My Personal Finance Blog

In order to be a successful investor and/or trader, one must define beforehand where how much and when one should invest according to its own age and financial status. Compound interest plays a big role here, so it will be way different (and harder) for a person that is almost retiring to become a millionaire than for a person that is at a young age. The young one, will have to same way less money in order to fulfill his own dreams.

Start young and finish earlier

At an old age, it will be way harder to accumulate all the wealth that you intend it to. It is still possible, but it will take way more work in order to do it so. You will have to have better investments and will have to save more money month after month. I believe the biggest drawback is that if something happen and you end up losing a big chunk of your equity, then you might not have sufficient time to recover. Plus, with that, the emotional stress that you will have to sustain will be greater than one for a young person.

If you are young, you are able to risk more and to try more because you have enough time to recover from a potential loss if that happens. Do not expect to always win. That is the market: sometimes you lose, sometimes you win. Just try to win BIGGER that you lose. You may have noticed that I did not say more, I said bigger. It is like that because, if you take your time, study and fully understand what you are doing, it is possible to lose more times than you win and still come out with a profit. That happens all the time with many investors. You just have to know what you are doing.

Proper research

When investing, a proper research and due diligence will pay big dividends. Most neophytes start out in the market hoping and expecting to duplicate their money in their first year. When that does not happen, they go out crying blaming everyone but themselves for their losses. You have to take your time in the market and study it carefully before acting upon it. Start light, do not try to make a stand where you can’t fall. Start light and as you go along and gain experience, then you slowly starting increasing your trades to have a better chance at the market.

Buying houses for less than $10,000 is now possible! Some find it hard to believe but methods like vendor finance, handyman specials and joint ventures can really help you purchase homes for less. To help you understand what these three methods are, then you should read along:

Vendor Finance. In vendor financing, the seller is responsible for financing just a portion or the entire home. Vendor financing is a great opportunity for both buyers and sellers. Buyers can avail of lower down payment or none at all. Sellers, on the other hand, can sell their homes faster because vendor financing opens up to a wider market. In banks and other lending institutions, a lot of formalities are involved and it’s time-consuming. But with vendor financing, there are lesser formalities and it takes lesser processing time.

Handyman Specials. Handyman specials pertain to homes that entail some repairs and are then sold, resided in or rented out. Some people find handyman special homes as unlikely since they do want to purchase their dream homes and enjoy the amenities. But there are others also who find these homes as great investment opportunities since they can be bought at low prices and can provide a quicker profit for real estate investors. They make repairs and have it sold before the first mortgage payments have to be paid.

Joint Ventures. Joint ventures involve two or more people combining their efforts in order to do conduct a single transaction or a business whereby these partners both shared the profits and losses of the same quantity to their contributions. A popular saying goes, “two heads are better than one”. It goes the same for a partnership like joint venture or in any activity. Joint ventures bring new and different skills. By partnering with others, an individual can avail of additional funds or capital, new technology and others which help a business succeed. Aside from the combination of the partners’ skills, they are also sharing the risks. That is why joint ventures are a good a move especially when the transactions are risky.

These are just a few of the ways to buy houses for less than $10,000. If you don’t have an enough budget, you better keep these methods in mind. They are your stepping stone to acquiring a home and starting a new life with your family!

In this article I am going to teach you an investment strategy that will pay high dividends if you learn to apply it. I learned some of the concepts herein through interaction with one of my personal mentors, John Childers.

What is the ideal investment for your money this year?

Consider an investment that has all five legs of the ideal investment-

1) I – Income – Look for an investment that produces ongoing income.
2) D – Depreciation – Look for an investment that allows you to depreciate losses or perceived losses on your taxes.
3) E – Equity – Look for an investment that allows you to have equity build-up or ownership percentage.
4) A – Appreciation – Look for an investment that goes up in value over time and that allows you to see a return for your time and money.
5) L – Leverage – Look for an investment that allows you to borrow against it to get much higher returns than if you had to come up with all of the money yourself.

What investment can be classified as an ideal investment? Stocks? Vacant land? Tax liens? Fix and Flip Real Estate?

Simply put, there are only two investments that meet this criteria – a business and buy and hold rental real estate.

Create a business that earns you money to purchase buy and hold real estate. This is what people have been doing for centuries to create massive wealth. Don’t get caught up in the hype of every new idea that comes your way. Create a plan and stick with it to your eventual destination – Destination Wealth.

Foreign exchange Trade – concentrated on Perfect Competition

I believe the foreign exchange trade is one market that has been fixated on one idea since it was incepted, and it was something that was done quite without thought when the makers of the forex market started this trading platform about thirty years back. One of the things that I like about this market is that it seems bent to make a platform that has perfect competition, and this is down to several factors. If you are interested in the currency market, you may want to be aware of this as a factor of the market that can be terribly beneficial to you.

One of the things to note is that it is a nil sum game, meaning that wins and losses are across the board on any market trading day. There is no half and half results, it is either you get it or you do not, and when you do, there’s some other person on the opposite side of the market that has lost. It is all about price movements. Good and bad choices are being made on a once a day basis and it is up to you to exploit them.

Another thing to consider is the over the counter nature of the currency market and how this will help you make choices on whether or not it is actually a free market system that you can exploit for your own trading needs. Why would you settle for less clear markets that have the potential to hijack your efforts at any one point. I do not like not knowing about variables. I do not mind variables surprising me, I mean, that’s part and parcel of any market, but I do not like it when i am shocked by market variables that I did not know was there in the first place.

Another thing to consider is the entire idea the market has no physical trading floor, and it moves from one country to another this implies, regional laws and irrational taxes ( based per country or region ). You just have one entity, and one market to handle and that’s all you must know about it. This is why I say that it is focused on perfect competition. Dealing it out is sort of good in every sense of the word, so you need to consider the forex trade as a good place to start your trading career.

Last but not least, you are then in the position of a market that exists in a free finance zone, meaning it is a market based on its own determinants and no other controlling factors. Some might say the existence of central banking organizations and governments in the forex market would make it not so perfect, but nothing is air tight. This is as near as you can most likely get to that reality and when taking a look at the imperfections of the other markets around me, i would rather have forex as a start and as a finish.

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Risk Management is an objective and rational way to identify and assess risks before making a decision that carries with it potentially devastating results. It is a very useful, and very versatile strategy that can be used in many different situations from planning a complex, multi national business venture, to deciding whether or not to use your nine iron from 120 yards out.

The stock market, and other financial markets, are believed by some to be dangerous places where only the lucky or connected can consistently make money. But the truth is, that with simple risk management techniques, you can keep your losses small, while making huge gains. In this article you’ll learn how apply these techniques to unlock the wealth potential of the stock markets.

To begin with, you’ll need a stock or investment you’re thinking of making. This can be a tip from a friend, or something you’ve discovered yourself. The first thing to do is to determine all of the possible risks, and come up with the worse case scenario. In investing, the worst case scenario is that the value of your investment goes to zero, and you lose all your money.

The second thing to do is to determine the likelihood of the worst case actually happening. This can be done by taking a look at the stocks history. Has the price been relatively stable for at least three years? Does the company have consistent sales and earnings growth? Is the stock owned by a significant number of mutual funds? These are good indications of the likelihood that it will suddenly drop to zero.

Next, it’s time to minimize the possibility of the worst case actually happening. You can’t do much to prevent any stock from dropping to zero, but you can certainly protect your investment from dropping to zero along with it. Make a decision to get out, no questions asked, if the stock dips five or ten percent below your purchase price. Stop loss orders were created exactly for this purpose.

Another strategy to protect against risk is to prepare yourself for the worst possible scenario. In case of a stock tanking to zero, this would mean investing less money. For most speculative ventures, it’s common practice to invest only what you can afford to lose. However, with proper use of a stop loss, this isn’t necessary.

By keeping to this simple strategy, you’ll minimize your losses, and watch your money grow consistently over time.