SHOULD I BUY OR RENT HOUSE?

One of the classic dilemmas haunting lot of people is the issue of buying versus renting the house for accommodation purposes. Some experts feel that buying a house is the better option as it helps you create an asset in the long run, while some believe that renting is better option considering the prohibitive rates realty commands these days. And by renting one can save money by paying rent which will be lower than the home loan EMI and these savings can be invested for long term wealth creation. So both arguments have their own merits and none can be dismissed easily. Both of them have their own benefits and shortcomings. So, before we decide on which way to go ,we need to fully understand the pros and cons of each of these options.
BUYING HOUSE
PROS OF BUYING

- It creates an asset for you in the long run.

- You don't have to pay for your accommodation after you pay off your loan, which is maximum of 20 years, unlike,in renting where you have to pay monthly rent for every month till you continue to stay in the rented premises.

- You also get income tax benefit. Upto Rs1.5 lakhs of your interest component paid in the year on your home loan is deducted from your taxable income and Rs 100000 principal repayment is also tax free. The same benefit is also available to your spouse in case you decide to go for joint loan for the house.So the total tax able income deduction benefit possible on your home loan could be a high as 5 lakhs for both the spouses.

- House may be used for generating income under reverse mortgage post retirement.

- No hassle of changing house every 11 months,unlike in rented accommodation.

- Fulfills the dream of having roti kapda and makaan.


CONS OF BUYING

- The monthly outgo in the form of home loan EMI is generally higher than the rent.

- Demands long commitment towards EMI payment. You have to commit a large portion of your income towards monthly payment of EMI for a relatively long period of time like 10-15 years or even 20 years. This limits your ability to meet exigencies and financial emergencies.

- Once you buy a house , you give up the flexibility of moving to another locality in the same city or to another city. You are stuck with that locality for ever,unless you decide to sell it off ,which is long and cumbersome process.

- Ownership of house also comes with high bills like society maintenance charges etc which have to be paid monthly/quarterly etc. This can feel like paying rent after buying a house and be very annoying for few.


RENTING HOUSE

PROS OF RENTING

- Lesser financial strain as monthly outflow is lesser.The rent paid for a house is generally much lesser than the home loan EMI paid to buy a similar house.

- Offers flexibility of choosing neighbourhood as and when desired,unlike with self owned house.

- No long term commitment of paying EMI.In case of any financial stress one can always stop paying rent ,if its higher, and move to a smaller place which has lesser rent. This is not possible with self owned house as the EMI is fixed and has to be paid every month .


CONS OF RENTING

- The money paid as rent is an expense unlike EMI which builds an asset.

- Lower IT benefit for money paid towards rent as against money paid towards home loan EMI.

- Forced to change house every 11 months and pay brokerage for new house on rent. This has both financial , emotional and practical difficulties. Changing house every now and then can throw off your social life out of gear. Your kids might have to shift to new school etc unless you manage to find another house in the same locality.

- No income possible post retirement, unlike with self owned house which does offer an option of income through reverse mortgage.

SO WHAT SHOULD YOU DO?Well you must decide for yourself depending upon your need . I would say you should go for buying a house as its pros far outweigh its cons. However, you may consider renting as well in case you cant afford to pay the EMI of the house that you want or are not sure of the certainty of future cash flow .for example if your job etc is not stable.

Choose Your Investments Carefully for Long-Term Growth

Entrepreneurs and beginning investors must be aggressive, but you don't have to be careless or foolish. Concentrate your investments in markets where you know and accept the associated risks. For example, if you invest in the futures market, you must be prepared to lose your entire nest egg in a heartbeat. However, this can also be an area of fantastic returns on your investment.
Other investments, like savings accounts, may offer safety, but offer little in the way of appreciation. Your task is to find the investments and business opportunities which offer a level of risk you can live with, while rewarding you sufficiently to reach your wealth building goals. Some investments, which offer stability and growth, include real estate, numismatic coins, and antiques.



In my opinion, however, the best investment in the world is a small business that you own and operate. Read books on small business management, attend seminars sponsored by the Small Business Administration, and talk to other small business owners.

One source of information that people think is great is the college; however, I have a problem taking business advice from a teacher who teaches about business but has probably never operated his or her own profitable business. The classroom is a great place to learn about the theory of business and investing, but search for your mentors beyond the classroom.

Wealth builders must learn from the school of hard knocks, and without the valuable experience gained from your daily exposure to the marketplace, and observation of other successful people, you will never learn to succeed or control your investments. As a rule, you must always maintain absolute control of your investments.

A wealth builder assumes responsibility for his wealth program and does not abdicate control of his resources to anyone. Absentee ownership is fine for the wealthy, but the wealth builder needs to be on hand. Nobody in the world cares about your future as much as you do, and nobody cares about your assets as much as you do.

If you want to get ahead, maintain control of your budding empire. Watch your assets like a mother hen watches her chicks. However, with all this effort to build wealth, don't lose sight of the big picture. In all your getting, don't lose sight of who you are, and don't forsake the love of family and friends.

Entrepreneurs are driven to succeed by an uncontrollable urge to surpass those around them. They are willing to work atrocious hours, sacrifice leisure, forego vacations, and focus every waking minute of their attention to their baby venture.

This is fine for some people, but most of us need to take time to maintain relationships and rest the body and soul. Don't sweat the time spent with your family. And don't ignore your body's demands for rest.

3 FINANCIAL MISTAKES OF MY LIFE

After having completed almost over 6 years in corporate world earning paychecks and living off it, I decided to do a bit of introspection last week and found out that in last 6 years , I have made some grave financial mistakes.I thought of sharing these mistakes with all my readers so that they can learn from them and don't end up making these mistakes themselves.
MISTAKE 1 - Opting for "No PF Deduction"

After I joined my first company ,I was thrilled at the thought of earning a handsome amount of Rs 12000 p.m.(Struggled to get anything better than that in those days after dot com burst). But I was taken aback when the first pay check that I got was for Rs 9800. I was baffled . I wanted to know what happened to the rest. A quick call to the HR and I was told about the various deductions that had eaten up the rest of my money. Eaten up? Yes that's what I felt then, and hence wanted to reclaim my money. So, I found out that there is an option wherein one can choose not to have his Provident Fund deductions out of his salary. off course you have to give a declaration to that effect to your company. I did so, and started enjoying my full salary from next month onwards. It was good while it lasted because it gave instant gratification on every occasion I splurged that extra cash. But, later on I realised that it was a big mistake. Not for nothing, PF deduction is made mandatory, by the Govt Of India. This PF deduction is kind of forced saving for our retirement. And the fact that I did not opt for it meant that I was left with no saving whatsoever after I quit the job. The money which could have gone in the PF fund, would over a period of next 35 years become a huge amount due to compounding effect.I lost out on that opportunity of starting with my retirement fund really early in my life. But, now I can not go back in time and reclaim that money. So my advice to all of you is to never do this with your PF deductions. Infact, if you can , then increase the percentage of PF deductions from minimum 12% to a higher level which you can afford. The more you save in your initial years , the bigger will be your final retirement corpus.

MISTAKE 2 - Buying an insurance policy just to meet a target and then letting it lapse.

I was working with ICICI Prudential and was involved in insurance sales. ICICI Prudential is known as the most aggressive company in the insurance domain in India and as such being in sales meant that we were always under huge pressure to log in more policies than the others. But insurance being insurance, no one wanted to buy it.Now under pressure, sometimes,the sales people buy policies in their own name just to meet the targets. This was counted under their targets which helped them save their skin from the boss's ire and then later on they used to cancel the policy.Cancellation of the policy in the free look period meant getting back almost the whole money back. So it was tactic used by lot of sales people to manage a difficult month in sales. I was always dead against it and never thought of buying a policy on ones own name just to meet the target as the right option. I always believed that you should buy a policy from your own company only if you really need it. But one one such really tough months when sales were not happening , I too fell for this. I convinced myself that I am not buying this policy to meet the number but because I really need it. So I bought the policy for RS 25000 annual premium. And Since I had somehow convinced myself that its a policy that I need it , I didn't cancel it during free look period. Had I cancelled it during free look period of 15 days , I would have got my money back. I continued with the policy for 5 more months and then stopped paying. I stopped because I knew that it was not the policy I needed. It was not worth paying for a ULIP . Result was that I lost my hard earned money in that policy. Had I put the same money in stock markets then,today I would have been sitting with a neat profit of atleast 400% on that. That taught me that one should never buy own company's product just to meet the numbers for your boss.

MISTAKE 3- Not transferring my PF accumulated from my 2nd and 3rd job.

This mistake is the lesser of the earlier two. You all know that in my first job, I didn't have any PF deductions and hence no hassle of transferring my PF money. However, I had PF deductions in my 2nd and 3rd job . But after I quit those respective jobs, I didn't get the money transferred to my new PF account. I have no reason why I didn't do so. Maybe I didn't think it was important enough or maybe I was just too lazy. But the fact is today after so many years I have not yet got the money transferred to my new account.Worse is that I have forgotten details like My employee ID etc of my earlier jobs. I am really at loss to explain this lack of sense of urgency on my part to deal with something which is so very important.But, the good thing is that , I can still reclaim it and get the money transferred. Hopefully will do so now.
I hope you will stay away from these mistakes that I made. If any of you have some thing similar to say , please do share with the fraternity.

How to a Earn Residual Income

Residual income is also known as passive income. It is an income generated through indirect involvement in something. Residual income is extra cash that you have earned as a product of another action like for example, writing a book and later you are receiving royalties on the sale of each book. Residual income is very appealing and attractive. Some people would like to free up time so they can seek other ways to earn income and others don't want to work anymore but desire income.
Here are some things to consider to earn residual income.

• In order to achieve extra income, try to consider investing your money. Popular venues to earn an income that requires an initial investment include interest, rental properties and dividends.

• Know where you are good at. Once you know what your strengths are, you can explore your skills and abilities to earn residual income.

• Create a site based on your interest and knowledge. Chances are if you are interested to something, others are interested too, and if you have a huge knowledge base to back that up, that is the prime situation for creating a site for others to link up and use that knowledge.

• Internet revenues. This is another type of popular residual income. This is money earned on web site through promoting and advertising a certain product or services. While, the initial direct work in building the business marketing web site is needed, the monthly earnings from advertising keeps on generating and this creates a passive income.

What Options And General Tips Do Investors Have

Investors today have a wide range of choices: stocks, bonds, mutual funds, Treasury securities (including savings bonds), options, commodities, commodity futures, real estate investment trusts (REITs), variable annuities and many more. You must investigate before you invest-and remember that every investment involves some degree of risk. These investments are not insured by the federal government if they lose money or fail, even if you purchase them through a bank or credit union that offers federally insured savings accounts.
Make sure you have answers to all of these questions before you invest.

How quickly can you get your money back? Stocks, bonds, and shares in mutual funds can usually be sold at any time, but there is no guarantee you will get back all the money you paid for them. Other investments, such as limited partnerships, often restrict your ability to cash out your holdings. What can you expect to earn on your money? While bonds generally promise a fixed return, earnings on most other securities go up and down with market changes. Also, keep in mind that just because an investment has done well in the past, there is no guarantee it will do well in the future. What type of earnings can you expect? Will you get income in the form of interest, dividends or rent? Some investments, such as stocks and real estate, have the potential for earnings and growth in value. What is the potential for earnings over time? How much risk is involved? With any investment, there is always the risk that you won't get your money back or the earnings promised. There is usually a trade-off between risk and reward: the higher the potential return, the greater the risk. The federal government insures bank savings accounts and backs up U.S. Treasury securities (including savings bonds). Other investment options are not protected. Are your investments diversified? Some investments perform better than others in certain situations. For example, when interest rates go up, bond prices tend to go down. One industry may struggle while another prospers. Putting your money in a variety of investment options can help to reduce your risk. Are there any tax advantages to a particular investment? U.S. Savings Bonds are exempt from state and local taxes. Municipal bonds are exempt from federal income tax and, sometimes, state income tax as well. For special goals, such as paying for college and retirement, tax-deferred investments are available that let you postpone or even eliminate payment of income taxes. The Securities and Exchange Commission (SEC) requires public companies to disclose financial and other information to help you make sound decisions. View the text of these files online. You can also call SEC's toll-free Investor Information Service at 1-800-732-0330 to obtain free publications and investor alerts or to learn how to file a complaint. The Financial Industry Regulatory Authority (FINRA) also provides up-to-date market data and information for a wide range of stocks, bonds, mutual funds, and other securities through its Market Data Center.

The following companies rate the financial condition of corporations and municipalities issuing bonds. Their ratings are available online and at many public libraries.

Financial Security Planning : Building Wealth and Freedom Principles of Wealthy Individuals

Have you ever felt once in a while how great would it be having all the good things in life, without having to worry where the next money will come from, retirement issues, etc?


But now, if your reading this and you are in a paycheck world, do you think it is still be possible for you to just enjoy a quiet morning, with a great coffee and a great sun? or maybe even enjoying trips from all the places you want to go so bad, without ever thinking about deadlines or what the boss might say?



The next best thing to do in order to do wealth building in a paycheck paycheck world, is to take a deep breath, know what is the difference between the poor and the rich, not is there anything wrong with being poor, you can be happy being poor or rich, being wildly wealthy is better. If we know the principles behind the ways to become wealthy, all we need to do is just duplicate it.



Some of the concepts below are some of the many principles the wealthy have used to create wealth. They have duplicated these principles to become what they are and have what they enjoy today.



1. Believe in the power of compound interest in investment

Compound Interest Investment is referred as to the investment in relation to time and interest. The higher the time, the larger the interest and therefore the compounding goes on and on.



Whether you are investing in Forex, Stocks and Commodities, compounding is the life force of your investment. You plant a seed, give it time to nurture and it will nurture you in the end, having your fruit bearing tree ( with money of course).



2. Real Estate and Financial Markets : accelerate your wealth



It is said in statistics that 98% of the millionaires have built wealth because of property.



This is not new, we all know that as population grows, so is that value of land, and is one of the most secure investments ever.



Financial markets is said to be risky, but most successful men and women will find that the financial markets is a river of money. You cannot fight the flow, you will only hurt yourself. Studying, understanding and going with the flow of the financial markets, combined with real estate makes a wealthy, wealthy man.



3. Leverage. The Wealthy repeats this principle to be wealthy in no time.



The financial markets has this one of a kind of specialty, the leverage. It uses a small portion of your money, borrows some more and use it as your investment. They say here is where it comes risky, but a proper education and understanding thinks otherwise, it can increase investment exponentially with a small amount.



Forex has one of this special privileges that is less more risky because in Forex you can start small, like $50-$100, and turn it into thousands. Do this process again and again carefully and that dream home is not a dream anymore.



This are some of the concepts that the wildly wealthy have used time and time again to have that nice car, vacations and houses that some might only dream about. Starting to shift your thinking into a prosperous one will open the doors to investments. The economy doesn't have to do with any of it. Let it start from you.

Financial Navigating in the Current Economy: Ten Things to Consider Before You Make Investing Decisions

Financial Navigating in the Current Economy: Ten Things to Consider Before You Make Investing Decisions
Given recent market events, you may be wondering whether you should make changes to your investment portfolio. The SEC's Office of Investor Education and Advocacy is concerned that some investors, including bargain hunters and mattress stuffers, are making rapid investment decisions without considering their long-term financial goals. While we can't tell you how to manage your investment portfolio during a volatile market, we are issuing this Investor Alert to give you the tools to make an informed decision. Before you make any decision, consider these areas of importance:

1. Draw a personal financial roadmap.

Before you make any investing decision, sit down and take an honest look at your entire financial situation -- especially if you've never made a financial plan before.

The first step to successful investing is figuring out your goals and risk tolerance - either on your own or with the help of a financial professional. There is no guarantee that you'll make money from your investments. But if you get the facts about saving and investing and follow through with an intelligent plan, you should be able to gain financial security over the years and enjoy the benefits of managing your money.

2. Evaluate your comfort zone in taking on risk.

All investments involve some degree of risk. If you intend to purchase securities - such as stocks, bonds, or mutual funds - it's important that you understand before you invest that you could lose some or all of your money. Unlike deposits at FDIC-insured banks and NCUA-insured credit unions, the money you invest in securities typically is not federally insured. You could lose your principal, which is the amount you've invested. That's true even if you purchase your investments through a bank.

Temporary Guarantee Program for Money Market Funds -- Recently, one money market fund "broke a buck" (its net asset value fell below $1 a share). This event caused investors to become concerned that their money market investments might lose value. To reassure investors in money market funds, the Treasury Department, working closely with the SEC, established a temporary guaranty program for U.S. money market funds.

The reward for taking on risk is the potential for a greater investment return. If you have a financial goal with a long time horizon, you are likely to make more money by carefully investing in asset categories with greater risk, like stocks or bonds, rather than restricting your investments to assets with less risk, like cash equivalents. On the other hand, investing solely in cash investments may be appropriate for short-term financial goals. The principal concern for individuals investing in cash equivalents is inflation risk, which is the risk that inflation will outpace and erode returns over time.

Federally Insured Deposits at Banks and Credit Unions -- If you're not sure if your deposits are backed by the full faith and credit of the U.S. government, it's easy to find out. For bank accounts, go to www.myfdicinsurance.gov. For credit union accounts, go to http://webapps.ncua.gov/Ins/.

3. Consider an appropriate mix of investments.

By including asset categories with investment returns that move up and down under different market conditions within a portfolio, an investor can help protect against significant losses. Historically, the returns of the three major asset categories - stocks, bonds, and cash - have not moved up and down at the same time. Market conditions that cause one asset category to do well often cause another asset category to have average or poor returns. By investing in more than one asset category, you'll reduce the risk that you'll lose money and your portfolio's overall investment returns will have a smoother ride. If one asset category's investment return falls, you'll be in a position to counteract your losses in that asset category with better investment returns in another asset category.

In addition, asset allocation is important because it has major impact on whether you will meet your financial goal. If you don't include enough risk in your portfolio, your investments may not earn a large enough return to meet your goal. For example, if you are saving for a long-term goal, such as retirement or college, most financial experts agree that you will likely need to include at least some stock or stock mutual funds in your portfolio.

Lifecycle Funds -- To accommodate investors who prefer to use one investment to save for a particular investment goal, such as retirement, some mutual fund companies have begun offering a product known as a "lifecycle fund." A lifecycle fund is a diversified mutual fund that automatically shifts towards a more conservative mix of investments as it approaches a particular year in the future, known as its "target date." A lifecycle fund investor picks a fund with the right target date based on his or her particular investment goal. The managers of the fund then make all decisions about asset allocation, diversification, and rebalancing. It's easy to identify a lifecycle fund because its name will likely refer to its target date. For example, you might see lifecycle funds with names like "Portfolio 2015," "Retirement Fund 2030," or "Target 2045."

4. Be careful if investing heavily in shares of employer's stock or any individual stock.

One of the most important ways to lessen the risks of investing is to diversify your investments. It's common sense: don't put all your eggs in one basket. By picking the right group of investments within an asset category, you may be able to limit your losses and reduce the fluctuations of investment returns without sacrificing too much potential gain. You'll be exposed to significant investment risk if you invest heavily in shares of your employer's stock or any individual stock. If that stock does poorly or the company goes bankrupt, you'll probably lose a lot of money (and perhaps your job).

5. Create and maintain an emergency fund.

Most smart investors put enough money in a savings product to cover an emergency, like sudden unemployment. Some make sure they have up to six months of their income in savings so that they know it will absolutely be there for them when they need it.

6. Pay off high interest credit card debt.

There is no investment strategy anywhere that pays off as well as, or with less risk than, merely paying off all high interest debt you may have. If you owe money on high interest credit cards, the wisest thing you can do under any market conditions is to pay off the balance in full as quickly as possible.

7. Consider dollar cost averaging.

Through the investment strategy known as "dollar cost averaging," you can protect yourself from the risk of investing all of your money at the wrong time by following a consistent pattern of adding new money to your investment over a long period of time. By making regular investments with the same amount of money each time, you will buy more of an investment when its price is low and less of the investment when its price is high. Individuals that typically make a lump-sum contribution to an individual retirement account either at the end of the calendar year or in early April may want to consider "dollar cost averaging" as an investment strategy, especially in a volatile market.

8. Take advantage of "free money" from employer.

In many employer-sponsored retirement plans, the employer will match some or all of your contributions. If your employer offers a retirement plan and you do not contribute enough to get your employer's maximum match, you are passing up "free money" for your retirement savings.

Keep Your Money Working -- In most cases, a workplace plan is the most effective way to save for retirement. Consider your options carefully before borrowing from your retirement plan. In particular, avoid using a 401(k) debit card, except as a last resort. Money you borrow now will reduce the savings available to grow over the years and ultimately what you have when you retire. Also, if you don't repay the loan, you may pay federal income taxes and penalties.

9. Consider rebalancing portfolio occasionally.

Rebalancing is bringing your portfolio back to your original asset allocation mix. By rebalancing, you'll ensure that your portfolio does not overemphasize one or more asset categories, and you'll return your portfolio to a comfortable level of risk.

Stick with Your Plan: Buy Low, Sell High -- Shifting money away from an asset category when it is doing well in favor an asset category that is doing poorly may not be easy, but it can be a wise move. By cutting back on the current "winners" and adding more of the current so-called "losers," rebalancing forces you to buy low and sell high.

You can rebalance your portfolio based either on the calendar or on your investments. Many financial experts recommend that investors rebalance their portfolios on a regular time interval, such as every six or twelve months. The advantage of this method is that the calendar is a reminder of when you should consider rebalancing. Others recommend rebalancing only when the relative weight of an asset class increases or decreases more than a certain percentage that you've identified in advance. The advantage of this method is that your investments tell you when to rebalance. In either case, rebalancing tends to work best when done on a relatively infrequent basis.

10. Avoid circumstances that can lead to fraud.

Scam artists read the headlines, too. Often, they'll use a highly publicized news item to lure potential investors and make their "opportunity" sound more legitimate. The SEC recommends that you ask questions and check out the answers with an unbiased source before you invest. Always take your time and talk to trusted friends and family members before investing.

7 Step Process of Making Money on the Internet

Ever tried making money on the internet? If you do then you could be doing either or all of the following 7 steps you need to be successful making money in the internet. If not, then you can still do so by carrying the following 7 steps.
Step One: You need to have a good product. If you don't have a good one of your own, then go ahead and make a search on the internet for a good one.

Step two: You need to have a website in order to promote your product.

Step three: You need to have a good webhost to host your website.

Step four: You need to have a good auto responder.

Step five: You need to prepare at least 7, the more the better email letters promoting your product. These letters should be plugged into your auto responder.

Step six: You need to prepare a squeeze page in order to collect names and emails for your future clients.

Step seven: You need to promote your squeeze page all over the internet.

So those are your seven steps in making money on the internet. As for me, those are tall orders.

But there is a quick way of making money on the internet without going thorough all the hassles above and yet it covers almost all the steps mentioned.

You could be making money you want on the internet by joining a program that I've joined. The name of the program is MyInstant Biz. You could be earning money on the internet while at the same time learning making money by getting involved with the program.

What is a good investment

What is a good investment? What makes one stock perform well while others perform poorly? Throughout history the best stock investments have been made throughout a bears market, so it is natural to assume that 2009 will be a time when money is to be made.

So how do you go about finding which stocks to invest in? There are 5 simple criteria’s you should use when deciding if a stock is good to invest in or not.

When asking what is a good investment? Ask yourself these questions.

1. Does the company fulfill a need? You want to make sure you invest only in companies that have a purpose. It should be something that is not going to disappear overnight. For example Coke a Kola is not going to vanish. They have millions of customers worldwide.

Another thing I should add here. The company’s product should be something that you can understand. There are many companies out there which there CEO’s do not fully understand. Stay away from these.

2. How is the company managed? There is a strong correlation between companies with good management and companies who have made money for their shareholders. The better a company is ran the more likely it is that they will survive and prosper in the long term.

3. Does the company have little or no debt? The best ran company with the best product will not last very long if they have too much debt. Companies that have very little debt can use their money not to pay bills but to invest in themselves and pay out dividends.

4. Does the company have increasing/stable earnings? It is a good sign if a company is continuously increasing their earnings. That shows they are growing and hopefully that growth will spread to the shareholders as well.

5. Is the stock Undervalued? The concept of investing is simple, buy an undervalued stock and wait for it to increase in price. The best stock investments for the long term can be found by conducting fundamental studies such as P/E ratios, PEG ratios, and Price to Book ratios.

Real Estate Investing - The Benefits from an Expert Investor

Benefit I-Tax Shelter
Through owning income producing real estate, Investors are able to use depreciation to offset a portion of the income a property generates. Through effective use of cost segregation, we are able to break out the components which make up a property and depreciate them on more aggressive schedules than typical straight line 27.5 year method.
If financing is used on the property, the amount of interest paid to a Lender is deductible expense which can also be used to lower the taxable income of a property.

Benefit II-Leverage
Income producing real estate is an asset which can be financed up to approximately 70-75% of appraised value. These loans can be non-recourse, which means an individual does not need to personally guarantee repayment of the loan. The asset is pledged as the sole security for repayment of the loan. Using leverage allows you to build up more assets over time using Other People's Money (OPM). The more assets you are able to acquire translates into greater income and wealth in the future. The interest paid on the loans is deductible, and the people actually working hard to pay off your mortgage are your tenants. This is another example leverage being used called "OPW", which stands for Other People's Work (OPW).

Benefit III-Inflation Hedged Income
Income from real estate is inflation hedged, as rents can be increased over time to keep up with inflation. The rising income will also lead to increased value, as income properties derive most of their valuation from the amount of income they produce. Many retirees today who did not have cost of living adjustments as part of their pensions are now struggling as their income stayed flat while the price of everything else rose.

Benefit IV-Tax Deferred Income*
Income from real estate can be tax deferred and in some cases actually tax free. Depending upon what your tax status is and your need for income, one of the best ways to pull money out of income producing real estate is to refinance it and pull cash out. Borrowed money is not defined as income, and is therefore not taxable as such. Income from the property will pay down the loan, and the interest paid is tax deductible. This strategy can be done repeatedly, putting tax free cash in to your pocket. Assuming you never sell the property but pass it on to your heirs, they will inherit the property at a stepped up basis, and those monies from the refinance will essentially have been tax free "income" to you.
If you decide that you want to sell your property and buy a different income producing one, you can defer any gain you have from the sale through doing a qualified IRC Section 1031 exchange aka "Starker Exchange". The basis you have from the old property moves with you into the new property. There are rules to follow, but through doing these exchanges, you could continually grow your portfolio through buying larger and larger assets. Again you could pass the property on to your heirs or leave it to your favorite charity and there would be no taxable gain to them.

Benefit V-Perpetual Income
Besides all of the other benefits income producing real estate has for an Investor, the benefit of income in to perpetuity cannot be overstated. Through proper planning and management, income producing real estate can provide you with income you will never out live, as well as the chance to leave an income stream to future generations. The asset could also be used to create a legacy of giving by leaving it to your favorite charity or house of worship.

TOP 10 INVESTMENT SCAMS IN WASHINGTON

Top 10 Investment Scams In Washington The Washington State Department of Financial Institutions (DFI) has identified the following ten investment scams as the most likely to trap Washington investors. The list is in no order of prevalence or seriousness.
Before making any investment, DFI recommends that you check to make sure that both the investment and the salesperson is registered and licensed in Washington by calling 360-902-8700 or 1-877-RING DFI (746-4334).

Ponzi Schemes In this scheme investors are told a cover story about how the business will earn money to allow it to pay high returns to its investors. In fact, the business is earning little or no money. Instead it repays early investors "profits" which are really money raised from new investors. Eventually the scheme collapses when the pool of new investor money runs dry. The scam artists often blame government intervention as the reason why new investors did not get their promised returns.

How to protect yourself:

When you are offered an investment promising high returns, stop and think before you commit yourself. Don't be swayed by "scarcity" tactics saying that the supply of the investment is limited and you have to act now to make sure you can get in on the deal. Do you understand how the investment works? If the claimed return for an investment is much higher than other investments make sure you understand the risks of the investment. Remember that if an investment sounds too good to be true, it usually is. Check to see if the investment is registered with DFI's Securities Division or U.S. Securities & Exchange Commission. Check to see if the person selling the investment is licensed with DFI's Securities Division.

Senior Fraud Seniors are targeted by scam artists because they are "where the money is." Volatile stock markets, low interest rates, rising health care costs, and increasing life expectancy, combine to create a perfect storm for investment fraud against senior investors. Older investors are being targeted with increasingly complex investment scams involving unregistered securities, promissory notes, charitable gift annuities, viatical settlements, and Ponzi schemes, all promising inflated returns. To learn more, visit NASAA's Senior Investor Resource Center at http://nasaa.org/Investor_Education/Senior_Investor_Resource_Center/.

How to protect yourself:

Don't let scare tactics cause you to make a hasty decision to lock up your money in an illiquid investment. If there really is something to worry about, take the time to consult with trusted family members and advisors to see what options are available to you. Make sure you understand what the costs of the investment are, how much the person selling it will be paid if you buy, and any restrictions or costs that might limit your ability to get your money out if you want or need to. Check to see if the person selling the investment is licensed with the Securities Division. Check to see if the investment is has been registered with the Securities Division or Securities & Exchange Commission.

Promissory Notes A long-time member of the Top 10 list, these short-term debt instruments often are issued by little known or non-existent companies promising high returns -- upwards of fifteen percent monthly -- with little or no risk. When interest rates are low, investors often are lured by the higher, fixed returns that promissory notes offer. These notes, however, can become vehicles for fraud when the issuer of the note has no intention or capability of ever delivering the returns promised by the sales person.

How to protect yourself:

A promissory note is only as good as the ability of the company to pay on the note. Make sure you understand the financial condition of the company and whether it is likely to be in a position to pay you back. Make sure you get a financial statement for the company. If you aren't familiar with financial statements, have someone you trust with an accounting background look at the statement for you. Check to see if the investment is registered with the Securities Division or Securities & Exchange Commission. Check to see if the person selling the investment is licensed with the Securities Division.

Unscrupulous Brokers While many investors find their stockbroker's assistance helpful, they should also take precautions and educate themselves to detect any problems that might occur.

How to protect yourself:

Before you choose a broker:

Make sure the broker is licensed with DFI's Securities Division. Check to see if the broker has any history of complaints. Call DFI's Securities Division at 1.877.RING DFI and FINRA's BrokerCheck Program hotline at 1.800.289-9999. Once you have established a relationship with a broker:

Read and keep the materials the broker provides to you. & Keep notes of conversations with your broker. Review statements carefully to see that your instructions were followed. If you see anything that does not look right, follow up with the broker promptly. If the broker does not answer your questions, speak with the branch manager. Remember that it's your account and your money so make sure that you understand and are comfortable with the level of risk of the investments in your account.

Affinity Fraud Con artists know that it's only human nature for us to trust people who are like us. That's why scammers often use a victim's religious or ethnic identity to gain the victim's trust and then steal his or her life savings. No group seems to be immune from fraud.

How to protect yourself:

Just because others you know have invested does not mean that an investment is right for you.

Invest only if you understand how an investment works. Check to see if the investment is has been registered with DFI's Securities Division or Securities & Exchange Commission. Check to see if the person selling the investment is licensed with DFI's Securities Division. Ask what the person selling the investment will be paid if you buy the investment. Remember that if an investment sounds too good to be true, it usually is too good to be true.

Unlicensed Securities Sellers Fraudulent and high-risk investments, such as promissory notes, oil and gas deals, gold or mining stock, and viatical settlements continue to be sold by unlicensed individuals. Scam artists continue to entice independent sales agents into selling investments they may know little about. The person running the scam instructs the independent sales force -- sometimes investment advisers, insurance agents or accountants -- to promise high returns with little or no risk.

How to protect yourself:

Check to see if the investment is has been registered with DFI's Securities Division or Securities & Exchange Commission. Check the status of a securities seller's license with DFI's Securities Division. Find out whether the seller has been the subject of any complaints.

Prime Bank Schemes Another perennial favorite of con artists who promise investors triple-digit returns through access to the investment portfolios of the world's elite or "prime" banks. Now it is common to avoid the term "Prime Bank" altogether and underplay the role of banks by referring to these schemes as "risk free guaranteed high yield instruments" or something equally deceptive. These "High Yield Programs" often reference the use of "treasury securities," "letters of credit" or similar methods. Scammers often use the allure of "tax free" money by using "offshore accounts" to entice investors.

How to protect yourself:

Don't fall prey to fantasies of great wealth. Beware if you are sworn to secrecy about the investment. Make sure you understand the investment. If it sounds too good to be true, it probably is. Check to see if the investment is has been registered with DFI's Securities Division or Securities & Exchange Commission. Check to see if the person selling the investment is licensed with DFI's Securities Division. Don't let your natural dislike of paying taxes cause you to invest in an offshore scheme where you lose control of your money. It's better to pay some tax on the profits from your investment than to lose your whole investment to schemers.

Internet Fraud Scams using the Internet have rapidly increased as scam artists have found that it is a cheap and anonymous way to reach their potential victims. Most Internet scams are not new, but simply done online rather than by mail, telephone or in person. Spam e-mails, chat rooms and online investment "newsletters" often promote stocks with hype and false information in the hope that unsuspecting investors looking to make a "quick profit" will buy and drive up the price of the stock. Unfortunately, it is the promoters of the hype and false info who are able to sell their shares and leave investors "holding the empty bag" when the price stock crashes. Internet scam artists can be difficult to identify and may be located out of the country, beyond the reach of U.S. laws. Investors should ignore e-mail offers from individuals representing themselves as Nigerian or West African government, business officials or anyone in need of help to deposit large sums of money in overseas bank accounts. Don't be dot.conned.

How to protect yourself:

Ignore unsolicited e-mail offers of investments. If you get an e-mail pitching a deal that can't be beat, hit delete. Ignore "phishing" e-mail messages that ask you to provide identifying information such as your birth date or social security number to update the records at your financial institution. Don't rely solely on what you read on a Web page. Remember that it is easy for scam artists to create slick and professional looking websites or post false information.

Free Lunches and Dinners Many seniors are being targeted with dubious free lunch or dinner seminars advertised as "educational." A yearlong study of free-meal investment seminars by state securities regulators across the nation highlighted the abusive tactics sometimes employed by seminar sponsors. Out of 110 supposedly "educational" seminars examined, all were actually sales presentations. Half of the seminars featured exaggerated or misleading claims about the performance of products being offered. Thirteen percent of the seminars were completely fraudulent.

How to protect yourself:

Look at your alternatives before investing. Talk with trusted advisors or family members. Just because a sales agent did you a small favor, such as providing a meal does not mean you have any obligation to invest. Evaluate any investment offered on its merits, not on whether you received a favor from the seller. Ask what firm the presenter represents and what products he or she sells. Remember there are no free lunches.

Telemarketing Fraud Hundreds of "boiler rooms" or high-pressure telephone sales operations peddle illegal or fraudulent investment products nationwide. These individuals will gladly accept the life savings of elderly persons who will never be able to recoup their loss. Many victims must return to the work force instead of enjoying the comfortable retirement they deserve, and the stress of their losses can have a deep impact on their emotional and physical well-being.

How to protect yourself:

Don't let your politeness make you a victim:

If you get an unsolicited telephone call offering a product, it's OK to hang up. If you start talking with the caller, it is easy to begin to see the caller as a friend. It's harder to say no to a friend, so it is best not to let the conversation get started. Practice what you will tell callers making unsolicited offers over the telephone: "Thank you, but I don't buy anything over the phone

Current Economic Recession Strategies

Making Money in the Recession - Is it Possible?
The current economic recession that major economies around the world are suffering from has many individuals worrying about their jobs, their savings and their future. The media is not helping one bit as they continue to focus on the problem and not on the solutions. And if you are wondering if there is a solution to the current economic recession the resounding answer is YES. As individuals, we may not have the cure for the global economic woe but each of us can do something that will minimize if not totally negate the impact of the recession in our lives.

People wondering if it is possible to make money during this recession must know that there were people in the past who have been able to turn crises into opportunities. The Great Depression that hit the United States in the 1930s produced some of the wealthiest individuals in American history. If these people were able to do it then with some hard work and determination so can you.

It all starts in your mind and how you view the current situation. If you will be focusing on the negative aspects of the recession: loss of jobs, businesses closing down, etc. then you will most likely miss the opportunities that are all around you regardless of the condition of the economy.

Today, one of the best sources of money-making opportunities is the Internet. There are plenty of ways to make money online. And the best part about opportunities on the Internet is that you don't need a hefty investment to take advantage of them. In fact, you can start making money on the Internet without spending a single cent. Annual Internet spending is over the hundred billion dollar mark already and it is not expected to slow down anytime soon even in the face of the global financial crisis. Imagine having just a small piece of this big wealth pie.

Indeed, it is possible to make money during a recession. In fact, you can even start building your wealth right now. There are plenty of opportunities to make money around you. Don't miss them because you are too busy being depressed about the recession.

Rules for Investing During Volatile Times

When markets are volatile, it's important to stick to some basic investment rules. Here are five tips to help you keep your investments on track.

1. Stick to your guns

Understand what you're trying to achieve and how long you're prepared to invest. The longer your investment timeframe, the more likely you'll experience some form of short-term market volatility - make sure you're comfortable with that prospect.

2. Understand how you feel about investment risk

Your investment strategy should reflect your attitude to investment risk - for example, investing in growth assets like shares can increase your long-term returns, but it's likely you'll experience greater short-term fluctuations than defensive assets like cash. Take a risk profile assessment to understand your tolerance to market volatility.

3. Invest in quality

Volatile markets aren't the place for speculation, unless you're prepared to lose your money on a bet that might or might not come good. Look for quality investments, and get a second opinion from your financial adviser.

4. Don't try to time the market

Investing would be simple if you could always pick the best time to put your money in and take it out. Remember that time in the market, not timing the market, is the key.

5. Get advice from a qualified source

If you're really serious about something - whether it's on a sporting field, in business - you should seek advice. Building and managing your wealth is no different. If you don't have a financial adviser, seek an adviser in your area who can help you with the following:


set your financial goals
devise strategies to reach your goals
choose investments that suit your needs
make informed financial decisions

Monthly Compounding Better Than Annual? Not Always

If you have spent any time thinking over your investment strategy for future, you would be knowing pretty well the power of compounding. And to go with it, the fact that daily compounding is better than monthly which is better than annual and so on. Lesser the compounding period, more the profit for you. If you haven't come accross this by now, let me explain it to you first. After that I will tell you how monthly compounding is not always better than annual.

Let's suppose you have $1000 and put it in a fixed deposit. This FD offers you 12% interst rate per annum. We will calculate now the money you would get after 5 years when compounded monthly: 1000*(1+12/1200)^60 = $1816.70 . When compounded annually, you get 1000*(1+12/100)^5 = $1762.30.

So does that mean you should always go for monthly compounding? No, not at all. Choosing the compounding period depends on the frequency or time interval of investments. Let us take two seperate investment strategies. We would keep the interest rate constant for both of them at 12% per annum. In strategy1, we would invest $100 per month for 12 months and opt for monthly compounding. In strategy2, we would invest $300 per quarter(every 3 months) for one year. That way, our net investment for the year in both cases is $1200. Let us see what returns do we get in each:

Strategy1 gives return of $1281.

Strategy2 gives return of $1292.74 !

Weigh your options carefully before investing that money.

Successfully Trading Silver Futures

Trading silver futures can be a very lucrative practice if you prepare yourself, do the proper research, and keep your emotions out of it.
Silver moves in very similar ways to gold, but is different in the sense that there is much more of it available, and there is also more demand for it in the industrial markets.

When economic times get tough, silver will be considered an inflation hedge just like gold is; although gold is usually thought of as a stronger hedge against inflation than silver.

Silver is used in a large number of industrial applications, but primarily, at least in the U.S., it is used in photographic film, accounting for 50 percent of its use in America.

It also has a significant amount of electronic uses, and of course is a major part of the jewellery trade.

Because of the various factors lining up pretty well for silver lately, we have circumstances where it should perform strongly for years to come.

Factors like the recessionary period we're in, which draws investors to protect themselves from inflation, as well as the strong silver demand emerging markets will continue to require for a long period.

Remember that a futures contract is just that - a contract, and when you enter into it you agree to acquire a set amount of silver at an agreed upon price.

So to be successful the overall economic health needs to be taken into account, especially concerning inflation; we must watch the spread between silver and gold, which has historically been important for silver futures; and finally, whether countries, companies and individuals are starting to purchase products that include a significant amount of silver that is part of production.

Success if trading silver futures is dependent amount getting the most accurate information available at the time, and making the best decision based upon that information.

Gold Coin Collecting Trends for 2008-2009

Gold coin collectors everywhere are celebrating the soaring gold prices that have been seen in recent times. Coins and collections that were once valuable are now very valuable. For 2008-2009, gold coin collecting will remain strong.

Proof gold coins are expected to be strong performers through 2009, as are rare date and early gold. With rare date and early gold coins, the better they look, the higher their value. Proof gold coins are rare by definition and those in F.D.C. (fleur de coin) condition are going to have the highest value.

The Saint Gaudens Double Eagle gold coin is still one of the most beautiful, popular and sought after gold coins on the market, and will remain so for a long time. Saint Gaudens proof coins, and those with no motto (without In God We Trust) on them are more rare and therefore more highly valued.

Newly minted 24-kt Jackson’s Liberty First Spouse gold coins, both proof and uncirculated are going to be strong for the coming months. Other gold coins that are remaining high in popularity are the $10 Liberty and the $5 Liberty, the $5 Liberty Half-Eagle (with or without motto), the Commemorative US gold coins – 1988 Olympic (uncirculated) and 1986 Statue of Liberty, British Sovereign gold coin – King Edward 1902-1910, Canadian Maple Leaf, and the Australian Lunar gold coins – 2005 1 oz Gold Rooster and 2004 1-oz. Gold Monkey.

In uncertain financial times, gold is one thing whose value continues to remain strong if not rise. Consider adding any of these coins to your collection. Shop for Gold Coins now!

South African Krugerrand Prices

When estimating South African Krugerrand Prices, you should count both "spot price" and premium or markups over spot.

South African Krugerrand is World's first bullion coin. Minted since 1967,Krugerrand was named after the last president of the old South African Republic, Paul Kruger. The 1 oz Gold Krugerrand coin was also the first gold coin that contains exactly one ounce (33.93 grams) of pure gold. In fact, Krugerrand coins didn’t have monetary value imprinted on them. Krugerrand Prices are based upon the market value of one-ounce pure gold.

Besides the “spot price” indicated above, you have to add premium for Krugerrands when estimating Krugerrand prices. Gold Krugerrands, like Mexican Gold 50 Peso, carry small premiums (5% to 10%) depending on purchase quantity. The smaller premiums are, the more gold you'll get for your money, making Gold Krugerrand an ideal option for small investors.

When gold price fluctuates in the market, the price or value of Krugerrand changes correspondingly. For instance, back in early 2006 when gold prices were around $550 per ounce, you could buy 1 oz Krugerrand for about $550 to $600 each. When gold price jumped to $900 per ounce today, the 1oz Krugerrand price is now close to $950 each. In other words, Krugerrand prices constantly fluctuate as gold prices do in the market place. So you must watch gold prices closely, and decide if it's time to buy, sell or hold krugerrands, anticipating a higher price.

With the world economy in turmoil, you should start looking for a safer and more effective investment to protect your assets beyond stocks and mutual funds. As the most popular gold coin with small premium, gold Krugerrands are often recommended especially towards small investors. The current market trend shows that Krugerrand Prices may continue increasing as the gold prices jumping north of $900, making buying Krugerrand a great investment option to consider.

Krugerrand Bullion Buying Guide

With the gold prices at record highs and the World economy on the downside, more and more smart investors are converting some of their assets to gold in order to hedge against the falling dollar. After all, no other investment has the wealth preserving power as gold does. Buying Gold Bullion especially South African Krugerrand Bullion, is the most practical and popular way of owning gold.

"Bullion" is a form of metal in which its value comes primarily from the worth of the precious metal instead of an imprinted currency value. Gold Bullion coin such as Krugerrand, is priced and sold according to the weight of gold it contains, plus the additional premium it carries. Many countries have or are minting bullion coins.

The Gold Krugerrand was World's first national Bullion. Minted in South Africa back in 1967, Krugerrand Bullion coins were named after the Old South African president Paul Kruger, Krugerrand's obverse side features Paul Kruger, and the reverse depicts South Africa's national symbol, the Springbok antelope. Today, gold Krugerrands come in four different sizes: 1 oz, 1/2 oz, 1/4 oz, and 1/10 oz. 1 oz gold Krugerrand is by far the most popular Krugerrand coin and is widely traded worldwide.

Here is the 1oz Krugerrand gold coin specifications:
Weight: 33.9305 gram
Gold Content: 1 troy oz (31.104 gram)
Fineness:0.917
Diameter: 32.61 mm to 32.77 mm
Thickness: 2.74 mm to 2.84 mm

There are many sources to purchase Krugerrand Bullion today. You can visit local coin shops, or order from mail catalogs. In my opinion, however, the best place to purchase Krugerrands is online. KrugerrandGoldCoins.com offers a wider selection and up-to-the-minute deals comparing to the traditional coin retail shops.

One tip for buying Krugerrand Bullion online is to buy from a reputable seller. You can look up the sellers' feedback scores, or carefully read the comments from previous customers. Ideally, you would want to do business with a seller with a feedback score of 100%. But you have to take everything into consideration. If a seller has a feedback score of less than 100% he still may be a reputable dealer.

Why You Should Buy Krugerrands Now

With the world economy wobbling and rescue package after rescue package not seemingly doing any good, you should start looking for better ways for investment and asset protection beyond stocks and mutual funds. Smart investors have recently turned to gold.

Investing in Gold has long been proven one of the safest and most effective ways to protect personal assets against the inflation and uncertainties. For average Americans, the easiest way to add gold to their investment portfolios and protect their hard-earned money during recessions is to buy gold coins, especially those gold coins with small markups such as South African Krugerrand. Buying Krugerrands is now considered the No.1 choice for small investors to protect their assets.

Here are 5 good reasons why you should buy Krugerrands now!

1) For centuries, gold has been Recession Proof, and this has been proven during countless crisis situations over the past centuries.

2) Buying gold coins is one of the most practical ways to physically own gold. Gold Krugerrand coins are small weighing no more than 1 oz, making them easy to store and transported.

3) Gold Krugerrand coins, especially 1 oz Krugerrand coin, is the ideal coin for you to start. The South African gold Krugerrand coin was the first gold coin that contains exactly one ounce of pure gold, which makes it the best known of modern bullion coins. As a matter of fact, gold Krugerrand coin has always been one of the most available and best-priced coins of its type in the market. There are thousands of gold Krugerrands bought and sold online or at the gold dealers everyday, making Krugerrand one of the most popular Gold Coins among investors.

4) Since gold Krugerrand coins are already well known in the industry and any dealer are readily trade them, Krugerrand coins could be easily converted into cash should the need arise. This allows you to liquidate your asset very quickly when necessary.

5) Gold Krugerrands carry small premium over spot. That means Krugerrand coins cost less per ounce than the standard American Eagle Gold Bullion and thus give you more gold for your money. If you have $5,000 or less to spend, I recommend you put half in US 90% silver coin, and half to buy Krugerrands.

Tips for Buying Cheap 1 oz Gold Krugerrand

With the World economy turmoil, it is no secret that we are living in uncertain times. Seasoned investors have recently been turning to one of the safest investment- gold, and gold coins in particular. Gold is Recession Proof, with its price recently hitting $900 per ounce. Gold coins, especially low-premium gold bullion coins such as 1 oz gold Krugerrand, have become favorites of seasoned gold bullion investors.

1 oz gold Krugerrand is the best known of all the modern gold bullion coins. Made from exactly 1 oz of pure gold, 1 oz Krugerrand gold coin is one of the most available and best-priced coins of its types on the market. In comparison to sovereigns, 1 oz gold Krugerrand coin may not look as nice as other coins for collection purpose. However, It is extremely popular as a solid investment against recession and deflation. What they lack in looks, however, they make up for in high cost effectiveness for small investors who want to buy more gold for the fixed budget.

Considering gold is now trading around $900 per ounce, you may ask how it is possible to buy cheap 1 oz gold Krugerrand coin now. Firstly, you need to do a bit research yourself, checking gold trading prices on daily basis and read some expert analysis of gold market value trending. Decide the timing of purchase is an important factor to get a good deal, since the 1 oz gold Krugerrand coin is valued at the current market value of 1 troy oz. gold. In other words, the coin's value is based upon the market value of one-ounce 22 carat gold it contains

In addition, try to buy 1 oz gold Krugerrand coin online via auction sites such as KrugerrandGoldCoins.com. Forget about local Gold Coin retailers or dealers ----- We now live in the “cyber-society” thanks to the Internet. Online Gold Coin auctioning has become a flourishing and very active market. Online auction sites such as KrugerrandGoldCoins.com tend to offer wider selection of Krugerrand coins and list up-to-the-minute deals constantly, due to the nature of these sites.

Remember to always purchase 1 oz Gold Krugerrand from a reputable seller, by looking at their feedback score. You can also view the comments previous customers have left for the seller. Ideally, you would want to do business with a seller with a feedback score of 100%. But you have to take everything into consideration. If a seller has a feedback score of less than 100% he still may be a reputable dealer.