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The Essentials of Investing

What is investing as opposed to saving?

There’s a broad line that sets apart savings from investing.  When you set aside funds for the near-term, it’s called saving but allotting funds for the long-term, it’s investing.

In short, saving is just postponing a purchase or acquisition.

money-1604921_640Short-term time deposits, savings account, money market placements are good channels to put in money that you want to access immediately when needed.  Buying a family car, vacation packages, or paying for household emergencies are short-term needs usually funded from these accounts. The return is minimal but you’re assured of getting the principal once needed.

Goals that are long-term in nature such as setting aside funds for college education and retirement require purchasing assets proven to yield a higher return on investments (ROI).

While stocks and bonds are examples of such assets which you can purchase and hold for longer periods, financial planners advise diversification of investments.

Now that you got a glimpse of what investment is, it’s time to understand why it’s so important.  Below are four top reasons:

Reduces uncertainty

A financially secure individual has fewer uncertainties when it comes to financial stability.  You have cash reserves and are empowered to make investment decisions.

Helps achieve long-term goals

Future plans like buying a new home, sending kids to college, and building a retirement fund are future goals you want to accomplish.  To do this, you need to put your money in the right forms of investment.  The appropriate type will depend on your goals and your timetable.

Builds wealth

There are many investment options available in the market that will help you grow your money.  Bonds, stocks, and mutual funds are some of these options that could help build wealth within longer time frames of around seven years and beyond.

Shields you from inflation

Inflation devalues your money and so with your savings. Prices of goods and services keep on increasing every year.  Investing shields you from decline or loss of capital whenever prices soar.  A good way to fight inflation is to invest in assets that assure an ROI that’s higher than current inflation rates.  Equity investments are one such investment type that yields higher-than-inflation-rate ROI.

Whatever long-term goals you have set for yourself, remember that investing will always be an essential tool for achieving success.

 

Reaping the Benefits of Investing in Real Estate

Real estate is one of the preferred investments for it offers a lot of benefits.  Investors are assured of a steady ROI and acts as a hedge against inflation. It is one of the most flexible investments with satisfactory returns for those who know how to manage them well.

What follows are three benefits of investing in this type of asset.

Provides a steady stream of cash flows

If there’s one top advantage real estate investing has, it’s the stream of income that follows after purchasing real property and renting it out.  Owning a property and having it leased to a good tenant is one of the best ways to derive income.  Just be sure that the lease payments you’re getting would be more than enough to cover property taxes, insurance, repairs, mortgage, and related expenses.  The net amount you get after deductions is your monthly income.

Whenever your leased property produces satisfactory yield, you can use the same money to purchase another income generating property.  If managed wisely, a portfolio of leased properties can pay for themselves.

Space requirements whether for residential or office is growing constantly.  This alone makes purchasing real property a very solid and sound investment.

 

Can be purchased thru financing

painting-1770211_640A lot of banks and financial institutions offer mortgage loans payable over long periods of time – some may offer 30-year loans.  Of course, you have to pay the interest.  But when you consistently pay your monthly loan amortization, you get closer to paying your property in full.  Every month, your principal loan is reduced.  At the end of the loan term, you will have fully paid it.

In essence, you have actually purchased and eventually owned a property using other people’s money.  This won’t happen with other investments.

A useful piece of advice though is to ensure you maintain good credit standing.  A poor credit history can affect your chances of getting a loan.  You should be able to present a good credit image so pay all forms of debts on time.  If you do this, you’ll get instant access to a mortgage loan and invest in a property in no time.

Property prices appreciate

Properties in prime areas tend to appreciate fast.  Purchasing ones that are located in sought-after communities is a wise investment.  While we all know that prices of real estate could also go down, over the long term, it will still increase in value.  When property prices decline due to a slack in the economy or oversupply,  prices will always make a rebound.

It is a hard asset, therefore it protects owners from economic conditions like high inflation.  It becomes a hedge during hard times.

Investing in real estate is a top investment vehicle that will leave you reaping a lot of benefits.  It allows you to accumulate income without necessarily coughing out a lot of your own savings.

If managed wisely, you reap the benefits of investing in real property for life.

 

General Tips For Buying Gold Bars

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Gold bars are as fantastic investment that you must make today to ensure you are saving as much money as possible for your future. You are saving cash that may be used for other things in the future, and you are buying into a market that is quite healthy. Ensure that you have an understanding of the market, and you will begin to see a change in the value of your accounts.

#1: Why Gold?

Gold is the most stable investment in the world, and it has been for some time. It is an investment that will change your life, and it will help you have confidence in the money you have spent on investing. There are many things that you must do to keep your money safe, and simply turning to buy gold is the smartest of them all.

#2: Where To Buy Gold Bars

You may buy gold bars from a number of registered dealers, and they will offer you current market prices on the bars that allow for the longest rise in price. You must buy from someone who is certified to sell gold, and you will find that they are registered by international agencies to do such work. Anyone who does not quite understand the gold market may not sell to you in good faith, and you will be in danger of losing your money in the process.

#3: How Many Gold Bars Should You Buy?

You may keep adding gold bars to your collection of investments for as long as you like, and each gold bar you have chosen will be quite helpful for you. You may not realize how many you have collected, but a lifetime of doing so will ensure that you have been given all the tools required to retire well. You may sell the gold for profit, or you may leave them to your children.

#4: Will Gold Always Rise In Price?

Gold will continue to rise in price for many years to come, and it will go up over and over because it has been known to be the most-stable investment. Someone who is investing already knows that they will earn the most money from a gold investment, and it is often the safety that people use when they are looking for a better way to earn money. They will turn to gold when they need assurances, and they will receive them in the rising price of gold.

Gold bars are a lovely investment that you may make today without selling them for many years to come. You will have money to spend when you sell the bars in the future, and you will find it quite simple to invest for long term goals that you may not have had in the past. Each gold bar is quite expensive, and it will continue to rise in value until you are ready to sell it off to the highest bidder.

How To Choose The Best Bank For Your Business Needs

One of the important decisions every businessperson must make is choosing the right bank to meet their needs. You need different things from a bank that handles your business needs than one that handles your personal needs. Therefore you should be prepared to do some research to find out the services they offer, their fee structure, the banking benefits they provide and the opportunities the bank provides for you to get to know and trust the staff and develop a relationship with them. The following are a few other things you will need to know about the bank that will handle your business.

Know What You Need From Your Bank

Do you need a bank through which you can get a business loan, get a line of credit or provide you with investment advice? Take a close look at the services banks in your area offer. Do they offer automatic bill payment and credit-card processing? If these and other specific things are important to your business, let them be among the first things you ask the banks with which that you are considering doing business. Before you commit, see how long it takes you to get a knowledgeable representative to respond to your questions and concerns. Let this help to inform the choice you make.

  1. Compare Banks Of Different Sizes

Some large national banks offer great interest rates and a large variety of services. Smaller regional or local banks may give businesses more personalized attention and be more committed to helping them grow. For some businesses the smaller local bank may be better suited to their needs. However, a large national bank may be able to provide the services your business needs to deal with customers all over the country. You must decide will group of elements is more important to your growing business.

  1. Investigate The Fee Structures

The way fees are structured can vary widely depending on the bank. When you are choosing a bank, be sure to ask about their fees. This should include fees for using the ATM, check writing fees and any other fees that may affect your business transactions. Some banks even charge a fee to get your monthly account statement. Even ask about fee for bank services like credit-card processing and wire transfers that you may need later.

  1. Find Out About The Bank’s Reputation

How a bank has treated other businesses in the past will give you an idea about how you will be treated. Your local professional network can share information about how various banks are known for treating businesspeople. They will let you now which ones have a reputation for providing businesses with quality customer service.

All these things can impact your ability to do business and affect your ability to establish a beneficial relationship with your bank.

Forex Trader Pro-User Approved

First-string trading platform is FOREXTrader Pro by Forex.com, is a completely custom-built trading platform accessible through the web, download and all real mobile working systems.

FOREXTrader Pro deals with controlled financial products and the risk is great. Buyers should consider all the outcomes. This type of investment is not for just anybody. It is imperative to get an fundamental understanding of the foreign exchange market. Forex Trade Pro strives to enhance the trading experience and make trading more profitable. Trading tools minimize the risk. A trading platform is one of the most important features a fx broker offers as this is the conduit between yourself and that broker. The best forex broker platform for you will be based on their charting options, quote, interface and ability to execute orders quickly and accurately.

Notwithstanding this Forex.com restrictive platform, traders can select to choose to exchange using MetaTrader4 which offers more than 77 Forex and CFD markets. Traders can exploit other incorporated features including streaming news, extensive specialized research from Trading Central and in-house analysts as well as example acknowledgment software from Autochartist, an autonomous research supplier.

The MetaTrader 4 platform supports several request types including market orders, constrained orders, One Cancels Other (OCO’s), trailing stops, and stop orders. Given the decision of settling on the ForexTrader vs MetaTrader4 decision, it should be noticed that the last is used fundamentally for Forex and CFD trades. Despite its age, Metatrader 4 seemingly the highest quality level of Forex exchanging platforms, with numerous successful traders asserting it has never been bettered for straightforward retail exchanging use, albeit significant criticisms remain in regards to its capacity to back test strategies, as well as specific issues which can postpone execution speed as orders are crossed over through to specialist back offices. Autochartist is also accessible for use on FX Trader PRO and is an extremely useful program for all Forex.com platforms. Autochartist naturally detects rising graph patterns and exchange ideas in the Forex, record and commodity markets by continuously scanning markets amid exchanging hours. With regards to exchange execution, the instant Execution Mode is designed for use in combination with the a single tick managing highlight. At the point when Instant Execution mode is empowered, market orders might be executed at the requested rate or inside a user-specified deviation. Traders can characterize their own value resilience and get 5 digit evaluating. FOREXTrader PRO provides refreshed Reuters news and offers extensive research and analysis. Margins are accessible up to 200:1 on CFDs and up to 400:1 on FX. A record summary bar in the lower left corner of the exchanging platform window displays Required Margin and Available Margin, refreshed progressively. Accessible Margin represents the distinction between the Tradable Balance and the Margin Utilized.

Users enjoy the Forex Trader Pro platform. They love dealing with a large broker on an easily manipulated platform. Forex Trader Pro fits most budgets and investors really appreciate it’s integration into real time reviews, market updates, social trading and education.

Understanding Settlement Risk

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As the name shows, a settlement risk is when one of the parties involved in a financial settlement, fails to abide by the contract terms at the time of the signing of the settlement. It is, in essence, the risk of default of payment when the settlement is done. The problem with this is that it can jeopardize the principle. As such, there are many financial services solutions that specialize in risk settlement.

There is also a timing issue in all of this. A prime example would be foreign exchange or forex trading, where timing is highly crucial. Another name for settlement risk is “Herstatt risk” which is a term coined after the failure of a German bank named Herstatt. In this situation, some banks had given Herstatt Deutschmarks in return for Dollars that was supposed to be given to a bank in New York. However, Herstatt closed down permanently before the funds were transferred to New York. This was due to the fact of time differences between the two countries. After that, the name stuck and the words “Herstatt Risk” has become synonymous with settlement risk.

What is a Settlement Period?

As mentioned, the settlement period is crucial in any transaction that faces settlement risk. Settlement period is defined as the time between the date of settlement and the date of a transaction. This time frame is put there to give the necessary parties enough time to fulfill their obligations. Both parties, in this case, are facing a risk. This is because the one who is buying needs to make the payment during the allotted time and the one who is selling, must make goods and services available during this time as well. There are allotted times that must be complied with for each type of transaction. For example, CD’s or Certificate of Deposits, transactions should happen on the same day itself. Forex transactions are given two days and so on. The key here is to have no doubts regarding the settlement period, and everything should go well.

Snail Mail and the Internet

Most of the rules regarding settlement period were written in a time before the internet existed. Therefore, the rules kept in mind the time it takes for the postal system to deliver the mail. This is why a generous amount of time was given for the settlement period. Nowadays, transactions can happen in a matter of seconds because of the internet. However, the rules regarding settlement period have not changed. Does this all mean that there are is no governmental organization looking over matters? The simple answer is no. The DTCC or the Depository Trust and Clearing Corporation has set up what is known as the NSCC (National Securities Clearing Corporation) which is a subsidiary to help protect everyone involved from settlement risk. The NSCC will keep everyone posted on the details of the transaction by confirming the settlement process. There have been various proposals of shortening settlement periods, but as of now, these have not gone into effect. However, it is never a bad idea to check with the broker, banker etc. just to be sure.

How to quickly sell your house

If you are in need to immediately sell your home you are likely facing a significant challenge. There are many things that you will need to quickly address to do so such as both finding a buyer, finding a new home to buy or rent and relocate to, and the coordination of any number of things. Here are some ways that you can quickly sell your home.

Use a Professional Real Estate Agency

Many people, in the internet era, are trying to cut out real estate agents and handle the sale of their home on their own. While this is a very real possibility that the internet has made possible and easy to do, a real estate agent will help you to sell your home much quicker than you would be able to on your own. A real estate agent can quickly and easily provide you insight into recent home listings on the market, how long they were on the market before they ended up selling to a buyer, and the ultimate price that they sold for, so that you can price your home accordingly. Further, while you may need to go to work and handle other aspects of your life, a real estate agent can show your home as much as there is interest in it and conduct many different open house events so that it can sell more quickly. Further, a real estate agent can drop hints to other agents or buyers that you are looking to quickly move on a fast house sale and thereby generate more interest to flexibly price your home.

Price Your Home Reasonably

If you are looking to move your home quickly you may need to be more flexible with your home price and sell the home for slightly less than what you may be able to get if you hold onto your home and wait for a better offer. While this may be unfortunate and you may be selling it for cheaper than you can get, if time is the essence a discounted house price will move quicker and more efficiently than a higher end home. If the buyer needs a mortgage, as most buyers do, then a bank is more likely to approve a home mortgage on a home’s value that they assess at a price that is higher than what the sale price is for. Further, buyers will be more willing to quickly move on a home that they see as a value price to avoid being undercut by the competition.

Have Your Paperwork and Issues Sorted Out

If you are aware of issues with your home such as not having proper paperwork for certain home renovations or extensions, then be sure to proactively take care of these issues before you try to sell your home as not doing so can lead to problems. If you have no mortgage, make sure to get the title and lien organized, as well as other inspection documents and paperwork as these will help to avoid the delays that happen in many home sales.

Why Surety Bonds Are Great For Construction

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The construction business is very high risk. Many new contractors won’t even be in business in a few years. Contractors are often too aggressive and try to expand too fast, not having the proper personnel, not having the capital to sustain themselves and not having done proper research about new markets. For these reasons and many others, owners are at great risk which exponentially increases depending on the job. Bad business practices and false claims from owners are also common, so the contractor also needs protection. The solution is the surety bond, a three-way agreement protecting all parties involved.

Everyone needs Protection

Imagine you have a new restaurant location set to open one year from now. You have your own financial obligations and deadlines to meet. And suddenly the progress on the project comes to a halt, you find out that the contractor you hired has gone bankrupt six months into the project. They seemed reputable, they seemed experienced, they may have even come recommended. The reality is construction companies come and go, even the large ones with a twenty-year history. This occurrence is not just unique to private enterprise, in 1984 Congress passed the Heard Act which protects federal projects from default.

How does it work?

The surety company will conduct a rigorous investigation on the contractor. If the surety company finds the contractor worthy than the obligee will be able to shift the risk of the contractor defaulting on the project. Here are some examples of what the surety company will investigate.

  • Does the contractor have an established relationship with a bank? Is there a line of credit?
  • Does the contractor own the necessary equipment and tools to perform the job? Do they have means to obtain the equipment?
  • What is their credit history?
  • Do they have strong references?

This bond may sound like it’s one-sided only protecting the owner but there is a long history of abuse from the obligee. And thus because of disputes that often arise between the two parties, if the owner formally declares the contractor in default another investigation is performed by the surety company. The terms may vary but if the contractor is in fact found in default, the owner can take different actions such as replacing the contractor or providing assistance in the form of subcontractors and so on. The most important part of this agreement is that in the event of a definitive default by the contractor. The surety company will fulfill the contract. Here is a number to chew on for confidence. According to The Surety and Fidelity Association of America, Since 1995 surety companies have paid an estimated $10 billion due to contractor default. Successfully protecting owners from potential financial loss and other problems which could arise in the event a contractor does not complete the work as per the agreement. Whether you be the owner, contractor or sub-contractor it seems hard to make a case against a surety bond providing investigation, support, and financial security.

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