lot of money fast. Now, for instance, if you're invested in an S&P 500 index fund and one stock has bad news you really don't care. That will only affect your investment one five hundredth.
3) Lower fees - Index funds fees are typically lower and are often around.5%. While the average mutual funds fees are around 2%. Over time this will make a big difference in your overall return.
4) Passive investment - When investing in individual stocks or mutual funds it is important to keep your eye on the market and up-to-date with current trends. Investing in broad based market indexes takes less stock market knowledge and requires less time to track.
The earlier you start investing the sooner you can reach financial freedom. invest with broad-based index funds that have similar returns to the overall market, because then we are receiving similar returns while hedging our portfolio - again, investing for young and beginning investors is all about diversifying to improve your chances for financial success.
How do I invest? There are two ways for young investors to begin investing in broad market indexes. Both are similar in their returns; but they are different in how the index is bought and have different fee structures.
* An Index Fund is a mutual fund that purchases the stocks that make up an index in order to match the returns of the overall market. For example, if investing in an S&P index fund, that mutual fund would own all the 500 stocks that make up that particular index. Index mutual funds may require a minimum investment, but some can be waived with a direct deposit investment plan that automatically invests money every month from your account. Typically, fees on index funds are higher and there are minor restrictions on when you can sell.
* An Exchange Traded Fund (ETF) is similar to an index fund, with the benefit that ETF's can be bought and sold similar to an individual stock. An illustration of an ETF is the "Spiders" (American Stock Exchange: SPY symbol). Each share of a spider contains one-tenth of the S&P 500 index, and so trades at roughly one-tenth of the S&P price. The management fees on ETFs are low. There are less restrictions on the sale of ETF's when compared to broad based index mutual funds.
Young investors will achieve similar returns whether investing in index funds or exchange traded funds, but typically ETFs have lower fees and fewer restrictions.
The earlier you start investing the bigger advantage you will have. Because there is only a minimal amount of money necessary to start and a low level of knowledge needed to invest - broad based market indexes will allow you to start investing young. So quit working for every dollar and get your money working for you.
Pick up complimentary video tips and other information that can help you choose the financial education resources that are best for you. The National Youth Financial Educators Council is your trusted leader in financial literacy events, financial educator certification, financial literacy curriculum, college planning and financial education products. Visit http://www.FinancialEducatorsCouncil.org now to learn more.
Monday, May 14, 2012
Guide To Overseas Investing
In terms of overseas investing, these days we are finding that exciting new investment opportunities are continually emerging in new markets. Long-gone are the days when investors only had easy access to more traditional markets like Spain and France! With globalization as an ever-increasing trend, property markets around the globe are becoming more accessible to potential investors where excellent returns are achieved. Low cost flights, the opening of local traditional markets, and the ease of local laws have all made investing overseas a straightforward and attractive option for many investors in recent years. The World is still a big place and you can rest assure that there is always a market on the up! However, to find a growth market is by no means enough - any deal must be well structured and competitively priced in order to warrant investment.
People typically look to purchase property overseas for 3 main reasons -
* As an investment
* As a holiday retreat
* As a retirement home
Of course many investors look for a combination of two or three of these when purchasing overseas. All three investment purposes are very different and it is important to define clear goals and a strategy before even beginning to search for the right investment.
Knowing Your Timescale
As with any goal, the first thing you must determine is the timescale that you want to work to. Will you look to hold your investment for many years and hold out for gradual capital appreciation, or buy off plan and sell within a few months? Both of these and other strategies can work well, but it is vital to define and stick to a definitive path before getting started. You must also decide whether you plan to buy-to-sell, rent, or do both. Many overseas investment opportunities will offer a few week's free-stay each year for the owner, and have a management team in place to organise the letting of the property for the remainder of the year. We recently offered such a deal in Antigua offering guaranteed returns for 8 years. Guaranteed returns are often ideal and very attractive for the less experienced overseas investor, as the developers' confidence in local demand is very high and reassuring for the investor.
Location, Location, Location
'Location, Location, Location' is probably the oldest saying in the property investment bible and the single most important factor to consider when looking to invest overseas! There are many factors to consider when choosing a location to invest, most of which we aim to cover below.
You must be confident that the country you are investing covers a region that is either in demand, or has the potential to grow in demand over time. I have met countless investors who have invested in properties overseas for what they believed to be an absolute steal, only to find that they now cannot rent nor sell their property. If the location is undeveloped, you must consider how factors from the weather to the geographical surrounding will affect potential demand.
The local political and economic situation is worth bearing in mind. In many nations, the government is offering incentives in the form of tax breaks and subsidies to encourage the construction of certain types of property. There is money to be saved and profits to be made if these are incentives are utilised correctly.
The infrastructure of a nation is also vital to its continued success and growth. If this is not already in place, I strongly recommend looking into proposed extensions and improvements to infrastructure. Morocco, for example, is currently difficult to access by road, but the government has guaranteed the provision of necessary infrastructure to connect the costal resorts with the rest of the country and Europe via 1,000 kilometers of new roads, as well as increasing internal and external flights. Similar pledges have also been set out by the Bulgarian and Polish governments.
The weather is also a key factor to consider, especially if the property is geared towards the tourist market. You want to be sure that the region you are investing in has enough natural sunshine or snow to ensure high occupancy levels during its 'high season'.
Local Demand
Local demand is always a key factor and must not be overlooked when investing overseas for several reasons. First and foremost, if you are buying with a view to rent then you need to be confident that local demand for your property is high enough for it to be rented for the majority of the year. You will need to determine the occupancy levels you are aiming for, and be sure that these are achievable and profitable. It is also worth looking at trends in local rental figures; the difference between stagnant rent levels and rising rents can make the difference between a lower steady yield and a rapidly rising income! This may seem tedious, but figures are often readily available, and taking the time to research before buying can literally save (or make) you thousands of pounds over the years!
Local demand is also very important in terms of exit strategy. When the time comes to sell, you will want to be sure that there are plenty of potential buyers not only in the form of overseas investors, but also locals. It is also vital that your investment property is competitively priced and affordable to the residence of the country you are investing in. When looking to invest overseas, it is always advisable to seek a good mix of local and international demand; the latter is by no means enough by itself.
Commercial Activity
Commercial activity is another important factor that is often overlooked. A country's development can be fuelled by a fast-growing commercial and business sector, and this can lead to rapidly rising property prices as locals are suddenly relatively richer and look to spend more money on their own property. Many investors overlook this factor when deciding to invest overseas, and can miss out on excellent returns. A prime example of this is in Sofia, the capital of Bulgaria. While the vast majority of investors look towards the ski and beach resorts in Bulgaria, the greatest gains are to be had in the city. This is where overseas companies are attracted by the relatively low costs of setting up and running a business. Labour costs are also relatively very low, but are now showing signs of steady growth as the city is becoming very commercially and economically developed. Property prices in the capital are following suit.
Mortgage Markets
Mortgage markets must also be investigated. In many countries, mortgage markets are not yet developed, and locals can borrow little or no money to finance their own home. If and when mortgages become available in these countries, locals will be able to borrow to purchase a bigger and better home, and the effect on prices can be astronomical! Likewise, you will need to seek advice on the mortgages available to you and other overseas investors. When taking leverage into account, it will at times make sense to invest in a growth market with greater levels of finance available rather than a high growth market with less finance available. This is shown by the following example (interest rates and all else held equal)
Purchase a property in Country A with anticipated growth of 20% next year with 90% finance available. Property Price £100,000
Purchase a property in Country B with anticipated growth of 80% next year with 0% finance available. Property Price £100,000
If buying in both countries and anticipated growth is achieved.
Country A
Deposit £10,000
90% Financed through mortgage
Property value after year 1 = £120,000
After redeeming loan, you will have made a net profit of £20,000 using just £10,000. This represents a 100% return on the capital you have employed. Leverage working at its best.
Country B
Deposit £100,000
0% Financed through mortgage
Property value after year 1 = £180,000
In this instance, you will have made a net profit of £80,000 using £100,000. This represents an 80% return on the capital you have employed. A phenomenal return, but not as high a return as that achievable in Country A when taking leverage into account.
Seeking Advice
So lots to think about! If you are inexperienced when it comes to investing overseas, then expert advice is vital. I would recommend speaking not only to solicitors about legal aspects of any investment, but also to investors who have already taken the plunge in the country you are targeting. Experience is priceless, and an existing investor can not only recommend ways in which you can save money, but also point out pitfalls that you may not have considered until it is too late. With any of the investment opportunities offered by Bueno Investments, relentless research is carried out before any opportunity is recommended to our investors.
Local advice is also key to your research. It is very rare that a foreign investor will know a local market like the natives will. It is easy to visit a country and overlook many of the underlying issues that affect the local market and the people living there. Ideally, you will speak to locals with a neutral perspective of any deal before committing. The internet is also great for this these days - there are few places remaining around the World that do not have local websites with information and news on the area.
Investment Strategy
Within your investment strategy you must decide whether you want high yielding properties from day one with an instant cashflow, or whether you can afford to wait and profit from off-plan. There are some large and relatively swift profits to be made off-plan if investing with the right company at the right price. It is vital that the discount you are buying at is in fact a true discount, and that quoted timescales are realistic.
In terms of checking prices, compare quoted sales prices with similar properties that have actually sold in the area. It is often useless to compare prices to those offered by other off-plan developers, as both may be drastically overvalued and need to be reduced in order to meet market value. It is also worthwhile checking the track record of the developer to ensure the reality and success of their promises in the past.
You should also make sure that you are 100% clear on the structure of any deal before committing. Unfortunately, not all of the developers out there are as up front as we expect, and you must be sure that you have investigated every last avenue before deciding to buy. Many developers will offer properties at prices that initially seem very competitive, but hidden charges are included such as furnishings which are drastically overpriced. I recently spoke to an investor who bought a property overseas, only to find that he needed to pay to have the walls plastered upon completion! Hidden costs like this can really dent your profits, so thorough research from the outset really is worthwhile.
The decision to invest for rental income versus capital appreciation is often a difficult one to make, and depends on other financial assets and commitments you may have. When buying off plan, you are obviously tying up a portion of your capital in the short term, in search of high returns upon completion. There are very good profits to be made this way if you can afford to tie up your capital in the short-run and offset this temporary capital shortage with income from other high yielding investments.
For more information on the importance of yield and cashflow check out one of our recent articles here. (link to Scott Goodall article on Cashflow)
After You Have Purchased
Once you have an investment property overseas, it is imperative that you have a good management firm in place to let and manage the upkeep of your property. Many investors leave organizing this important factor until their property is near completion only to find that there are few or no suitable management agents available at the price anticipated. Management costs are just as important as any other factor when calculating your monthly cashflow, and you should be sure that there is a suitable agent in place long before completion.
Finally, taxation is an area that must be considered before investing overseas. If you reside in the UK permanently you'll need to pay tax on overseas income. If you live in the UK temporarily, you will be obliged to pay tax only on overseas income you bring into the UK. If a 'double taxation agreement' exists between the UK and the country in which the income originates, then you will not have to pay tax twice. If you do not reside in the UK then your situation will vary. Should you have any questions regarding taxation wherever you are from, you can email us or call the office and we will be happy to point you in the right direction.
And Finally ...
So there is a lot to consider when investing overseas! Hopefully this has been a good starting point for any of you considering an investment away from home! The above may seem a lot to digest, but I can assure you it is all worthwhile when you find the perfect property overseas, whether it is for investment, a holiday home, retirement, or a combination!
[http://www.buenoinvestments.com]
Scott co-founder of Bueno Investments, which was formed in 2005. Prior to this, Scott had been working in the property investment industry for many years where he built the foundations for the knowledge and experience he has today. Scott was fortunate to have worked with an excellent investor in his early years, which enabled him to learn the art of seeking out the few excellent opportunities on the market.
Within the company, Scott is primarily responsible for sales facilitation, business development and public relations.
In his spare time Scott enjoys spending time with family and friends, personal development events, playing sports with his favourites being tennis, football and golf, and he is a keen gardener. Scott also has a degree in Business & Finance Economics at Royal Holloway (University of London).
Sunday, May 13, 2012
Learn From Your Investment Mistakes
Every one makes investment mistakes. From the time we were born, we learned from the mistakes we made. As investors, we need to learn from our investment mistakes by recognizing when we make them and make the appropriate adjustments to our investing discipline. When we make a losing investment, do we recognize our investing mistake and learn from it, or do we attribute it to some outside factor, like bad luck or the market? To make money from your investments and beat the market, we must recognize our investing mistakes and then learn from them. Unfortunately, learning from these investing mistakes is much harder than it seems.
Some of you may have heard of this experiment. It is an example of a failure to learn from investing mistakes during a simple game devised by Antoine Bechara. Each player received $20. They had to make a decision on each round of the game: invest $1 or not invest. If the decision was not to invest, the task advanced to the next round. If the decision was to invest, players would hand over one dollar to the experimenter. The experimenter would then toss a coin in view of the players. If the outcome was heads, the player lost the dollar. If the outcome landed tails up then $2.50 was added to the player's account. The task would then move to the next round. Overall, 20 rounds were played.
In this study there was no evidence of learning as the game went on. As the game progressed, the number of players who elected to play another round fell to just over 50%. If players learned over time, they would have realized that it was optimal to invest in all rounds. However, as the game went on, fewer and fewer players made decisions to invest. They were actually becoming worse with each round. When they lost, they assumed they made an investing mistake and decided to not play the next time.
So how do we learn from our investing mistakes? What techniques can we use to overcome our "bad" behavior and become better investors? The major reason we don't learn from our mistakes (or the mistakes of others) is that we simply don't recognize them as such. We have a gamut of mental devices set up to protect us from the terrible truth that we regularly make mistakes. We also become afraid to invest, when we have a losing experience, as in the experiment above. Let's look at several of the investing mistake behaviors we need to overcome.
I Knew That
Hindsight is a wonderful thing. As a Monday morning quarterback, we can always say we would have made the right decision. Looking again at the experiment mentioned above, it is easy to say, "I knew that, so I would have invested on each flip of the dice". So why didn't everyone do just that? In my opinion, they let their emotions rule over logical decision-making. Maybe their last several trades were losers, so they decided it was an investing mistake and they become afraid to experience another losing trade.
The advantage of hindsight is we can employ logic as we evaluate the decision we should have made. This allows us to avoid the emotion that gets in our way. Emotion is one of the most common investing mistake and it is the worst enemy of any good investor. To help overcome this emotion, I recommend that every investor write down the reason you are making the decision to invest. Documenting the logic used to make an investment decision goes a long way to remove the emotion that leads to investment mistakes. To me the idea is to get into the position where you can say "I know that" rather than I knew that. By removing the emotion from your decision, you are using the logic you typically use in hindsight to your advantage.
Self Congratulations
Whenever we make a winning investment, we congratulate ourselves for making such a good decision based on our investing prowess. However, if the investment goes bad, then we often blame it on bad luck. According to psychologists, this is a natural mechanism that we, as humans possess. As investors, it is a bad trait to have as it leads to additional investing mistakes.
To combat this unfortunate human trait, I have found that I must document each of my trades, especially the reason I am making the decision. I can then assess my decisions based on the outcome. Was I right for the right reason? If so, then I can claim some skill, it could still be luck, but at least I can claim skill. Was I right for some spurious reason? In which case I will keep the result because it makes me a profit, but I shouldn't fool myself into thinking that I really knew what I was doing. I need to analyze what I missed.
Was I wrong for the wrong reason? I made an investing mistake, I need to learn from it, or was I wrong for the right reason? After all, bad luck does occur. Only by analyzing my investment decisions and the reasons for those decisions, can I hope to learn from my investing mistakes. This is an important step toward building genuine investment skill.
Luck Becomes Insight
The market is comprised of a series of cause and effect actions, which are not always transparent. This cause and effect has created some interesting behaviors by some very successful people. For example, some baseball pitchers are known to not step on the white chalk line when they are playing. I am sure you have heard of many "superstitions" that people hold to be true to help them perform well.
In an experiment by Koichi Ono's in 1987, subjects were asked to earn points in response to a signal light. They could pull three levers, though they were not told to do anything in particular. They could see their score on a counter, but did not know that points were awarded completely independent of what they did. Nothing they did influenced the outcome in terms of points awarded. During the experiment, they observed some odd behavior as the participants tried to make the most points possible. Most subjects developed superstitious behavior, mainly in patterns of lever pulling, but in some cases, they performed elaborate or even strenuous actions. Each of these superstitions began with a coincidence. In some cases, the participants would pull levers in a particular sequence. In other cases, even more odd behavior was observed, including a person who jumped off a table and then later jumped up to touch the ceiling to "score" points. Keep in mind the points were awarded either on a fixed time schedule or on a variable time schedule, not based on the action of the participant.
The point of this is that as humans we tend to think that luck is insight. We fail to analyze effectively the situation and the real reason for our success or failure. In investing this behavior will lead to ruin. To help overcome our natural tendency, we must document our investing decisions and then assess the results. This assessment process helps us learn from our success and from our failures and is critical for each of us if we hope to become successful investors.
Learn from Investment Mistakes
To help avoid investing mistakes, what should you document before you make an trade? I like to look at three categories regarding a stock I am considering. First, I look at a series of fundamental information such as earnings yield, return on capital, revenue growth, insider holdings, sector, and free cash flow. The fundamental information helps me identify if this is a good company with growing earnings, good management and has potential. After reviewing the appropriate financial information including SEC documents, I identify the risks inherent in the company. These risks might include competition, market share, insider transactions, and any litigation that the company is experiencing. Here one needs to try to identify every possible risk and assess them critically. Finally, I look at the chart of the stock, seeking to identify support and resistance zones. This gives me potential entry points, exit targets, and the trailing stop loss. I complete these sections with a written trading strategy describing how I expect to make my trades. All these investment factors should be documented before making a trade. Once the trade is complete, I review them to see what I can learn so I can avoid any investing mistakes in the future.
To learn from our investing mistakes, we need to document our actions before we make the decision. We also need to be honest with ourselves when assessing our results. As we have seen, it is quite easy for each of us to put on rose-colored glasses and think we are better investors than we really are. We need to assess critically our investing abilities without distorting the feedback we receive from our decisions. Those of us who are able to learn this valuable skill will benefit greatly. Those of us who are unable to apply this learning will be destined to mediocrity at best and likely lose much of their capital before they quite investing.
Hans E. Wagner
I began investing in high school and have remained active in the markets. A graduate of the US Air Force Academy with an MBA majoring in Finance from the University of Colorado, I continued to invest throughout my career in the US Air Force, Bank of America, Coopers & Lybrand, and working for Ross Perot before retiring at 55. During that time I have gained a very good understanding of what works and what doesn't. I hope to impart that knowledge to others so they can achieve financial independence as well.
Hans runs a very successful investing site at http://www.tradingonlinemarkets.com that helps people learn to invest using proven stock market portfolio strategies. The site also includes several sample portfolios that substantially beat all the market averages.
Measuring Your Real Estate Investment Returns
Congratulations, you have finally found one source of information that is both invaluable and easily applicable for your future investment decisions.
We have read many books, reports and various articles on investments, property investment in particular. The majority of them contain great information, some of them even give you instructions on how to implement that information. However, none of them seem to provide the missing ingredient to convert the intent of the article into the actual result. Their "how to" information is never complete, too complicated or overly simplified.
Finally, out of all our research, we have found a major deficiency in the information provided by other authors -
They do not explain properly why you would invest in the first place!
They do not explain how to measure your investments!
What is the point of investment if you do not have a very specific goal in mind? And if you do have an outcome in mind, how do you know that a particular investment will achieve your desired goal?
We hear many times that people wanting to purchase an investment property, without necessarily knowing why they are buying an investment property in the first place. We have probed for the answer only to receive blank looks, vague statements and complete incomprehension of the questions.
Ask yourself, why would you purchase an investment property?
Is it to create more wealth sometime in the future?
Is it to help you financially on a daily basis?
Is it to generate a specific return on your investment?
Is it because investment property is a better investment than shares?
Do you have answers to the above questions? If you do, how specific are those answers?
We have found that people will generally answer yes to all the above without having any specific outcome in mind.
In this report we will give you the primary tool that you will need to start answering the above questions.
That tool is the ability to measure the return on your invested funds.
If you cannot measure your return, you will never be able to achieve any of your objectives, or you will achieve them through luck and not objective, measured approach. Luck will not let you repeat your investment strategies. Luck is only good in casinos!
So how do you measure returns?
Let's step back and discuss what is a return on your investment. When people talk about percentage returns or dollar returns on investment, they usually define these returns by time and the baseline investment.
So for example if you purchased a property for $200,000, after 1 year that property might be worth $210,000. Therefore your return on investment is $10,000 in one year or 5% in one year. This example has a specific period of time within which a return is measured.
However, when you measure a return on investment, do you need to measure the return on the whole price of the investment? When you purchase an investment property, do you purchase the property with CASH? Granted, some people in very exceptional and sometimes suspicious circumstances do buy property with cash! You would agree with us when we say that this is extremely rare. In most cases the investment property is purchased with a combination of your money and the bank's money.
In fact, in most cases, the bank lends the majority of the purchase price - 70% to 90% of the purchase price. This means that generally you only put up your own cash as a fraction of the property price. Given that you have only invested 10% to 20% of the total purchase price, when working out the return on YOUR investment, why would you work out the return on investment based on the whole price of the property? You did not buy the property entirely with cash, therefore you don't need to work out the return on investment on the entire price of the property.
We can provide an example of this in another field. Say you wanted to purchase an antique chest of drawers. You know that antiques go up in price with time, especially if they are properly looked after.
This particular chest of drawers cost $1,000. You did not have $1,000 so you borrowed $800 from a friend and put up the balance of $200. You made a deal with a friend that at the end of the year once you sell the piece, you will pay him $40 for the loan. At the end of the year you managed to sell the piece for $1,100, or for an extra $100. So you might think that you have made 10% return.
Or $100 profit divided by the $1,000 purchase price. You would be wrong. What you really made was $100 profit less $40 that you have to give to your friend for the loan. That makes $60 profit to you. To calculate your return you need to divide YOUR $60 profit by YOUR $200 investment. This means you made 30%. You only calculate the return on YOUR money and not your friend's and not on the total purchase price of the antique piece.
Here is an example of how your property investment will look. The numbers are purposely simplified and do not take into account various expenses:
Example 1 - Return on investment based on $200,000 property purchased with an injection of 20% of your own money.
Purchase Price $200,000
Increase in price in 1 year $10,000
Return on Investment in 1 year 5% (this is calculated by dividing the Increase by the Purchase Price)
Example 2 - Return on investment based on $200,000 property purchased with an injection of 20% of your own money.
Purchase Price $200,000
Your investment of 20% $40,000
Increase in price in 1 year $10,000
Return on YOUR Investment in 1 year 25% (this is calculated by dividing the Increase in price by Your Investment)
In both cases the property cost the same and increased in price the same and over the same period of time. However, in Example 2 the return on investment was calculated on YOUR initial cash that you invested into the property. The difference is massive - 500%.
You see, in this example, the bank that lent you 80% of the value of the property is already receiving a return on their investment. It is called interest. They do not require you to give them a part of the property appreciation as well. Given this, you can not count the entire value of the property in your investment return calculations.
Of course it is not as simple as that. There are other considerations that need to be included in the calculations to be precise but the basic idea is correct. If you started applying this method to calculating your return on investment, you will discover that investment property is an extremely high yielding investment returning anything from 20% to 100% per year on your investment. Investment property rivals shares for returns and surpasses shares through removing volatility and risk from your investment.
You have heard from so called experts that investment property will always underperform shares and other investments. You have heard that the only way to receive a high return on investing in property is through appreciation (price growth). You have heard that rent does not give you a high return. You have heard that you have to use Negative Gearing when investing in property to squeeze out any return. Unfortunately, none of these statements are true.
Let us show you why....
Let's take an example property with the following variables:
Purchasing and Investment details:
Purchase Price (new 2 bedroom unit) $185,000
Bank Loan - 80% $148,000
Interest on Loan (Interest rate 5%) $7,400
Your Contribution - 20% (your cash) $37,000
Cashflow details:
Rent per year (Gross) $10,140
Total Expenses (property management, insurance etc..) $3,100
Rent per year (Nett - rental income after all expenses) $7,040
Total income from tax deductions $1,960
Total NETT rental income plus tax deductions $9,000
From this example we see that your final position by owning this property is that you will have a $7,400 interest bill and about $9,000 in income. Therefore, you will MAKE A SURPLUS OF $1,400 PER YEAR. What does that mean if you work out return on your investment?
Well, you have earned $1,400 on your initial cash investment of $37,000 (your contribution to purchase the property). This represents a return on your initial cash investment of 3.8%. That is low you might say and we would agree with you. You forgot about one thing... this property is paying you money to own it. You have just bought an asset that pays you from day one.
What happens to property over long term? Generally properties go up in price. In fact, the average increase in price recorded over the last 100 years or so is compound 7% per year. If we apply this thinking to the above example, 7% increase on the original purchase price of $185,000 is $12,950.
Therefore to calculate the TOTAL return on your original CASH investment, you need to do the following.....
1. Add the income from rent and tax deductions to the price appreciation.
* $1,400 + $12,950 = $14,350
2. Work out the total return on your initial investment by dividing the above by your investment
* $14,350 / $37,000 = 39%
Amazing, your initial investment of $37,000 used to purchase this property earned you 39% return on YOUR MONEY in the first year. Of course, unlike shares you are not able to cash out and take this profit immediately. With property, you have to wait for some time before you can cash out fully.
To put a 39% annual return on your money in perspective, it is 10 times greater then the bank will pay you. It is 4 times greater then professional fund managers strive to obtain - the same ones that get paid millions in bonuses. It is nearly 2 times greater then the richest man on the planet, Warren Buffet, consistently makes.
How does that compare to all your share investments or any other investment for that matter? Where else can you buy an asset and have it pay YOU from day one and increase in price? Remember property appreciates in cycles, but it ALWAYS appreciates.
This is what property professionals know and do not seem to want to explain to everyone else. Now you know how to calculate real return on your money, not the bank's money. You do not have to work out the return on the bank's money, the banks can do it themselves. You need to care only about your funds. So when you do the calculations right, you will find that overall by purchasing the right investment property, you will make up to 100% returns on your money. In the worst case scenario you will only make 30%. Either way, the returns are phenomenally high by normal standards.
All this can be done without any risk and in some cases, with absolutely guaranteed rent!
Now what do I do?
Hopefully we have shown you that property is a remarkable investment that is hard to substitute. Not all properties are the same and you need to watch out for those that may stand empty for long periods or give you tiny tax deductions.
Viva Properties has an education department that teaches people for FREE aspects of property investment - various pitfalls, risk minimization techniques, early mortgage repayments, ways of accessing properties for a discount etc... We teach by running small workshops of 10 to 20 people. During the workshops you are given incredible insights into how property investment works and this new knowledge is applied to specific property examples including those that you want to examine.
So if you want to learn from the experts how property investment should be done and pay nothing for the knowledge, please go to www.vivaproperties.com.au
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