A Blog About Financial Freedom

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Few would deny that real estate is a solid investment. It provides an attractive combination of stability, reliable cash flow, preservation of principal and capital appreciation. However, many investment property owners nearing retirement find themselves in a quandary. They are equity rich, but cash poor, with increases in the value of their property far outpacing income growth. They also are often tied down by the day-to-day issues of property management and, particularly in cities like San Francisco, California, shackled to the constraints of rent (and eviction) control. In fact, San Francisco is home to some of the lowest cash return on equity in the state’s real estate marketplace. This is something to consider for long term investing matters.

Many investors know about the concept of diversification and think that by owning different investments, they are diversified.

Diversification of an investment portfolio makes good sense on an intuitive level. It wasn’t until Harry Markowitz published his model of portfolio selection that this concept became a formalized part of sound investment practice. Beyond this basic concept of diversification, the key to Markowitz’s premise is the revelation that the risk of any investment can be reduced and/or performance increased by forming a portfolio of diverse and non-correlated assets. This is an interesting solution to the where best to invest problem. That is, it is important not just to seek a diversity of asset types, but also to seek assets that have low or near-zero correlations to one another. It’s about owning different, non-correlated investments.

Anyone who’s been investing for a while has probably heard of individuals moving their funds to foreign markets to avoid capital gains tax. I always figured it was a fantastic idea. My first step was to talk to my local broker about the idea, of course since he is paid commissions on my account he just attempted to sell me on the idea of keeping my portfolio with him and his brokerage. I was going to have to look elsewhere for the information I needed, so I fired up my favorite search engine and started doing some searches for offshore investment advice.

An investment mortgage is a mortgage that is taken out to purchase property that is not designed to be the family home of the individual whose name is on the deeds. Instead, it is designed to be an investment. This property may be used as a second home or as a buy to let property or even as one of many in a portfolio. Property is a popular area of investment at the moment and with good reason. A man that has property is a man that has a financial future!

Those who would like to learn invest in Forex, this is a more risky market, but still this is diversification!

As exchange traded options were introduced new investment strategies and became available to the majority of investors. As a result, option trading has grown steadily and now the average investor can employ a broad range of investment strategies from conservative investment strategies to high risk investment strategies.

This allows the average Joe to construct an investment strategy that will either increase expected returns while keeping the same risk levels or decrease risk levels while keeping the same expected returns.

Let’s Get Down to Business - Where Best to Invest?

At the other end of the available strategic choices you will find the possibility to invest like a generalist. In this case you should learn also about the different investment instruments, like stocks, bonds, options, how to invest in Forex, etc. But then, the strategy is different. Rather than focusing on one stock or company you are indifferent to companies, sectors, or even currencies. You balance your portfolio with different instruments in the way it best suits your investment profile, especially for the long term investments. You may do this in an autonomous way, or with the help of a financial advisor.

Most real estate investors at one time or other think about a multi unit as a way to increase their rental income. There are big apartment buildings with many units, but most investors start out with a duplex or a triplex. A duplex or a triplex is a single dwelling that has two or three different units under one roof. These properties can come in many different floor plans.

All investors must realize that commercial real estate has different guidelines and regulations which must be followed different from residential real estate. You do not want to purchase investment commercial land to find out that you are not permitted to lease it to a specific type of business. You may also be prohibited from making certain improvements on your property which go against the zoning laws. As an investor, it is important to go to City Hall and educate yourself on the local governmental rules and regulations which will govern what you can do with the land. Make sure you are able to do all that you plan on the property in question.

Taxes are very important to consider when you are conducting a commercial property analysis. Many local municipalities offer tax breaks or incentives for business property owners who fall under a certain business-type or industry. You may also be eligible for a tax reduction, if you meet the applied deadlines. If the region charges taxes on commercial real estate at a high rate, investors could be unpleasantly surprised especially if they do not consider taxes in their commercial analysis.

If we are talking about real estate investment you should know that when it comes to buying investment real estate, there are many schools of thoughts on how to get the most out of your money. Some say lease optioning your houses is the best and safest way to go. For getting the most out of each investment dollar, though, and seeing a quick return, I believe that it is best to find property that you can rehab and resell. Many people have tried this strategy and failed.

Not the Best Answer to Where Best to Invest Question!

Let me tell you why this is. Anyone can make money buying investment real estate, fixing it up and reselling it, as long as he or she understands how to buy and how to sell. This is the key. The people who fail in the rehab strategy of investment real estate fail because they know everything about rehabbing but nothing about buying and selling. And that is why this is not a proof that real estate investment is bad for long term invest purposes.

When you are investing on the stock market it can be a fine line between trading and gambling. If anybody knew exactly what the stock market was going to do they would make millions of dollars everyday but not even Warren Buffet knows EXACTLY which way the market will go every time. So how can we decipher between stock market gamblers and traders? Or do you think there simply isn’t any difference? You should be ready to spot the difference in case you want to make money from stocks or what to understand the invest in Forex matters.

Sometimes it is difficult to know where or with whom you should invest. It can be even more difficult when you begin to investigate online marketing initiatives and companies. The web is largely the wild west of marketing. It has very few rules and even fewer lawmen (or law women if you prefer). If you put your project out there, whether it is a complete website redesign or a natural search optimization campaign, you’re likely to get all kinds of people knocking down your (virtual) door. You might receive bids for $500 and $50,000 on the same project for the same work. So how do you tell the snake oil salesman from the real deal? First thing you can do is eliminate the outliers, the extreme lows and the extreme [spin]highs. It is very important in this area.|highs.[spin]

An investment can be perceived as a saving and an additional income also. Both these factors are necessary. Any form of property, either in cash or kind, which has the potential to grow in value can be an investment. These days various investment products are offered by the financial market and you can make a smart decision by opting for an investments solutions company market. These days’ investment products are available in the form of funds which pool together people’s money and are invested in a mixture of different investment solutions like equities, bonds or even property and cash.

There are many people who are searching for additional ways to make additional income. That is to be expected when it comes to real estate. Real estate has been a popular investment for many years, especially talking about long term invest purposes. Many millionaires made their first million dollars in real estate. No wonder Real Estate Investing is being glamorized by celebrities like Donald Trump and various television shows.

Where Best to Invest - Possible Options

If you think about risks then you should know that there are several avenues to park your funds and not all of them have the same risk-return profile. If you invest in bank or trust deposits, fixed interest rates mean fixed income over a time period. This does not cover for higher outflows on xpenses due to rising inflation. If you are adventurous and invest in stocks, the ebb and flow of the market affects your fortunes. From a millionaire you could go bankrupt overnight, as the market corrections are generally volatile. At the same time the federal rules governing the real estate investment trust allows it to save huge corporate taxes, which in turns much beneficial to you as a partner.

The mandate given to the real estate investment trust stipulates an investment of 75% in real estate related business only. Also it is notable that 75% of the revenue of the trust comes from rentals and mortgage interests. The activities of the real estate investment trusts are of various types. Some of them concentrate purely on rentals on the properties they own and some others purely carry out mortgage loans disbursements. There are some professional real estate investment trusts who do both, so that they can maximize the income.

If the property you are considering purchasing is a rental unit, you will want to make certain the property is in a location that is considered to be desirable. What makes an area desirable? It depends upon the type of property. If it is for commercial use, you will want to make certain the property is located in an area where a certain type of business is more apt to rent. For example, if you have a property that is more suited for retail and it is located five-miles outside of town on a back road, you are less likely to be able to rent the property for its highest and best use. If the property, however, is located on a main street, it makes the property much more desirable.

Meanwhile life insurance is looked at as an expense when in reality it should be looked at as one of the safest investments you can make. We know that we are all going to die at some point and that is the only thing that has to happen for your loved ones to collect on your investment of paying the premiums for your life insurance policy. I would like to make sure you understand that I do not know if life insurance can be looked at as a true investment but I am merely using the word because that is how I personally perceive it. If you would like to know what I am basing my opinion on I will try to explain it.

Those who are interested to try investing into Forex, please pay special attention to the how to invest in Forex publications.

Real estate has become a very stylish method of investment in the last several years. While the housing market was expanding, investors were were making home purchases a lucrative way to grow your financial profile. There are several factors to consider when using real estate as an investment depending on whether you are planning want to do a long term invest or short-term commitment. The two best times for investment property is when you buy a property and when you sell a property. The time in between is where the holding costs add up with time. In my market, investment properties are taking longer and longer to flip. The times on the market are increasing and the eventual contract price that you will get is also decreasing.

So, Where Best to Invest?

If you rent or bought investment property, such as a single family residence, town-home, condo, or residential income property, commonly known as an apartment building, you more than likely have a property management company associated to it. The property manager’s role is to maintain the property so it means that this not only includes regular maintenance, but also includes refurbishing the property when it is needed. And it is up to the property manager to ensure that whatever the problem is can be fixed If there are problems with the property. If the building is old, the property manager will need to determine what to change in order to allow the area to function to its best ability without causing future problems. It is in this time that you must be fully aware of your holding costs and how time will affect your bottom line. A lot of experienced investors ignore holding costs, or not understand all the costs associated with holding property. It usually works out for them because there was usually enough profit to cover these holding costs. Not to mention the fact that properties sold faster. This can be a nice solution for 401 retirement plan.

Real estate business - as any business - must have a good plan and sufficient finances. It is true that arranging an amount all by ourselves is a difficult task. So, there is a source which provides hassle free finance, known as secured business loan. Secured business loan is usually taken for buying business land, premises, purchasing machinery and equipments, consolidating business debts etc. In secured business loan, there is an obligationton place asset as collateral against the loan amount. The amount which gets approved depends on the equity in the collateral placed, that is, more is the equity; more are the chances of getting larger amount being approved. Basically this is hassle free finance on low rates and with flexible terms so that, your business reaches to that heights, where you dream of.

Where Best to Invest

The first real estate area that you may be interested in is commercial properties. Real estate investing that specializes in commercial properties can be either a business that acquires real estate to rent to businesses, or a business that develops properties to sell to businesses. If this is the area that you are most interested in it will be important for you to know the contract and real estate laws of your local area, what the commercial property market is like in your area, as well as know what commercial properties typically sell or rent for in your area. By the way, this is one of the best ways of handling the long term invest purposes.

Also you should pay attention to the world of online stock investing because it has proved to be the fortune maker for thousandsof people. It is a dynamic market where an intelligent and careful investor can make a lot of money. It has been regarded as the best legal way of making money in the shortest time. In spite of all this, the fact that the stock market can be a risky market and it has made many investors back out. For a new stockbroker it is essential to be well versed with the terms and trends of the stock market if he/she wants to succeed with the least of risks involved. It is futile to make brash theories about the stock trading field on your own hunches. This will lead to the loss of money and you might be forced to withdraw from future efforts in this field. Better employ good planning skills with a lot of patience to get the desired results.

If you running a business you should know that efficient allocation of the financial resources of a firm is an imperative necessity for the efficient functioning of a firm. The firm’s investment decisions involve decisions regarding long-term capital assets such as land, buildings, equipment and more. The investment on these assets is considered very important. It, therefore, follows that the future development of a firm could, to a large extent, depend on effective selection of capital investment projects.

There are different types of investments to choose from. For example, 401 retirement plan investments. Or stocks, that are equity investments that give you a share in a corporation. Bonds or fixed income securities pay interest over a fixed period of time. Mutual funds are diverse equity funds that pool money together from many different investors for greater buying power. Futures are obligations to buy or sell a specific commodity at a preset price on a specific day. Options give you rights to buy or sell a specific stock, bond, etc at a preset price during a specified time period.

Step 6 - Trusting Yourself More Than You Trust Others

We all tend to defer to “experts”. Elementary school has taught us that there are Big People who know more than we do, and the consequences of making mistakes are terribly painful, and therefore is is better to do what we are told than to think for ourselves.

This attitude might enable you to have an average life financially, but bear in mind that studies have shown that the average financial life results in a retirement of struggle, poverty and dependence. Is that what you really want?

Financial freedom comes from taking the road less travelled.

“When it comes to every financial decision you will make for the rest of your life, you will choose correctly if you go with the answer that reflects your instinctual response.” Suze Orman

To most of us, this advice just sounds wrong. We don’t think of ourselves as having good financial instincts. Or financial instincts at all, really.

However, the truth is that nobody else can possibly make you financially free.

Your financial freedom is your responsibility, and it can only be planned and brought about by you. There is no “expert” or “insider” who knows better than you what you should do.

We are all equipped with an emotional guidance system. It’s just that we are not taught how to use it. In fact, most of us are taught not to use it at all. And certainly not when it comes to money - money is supposed to be unemotional, isn’t it?

The little-known secret is that our unemotional mind, the logical part of your brain, is a little handicapped. Actually it’s incredibly handicapped. It is like one of the autistic savants who can do complex multiplications of huge numbers in their heads, but can’t manage the simplest of human interactions.

Our logical mind is only capable of considering a very limited number of variables when making a decision.

Fortunately, we have another mind as well. The subconscious mind is capable of noticing and taking into consideration hundreds and hundreds of tiny pieces of information all at once. It makes much better decisions, but it communicates those decisions as feelings, not words.

While the logical brain is looking at the numbers the salesman wrote on the paper, and the graphs of projected returns, the subconscious mind is considering the subtle twitches of tiny muscles in his face which show that he is feeling contempt and impatience. The numbers all look good, but you feel uncomfortable about going ahead with the investment.

At this point, you need to trust your intuition. It can’t draw you diagrams of facial expressions and show you photographs of the fleeting glimpses that gave away the saleman’s selfishness. All it can do is communicate to you, “don’t do it”.

Your logical mind, on the other hand, is great at arguing. It will go over and over the facts and figures, pushing you to do what is “logical”.

Financial freedom results from trusting your intuition. It will lead you to another salesman, who may even be selling the same product, but who genuinely has your best interests at heart. And investing with someone who cares about you will bring you a sense of freedom you could never experience with someone who secretly views you as a meal ticket and nothing more.

The 9 Steps To Financial Freedom are a journey of self-discovery. Read more of Suze Orman’s 9 Steps To Financial Freedom at our website.

Step 3 - Being Honest With Yourself

There are two areas of life in which we persistently delude ourselves - love, and money.

Just as all of us have watched a person bounce from one bad relationship to another, or have the same argument with their partner over and over, we all know people who seem to be struggling financially, no matter how much they earn.

It has been said that the definition of insanity is doing the same thing over and over, and expecting to get a different result. In the case of our personal finances, many of us meet that definition!

As a financial coash, Suze Orman has seen this first-hand.

“Most of us believe, or deceive ourselves into believing, that we need about $1,000 to $1,500 a month less than we actually do need to go on living the exact same way we live right now.” Suze Orman

It is very important to go back through your records and establish exactly how much you have really spent. Guessing won’t get you free!

Suze devotes a sizable chunk of her book to this step.

If you are the type of person who gets to the end of the week and just can’t think where the money has gone, this step will be a challenge.

It is crucial to keep accurate records of where your money goes. Whether you carry a notebook and record what you spend, or you use a debit card for everything so there is a record in your bank account, simply setting yourself up to know accurately what you spend each week or each month can be a emotional challenge.

You may find you have a lot of really good reasons why it is not practical for you to record each and every transaction as it happens. You might discover that you have a strong aversion to paperwork, or to reporting on your actions. You may be uncomfortable about putting such personal and private information on paper.

Each of these reactions should be a “red flag” that sends you back to practice the skills you have learned in Step 1 and Step 2.

The first two of Suze Orman’s 9 Steps to Financial Freedom involve identifying and freeing yourself from the limiting emotional baggage of your past. When you start trying to do Step 3 may be the first time you truly comprehend how much work is involved in doing the first two steps properly!

Read more of Suze Orman’s 9 Steps To Financial Freedom at our website.