SDB Finance Information

Finance information for you

Posts Tagged financial security

Investing in the Real Estate Market

Dec 31

Posted by admin in Real Estate

Many people market real estate investing as your key to financial security. Is it? Will investing in real estate let you live the dream life? How does real estate investing work over other forms of investment?  First you have to consider that there are different ways to invest in real estate. Here are a few of the basics:

1. Investing in tax liens. Many boroughs and counties sell overdue tax liens to companies at reduced rates. These position the buyer to either collect a large profit on money invested in the lien (when the overdue tax is paid to the buyer) or to obtain the property in foreclosure. Note that in buying a lien, you in essence become a debt collector. Also, you must be willing to go through the foreclosure process to obtain the property should the homeowner not pay.

2. Flipping properties. This involves buying run-down or foreclosed houses significantly under their market value, fixing them up, and reselling them for a profit. The upside is that you do not have tenants or homeowners to evict like you would in owning a rental or tax lien. The downside is that if the real estate market becomes bloated with inventory, you could be holding your house for a long time before selling it.

3. Renting properties. Renting to people the right properties (meaning location, quality, and design of the properties) for an extended period of time can be a good financial investment. If you buy the properties below market value and with the right amount of rental income, the tenants will pay the mortgage for you plus provide some positive cash flow. Once the properties are paid for, most of the rent can go into your pocket (some will have to go towards upkeep), and you can cash out by selling the properties. When renting out your properties, you can either manage the properties yourself or you can hire a property management company.

4. Wholesaling. This involves finding houses that are well below market value and selling them to other real estate investors for a fee. If the contracts are properly structured, you do not have to do anything to the property itself other than be a middle man. Is real estate investing better than other forms of investment? It really depends on your skills and your desire to work for your money. With a mutual fund you have few responsibilities other than selecting and monitoring the fund. Real estate investing generally requires more time and energy on your part, being more like owning a business than simply putting your money into an account each month. Because of that, you will want to start off slowly.

Skills that can be beneficial in real estate investing include good research skills for finding the right properties to buy, self-discipline, networking skills to find others in your area from which you can learn and develop relationships between, debt-management practices and organizational skills.

Tags: , , , , , ,

No Comments

Creating A Trading Plan That Makes Sense

Aug 27

Posted by admin in Finance, Investing

As part two of this three part series, this article assumes you have been using a trading journal over the past few months and are finally ready to dive into the stock market using actual money. If you are already involved in the stock market this article can help you to define your investment strategy.

As an investor you need to ask yourself. Why exactly are you investing? Are you looking for that one lucky pick that sets you for life? Sure it has happened to people before, we may even know someone who made their fortune the easy way.

But for every success story we hear, there are 10 stories about failures that are almost never told. People diving head first into the stock market without thinking through a solid investment plan often end up losing their life savings or even worse everything they have. In most of those cases, a diverse trading plan would have protected those investors.

A trading plan is basically a financial road map that helps you get from point A (current financial position) to point B (your financial goals). No one map is going to work for everyone, each map is going to be different, as different routes must be taken based on a person?s individual financial situation. So the first step to a solid trading plan is to have your financial goals firmly in mind.

A lot of new investors make the mistake of just stabbing around in the dark trying to figure out what they are doing, but having a trading plan lets you know exactly what needs to be done to become financially secure. Once the financial goals are set you have to determine how exactly to get there. For example, for a person fresh out of high school or college, they aren’t necessarily as concerned about retirement or long-term savings.

Younger people can assume a significantly higher amount of risk in their overall portfolio. The balanced portfolio mixes short-term risk with long-term growth. Consider investing a mutual fund that matches the direction want to go, by doing so not only do you invest in broad number of stocks, but you also get the benefit of professional management. Mix this along with funds that carry a very low amount of risk in order to be able to bounce back in the case of any severe market activity.

For those getting into investment a little later in life, a less risk-oriented portfolio should be considered. This allows you to put your money into a relatively “safe” place (keep in mind that even low risk investments can occasionally suffer due to irrational market activity).

By making sound financial decision no matter where you are on your road to financial security, it is important to always have a plan. A strong portfolio is a diverse portfolio. Focusing in only one direction is too risky. Research should be conducted thoroughly first in order to determine what kind of trading plan is right for you. More importantly, seek the help of a qualified professional. Financial consultants can help you determine what kind of realistic goals you can set, and help you to come up with a plan that helps you to meet them.

Tags: , , , , , ,

No Comments

Investment Ideas For the New Era

Jun 11

Posted by admin in Investing

Instead of regretting lost opportunities, spend a little time considering your investment options for the coming decade, and begin your investing wisely in 2010. With a few good investment ideas, you can put your plans for financial security into action.

Investing in large-cap U.S. stocks is one long-term method for building a strong financial portfolio. While the previous year’s economic turmoil caused many investors to sell their large-cap stocks and instead purchase safer bonds. But bonds do not have the same potential return as do stocks.

Choosing the right stocks and investing wisely can produce significant returns. It may take the stock market some time to fully recover from the previous decade’s economic tumultuousness, but the recovery will occur, and investment in large-cap U.S. stocks should be considered for that reason.

Investment in international stocks should also be considered. Many foreign stocks have recovered even more quickly in the market than have their U.S. counterparts. Many of the developed markets in international business have shown significant improvement over the several months. Emerging markets have also shown strong potential as investment options.

Energy stocks, particularly those of oil and natural gas can be quite profitable, with long-term gains to be had. Other energy stocks including those involving green and alternative energies are sound investment ideas as well.

Gold is always a good investment. Due to the weak U.S. Dollar status, gold prices are rising. Gold might be slightly more expensive now to purchase than it has been in the past, but it is also an investment which never loses its value. Unlike many investment options available, gold will never become more of a burden than a benefit.

Mutual funds and capital preservation funds are another sound option for inclusion in a well balanced portfolio. The stock market is improving and its foundations are still strong, but diversification of investment allows you to survive in the event of any future economic difficult which might hit the stock market.

Mutual funds which are designed to preserve their shareholders’ principal investment over time, regardless of the stock market performance. These types of funds are a sure method to insulate your money from potential economic downturns like that from which the market is currently in recovery.

Tags: , , , , , , , ,

No Comments

Making Money Work For You!

Jul 2

Posted by admin in Wealth Building

In the book ?Rich Dad, Poor Dad?, Robert Kiyosaki tells us that the principles of proper money management aren?t taught in the public schools.

I never had any courses like Money 101, or Elementary Investing 207, or Finance and Marriage 315. They aren?t offered in any schools I attended.

Anyone can achieve financial security with the proper effort and self-discipline. There are no magic formulas. Just old-fashioned values of desire and fortitude!

Look around you. Things have changed a lot in the last 50 years. The days of job security and automatic pensions are nearly extinct. If we plan to have a decent retirement experience, it is now pretty much up to ourselves to plan for, save for, and enjoy the benefits for our own labors. After all, ?retirement? is no longer a matter of age, but an income level. It is a matter of financial preparedness.

Obviously, this is an extensive subject with volumes written on the details. I am only going to lay out a road map, a basic plan, to set you on the right path to planning for and implementing strategies for your financial futures. Regardless of where you are today, financially, it is critically important that you review you own situation and start to make the necessary changes, today!

In a nutshell, this is where you need to go in planning your own financial future:

(1) Assume comtrol of your own financial future. It?s your future. No one cares more about your success here than you do. It?s your responsibility, so take it seriously and take the reins to start searching out the best resources to learn what you need to know.

(2) Take your cut off of the top. Always pay yourself something, first. I?m not talking ?spending? money, here. I?m talking money to save for investment purposes, to save for your future. The resource material out there is very consistent on this one. The suggestion is to save at least 10% of your earnings in an investment vehicle with a good performance record. But whatever amount you decide on, make it regular and consistent!

(3) Be consistent over time. Here is a key secret to your success. Albert Einstein once commented that ?compound interest? should be considered the eighth wonder of the world. Through the principle of ?dollar cost averaging?, your consistent investments over time (in spite of the ups and downs of the market), coupled with compound interest, should produce phenomenal results.

(4) Pay down your debt. A simplistic statement, but vitally important. Check into simple interest mortgages with with bi-weekly payments. Remember that the APR (annual percentage rate) is not so important as the actual interest paid! Also, a debt consolidation loan may be a good solution for you. The income freed up as a result could be used to pay down your debt and invest in your future. The main caution, here, is to not allow the temptation of extra cash to drive you into more debt.

(5) Establish the right life insurance plan. Life insurance is not exactly considered a topic of social conversation. And yet how many people do not have any life insurance? Statistics indicate nearly 50%. Of those who do have life insurance, many are underinsured. I won?t discuss the need for life insurance. It should be obvious. I will only recommend that you get adequate coverage using term insurance, leaving you money to invest in your future.

(6) Company participating retirement plans. See if the company you work for offers some form of an IRA participating plan, where they match a percentage of your pay with your own investment. If they do, then take advantage of it. It probably yields the highest dollar for dollar return on your investment. But don?t invest more than they will match.

(7) Be the primary collector of interest. Don?t be giving Uncle Sam an interest-free loan. Check your W-2 at work and only have enough taxes taken out to equal your own tax obligation, as closely as possible. Also, don?t put your own money in any ?savings? accounts that don?t pay at least as much interest as the cost of inflation. Learn the ?Rule of 72?. This was discovered a long time ago by Benjamin Franklin. The Rule of 72 teaches you how many years it will take your money to double. This is done by dividing the number 72 by your interest rate. The resulting number is the number of years it will take your money to double at that interest rate. For example, at 6% it will take 12 years to double your money. At 8% it will take 9 years. At 12% it will take 6 years.

(8) Professional Management makes sense. Most of us are not well versed or experienced in the areas of and opportunities for investment. The many investment funds hire professional money managers who are not paid according to ?trades? that are made, but are paid according to the performance of the portfolio. That is what they do. It only makes sense to invest with those who have a finger on the pulse of the market.

(9) Have faith in yourself. Consult with people whom you trust and formulate a financial plan for your future. Success will be yours as you accomplish your dreams and work your plan!

Perhaps you may be interested in becoming a part of the
financial services industry, personally earning the commissions on these mortgages, personal loans, life insurance and securities. It is estimated that the baby boomers will be rolling over $100 trillion in retirement accounts into other investments. This is an event required by law. Someone will be earning the commissions on this event.

Want to participate?

Here?s to your future!

Bob Curtis has a bachelor\’s degree in Psychology, and has been writing about the elements of relationships for a number of years. He is the manager of the Essential Sunshine Association, a new website for positive relationship development at http://www.essun.blogspot.com

Writen By : Robert Curtis

Tags: , , , , , , ,

No Comments

Will You Outlive Your Money?

Jul 1

Posted by admin in Investing, Wealth Building

The number of retirees is set to double over the next 30 years according to the U.S. Census Bureau. In 2008, the leading edge of the baby boom generation ? those born between 1946 and 1964 ? will turn 62. By the year 2050, over one million Americans are projected to be 100 years of age or older. For the 78 million Americans who make up this generation, retirement may represent the longest stage of their life.

Along with a much longer life, however, comes more complex and more expensive financial challenges. Proper planning and preparation is critical for meeting the challenges and uncertainties that lie ahead as you approach retirement and during your retirement years to protect against the potential risk of outliving your money.

When people retire, they want their retirement funds to last for the rest of their life. How much you need to finance your retirement depends on how well you want to live and the expected length of your retirement life. Do you want to maintain or increase your standard of living? Do you want to start a new business, provide financial help to family members or engage in a new hobby or activity? How much you need to accumulate depends on the lifestyle you envision.

The shift away from defined benefit plans to defined contribution plans is a trend that has revolutionized retirement planning by placing more of the responsibility for saving on the individual. Since fewer retirees in the future can expect to receive a steady stream of income from employer provided defined benefit plans, individuals will have to rely more on their own resources for a much higher percentage of their retirement income. Now more than ever, people are faced with having to make serious decisions about how to manage their company retirement plan, how much to contribute, how to invest their money and what to do with their vested balance after they retire. They need to have a plan based on clear and accurate information to help them make decisions about when to retire, how long they can expect to live in retirement, how much they need to accumulate and how to manage their funds throughout their retirement years.

Many people depend on a fixed income stream during retirement. However, in an inflationary environment, a fixed income stream will not allow one to maintain a constant standard of living. A more appropriate means of providing an income stream throughout the retirement years is to have your income increase annually with inflation. For example, to receive the equivalent of $150,000 in today?s dollars at the beginning of each year increasing at the rate of 3% for thirty-five years, you would need an estimated target portfolio of over $2,620,000 earning an average annual after-tax return of 8%.

Decisions about when to retire, how long you can expect to live in retirement and how much you need to accumulate are complicated by an ever changing set of circumstances. Uncertain knowledge of investment returns, length of life in retirement, and rising expenditures make assumptions about the future less reliable. An extended market decline soon after retirement could jeopardize the sustainability of withdrawals over the life of the retirement period. This is a significant risk in retirement, which can have a tremendous impact on retirement security.

When planning for retirement, the challenge is to assure that you never outlive your money. How you configure your retirement accumulations using the most appropriate asset allocation strategy is one of the most important factors that determines both the risk and return of your portfolio. During the distribution phase, the sustainability of your investment portfolio depends largely on the stability of the withdrawal rate. This is the rate of portfolio liquidation, expressed as a percentage. Meeting financial obligations through an investment-based approach is only one part of the process. If the withdrawal rate increases over the years, more of the portfolio will be liquidated each year increasing the possibility that the portfolio will be depleted much sooner the expected. Combining a diversified allocation strategy with a guaranteed income stream increases the likelihood that the retirement funds will provide an income for life.

If you are committed to the proper management of your retirement funds today, you will be in the best possible position to achieve your goal of financial independence and freedom for tomorrow.

Copyright ? 2006 William E. Griffith, Jr. CFP?

Bill Griffith, Jr., CFP? is the author of Securing a Retirement Income for Life: Strategies for Managing, Protecting and Preserving Your Wealth. He is the principal of W.E. Griffith

Tags: , , , ,

No Comments