Financial Planning – Investment Guide For Beginner

Today or rather last night, U.S. Stocks Slide to Worst Inauguration Day Drop in Dow Industrial History.

What an ironic situation when Barack Obama is supposed to represent hope and change. So how will this incident impact us?  

There is a saying in the market “When the U.S. sneezes, the World catches a cold.” Therefore, if past history serves us right, the market will drop for a short term. And if you like Warren Buffett treats Investment like a Business, this will serve a great buying opportunity. Why? Because when will you purchase more stocks (as in supply) for your business? You are right! When the prices are low! Aren’t the prices low now?

Well, most people invest a huge sum of money (sometimes all their savings) when they see an opportunity. This is no longer an investment but gambling. As we don’t inherit a prophetic thinking to predict the market as accurate. We wouldn’t really know where the market bottom will be.  Hence, we should go in on a systematic approach through a Regular Saving Program (RSP) strategy which is a fixed amount across 12 to 24 months period. By doing so, we are taking advantage of the low prices at the same time, reduced the risk of investment.

Lastly, do you know that, looking back at U.S. history… In 1933, there was a 12 percent slide after Franklin D. Roosevelt’s election, gave way to a 75% rally! Past performance is no guarantee of future results but it’s the best indication. What would you do?

Tips For Refinancing the Unseasoned, Recently Listed Investment Property

One of the most commonly asked questions concerning fix and flip real estate investment financing is how to refinance the unseasoned, recently listed investment properties. This is especially true for those investors that have houses on the market that are not moving and which were purchased with hard money.

Real estate investors in those situations want to refinance their houses and place them into regular, conventional financing to reduce their holding costs since interest rates through conventional means are about half of what they are on hard money.

I’ll be honest with you, these are some of the most difficult loans to close. What you’re looking to do is a cash out refinance on a vacant rental property that has been listed on the MLS within the last year. Most lenders out there simply refuse to touch this kind of deal…

Why? Because they don’t want to deal with these loans as they figure the only reason you are trying to refinance is… you want to strip your equity… and the minute you get a buyer, you will pay off the new loan. Lenders hate early pay-offs.

I read somewhere that a lender breaks even on the costs that it takes to set up and fund your loan at the three month mark. So if you pay off a lender in the first 90 days of the loan, the lender loses money. And, lenders absolutely hate to lose money.

The number of lenders out there that will do unseasoned rate and term refinances are considerable, maybe numbering 100-150 lenders. The number of lenders that will do unseasoned rate and term refinances on a recently listed property are few. I think you’ll find that only about 5 will do this type of deal. Not only will you pay for this type of loan in rate but also, about 100% of the time, these deals will have pre-payment penalties.

If you decide to keep the property as a rental, you may feel okay with the pre-payment penalties, but you might also have some explaining to do to others! You will need a letter of explanation for the underwriter stating why you pulled it off the MLS… And to assure them you will not be selling it anytime soon.

It’s nice if you can have your CPA write a letter saying the he/she advised you to pull the property off the market because it will be better for your tax purposes to hold on to it as a long-term rental rather than to flip it and take the capital gains hit.

One other thing to remember is that these loans are tough to do if the property was recently listed and almost impossible to do if the property is vacant. So, make sure you have a tenant in the property. Another tip is to make sure that when the appraiser comes to take a photo of your property and make the appraisal, be sure there’s not a “For Sale” sign in the front yard.

If you have such a sign, the underwriter will see it in the picture and it will be a definite “red flag” to them. It won’t hurt to have the sign removed for a few days, but will be a deal killer to have it there.

Deals like this may be difficult, but they’re not impossible. Find out more about how to finance your real estate investments by going to Financing Your Real Estate Investments [http://www.realtormarketinginfo.com/real-estate-investing/financing-real-estate-investments.html]

Book Summary: Guide to Investing in Gold and Silver – Written by Michael Maloney

This is a great education book about real money. Mike reviews sound money principles that have lasted throughout human history. One thing is consistent and that is Gold and Silver are real money. In today’s world of fiat currencies, Gold and Silver are tools you can use to preserve and protect your wealth. Mike reviews the differences between currencies, real money and fiat money. Fiat currency is basically paper money not backed by anything. We will go into some detail on why this is dangerous and the average investor should at least understand the significance of debased money and bloated fiat currencies. With the 2008 economic meltdown along with Ireland, Greece and other bankrupt countries, we as small investors need to be educated so we can protect ourselves.

Why is this important to me?

This is important because the greatest wealth transfer is happening right now and that transfer is moving away from America and not toward us. This needs to be a priority if you want to protect yourself and your family.

Several things are happening but 90% of the general public does not truly understand it. This is understandable because of the noise between the political bobble heads on CNN and Fox News diverts the real issues. The real issue is this – The Federal Reserve is a private institution that is not regulated and not audited. They control the financial system. These guys are the quintessential king makers running the country in the background. Thomas Jefferson was admittedly against a central bank in the United States. For more information on this subject, you can listen to Ron Paul. He is the congressmen from Texas that is all over this stuff.

The big swings that we have seen from the Internet boom to the housing bust have been a direct result of the Fed. Not many people know this and some will bitch that this is wrong. The Fed has been keeping the interest rates artificially low which spawned the bloated housing market. The relaxed debt to equity and the financial instruments of mass destruction known as CDO’s & MBS’s and other weapons nearly killed the country. Financial education is needed for us little guys to have a chance. Read this book to get your eyes opened. One thing that is not being said in main stream media and is more potent than Terrorism is the following: If the dollar is lost as the world’s reserve currency then our total standard of living will reduce by a minimum of 25%. Right now it is already tough for 85% of American families. Another wealth transfer could put the last nail in the coffin. Get educated.

There is a ton of information in Mike’s book. The history of currency debasement is outlined from every major empire including Persian, Greek, Roman, British and now American. Currency debasement, inflation and taxation are the wealth stealers. If your money is a candle then taxes and inflation are the flames burning at both ends.

1. Ingenuity – I am not a doom and gloom person. I believe in the strength and resolve of the American people. This still does not hinder the fact that we all need to be educated and the only way to change is from the bottom up. There is no way top down government can benefit the country in this light. It is the iron horse ingenuity of the American people that will solve our financial issues.

2. Gold and Silver – Gold has been money for over 5,000 years. Its redheaded step sister Silver has also been known as money. The ratio between the two has been historically 16-1. I have personally seen that spread in the last year go from 80 to 1 down to 30 to 1 and it is back up to about 40 to 1. What this means is that you can by 40 ounces of silver for 1 ounce of gold. Thus silver is $35 per once and Gold is $1,500 per ounce. Now – reality check. Warren Buffett does not invest in Gold. If you have been following any of my book summaries then you know I am a Buffett fan so let’s look at this. Basically Buffett says that if he owned all the Gold in the world then he would have a 67 foot cube of gold (height, width, length for you beginning math majors). He could polish it and kiss it and sleep on top of it. Instead of the gold cube he could have half of the farm land in the U.S. plus 7 Exxon Mobiles plus a trillion dollars in cash. He would rather take the latter as I would. Basically Buffett is arguing that Gold has NO UTILITY. I agree with him. Silver on the hand is different. Buffett has owned silver in the past and still may own some. Silver does have utility because it is used in Cell phones, computers, smart devices and medical gadgets. This is why I love Silver as a means of savings.

3. Cash Flow vs. Capital Gains – We do not want to fall into the great fool theory and invest in Capital Gains. Well in true contradictory fashion, Silver is a capital gains investment. Anyway you need to look at all of you investments in a synergistic approach. This means that we want investments to spit off cash flow but we also want our savings to increase. Robert Kiyosaki states that savers are losers. Translated this means that if you hold onto dollars then you are losing because of inflation and currency debasement. Thus you can hold your savings in Silver.

Now let’s chat about holding “real money” as a wealth life preserver. Note: Get educated, I am not saying go out and invest in silver and gold today. I am saying get educated. I do personally invest in Silver and will continue to do so but it is a very volatile so you need to educate yourself. Also, I am not a financial planner and don’t give advice so please do your own homework. My goal is to simply help you with that homework.

1. Mountain of Debt – This book was written in 2007 BEFORE the subprime crash. Even then the U.S. was buried in a mountain of debt. Since then, the money supply has been TRIPLED by the Fed. Thus that Mountain just became Mount Everest. This happened in the last 3 years and that is why the dollar is at an all-time low in 2011.

2. Unfunded Liabilities – Social Security, Medicare, Medicaid……… These unfunded liabilities along with the mountain of debt just magnify the problem. When you give something to somebody and then try to take it away, all hell breaks loose. Take a look at GM. They had to go into bankruptcy, get a government bailout and renege on all their unfunded liabilities in order to survive. They are now doing pretty well but the little guy lost their pensions and medical care. Get educated my friends. Do not let other people manage your money… The same will happen to the U.S. with the unfunded liabilities. Start planning NOW.

3. Derivatives – We touched on this earlier but in a nutshell here is what happened in the subprime meltdown. Around 100 people sat in rooms and decided to sell MBS (Mortgage backed securities) to investors. The problem was they wrapped up crap and sprayed it with perfume and sold it as triple A rated instruments. The ratings agencies and the leadership of these companies should be prosecuted. What happened was that a 1-2% move in values could wipe out the companies because the Leverage was so deep. These guys were leveraging billions to make tens of millions. There are too many zeros for that to work in the long run. As we know now, it didn’t.

To summarize, what does all this mean? This book and others like it will help you take control of your own destiny. It is recommended that you should hold 10% of your assets outside the financial system. This means that there is no counter party risk. When you put all your money in the bank and there is a run on the bank and it fails, the bank is the counter party. Holding physical gold and silver as real money eliminates the counter party risk.

I hope you have found this short summary useful. The key to any new idea is to work it into your daily routine until it becomes habit. Habits form in as little as 21 days.

One thing you can take away from this book is GET EDUCATED. Please open your eyes and spend a few minutes per day educating yourself. You will be happy you did.

How to Save Beaucoup Money When Investing in Fixer-Upper Houses! 5 Tips on Learning to Make Repairs

Let your knowledge of how to repair investment properties grow like plants in a garden. Follow my tips and you will be prepared to respond to any problem.

Here is how I learn new skills:

Stick to Experts like Glue

Always be there to help when the handyman or contractors do work on the house. Ask questions. Make mental notes of how things work. For example, every time a technician works on my air conditioner, I am right there on the roof with them, I see how they analyze the problems, I asked them what the different components and parts are called, and I ask how to identify other types of A/C problems. Now I know what to look for, and I can do what he did, if the same problem arises.

Take Community College Classes

Community colleges offer a smorgasbord of useful classes for the fixer-upper investor. I have mostly taken classes in electrical wiring, but done some plumbing and woodwork too. The classes are at night to accommodate working persons schedules. No snoozing at the back of class during boring lectures because the classes are focused on hand-on learning.

Start a Library

Take to heart the old saying “A house without a library is like a body without a soul.” I own least 100 books related to real estate buying, selling, repair, taxes, and tenant management, as well as several how-to videos. Every time I am at a book sale, I always cruise the aisle with the real estate books and the aisle with the house repair books.

I have more house repair books than any other kind of book. Before I start a new project, I consult a book to show how the professionals demonstrate how to do it. During a project, when I get stuck, I refer to a book to find the answer to my problem.

Sometimes, when I’m not working on a project, I like to browse though my repair books to get ideas for the future.

Ask Help at Hardware Stores

I have always had better luck getting answers to my questions at smaller hardware stores, like ACE, rather than at the big box stores, like Home Depot. When I was learning to lay carpet, I got some good advise on how to secure the carpet to the floor from a sales person. The people who work there generally seem to have the hands-on experience to offer useful advice.

Internet

This is an area that I often overlook, yet it is potentially the most useful tool to find repair information.

To find out how answers to repair problems, I just type in what it is that I want to do on Google. For example, “I want to change a washer on a kitchen faucet”. Usually several good links pop up that offer solutions to my problem.

When you need help repairing your fixer-upper houses, don’t get frustrated, get prepared!

Tips For Buying Mutual Funds Online

Buy Mutual Funds Online

When it comes to investing, whether it be to save money for retirement or pay for a child’s college education, it’s a good decision to buy mutual funds online. They’re typically safer than purchasing stock, as these funds are actually partially composed of stocks. If a person’s shares in stock were to fail, their entire investment could collapse, whereas with mutual funds, the failure of one portion of a portfolio does not doom the fate of the entire fund. Should you decide to invest, there are a variety of options for you to consider. If you decide you’d rather not buy mutual funds online, you can always go straight to a broker. The following article, however, is about purchasing your funds through the Internet.

Choose A Mutual Funds Company

Your first order of business should be to decide whether to invest in a company, or to put money in an account for trading. An example of a company to invest with is T. Rowe Price; in the case of an account, you can go to Scottrade.com. If you choose T. Rowe Price, you will have access to only their funds, however, this is quite the wide selection. There will be no fees for the funds that you choose, unlike with Scottrade, which does impose a fee, in return for an even wider variety of funds. Once you have decided which company you will buy mutual funds online from, you will need to set up an account. This can be done online, but at some point will need to either wire funds or send in a check to get your investment started. It will also be required that you set up your banking information so that future investments can be made.

Select Your Mutual Fund

Next comes choosing the fund that you will invest in. Before deciding, make sure to carefully go through the fund’s prospectus, or the main goal of the fund. You can read up on the funds through the website of the company you have chosen, or you can browse for general information online. When you buy mutual funds online, finding out about past performance will help you to decide the best place to invest your money. It is ideal to try to be as well-versed in the nature of a fund as possible before you finally make the decision to get behind it. Once you’ve made your decision, all that’s left is to decide on how you will be investing, and finally, purchase your fund. Your options include making a one-time investment, or setting up monthly payments. You will find simple and helpful directions on how to proceed with either option on the website of your choosing.