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How True Professionals and Private Bankers Can Help You (Post RV)

3/18/2015

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REPOST FROM 2012

"How True Professionals and Private Bankers Can Help You (Post RV)"
    - by Mr. Anonymous

Lately as we seem to draw very near to the reality of  pushing that "RV Button" there has been a lot of talk about Private Bankers, Bank Packages and following "gurus" to other so-called "investment" resources.



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Bank Packages Warning~~Mr Bentley

7/3/2012

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Thanks to several of you who forwarded this to us.....We thought is was good enough to post as an additional warning

PLEASE READ.......

I have replaced our normal chat comments today with this post – an excellent read and thanks Mr. Bentley!!

I left this warning in the Blog one more day – IT’S THAT IMPORTANT!! Be very careful about who you allow to have your personal information. It will be out in open (soon) as to who are the main actors at the core of these “bank package schemes” are – it’s not the Guru’s you know and love – it’s possible they are being DUPED as well (best case). You will be furious when the truth comes out.

I have been hearing about, “Bank Deals” for months and months.  Every “deal” I’ve checked out, was a hoax.  I know bankers and bank procedures pretty well.  I have 9 bank accounts with 4 different banks.  I have been in business for myself most of my life and currently  own two businesses.  The bank Presidents I speak to say, “we won’t know anything in the local banks, until the final button is pushed”.  Even the Regional Banks do not know for sure because this thing has changed so many times.  They are sick and tired of the questions and have quit giving out any information.   

A few “whales” have negotiated some fringe benefits or side deals based on the movement of additional large Commercial Loans or other hefty deposits,  financing projects, etc.  in conjunction with their exchange, but he’s going to get the same “exchange rate” as any other client at that bank.  What do you think would happen if one “minnow” like you or me, ratted a bank out for giving a “whale” a better International Currency Exchange Rate than us common folk?

I just happened to be in Tampa at the time all the Wells Fargo “Yuppies” were there getting training on the Da La Rue machines and “currency exchange” procedures” so I know for a fact, they were there.  They didn’t send all those people there for milk, some fig newtons and a fire-side pep rally on housing foreclosures….but nothing came about.  Why? because they are on the same merry-go-round we are on.  Its the “Pump-go-round” at  the “Misconception Circus”.  They thought is was about to happen and perhaps it really was set to happen.  Just like the other 50 times it should have happened this year….and didn’t).

I was asked the other day, “are you keeping up with all the bank deals?”  I said, “I sure am”!  ” I want to make certain I don’t go to any of them!”    I think the latest deal out there reads something like….”call us, give us your info so you will be the first to cash in at a rate no one else will get”.  That’s B.S.!  (B.S. is a Baptist term for…”Better Sleep-on-it”) .

Take a time out and ask your common sense to sit with you for a moment and just talk.  (You know, like you used to before he left about a year ago for parts unknown).  Give someone your name, address, and other vital information probably including how much Dinar you have….and they will put you on their list.  Really?  What list?  the “priority list of scam targets”?  You might as well send them your Dinar to hold for you while you are out getting that bullseye tattooed on your forehead!

I’m not saying that everyone offering a “Bank Deal” is crooked. Or that there may not be some type of legitimate, “deal” of some sort for a group.  But I DO NOT BELIEVE that banks have the luxury of offering the next person in line a different exchange rate that the man with the suitcase in front of him.  There may be fringe benefits based on the length of time the deposits must remain in the bank, etc.  But, I believe the actual “exchange rate” must be the same.

We have been told that here are some pretty heavy hitters that have already been “taken” and some who were very close to being taken in scams represented as a, “bank deal”.  Some are still shaking from the experience.  
Lets just check the list of things that would have to happen….

* First, you need to find someone you know and trust personally, who’s integrity is beyond question, and that you would be willing to trust with your entire estate.  (there are some out there, but ya gotta look hard).

* Next:  he needs to have an “in” with a banker that you don’t have and cannot get.

* Then: that banker needs to have the same compassionate heart and pure motive that your friend has and is willing to work on something special, just for you.

* Next:  The Banker has to have an “in” in Upper Management who is willing to risk his/her job to leak info the branch grunts on the front line..


* And:  Upper Management has to have an “in” somewhere where information is totally accurate so they can make a deal for the future that they can commit to and live with…by-the-way, where the heck is that place?

* Finally, ask yourself… am I really that lucky?

I don’t want to be a wet blanket but - C’MON people!! You need to start thinking or you are going to be poorer than you were before this thing ever started.

Don’t share any information about yourself, your plans or the amount of Dinar you have.  DO YOUR OWN RESEARCH, make your deal and live with it.  that is not to say, don’t get help from professional’s when the time comes,  Just quit depending on someone else to make your initial deal(s) for you.  You were smart enough to invest in this, be smart enough to protect it.  Then, get tax and investment counsel from the people you can now afford to hire!  Make your own deal.  Tailor it to your specific needs


Unfortunately, the ones who will get hurt the worst on this “exchange” are the same ones that have never researched a thing.  They just read, complain, listen to CC’s and comment on those that do.  And when they get hurt, they will blame the lousy advise and incorrect information they got in the “Chat rooms, blogs and Guru’s”.  

I quit giving out advise on the Dinar a couple years ago when it suddenly dawned on me that I was setting myself up as a “professional Dinar advisor”. BUT JUST FOR YOU GUYS,  I WILL COME OUT OF THAT CLOSET ONE MORE TIME AND GIVE YOU THE BEST ADVISE YOU WILL EVER GET – GUARANTEED!   … Don’t take too much advice!!!
…even mine!


Mr. Bentley
Footnote: Mr. Bentley is a close personal friend with significant banking, currency and overseas contacts. He is “the real McCoy” – unlike some of the other “enigmas” out there.

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Investor Guide to Iraq

2/26/2012

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As promised, these links have been added to the website for all of our listeners that asked for it.......You ask for it....you get it...within reason that is..

Enjoy...MORE TO COME SOON.....Go Shabs....Push that Button
 
Investor Guide to Iraq - Open for Business
 

2012 Investor Guide to Iraq - The New Iraq
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SPLIT IT UP - PROTECT IT ALL!

2/21/2012

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Thanks for more of your common sense wisdom..The IQD Team

SPLIT IT UP - PROTECT IT ALL!
     - by Anonymous

Have you noticed how exciting the news has been lately!!!  I don't know about you, but I personally feel that we are really close to the IQD's RV...  I can't explain it, but it is kinda like that feeling you get sitting with your back to a fire that is going in the fireplace - you feel the heat, but you can't see it!

Well, with all this excitement, it is a bit difficult to keep our heads about us.  We keep hearing that we must prepare, we must make our plans, we should get everything in order BEFORE the RV.  And, I'm sure, you have a few ideas, and that is about all.  I'm pretty much in the same boat as you, I have ideas of things I want to do, but I don't have an "exact" order of progression - I believe that is impossible!

However, I do believe that a reality check may be in order for both of us, just to make sure we are "planting the seeds" of correct thinking.


SPLIT IT UP!

First off, I am hearing of more and more people who are worried about FDIC Insurance or Bank Failure Rates and are asking for advice!

Let me just say this, if I were to give you a list of "good" Banks today, that does not change the fact that tomorrow they may go through an Audit and determined to be insolvent!!! 

I would not spend too much time today worrying about what bank today is a "good" bank - lets worry about that AFTER THE RV and when you are wealthy! 

Here are two useful links from ehow.com on determining a bank's financial health:
   LINK 1:  

http://www.ehow.com/how_5169725_quickly-determine-banks-financial-health.html

   LINK 2:  
http://www.ehow.com/how_6518411_check-financial-health-bank.html

But, really, there are NO GUARANTEES in life

You must know that Life is NOT "Fair"!  Therefore, to best protect yourself and your money, split it up and deposit your money in several banks!

You can start from "day 1" when you go to exchange your IQD after the RV.  Let's use some simple numbers and assumptions for this example.


Lets assume you own 1 Million IQD after the RV, and the rate comes in at exactly $4.00 to 1 IQD.  Congrats, you are now worth $4Million!!!

Now, did you know that when you exchange the IQD, you don't have to do it all in one lump sum? 

In fact many experts will tell you to split it up!

So, lets assume you take just 125,000 IQD ($500,000 USD) to Bank/Broker #1, and then take another 125,000 IQD to Bank/Broker #2 and do this with a total of Eight different Banks / Brokers!  You have split up your deposits, making it very difficult to now lose all your money due to a Bank Failure, or a dishonest Private Banker!

If you have one favorite Currency Dealer, and are planning on using that organization, have them send out 8 separate wire transfers to each of your 8 banks.

Of course for each of the 8 banks you will need to set up your account with them using one of their Private Bankers which is assigned to you from that Bank. 

Do you need to do any of this today?  Heck NO!!!!  In fact, I am going to wait several weeks after the RV to contact banks and Private Bankers!

THINK ABOUT THE "OTHER" BANKS...

Another thing to think about is we are all familiar with the common Four "Big" Banks, but most of us have never had to use Commercial and Business Banks.  Keep your mind open about working with them too!  They are used to working with large depositors! 


You have to remember, the "Big 4 Banks" make their money off the "average, middle class" people who have a monthly average balance of only a few hundred dollars or a few thousand dollars in our accounts (like you and me today!) 

But, Commercial and Business Banks make their money off the "rich and wealthy"!  They are very familiar in dealing with "Million Dollar Clients" who are often Small Businesses that run Millions of dollars monthly through their institution.


CAUTION ABOUT PROFESSIONALS...

You and I will be "new" to this reality of being considered a "Million Dollar Client" by these Banking Professionals, Attorneys and Investment Professionals. 

A few of these people will be jealous of our new wealth!  Yes, some of these people will want to help us, however unfortunately some will try to betray us!  That is reality and that is fact! 

Beware of this now, before you go in to banks or meet with Investment Advisors.  Keep your mind about you, if they start talking all kinds of fancy words that you never heard before, ask them to explain it for you! 

If these Professionals are not patient enough to fully and patiently explain their programs to you, then wright down the words you don't understand, get their brochures, and leave to go do your own research!!!  I would suggest you always make a point of meeting with a few more Professionals to hear their opinions and offers also before you ever make an agreement.

A FEW MORE CAUTIONS TO CONSIDER...

I will not do business with anyone over the telephone that has contacted me first!  You know what I mean, the Telemarketer who calls you out of the blue, is very friendly and sounds extremely intelligent!  He/She may be as honest as the day is long, but I will refuse to hear his/her offer or talk to them! 

Not to be "rude' but there are just too many scam artists who use the telephone to steal money!  If I do have any interest, I will tell them to send me a proposal to my email address.  I will give them a free email address that I use ONLY for this purpose (I call it my "SPAM BOX") it will be a free email account with a free provider like Hotmail, Yahoo or Gmail.

If someone is pressuring you to buy some sort of investment, tell them you need to run it past your attorney first and it will take a minimum of a week before you can come to a decision.  If they insist you still decide "now", leave! 

Trust me, what they are offering to you is not that "urgent", and if they don't want you to take time to think about it, then it is 99% because what they are "selling" to you is a "SCAM"!!!! 

Would you rather wait a week to be sure and better protect yourself from scam artists or jump on some "hot" deal that "fails" and you are now out the money or worse yet, broke!


IN CONCLUSION...

I would recommend that you NEVER tell anybody exactly how much money you really have!  And just to be clear, "anybody" DOES refer to my family as well, especially my family! 

No offense to my family, but only my Spouse will be privileged to know exactly how much money we are worth!!!  I'm not even going to tell my children, they can find out from my Will after I'm dead!  This will be really tough on most of you, it is for me too, but it is vitally important to NOT tell them!!! 


So, knowing my opinion on who to tell, when working with Private Bankers, Attorneys, CPAs and other Investment Professionals, stick to only the amount of money that you have on deposit with them!  Don't tell them about your other investments and don't tell them that you have seven other banks with a Quarter Million each! 


If you tell them.....  Do you know what will happen???
That Private Banker or Investment Professional will lose sleep at night, he/she will have nightmares thinking about how they can convince you to move your money over to their bank! 

When their Supervisor tells them to "up their numbers" for the Month/Quarter/Year - who are they going to call???  YOU!  So, don't tell them you have other money or investments! 

I will say it again!  Don't tell anybody, its none of their darn'd business to know!  This will keep you and your family much safer too.

Trust, but verify!
Keep one sad reality in your mind at all times, nobody is your "friend" when it comes to large sums of money!  The more a professional wants to become your "buddy" and "friend" by giving you gifts, taking you out to dinner or a vacation, that person is trying to set you up to take your money! 

Almost all legal financial and investment Individuals and Institutions in the United States (and most other Modern Countries) are Regulated to a gifting limit of something around $100 USD in value per year!  If that guy just "gave" you a vacation worth $5K or $10K he is breaking the law!  If he is breaking the law, what are his intentions with your money???!!!

The "deal" that is just too good to be "true" is almost always a scam!  The harder they push to rush your decisions, the more likely it is a SCAM, and you should walk away and don't look back! 

FINAL LAST WORD!!!
If you now have (in my post RV example above) $4,000,000.00 in the "bank" you are "RICH"!!!  You don't need a "get quick rich" investment scheme to make you what you already are!!!  If you don't feel good about it, or understand it, then don't do it!!!



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The IQD Team: Helpful Information from Anonymous Pre & Post RV

2/14/2012

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Good morning Dinarian Friends...and Happy Valentines Day.... 

I have a new friend "Anonymous" and listener at The IQD Team who sends me some great info about everything to help us in this journey...I have posted these all on our website - the links are below for each one.  

You might want to check them out - some great helpful information for us all Pre & Post RV:

How to easily and safely protect your Identity

Tips you must know before buying investment real estate

Life Insurance Be Informed

The New Big Responsibility 

Listen to Mom  Don't Put All your eggs in one basket

Protect your principle - Consider this After the RV 

Here are a few I have posted lately as well....Check them all out and all the other helpful information posted recently... 

Changing State Residency
 
The Travelers Checklist 

Traveling Light in a Time of Digital Thievery  

Thanks and Don't Forget Your Valentine Today...   HAPPY VALENTINES DAY ....DEB
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Great Deals on Gold and Silver: James Turk

2/13/2012

0 Comments

 
Thanks Dave for sending this.....

Great Deals on Gold and Silver: James Turk

Source: Karen Roche of The Gold Report   (2/1/12) |

http://www.theaureport.com/pub/na/12455

GoldMoney Founder and Chairman James Turk knows how to find great deals on gold and silver. He claims that the 2012 bottom for gold came during the first week in January. If the year's low is already history and if his projection that gold will hit the $2,000/oz mark within three months is on target, you do the math. "Gold is way too cheap," he tells The Gold Report in this exclusive interview.  

The Gold Report: Given the volatile 2011 market and the fact that gold trades at seasonally lower prices in the summer, James, what led you to say you believe we've already hit the low for the gold price in 2012?

James Turk: We started this year in an unusual position. Normally, we see seasonal strength in the last quarter. We didn't get it. We'd been in a correction since the high in silver back in April 2011. The high in gold came during the summer, which was very unusual, but basically both metals have been moving sideways. Starting from the end of a correction, value is more important than seasonality. Clearly, gold and silver both represent good, undervalued assets at the moment.

The other factor is continuing problems in the financial system. The European banks are still on the brink and many American banks are in a similar situation. Questions about the currency—whether the euro will survive—and the ongoing sovereign debt issue will cause people to look at the precious metals. I've said we saw the low in the gold price the first week of January, and the further into the year we get without going lower, the greater the probability that it was, in fact, the low for the year.

TGR: Considering all the issues you mentioned that existed last summer as well, why didn't that seasonal strength return late in 2011?

JT: An interesting thing about markets is that nothing works all of the time. You just have to respond accordingly in looking at how things are going to unfold. That's why I think the low has been made already.

TGR: You also mentioned in a recent interview that you thought gold could get above $2,000/ounce (oz) in the next three months. With all the monetary issues on the table, not to mention a few new wrinkles, what will make the gold price pop up so much in such a short period of time? What's the catalyst?

JT: I can't tell you what the event will be, but I look at charts and things of that nature to give me an indication as to when something's ready to move. The fact that we've been in a correction for several months is one indication that something will happen. Whether it's a bank failure or a problem with the euro or some European bank, you can't really tell. But whatever is coming, the markets reflect it. It's like following footprints in the sand on the beach, leading a certain way. The charts and the circumstances are telling me to expect a big pop in the gold price this year.

TGR: And would it correct immediately afterward?

JT: Not necessarily, because at some point, the currencies will collapse. When they do, gold won't correct. It will just keep going up.

TGR: So are you projecting currency collapses within the next few months?

JT: No, I'm not, but they will at some point. It could happen in the next several months; it could happen in the next several years. We are in a bubble, not a gold bubble but a fiat currency bubble. The belief that fiat currencies have value will be tested. I think fiat currencies, which are backed by nothing but government promises, will collapse, and gold will return to center stage in global commerce. When it does, expect a straight shot up. It may be three months or three years. Take it month by month and see how it goes. Don't try to trade the gold market. Continue to build your gold and/or silver holdings, and when all is said and done, you'll be very, very happy.

TGR: You've also indicated that you expect the U.S. to get into hyperinflation, citing examples of currencies in the Weimar Republic, Argentina and Zimbabwe. None of those currencies was world reserve currencies as the U.S. dollar is. Would the world allow the U.S. dollar to go into hyperinflation?

JT: The world can't do anything to stop it. President Nixon's Treasury secretary, John Connally, captured it perfectly when he told one of his European counterparts, "The dollar is our currency but your problem." That's still true 40 years later.

The dollar continues to be the world's problem, and the U.S. government isn't doing anything to make the dollar worthy of the esteemed position of being the world's reserve currency. There is no pressure that can be brought to bear on the dollar that would cause the U.S. government to reverse course and go in the right direction.

We are seeing countries around the world accumulating more gold in case the dollar collapses, which is what individuals should be doing as well. Countries around the world are also taking other steps to protect themselves. For instance, they're entering bilateral trade agreements that don't involve U.S. dollars. China has been doing a lot of bilateral trade agreements that completely exclude the dollar. India and Iran, of all places, just recently announced an agreement whereby they're going to use gold for transacting.

TGR: In King World News in October you wowed the world with the Gold Money Index discussion and how it shows that the fair price of gold is really $11,000/oz. You based your calculation on the combined total of central banks' foreign exchange reserves divided by their gold holdings. Why do you use only foreign-exchange reserves in that calculation and not total reserves?  

JT: Because gold is international money, and I'm trying to focus solely on the monetary component. Instead of moving gold around as they did under the classical gold standard, the central banks have been using foreign currencies as a money substitute. If you're using a money substitute, the money itself should be equivalent to gold. The real factor underlying all of this is that gold is way too cheap, and accepting paper currencies instead of gold is the wrong thing to do, which is what the Gold Money Index shows.

So it's basically reestablishing gold's role in the international monetary system and what its value would be based on historical evidence, particularly from the 1960s and 1970s, when the index was working much more clearly. Over the last 20 years, the gap between the fair value of gold and its actual price has become huge.

TGR: Have you gone back to 1900 with that calculation?

JT: It's hard to get all the data, but the logic is basically there. I've gone back prior to 1900, not with the Gold Money Index, but with my Fear Index, looking at domestic money supplies. The Fear Index is at about 3% now, so gold today backs about 3% of the domestic money supply. When Sir Isaac Newton devised the classical gold standard, an average of 40% of the monetary system's value was based on gold and 60% on paper. That we're so far below the guideline he established is an indication to how undervalued gold is relative to all the paper money systems out there.

TGR: You mentioned using foreign-exchange reserves because they mimic the way gold was transferred under the gold standard. But wasn't it part of being on the gold standard that each currency unit reflected a gold component?

JT: Yes. But, the Fear Index and the Gold Money Index distinguish between domestic and international money supplies. That's why I was saying this 40% on the Fear Index is the historical norm.

TGR: Your Gold Money Index is interesting, and the $11,000/oz number grabs a lot of attention, but maybe the real underlying question is whether this ratio is really relevant.

JT: What makes the ratio relevant is that it had relevance up until the last 20 years. The fair price and the actual price have separated so far due to government intervention—attempts to cap the price of gold. Governments intervene in the gold market for the same reason they intervene in any market. When they don't like the outcome, they try to change things around. This index gives people an opportunity to understand how undervalued gold is.

The index is relevant, too, in that it makes it very clear that we're living in a bubble. How can something work for so many years and then all of a sudden not work? It's because we're in a bubble.

TGR: Didn't it work for so many years because we were on a gold standard?

JT: Exactly, but we went off the gold standard in 1971, and even in the 1970s, that ratio worked. It continued to work in the early 1980s. Then it stopped working.

TGR: So it wasn't until they started printing money, and expanding the M1—increasing the money supply—that the imbalance grew.

JT: Yes. The attributes that gave gold value and made it money in the first place did not disappear, but they were ignored or forgotten. Gold was marginalized. Then in recent years, people started to rediscover those attributes and realized that gold is very, very useful.

At some point the price of gold will just keep rising and not stop. That's when the currency collapses. And while we can't predict when it will happen, people have to reach one of two conclusions. Either 1) monetary history is not relevant and the fiat currency system will survive, or 2) monetary history is relevant, this is a bubble, the fiat currency system will collapse and gold is much undervalued.

TGR: There's no doubt about which conclusion you've reached. You've also made it clear that while you can't predict when the fiat currency will collapse or when hyperinflation will kick in, you recognize where the path we're going down leads. Still, as an astute historian of the currencies, could you tell us how long it took from the tipping point to all-out hyperinflation in the countries that experienced it?

JT: Once you hit the tipping point, it's usually six months before the currency is finished. To give you an example, I went to Argentina in 1991 to study what was happening there. Hyperinflation appeared to be brewing. The currency, the austral, was linked to the U.S. dollar at 14:1 in January, and the link was broken. During the first week of May, when I arrived, the austral had already devalued to 64:1 against the dollar. When I left at the end of the week, it was 96:1 and by December, it was 10,000:1. So I was right there at the tipping point.

But here's the interesting thing. Hyperinflation is first recognized outside the country before it's recognized within, because foreigners own another country's currency by choice. If they don't like what's going on, they sell that currency and move into something else. Where we are with the U.S. dollar, so many indications suggest that internationally we've hit the tipping point, but not yet within the U.S., where people are still getting paid in dollars and still spending dollars. Once the domestic tipping point is reached, it's six months before the currency collapses.

TGR: Considering that you're based in London now and presumably have greater insight into what's happening with the euro and in the European Union than most of us, how do you see the situation in Europe vis-à-vis the U.S.?

JT: Last year, the euro was in the doghouse and the dollar was relatively strong. A couple of years ago, the dollar was in the doghouse and the euro was relatively strong. As a famous hedge fund manager in New York said, trying to pick between the currencies today is like trying to choose the best-looking horse in the glue factory. You really can't say that the dollar is a good choice just because the euro is weak this year. It's not. All fiat currencies have serious problems.

The problems differ to a certain extent, and at any moment in time—depending upon what different central banks are doing or how investor sentiment is moving—you could have relative strength in one or the other. But they're all sinking relative to gold, so when deciding how to hold your liquidity, you have to consider gold bullion as one of the best choices simply because it's done so well against all of the world's major currencies for the past decade.

TGR: You've said many times that anyone who gets into precious metals needs to know why. You've suggested it's either exposure to the silver and gold prices—in which case people can opt for instruments such as exchange-traded funds—or elimination of counterparty risk, which means they need tangible assets. Most of the rationale for people getting into precious metals these days is the insurance factor. Does protection against currency devaluation fall into either of those two categories?

JT: It falls into the tangible asset category. If you're holding gold or silver for insurance, you're holding bedrock assets with thousands of years of history. Come what may, they're going to have value in the future.

TGR: The typical advice for people holding gold as insurance is to have 10% of your assets in gold. Maybe now that things are so volatile, 20% would be a better idea. But you're even more aggressive on that.

JT: I am, but everybody has unique circumstances, so it's hard to make sweeping generalizations. My basic view, though, is the older you are the more conservative you should be and, therefore, the more gold you should own. As a rule of thumb, use your age as a guide. If you're 20, you may want 20% of your portfolio in gold and the rest in higher risk assets because you still have time to generate wealth as you get older. But once you're older, you want to be conservative, and the way to be conservative in this environment is to own physical bullion. If you're 60, you should have 60% of your portfolio in gold.

TGR: People look at gold now and see the wonderful returns—17% annually on average, in the U.S. alone. What about an investor who says, "Hey, I'm just going to invest in gold because it will give me a better return than equities"? Is that a bad way to look at it?

JT: No, but understand that gold doesn't create wealth. It doesn't have cash flow, it doesn't have a management team and it doesn't have a price/earnings ratio. It's just a sterile, tangible asset. Gold doesn't even really generate a return. When you talk about returns in gold, you're actually talking about the lost purchasing power of the dollar. An ounce of gold today buys the same amount of crude oil it did 60 years ago. It didn't increase your wealth. It basically just preserved your purchasing power over that period of time.

Even when the gold price rises, even at 17.7%/year on average over the last 11 years against the U.S. dollar, it's not creating wealth. It's taking wealth that already exists and is being held by people who own fiat currencies. That wealth is being moved from them to people who own gold. But gold is not a wealth-generating asset. It doesn't grow anything.

TGR: A lot of vehicles that people put in their portfolios mimic stock indices, which also don't create wealth, but they do create returns.

JT: If they mimic stock indices, they create wealth. Ultimately, if the shares themselves go up, what mimics those shares goes up. If the stock in these indices goes up, the wealth in the world expands because it generates cash flow. A company generates some goods or services that benefit people, and people are willing to use their hard-earned cash to buy those goods or services. Ultimately, the firm grows and, as a consequence, creates wealth.

TGR: Now that we're talking about stocks, what's the role of gold equities? You said that people should use their age when they think about what percentage of their portfolio should be in gold. Let's say someone is 50. Would that 50% be in physical gold, or could it also include gold equities?

JT: Gold equities are different than gold. Gold equities are investments. Gold bullion is money. A portfolio has two components. The investment component focuses on risk versus return. The monetary component provides liquidity. When you sell an investment, you have liquidity, whether gold, a national currency or some mix. You hold that liquidity until you're ready to use some of it to make your next investment or to buy goods or services.

But, mining stocks are fundamentally different than gold. A company you invest in has a balance sheet. It has a management team. Acts of God can destroy a mine. There are political risks and other considerations involved in owning mining stocks. Of course, that's also how you actually create wealth—if you choose the right stock, you get a return. It's also true that these stocks have exposure to the gold price in the sense that if the gold price goes up, the mining stocks probably will go up also. But even then, there's no guarantee that the mining stocks will go up.

And remember, gold mining stocks are investments. Gold is money. Do you want liquidity or do you want an investment?

TGR: For those who want an investment, how do you feel about the gold equities? They do carry the additional risks you outlined but not so much the counterparty risk.

JT: I happen to be bullish on mining stocks because I think their bear market ended a few years ago. We're just now retesting lows that had been made previously, and with the rise in gold and silver I expect this year, I think we'll see the mining stocks go up as well.

In fact, if you choose the right mining stock and the gold price increases, the mining stock should rise by a higher percentage than gold itself. This has to do with the fact that a rising gold price improves the bottom line, increases the profit margin and ultimately results in a higher price/earnings ratio because the market senses that this is a major bull market, and the earnings and cash flow generated will lead the company to possibly increase dividends or something like that down the road.

As I indicated at the start of our conversation, though, an interesting thing about markets is that nothing works all the time. So while generally speaking, mining stocks rise by a higher percentage in a rising gold price environment, it doesn't always work that way. For the last 10 years, gold has done very well, but the mining stocks have basically gone nowhere.

TGR: One of the themes of the Vancouver Resource Investment Conference seemed to be that gold stocks are a really good deal for that very reason, and that they're on sale at bargain prices right now.

JT: I agree completely.

TGR: You're also bullish on silver and apparently expect the silver/gold ratio to return to historic levels.

JT: I am very bullish on silver, but not because of that ratio. The ratio is basically just the outward measure used to show how silver is undervalued relative to gold. The underlying fundamentals suggest to me that the silver price is very cheap relative to how I sense the supply and demand characteristics.

TGR: We have minimal economic growth in Europe and the U.S., if any, and everyone seems to agree that China's growth is slowing. With the world economy in slow motion, and silver being an industrial metal, what makes you so bullish on this commodity? What underlying fundamentals will drive the silver price up?

JT: It's a good substitute for gold. Fifty-one ounces of silver do the same thing as one ounce of gold. Silver is a monetary asset that preserves and protects purchasing power. It's the combination of the monetary and industrial demands that creates so much volatility in silver relative to gold. With gold, you have only the monetary demand. Economists call that demand inelastic, because people want to own gold regardless of the price. With silver, the demand is very elastic, meaning it's very sensitive to changes in price.

TGR: If people want both metals in their portfolio, what kind of balance do you recommend?

JT: Two-thirds gold and one-third silver.

TGR: You've suggested that silver prices are going to rise faster than gold. Should that carry over to silver equities? Do you expect them to outperform gold equities?

JT: Yes, I do. Again, it's difficult to make a sweeping generalization, but the odds are that silver stocks will do better than gold stocks in the foreseeable future.

TGR: You've covered some of the same points here that you made in your presentation at the Vancouver Resource Investment Conference. What would you consider the key takeaways from that presentation?

JT: First of all, I hope people understand more clearly that gold is money, and that they view it from that perspective in order to properly assess whether it makes sense in their portfolios. Secondly, I hope people realize that despite the fact that the gold price has risen, it's important to distinguish between price and value—they're different things. The gold price has risen because the dollar is being debased, but gold remains very undervalued and it's well worth it for you to continue to accumulate it. Work it into your family budget, and every month or two, buy more gold—and silver, if you're so inclined. That leads to the third point. Don't try to trade gold; save it. When you're doing that, you're saving sound money, and that's a good thing.

TGR: When you started GoldMoney, you talked about a vision that at some point people would use GoldMoney units as currency to trade for services—a bit like using PayPal or an online bank but using your digital gold currency (DGC) instead. Do you still see that coming?

JT: Yes, it seems inevitable to me. In fact we've used the DGC payment feature, but recently stopped for a variety of reasons. It had not been used very actively anyway because of Gresham's law—that bad money drives out good. In today's world, people would rather spend fiat currency as a form of payment and save their gold and silver. That's a good thing, for now, but that will change as fiat currency itself becomes less trusted and ultimately collapses.

James Turk, a renowned authority on gold and the precious metals markets, is founder and chairman of GoldMoney®, patented gold-based electronic money—digital gold currency (DGC)—that's transferred over the Internet. In vaults in London, Zurich and Hong Kong, GoldMoney.com stores more than $2 billion worth of precious metals bullion, including platinum and palladium as well as gold and silver, for customers located in more than 100 countries. In August 2009, Turk's Freemarket Gold & Money Report, which began in 1987 as a subscription-based investment newsletter, completed a transformation to become a free, web-based commentary. Accordingly, its name changed to the Free Gold Money Report (FGMR).

Turk is also a director of the GoldMoney Foundation, a nonprofit educational organization dedicated to providing information on the role of gold and silver as money and currency and their importance to society. Co-author of The Collapse of the Dollar, Turk has specialized in international banking, finance and investments since his 1969 graduation from George Washington University with a Bachelor of Arts degree in international economics. He began his business career with The Chase Manhattan Bank (now JPMorgan Chase), which included assignments in Thailand, the Philippines and Hong Kong, followed by several years with a prominent precious metals trader's private investment and trading company, and, based in the United Arab Emirates, several more years managing the Abu Dhabi Investment Authority's Commodity Department.

Information on the Cambridge House conference is available here.

Want to read more exclusive Gold Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Exclusive Interviews page.

DISCLOSURE:
From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles on the site, may have a long or short position in securities mentioned and may make purchases and/or sales of those securities in the open market or otherwise.

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TIPS YOU MUST KNOW BEFORE BUYING INVESTMENT REAL ESTATE

2/13/2012

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Some more helpful Tips from my favorite listener ANONYMOUS...
THANKS from Deb at The IQD Team...


TIPS YOU MUST KNOW BEFORE BUYING INVESTMENT REAL ESTATE
   by Anonymous

Hello again friends, recently I was asked by a fellow Dinarian who knew that I have been in the Real Estate Industry for over 20 years some questions about buying investment properties after the RV.  I figured I would relay some of his questions over to you as well, I hope this helps, but remember your situation is different and please be sure to always consult several other local to your State and area professionals for their assistance.

Q: Should I buy Residential Housing (i.e. Apartment Building) or should I buy Commercial?

A: The answer primarily depends on your preference, both have positives and negatives, here are some things to keep in mind.

    RESIDENTIAL:
       1)  Renters tend to come and go much more frequently, causing higher costs to 'refresh' the unit (clean carpets, paint, repairs, etc.) a typical rental contract is 1 to 2 years.

       2)  Renters tend to be more 'destructive' as they have no sense of ownership.

       3)  Renters tend to be "high-maintenance" needing their toilets repaired at 3:00 am, etc.

       4)  Renters may not be as consistent with making their monthly rent payments.

       5)  You will be responsible for all property taxes and other potential liens (i.e. Trash/Water & Sewer).

       6)  Management services will need to be employed to manage points 1, 2, 3 and 4 - costing you extra.

       7)  Consists of 1 to 4 units (single family residence (sfr), Townhouse/Condo, or 2,3 or 4 unit building (duplex, triplex or 4-Plex).


    COMMERCIAL:

       1)  Desirable Premium Types:  
               a) Major Chain Restaurants (i.e. Applebees, McDonalds, Starbucks)
               b) Consumer Stores (i.e. Grocery, Electronics, CVS, Rite-Aid, etc.)
               c) Professional Business (i.e. Dental, Legal)
               d) Senior Retirement Homes

       2)  Commercial Tenants tend to be much more stable and not move.  
               a) They want to lease long-term (i.e. 5, 10, 20+ years) from you because of the tax deductions
               b) They want to lease because your property's location is more desirable to anything they can currently purchase.

       3)  Tenants typically lease with a "Triple-Net" Lease - in very short "plain English" that means that they pay you a monthly amount and they are responsible to pay all other costs including, maintenance, repairs, and property taxes.

       4)  Tenants mail you a monthly check, many times you would not need a Management Company, saving you money.

       5)  Consists of 5+ units, or undeveloped land, or Farm/Ranch land.


Q:  Should I just pay cash for the property?
A:  If it was up to me, I would use "OPM" (other people's money) and only pay the minimum cash required.  With commercial / investment type properties, many banks will want to see a sizable deposit, such as around 50% deposit cash!


TIP & TRICK:  An old "loophole" - this loophole may have already been "plugged up" with the new lending laws, however it may still be open, so listen to this which was taught to me many years ago by an old Mortgage Pro....  Every year he purchased a few 4-Plex Rental Units.  He would officially "occupy" one of those units as his "Primary Residence" and then rent out the other Three Units.  He did this to get around the classification of Investment Property which required a 50% deposit of cash.  Since he was buying this 4-Plex as his Primary residence he only put down 10% cash.  He had the utilities, cable, phone all in his name for one of the four units.  Then several months later he would "decide to move" to another 4-Plex unit which he was purchasing as his new "Primary Residence".  Last time I heard, he had purchased over 20 of these 4-plex units this way!  Again, the lending laws may have plugged up this loophole, but it is worth checking in to, just be sure to ask the right people, or you may get yourself into trouble.  

Q:  The real estate saleswoman told me that with the rents collected on this one property, I will easily cover my mortgage, expenses and my property taxes - does that sound like a good property to buy?
A:  Be careful of real estate sales people's "fuzzy math"!!!  After looking at her Estimate she left off the most obvious, but most frequently (and conveniently) overlooked aspect of the investment!!!  


This "overlooked" (ooops!) aspect is when they conveniently forget to factor in YOUR "Cost of (YOUR) Money" more importantly the COST of using your CASH Money Deposit!  The 10% to 50% Cash paid to purchase that property!  They never factor that you could take that money and invest it in other safe investments that will often pay 4%, 5% up to 10% (or more) annually.  So, if that is not included, you had better factor that in!!!  It is not enough that the rents cover the Mortgage, Expenses and Taxes, it MUST cover the cost of using your own money which could have been invested somewhere else!  This is an OLD TRICK, so don't let them fool you!!!


TIP & TRICK:  Watch out for the Cost Estimate Sheets that also don't factor in the true costs of Vacancy!  The cost of Vacancy is not just the lost monthly rent income, but it is the cost of keeping electricity on in that vacant unit, the advertising costs, the vandalism costs, and lastly the profits that would have been earned you would have invested those profits on other investments that may be paying you 4%, 5%, 10% or ???%! 

Watch Out Especially if you are purchasing a Residential Income Property (i.e. Apartment Building) - You must account for the vacancy factor!!!  Even if all the units are rented out "today" that does not factor for the reality of "tomorrow". 

Watch out also with Commercial Property and the Vacancy Rates.  The property may be a "dud" even though it is located in a "hot" area, so be sure to look in to that as well.  And, that reminds me, go look at the property and the neighborhood before you commit yourself to buying it!  I'm sure you, like me, have driven by that one "prime building location" for the last 5 years, and it is STILL "empty" - ask yourself, if that location is just so "good" then why is that unit always "empty"???  Probably because it isn't as great as we think!


Q:  The real estate person told me I had to put my offer in today, or else I'll lose my chance to buy it!

A:  Great, then you in most all cases just "lost" the chance of being RIPPED OFF!!!  If you have not yet had a chance to go tour the property and look around the neighborhood then DON'T BUY the property!  The harder a salesperson pushes you, the more reason you need to walk away from that deal AND also that salesperson!  As my dad always told me growing up: "Haste Makes Waste".

IN CONCLUSION....
There will be many more questions to cover in the future, especially after the RV and The IQD Team has said they will host calls after the RV to provide Professional Help and Advice to you, so in the inter-rum, hopefully these few tips and tricks and answers will get your creative juices flowing and help guide you on starting to think about what you will want to buy (or not buy) in terms of real estate.

Thanks to "Anonymous" Again for sharing with us and our listeners





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Advice Opinion from Anonymous: Protect your Principle Consider this after the RV

2/9/2012

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Picture
_Thanks to one of my favorite guy "Anonymous"  who just keeps sending good ideas and things to remember....Thanks you are an angel (one of my favorite things)

THE NEW "BIG" RESPONSIBILITY
  - by Anonymous


Hello again!  This article of contemplation of gifting comes to you now as we near the RV of the IQD Currency.


Lately I have been thinking a lot about gifting some of this new good fortune and blessing away.  Perhaps that has been on your mind more also? 


It occurs to me that on the surface this gifting idea and the idea of "random acts of kindness" can have a much larger and deeper impact than you and I have perhaps thought about before.  Honestly, I've never had too much disposable income to freely give away that would seriously impact other people's lives!  So, I'm a novice at this, maybe you are too?

SO WHAT'S THERE TO WORRY ABOUT?

I'm thinking of people I can easily gift one, two or maybe even more 25K IQD Notes to.  As we know, after the RV these one or two 25K IQD notes will be a very substantial amount of money to this person!  I want to give this money to them, but should I do it anonymously or should I let them know it was me? 

AN ACT OF DESTRUCTION?

Sometimes I really wonder if the action of giving a person some of this money is a destructive act instead of a blessing?  I'm worried that I may be changing this person's "destiny" or "God's will" or call it what you will according to your belief system. 


There are stories of people faced with winning the lottery, and lost it in various ways, and then committed suicide!  Just because they could not handle the stress of the money!  This unfortunately will happen to many of us Dinarians, especially the ones out there that are not fortunate enough to have found a great resource like what is offered here at the IQD Team.

THE SPOUSE MAY HAVE OTHER IDEAS...

There are people of the opposite gender that I want to give money to, some of these people my spouse would approve of, however there are others that my spouse would probably be pretty mad at me for giving them any money, let alone tens of thousands of dollars!  Do you risk your marriage and the love of your spouse just to commit a random act of kindness?  These questions and scenarios need to be carefully thought out now, in advance, while you and I still have time to think!

DANGER - ITS A LOT OF MONEY

Have you noticed how much people on TV Reality Shows are affected by a "small" amount of money?  Ever notice how excited a winner on a TV Game Show gets when they win $5 or $10 thousand dollars or even some bigger prizes of just $50 or $100 thousand dollars?  They are jumpin' up and down and screaming and hollering with excitement!  This is what people will do when we gift them money!  It will make us feel good inside, but it may also put us and our family in to DANGER!

But, that person just got a wad of cash from us, they would never HURT us!!!  Maybe not directly, but they will feel compelled to talk about you and your act of kindness to other people, other people who have not received any money.....  See the potential problem?!  Those other people will want money too!  NOW DO YOU SEE THE PROBLEM?

Furthermore, you must think about the impact that giving a large sum of money to a person will do to them!  If they don't handle the money correctly, they could end up having serious problems, like if they fail to pay their Taxes on the money!  Even though it was their fault not paying the Government Taxes, they will blame you - most people never want to take responsibility for their own actions.  Taxes is just one serious consideration, there are may others to think about too before you just go out and hand someone a large sum of cash!

KILLING THE GOLDEN GOOSE

We must remember the children's story growing up about the Golden Goose and how it laid a golden egg every day.  But, later this was not good enough for the Farmer and he grew more impatient with the goose, and he started thinking crazy thoughts about getting inside of that goose to get all of the eggs at once, instead of waiting for a new egg each day!  You remember this story don't you, he killed his golden goose, found no gold eggs inside and was left with nothing!

Your RV cash out IS YOUR GOLDEN GOOSE - don't "kill" her by trying to get all the eggs at once!  With a large cash amount, that can be invested properly in interest bearing accounts which are higher than the average rate of inflation (aprox 4% annually is the rate of Inflation in the US).

DISCLAIMER:  Before I continue, I'm NOT giving you "investment advice" I am pointing out ideas for you to take with you to a Financial Investment Professional.

Back to our golden goose - your cash is your golden goose!  Using just simple numbers I am going to show you that with an extra $1,000,000.00 USD (after paying taxes etc) is used for "giving away" after the RV!  This is the money you are setting aside to give away to charity, people, etc. 

Instead of splitting this up 10 or 20 ways and giving to only 10 or 20 people, single one-time gifts, think about this:  Setting up your own Charity, fund it with the $1M in cash, have that cash invested in safe Mutual Funds that have a long track record of successfully averaging high returns (i.e. 10%+). 

This new Charity fund of yours (keeping it simple) can now earn an annual $100K / year interest on the $1M invested.  There will be taxes to pay, and a portion should be kept to add to the principle.  But, lets say for a simple example this leaves you with $50K / year to give away as scholarships and to worthy people and your favorite charitable causes!  You could do to this for the rest of your life, not just one time to just 10 or 20 people!  It is something to think about, right?!

IN CONCLUSION....

I may expand on this topic later, or you can even urge the IQD Team Mods to host a Call Pre/Post that will cover this topic along with other related topics.  However, for now, I only wanted to spark the fire, and let it grow within you.  Think about it, think about the long-term affects, not just the short-term gratitude of the situation. 

I will be contemplating this also, trying to figure out if over-riding my huge ego to be recognized as a "great" person is more important to the safety and security of myself and my family!  It just may be better to commit these acts of kindness as "random acts of kindness" and never let that person know who it came from!


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LISTEN TO MOM - DON'T PUT ALL YOUR EGGS IN ONE BASKET!!!

2/3/2012

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_ More Advice sent in by one of my favorite listeners.....Thank You

LISTEN TO MOM - DON'T PUT ALL YOUR EGGS IN ONE BASKET!!!      - by Anonymous

If you had a mom (or dad) that was anything like mine, you probably remember hearing her tell you a thousand times growing up to "not put all your eggs in one basket"! Well, if you are like me, as a child, you mostly let tuned her out and let it go in one ear, and out the other!  Right!!!???   Oh, we can laugh about it today, but this is just a little more serious, and mom's advice is more true today than ever before with the prospects of the Iraqi Dinar revaluing sometime hopefully in the very near future.  So, please listen up my Dinarian Friends!

I bring this up because earlier today a good friend of mine blew my socks off when she told me a story of a personal friend of hers who had actually won $1,000,000.00 from the Lottery! 

Holy Cow I thought, I finally actually know someone who knows someone that has really won the Lottery!!!

Long story short, her friend had trusted just one "Very Professional looking and fast talking" Financial Adviser/Company with investing all of his $1 Million lottery winnings!  Yikes!!!  Sounds foolish right???  Especially after all those years of mom telling us while growing up - "don't put all your eggs in one basket"!

So, how does that apply to us Dinarians? 

First, we can learn from his mistake by trusting just one person/company to handle all of our money!  Today the Big 4 Banks try to train us to keep all of our investing and money with their one company or family of companies.

How many of you have your Checking and Savings, Mortgage and Car Loan all with one Banking Institution?  The banks do this to make more money off of you!  They do this despite it being in your "best" interest!  We have been trained to do this - at our own peril.

Next, let me make a very simple and quick Dinarian example:

Let's assume you're holding a total of 1 Million IQD Dinars.  

And lets assume "today" the Dinar has revalued to the equivalent of $4.00 to 1.00 IQD Dinar!  Wahoo!!!  Party!!!  Celebration!!!

Okay, now that we all have celebrated its time for you to get a little more serious about your thinking!  

You now have $4,000,000.00 in Cash!  What Next???... Think about this, split up the money to several "baskets", maybe something like this:

Basket #1 = $500,000.00  (to pay off bills, the mortgage, car loans, pay for a vacation, etc.)

Basket #2 = $500,000.00  (to buy real estate investments - read my other article  "ADVICE: 'PROTECT YOUR PRINCIPLE" CONSIDER THIS AFTER THE RV" )

Basket #3 = $3,000,000.00 (long term investments such as mixed Mutual Funds issued by ONLY Top 10 Investment Companies)  Lets say you are satisfied with the qualifications of the Top 10 Ranked Investment Companies (i.e. Investco, Franklin Templeton, Oppenheimer, etc.)  You could give each company just $300,000.00 to invest for you, right?!!!

This is only an example, I'm really trying to get you to start thinking of how to split up your money and your investments.  

By splitting up your $3 Million with 10 different Top Rated investment companies, you greatly minimize your risk of loosing all of your money like the guy who gave ALL of his Lottery Winnings to one Investment Broker/Company!

In Conclusion.....  

Listen to Mom's Advice, sometimes she is correct!!!
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Advice Opinion from Anonymous: Protect your Principle Consider this after the RV

2/2/2012

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_Sent in by one of our listeners....Thank You to you know who....

ADVICE: "PROTECT YOUR PRINCIPLE" CONSIDER THIS AFTER THE RV    - by Anonymous

To save time and keep this simple I'm going to get straight to the point...

After the RV happens all of us will be afflicted with SWS (Sudden Wealth Syndrome) a common ailment that is a real problem for people who come in to wealth suddenly.  There have been plenty of articles written about it, so Google for it to learn more if you want - I won't focus on SWS in my article here.

With a deep respect for SWS, after the RV you and I will be highly tempted to run out and buy lots of "stuff" - please don't do it!!!  As the IQD Team Mods are always suggesting, take a few weeks to absorb the fact that you are now wealthy!

So, now you've taken a little time after the RV, and you are now looking around and thinking of what to do with your money - may I suggest you think about this, Invest your money, and try to ONLY SPEND THE INTEREST.

Here is an example: Lets say after the RV you'll have $500,000.00 USD as "free" cash to spend.  You are thinking about investing in Real Estate, maybe buying a home to live in or as a rental for rent income.

At first you think, I'll just pay cash for that house, and own it out right!  That may not be the best option, lets just for fun say that the house/rental you want to buy is $350,000.00 USD - did you realize that you can use the interest from your $500,000.00 that is invested to purchase this home?

Let me break it down with simple CONSERVATIVE numbers: 

   Purchase Price = $350,000.00     
   Down Payment = $ 50,000.00                   
   Loan = $300,000.00

Lets look at your loan:  NOTE: you can find free loan / mortgage calculators all over the internet as well as iPhone / Android Phone Apps.                  

Loan = $300,000.00        
Loan's Term = 30 years       
Interest Rate = 6.0% - fixed 30 years  (today's rate I got was 3.60%, but I'm going very conservative with 6% almost being double today's rate)      
Mo. Payment = $2,298.65   NOTE: A payment of $2,600.00/month will reduce the term from 30 years to 20 years - paying just $300 extra a month will save you a lot of money on Interest.  
Annual Payment = $27,583.80

NOW, Lets look at investing your $500,000.00 in "free" cash  - DISCLAIMER: This is NOT investment advice, consult a professional, every individual has their own situation based on Age, risk tolerance, etc.  Again, seek out a professional - not me!  :0) There!  

Cash =  $500,000.00     
Interest Rate = 10.0%  (Investco has a portfolio which averages over 11% for over 40 years - This company is listed as one of the top 10 Investment companies in the world, there are other great companies to look at to that pay less and pay more, but for this example I'm bench-marking at 10%).    
Annual Distribution = $50,000.00 (Gross before  - their will be income and capital gains taxes that will be due as well)
Quarterly Distribution = $12,500.00 (Mutual funds normally distribute Quarterly)

Okay, I'm sure by now you are starting to see where I'm going and putting 2 & 2 together!!!

So, lets look at it...  You have annual mortgage payments of $27,583.80, and you have annual Interest gains of $50,000.00 - even after taxes you will more than cover your mortgage on the real estate property.  

The leftover monies that you don't need to use to pay the mortgage you can leave in your mutual fund to increase the principle.  So, lets assume you can leave $10,000.00 of the $50,000.00 gain on the Principle - that will add $200,000.00 to your principle making it $700,000.00 in priciple within just 20 years!  But hold on, it gets even better, because of the compounding effect of principle your $200,000 will be actually approximately $630,000.00 + your original $500,000.00 - or $1,130,000.00!!!  AND YOU OWN BOTH THE CASH AND THE HOUSE!!!

For the real estate investment, I would also suggest you think about paying a little extra to accelerate that mortgage so you pay it off in 15 or 20 years instead of 30 years - only about an extra $300/month on the payment will drop that term down to 20 years, probably saving you well over $100K in interest. 

Oh, and remember, that mortgage interest is tax deductible if it is your primary residence!  If it is an income property (commercial) then your CPA can Depreciate the property and that will reduce your tax.  Be sure to consult with your TAX, LEGAL and Investment Professional before you make any final decisions!  

Buy now - at the end of say 20 years, you will have a paid off home or rental (which is also paying you rental income) and you also have your original $500,000.00 - that friends is how the Wealthy People get richer!!!  I know this last line was a bit "repetitive" however, I believe this point is extremely important - you can have BOTH!!!  

Regarding Insurance a tip for you to please consider....

For your real estate investment's mortgage you will be required to purchase mortgage insurance and fire insurance to protect the lender, this sucks, but is normal.  You may also want to get Home Owners Insurance (there is a version for investment properties also).  In most states you also need car insurance to drive, these types of insurance are necessary-evils and cannot be avoided - just try to get the best rates you can!

HOWEVER -- Think long and hard BEFORE you purchase ANY Life Insurance Product (i.e. Whole Life Insurance, Annuity, etc.) - Insurance is generally not a good product for "investment" although they try to dress it up - but you can't "polish a turd" (IMHO).  Think about this, if you have $500,000.00 (or more) in Cash and Investments - more than enough to cover any/all expenses for your spouse & family if you should die, then why waste (IMHO) your good money on buying Life Insurance or Annuity products???  

Please promise yourself that you will think long and hard about it first, those policies are almost impossible to read and understand, and ANYTHING the Agent "tells" you, INCLUDING if s/he writes it on paper - it null and void and NOT enforceable!!!  The only entity that can modify those insurance policies is/are the Corporation/Underwriter - and they will never do it for you!  If you are confused - then DON'T sign it, don't do it!  :-)

In Conclusion.... The real estate example above does not have to be just for real estate, it can relate to cars, vacations, parties, and other luxury toys!  Remember, let your money work for you - keep the principle protected!  Keep a portion of the interest on the principle and then spend the rest of the interest - this will let you have both your toys and keep your security of your investment!  :-)

One last and very important thing, please be careful of the people you take advice from!!! Don't be afraid to interview many people - think of it like dating (especially from a Lady's perspective....) and please don't be too tight with your money, go ahead and pay for true professionals, not your 2nd cousin's brother-in-law who just joined with an investment company!  One tip I can suggest is look for Series 65 Licensed Investment Advisers - they make their money from the fee you pay to them.  Then you can take that advise and purchase from whomever you wish.  Keep in mind that Series 6, 7 and 63 Licensed Professionals make their fee from the investment they SELL to you!  This isn't "bad" I'm just making you aware of the differences.

Thank you for sharing
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The Best Time Investments You Can Make

1/12/2012

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_The Best Time Investments You Can Make
Posted on November 29, 2011 by Maria Lin

Invest Your TimeWe all agree that time is more valuable than money.

At least, that’s what we say.

Then we turn around and spend hours watching bad TV we’re not even that interested in. Or 45 minutes on the phone with customer service fighting a $5 charge. Or years in a relationship or friendship we stopped feeling fulfilled by long ago.

But I’m convinced it’s not for a lack of good intent that we often end up treating time as our most fungible asset. (Hey, there’s plenty more where that came from, right? Well, not really … ) I think we simply get too busy to think about it, or don’t think we have the resources to make more time in our lives. We do have the resources, though. All it takes is a fresh look at how we really spend our days, hours and moments.

I’ve been thinking about time as a tangible asset not unlike money in many ways, and about ways to invest our time to yield higher returns—better memories, more hours well spent, even minutes that nourish us instead of fly by. After much research, experience and reflection, below are what I found to be the seven best investments you can make with your time. Think of these as blue-chip time investments that can’t go wrong—and that will yield high dividends for a more fulfilled life.
1. Invest in “Life-Extending” Time

Investing time in caring for your health is an obvious one that will certainly yield you more time, literally—in days, months, if not years tacked on to your life. Yet we often take our health for granted until we experience a wake-up call. Proactively invest your time in your health by eating well, exercising regularly, getting plenty of sleep and regularly seeing your doctors. Invest heartily in those non-physical markers of well-being as well: emotional, mental and spiritual health—you will reap many hours of well-lived life from them. Learn the habits of the Blue Zone people, from the regions in the world where people live the longest. Some common lifestyle traits they share? Building in natural movement and activity, lowering stress and being part of a faith-based community.
2. Invest in “Foundation-Building” Time

There’s a little saying that goes, “A stitch in time saves nine.” Create the time to make the right stitches, and you’ll be spared much time, hassle (and usually expense) later. Stephen Covey refers to this concept in “The 7 Habits of Highly Effective People.” According to him, we spend our time primarily on four types of activity:

    (1) urgent and important (crisis, deadlines, putting out fires)
    (2) non-urgent and important (building relationships, identifying opportunities, prevention, planning)
    (3) urgent and non-important (interruptions, phone calls, meetings)
    (4) non-urgent and non-important (TV, email, time wasters)

Covey says that we spend most of our time in sections (1) and (4), but the real area of personal growth is in (2). If you’re spending more time putting out fires than building the right foundations, you’ll never get out ahead of your to-do list.
3. Invest in “Do-Nothing” Time

Americans could use a little dose of “La Dolce Far Niente,” or “the sweetness of doing nothing,” something the Italians and many other cultures have mastered. In America, we don’t feel our time is well spent unless we’re either producing or consuming, says social psychologist Robert V. Levine, author of “A Geography of Time: On Tempo, Culture, and the Pace of Life,” which is a limited (and frankly, stressful) perspective. In other parts of the world, such as India, it’s normal for people to enjoy each others’ company without activity or even conversation. Investing in do-nothing time will help us slow down and experience a different pace of life, in which time’s value is not measured by its productivity.
4. Invest in “System-Creating” Time

It’s well-established in happiness psychology research that making small improvements to your life pays out exponentially in happiness. For example, putting a keyhook by the door so that you don’t spend five minutes every morning hunting for your keys. Or rearranging your closet so you can actually see everything, and not spend 20 minutes each morning figuring out what to wear. Or coming up with a better filing system for your digital photos, or your expenses (check out LearnVest’s My Money Center), so your personal admin time can be cut in half. Investing some up-front time in creating better, more organized systems will reap you lots of time in the long run.

    Where Do You Get the Best Return?

    Let us know where you get the best return on your time investment in LV Discussions! Maybe we can pick up some hints …

    SHARE AWAY

5. Invest in “Cushion” Time

This is one of those time investments that’s so simple, but can yield such great results in your life. In the famous “Good Samaritan” study from Princeton University in 1973, researchers John M. Darley and C. Daniel Batson put an injured person in the path of several groups of people, to see who would stop and help: those running late, those who had just enough time, and those with plenty of time to get to their destination. They also controlled for people’s religious affiliation. The results: religious affiliation had no impact on whether the individual stopped to help the person—but whether the person was in a hurry had a huge impact. Only 10% of those in a big hurry stopped to help the person, 45% of those in a medium hurry did—but 63% of those not rushed at all stopped to help. This means that being in a rush may be preventing you from being the kind of person you want to be—the kind to stop and help someone in need. Building in lots of cushion time in your schedule and preventing “constant hurriedness syndrome” is a great investment in yourself and in the quality of life of those around you.
6. Invest in “Savoring” Time

A recent 2010 study published in the Association for Psychological Science found that wealthy people are unhappier because they have a lower “savoring ability” (the ability to enhance and prolong positive emotional experience), like taking in the colors of a sunset or the taste of a cold beer. Apparently, having access to the best things in life may actually undermine your ability to reap enjoyment from life’s small pleasures. It’s not a coincidence that savoring requires slowing down—taking a few extra seconds to really look at the colors of the leaves, or munching slowly to enjoy the texture of a bite. Investing time in savoring all the unique sensorial moments of your day will guarantee your moments don’t flash by in a dull blur.
7. Invest in “Time Assessment” Time

You wouldn’t keep spending or investing money without assessing how well things were going every month, quarter or year, and the same thing should apply to your time. How frequently you decide to take stock is up to you—but a good system might be:

    Five minutes a day to make sure you’ve invested time in at least one thing on this list
    15 minutes a week to review your past week’s schedule and what you wish you had made time for, and what time investment made you happiest
    One hour a month (or two to three hours a season) of quiet time with a journal to assess the past season, how your time felt and how you’d like to invest your time in the coming season—this can pair nicely with the tempo of the period. For example, holidays may mean more family investment time, the new year can be career-focused, summertime may have a big leisure time component, etc.
    One day a year of time alone or with a friend or partner (best if you can physically go somewhere peaceful and different from your daily routine), assessing the past year and where your times and energies went, setting goals for the new year, and whether you are closer to achieving what is truly important to you in life

Follow Maria Lin on Twitter: @marialinnyc

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Why Are Billionaires Paying the Least in Taxes?

1/9/2012

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_Why Are Billionaires Paying the Least in Taxes?
Posted on December 9, 2011 by Libby Kane

No one likes taxes.

And no one likes the idea that they’re paying more taxes than anyone else, no matter what their income.

That’s why President Obama’s claim Tuesday night that “some billionaires have a tax rate as low as 1%” is making waves. The idea that the people who have the most are handing over the least to the government is unappealing, but, in some cases, true.

Warren Buffett, the philanthropic billionaire and chairman and C.E.O. of Berkshire Hathaway, published an August opinion piece in the New York Times titled “Stop Coddling the Super-Rich,” where he revealed that he paid 17.4% in federal income taxes in 2010, while the rest of his office averaged a tax rate of 36%.

His essay was so widely discussed that when President Obama proposed that people earning more than $1 million per year should pay at least the same income tax rate as middle-class Americans, it was dubbed “The Buffett Rule.”

All of this is well and good, but let’s back up for a second: How is it possible that the taxes of the 1% are only 1%?
Is the 1% Really Only Paying 1%?

It’s a fact that those in the highest income brackets often pay the least in taxes. The actual rate, whether 1% or more, is not likely to ever be confirmed due to the relatively low number of billionaires and the privacy restrictions of such an investigation. But, we do know, courtesy of the Tax Policy Center, that more than 4,000 households earning over $1 million owed no federal income tax whatsoever last year.

It’s not that the rich are operating outside of the law: Perfectly legal tax rules tax investments at a lower rate than regular income. And what’s something that many wealthy people have? Investments and other monetary vehicles with low tax rates. They also have the disposable income necessary to hire a money manager and to make charitable donations, both of which help them get even more tax breaks.
Why Taxes Are a Political Sticking Point

So as the Occupy Wall Street protests pointed out, there really is a difference between the 1% and the 99%, at least when it comes to what they pay Uncle Sam.

But whether we should do anything about that difference has the government divided. Taxes were, in fact, one of the points of contention that led to the breakdown of the so-called Super Committee, which was charged with creating a feasible solution to reduce the country’s debt.

To funnel more money into the government, the Democratic party has proposed increasing taxes for those earning more than $1 million and simultaneously extending, for everyone else, the Bush-era tax cuts that are set to expire at the end of the year.

The Republicans, meanwhile, are in a tight spot politically. They oppose the Democrats’ plan to extend the Bush-era tax cuts for everyone but the rich, but can’t vote against the Democrats’ proposal without appearing that they only support tax breaks for the rich.

While it remains to be seen how Washington will rule on the matter, we can say this: “The rich” are taxed disproportionately less because they have the resources and the knowledge to legally work the system. Not everyone can have the resources, but know-how is something we can all work to acquire.

http://www.learnvest.com/2011/12/why-are-billionaires-paying-the-least-in-taxes/

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4 Important Words: How Should I Invest?

1/8/2012

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_
4 Important Words: How Should I Invest?

Posted on February 21, 2011 by Manisha Thakor

If you were getting ready to go out for the evening, would you ask yourself what you planned to wear without thinking of where you were heading? Of course not, because the clothes you’d wear to shovel snow would be very different from those you’d wear to a wedding.

The answer to the question, “How should I invest?” is often given a one-size-fits-all response when it’s anything but. To protect yourself, here are 5 things to think about to make sure your hard-earned money is invested appropriately.

1. When Do You Need To Spend That Money?If you’ll need to access this money again within the next five years, you’ll typically want to protect that money against inflation by putting it in savings accounts, money market funds or accounts, or CDs, rather than taking on market risk that stocks or bonds.

2. Do You Have Any Outstanding High-Interest Debt?If so, paying off that debt may be the best investment you can make, as it gives a “guaranteed” return—especially when interest rates on savings vehicles are so low.

3. How Steady Is Your Income?A professor with tenure may feel more comfortable taking higher short-term risk than an entrepreneur with variable cash flow.

4. How Old Are You?The older you are, the less time you have on your side to bounce back from volatile markets, so the more conservative you’ll want your portfolio to be. For women, a rough rule of thumb is to take 110 minus your age to arrive at the ideal maximum percentage of your portfolio in stocks. For example, if you’re a 40-year-old woman, 110 minus 40 equals 70. So, up to 70% of your portfolio could be in stocks and 30% in bonds (for men, use John Bogle’s oft-quoted 100 minus your age…because men generally have shorter life spans).

5. Are You Actually Interested In Investing?Unless you are inherently passionate about picking individual stocks or studying active money managers, I love target-date retirement funds or low-cost index funds and ETFs. My favorite basic “portfolio recipe” comes from Boglehead Mel Lindauer. His recommendation: For the percentage of your portfolio devoted to stocks, put half in a total U.S. stock market index and half in a total international index. For the portion that goes into bonds, put half in a total U.S. bond market index and half into Treasury Inflation Protected Securities (“TIPs”) via funds, ETFs, or direct purchases. From there, you can add some additional investment spice in the form of REITS or commodities, but for most people, this core recipe will do just fine.

Bottom line: Always remember that before anyone can give you meaningful investment guidance, they need to understand where it is that you specifically want to go.


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Avoid Scams

1/7/2012

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_Avoid Scams

Scam artists use clever schemes to defraud millions of people around the globe each year. Being on guard online can help you maximize the benefits of the internet and minimize your chance of being defrauded. Learn how to recognize common scams and what you can do to avoid them.


Avoiding Online Scams
Ten steps you can take to avoid scams
http://onguardonline.gov/articles/0001-avoiding-online-scams

Common Online Scams
Tricks that con artists use to get people to send them money
http://onguardonline.gov/articles/0002-common-online-scams

Spam
What you can do to reduce unwanted commercial emails
http://onguardonline.gov/articles/0038-spam

Phishing
What to do about messages that ask for your personal information
http://onguardonline.gov/articles/0003-phishing

Money Transfer Scams
Scammers often insist on money transfers for payment because wiring money is like sending cash: Once it's gone, you can't get it back
http://onguardonline.gov/articles/0007-money-transfer-scams

Online Dating Scams
Signs that your online love is a scam artist
http://onguardonline.gov/articles/0004-online-dating-scams

Online Penny Auctions
Tips to help you understand how penny auctions work and recognize the pitfalls before you lose any money
http://onguardonline.gov/articles/0037-online-penny-auctions

Identity Theft
If you believe your personal information has been lost or stolen, there are steps you can take to minimize the damage
http://onguardonline.gov/articles/0005-identity-theft

Tax-Related Identity Theft
Warning signs that an identity thief has used your social security number for tax purposes and what to do about it
http://onguardonline.gov/articles/0008-tax-related-identity-theft

Work-at-Home Scams
Bogus ads often promise steady income for minimal labor
http://onguardonline.gov/articles/0002a-work-home-scams

Weight Loss Claims
Weight loss gimmicks that promise more than they can deliver
http://onguardonline.gov/articles/0002b-weight-loss-claims

Lotteries and Sweepstakes Scams
Have to pay to get your prize? It’s a scam.
http://onguardonline.gov/articles/0002c-lotteries-and-sweepstakes-scams

Fake Check Scams
A fake check can take weeks to uncover – and cost you a fortune
http://onguardonline.gov/articles/0002d-fake-check-scams

Imposter Scams
Tips to help you spot a scammer impersonating a friend or relative
http://onguardonline.gov/articles/0002e-imposter-scams

Mystery Shopper Scams
Interested in mystery shopping? Distinguish real opportunities from bogus offers
http://onguardonline.gov/articles/0002f-mystery-shopper-scams


Bogus Apartment Rentals
Looking for an apartment? Look out for bogus listings.
http://onguardonline.gov/articles/0002g-bogus-apartment-rentals

Miracle Cures
Health products that overpromise usually under-deliver. Here’s why.
http://onguardonline.gov/articles/0002h-miracle-cures

Debt Relief Scams
Some debt relief offers are code for bankruptcy
http://onguardonline.gov/articles/0002i-debt-relief-scams

Pay-in-Advance Credit Offers
Legitimate lenders don’t guarantee you credit – or require large upfront fees – before you apply'
http://onguardonline.gov/articles/0002j-pay-advance-credit-offers

Investment Schemes
Signs that a “low risk” investment is really a sham
http://onguardonline.gov/articles/0002k-investment-schemes

The “Nigerian” Email Scam
Don’t believe strangers who offer “big rewards” to help them move money out of a foreign country
http://onguardonline.gov/articles/0002l-nigerian-email-scam

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When's the Right Time to Invest?

1/7/2012

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_When's the Right Time to Invest?


It's not surprising that first-time investors often worry about the timing of their initial stock purchases. Getting started at the wrong point in the market's ups and downs can leave you staring at big losses right off the bat.

But take heart, Fools: Whenever you first invest, time is on your side. Over the long haul, the compounding returns of a well-chosen investment will add up nicely, whatever the market happens to be doing when you buy your first shares.

Don't waste time
Rather than fretting about when you should make that first stock purchase, think instead about how long you're planning to keep money in the market. Different investments offer varying degrees of risk and return, and each is best suited for a different investing time frame.

In general, bonds offer smaller, more dependable returns for investors with shorter time frames. According to Ibbotson, short-term U.S. Treasury bills yielded roughly 3.7% per year from 1926 to 2003. (We picked 2003 as an endpoint because it was right after the end of a bear market.) While this seems relatively meager, remember that inflation was nonexistent for most of this period, making a 3.7% average annual return fairly attractive until the 1960s.

Longer-term government bonds have provided slightly higher returns: an average of 5.4% annually from 1926 to 2003. Surprisingly, their gains have been relatively volatile. In the 1980s, for instance, they returned nearly 14% annually, but in the 1950s, bonds lost an average of nearly 4% per year.

Stocks have also been very good to investors. Overall, large-cap stocks have returned an average of 10.4% per year from 1926 to 2003 -- quite a bit higher than bonds. Surprisingly, the range of the returns for stocks is not that much larger than the range for bonds over the same period. Stocks suffered a slight decline in the 1930s, but enjoyed several particularly strong decades as well, including the 1950s (18% average annual return), the 1980s (16.6%), and the 1990s (17.3%).

When will you need the money?
The longer you have to amass your cash, the greater risk you can accept, since you'll have more time to wait out periods of bad returns.

If you need the money within the next five years, you'll want to avoid individual stocks and stock-centric mutual funds. If you need the money within the next three years, you should also avoid bond mutual funds and real estate investment trusts (REITs), which can drop if interest rates increase.

With those options eliminated, you have a few choices left: buying individual bonds or certificates of deposit (CDs) with durations of less than three years, putting your money in a money market fund, or using a savings account. Each vehicle generates income while guaranteeing the return of your principal. The sooner you need the money, the less you can afford to lose, right?

On the other hand, stocks are a very attractive option for long-term goals like retirement. The higher returns are simply too good to pass up.

When to sell
Once you've decided what to buy, and when to buy it, you'll next need to decide when to cash out. Since bonds essentially sell themselves when they mature, this question primarily applies to stocks or stock mutual funds.

Some investors believe they can "time" the market, accurately predicting when it will rise and fall. As a result, they counsel selling all your stocks when the market is about to fall, and buying them all back when the market prepares to rise. Unfortunately, if investing were that easy, these same folks would be sunning themselves on beaches in Acapulco, rather than trying to sell their timing methods to other investors.

Granted, when overall economic woes begin to hurt corporate earnings growth, and companies start to flounder, you might consider selling some of your overvalued, lower-quality companies. But beyond that very general scenario, an accurate system for timing the market remains an investor's pipe dream.

Many mutual fund investors are quick to withdraw their cash when returns turn sour. But several academic studies have proven that investors who jump from one fund to the next, chasing performance, tend to do vastly worse than those who stay put. Be prepared to stick with a fund through good times and bad -- with one exception.

In an actively managed fund, you've entrusted your cash to a professional money manager. If that manager abandons your fund to manage another, his or her replacement may not manage your money with equal skill, and you may want to consider selling. Otherwise, a few months of poor fund performance are no reason to jump ship.

Selling stocks can present a more complex set of questions. Two major warning signs may suggest that it's a good time to sell:

    The business's fundamentals change. Is a new competitor rendering its basic products obsolete? Is the company branching out into areas wildly unrelated to its core competencies, leaving you no longer able to understand the business?
    The stock becomes overvalued. Has the market bid the company's shares up to unsupportable heights? Is the stock likely to crash on the slightest bad news? Does the risk of such a tumble outweigh any tax hit you'd take by selling now?

While both those red flags can provide excellent reasons to sell, many of the other screaming sirens surrounding the market can be safely ignored.

Don't listen to the noise
The media pays meticulous attention to Wall Street -- but it tends to focus entirely on one particular index, assuming that it reflects the entire market. Index goes up? The market is bullish! Index goes down? Here comes the bear market! Index yo-yos back and forth? Now the market is "volatile!"

Some investors, particularly those keen on technical analysis, study the ups and downs of market graphs to gauge whether investors will take the market higher. For Foolish investors, this is an exercise in futility. Successful investing relies not on monitoring the market as a whole, but on analyzing the strengths and weaknesses of individual companies. Whatever the market's doing at the moment, a buy-and-hold approach to investing is the best way to earn reliable long-term returns.

Review, review, review
Of course, you can't just load your portfolio with a few stocks -- however well-chosen -- and forget all about them. Like houseplants, investments need regular care and attention to flourish. Unless you've parked your money in government bonds, with their guaranteed rates of return, you need to check on your investments regularly to make sure they're beating the market -- and doing so more substantially and less expensively than other, similar options.

Reviewing your investments, particularly when you may have made mistakes, also offers a crucial opportunity to learn from your mistakes. Everyone makes errors now and then, but most successful investors avoid making the same goofs twice. Set aside time to review your portfolio at least once every three months, if not every week. While you shouldn't be glued to the computer screen, tracking your investments minute-by-minute, don't forget them entirely, either.

Beyond the basics
Congratulations -- you've gotten through the Getting Started part of Investing Basics! But you're not finished yet. There's plenty more for you to learn, including the 13 Steps to Investing Foolishly, How to Value Stocks, and much more. Go at your own pace, take a break when it's too much, and enjoy learning about the Foolish world of investing.

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What Should I Invest In?

1/7/2012

1 Comment

 
_

What Should I Invest In?

By Motley Fool Staff

Now that you know why you're investing and how to get started, it's time to dig deeper and pick some investments. As you may have noticed, there are several categories of investments, and many of those categories have thousands of choices within them. So finding the right ones for you isn't a trivial matter.

The single greatest factor, by far, in growing your long-term wealth is the rate of return you get on your investment. There are times, though, when you may need to park your money someplace for a short time, even though you won't get very good returns. Here is a summary of the most common short-term savings vehicles:

Short-term savings vehicles

    Savings account: Often the first banking product people use, savings accounts earn a small amount in interest, so they're a little better than that dusty piggy bank on the dresser.

    Money market funds: These are a specialized type of mutual fund that invest in extremely short-term bonds. Unlike most mutual funds, shares in a money market fund are designed to be worth $1 at all times. Money market funds usually pay better interest rates than a conventional savings account does, but you'll earn less than what you could get in certificates of deposit.

    Certificate of deposit (CD): This is a specialized deposit you make at a bank or other financial institution. The interest rate on CDs is usually about the same as that of short- or intermediate-term bonds, depending on the duration of the CD. Interest is paid at regular intervals until the CD matures, at which point you get the money you originally deposited plus the accumulated interest payments. CDs through banks are usually insured up to $100,000.

Fools are partial to investing in stocks, as opposed to other long-term investing vehicles, because stocks have historically offered the highest return on our money. Here are the most common long-term investing vehicles:

Long-term investing vehicles

    Bonds: Bonds come in various forms. They're known as "fixed-income" securities because the amount of income the bond generates each year is "fixed," or set, when the bond is sold. From an investor's point of view, bonds are similar to CDs, except that the government or corporations issue them, instead of banks.

    Stocks: Stocks are a way for individuals to own parts of businesses. A share of stock represents a proportional share of ownership in a company. As the value of the company changes, the value of the share in that company rises and falls.

    Mutual funds: Mutual funds are a way for investors to pool their money to buy stocks, bonds, or anything else the fund manager decides is worthwhile. Instead of managing your money yourself, you turn over the responsibility of managing that money to a professional. Unfortunately, the vast majority of such "professionals" tend to underperform the market indexes.

Retirement plans
A number of special plans are designed to create retirement savings, and many of these plans allow you to deposit money directly from your paycheck before taxes are taken out. Employers occasionally will match the amount (or a percentage of that amount) you have withheld from your paycheck up to a certain percentage of your salary. (Pssssst … that's what we affectionately call "free money.") Some of these plans let you withdraw money early without a penalty if you want to buy a home or pay for education. If early withdrawals are not permitted, you may be able to borrow money from the account, or take out low-interest secured loans with your retirement savings as collateral. Rates of return vary on these plans, depending on what you invest in, since you can invest in stocks, bonds, mutual funds, CDs, or any combination.

    Individual retirement account (IRA): This is one of a group of plans that allow you to put some of your income into a tax-deferred retirement fund -- you won't pay taxes until you withdraw your funds. Withdrawals are taxed at regular income-tax rates, not at the lower capital-gains rates. All IRAs are specialized accounts (not investments) that allow the account holder to invest the money however he or she likes. If you qualify, some or all of your IRA contribution may be tax-deductible.

    Roth IRA: This retirement account differs from the conventional IRA in that it provides no tax deduction up front on contributions. Instead, it offers total exemption from federal taxes when you cash out to pay for retirement or a first home. A Roth can also be used for certain other expenses, such as education or unreimbursed medical expenses, without incurring a penalty -- although any earnings that are withdrawn are subject to income taxes unless you are more than 59 ½ years old. Not all taxpayers are eligible to contribute to a Roth IRA. You may be able to qualify if you participate in corporate retirement plans and don't qualify for deductible contributions to the conventional IRA.

    401(k): A retirement savings vehicle that employers offer. It's named for the section of the Internal Revenue Code where it's covered. Given the tax advantages and the possibility of corporate matching -- those cases when your employer matches part of your contribution -- the 401(k) is well worth considering.

    403(b): The nonprofit version of a 401(k) plan. Local and state governments offer a 457 plan.

    Keogh: A special type of IRA that doubles as a pension plan for a self-employed person, who can put aside significantly more than the contributions allowed for an IRA.

    Simplified Employee Pension (SEP) plan: A special kind of Keogh-individual retirement account. SEPs were created so that small businesses could set up retirement plans that were a little easier to administer than normal pension plans are. Both employees and the employer can contribute to a SEP.

Investing in stocks
It's worth taking a closer look at stocks, because historically, they've had much better returns than bonds and other investments. Essentially, stock lets you own a part of a business. Dating back to the Dutch mutual stock corporations of the 16th century, the modern stock market exists as a way for entrepreneurs to finance businesses using money collected from investors. In return for ponying up the dough to finance the company, the investor becomes a part-owner of the company. That ownership is represented by stock -- specialized financial "securities," or financial instruments -- that are "secured" by a claim on the assets and profits of a company.

Common stock
Common stock is aptly named -- it's the most common form of stock an investor will encounter. This is an ideal investment vehicle for individuals, because anyone can take part; there are absolutely no restrictions on who can purchase common stock -- the young, the old, the savvy, the reckless. Common stock is more than just a piece of paper; it represents a proportional share of ownership in a company -- a stake in a real, living, breathing business. By owning stock -- the most amazing wealth-creation vehicle ever conceived (except for inheriting money from a relative you've never heard of) -- you are a part-owner of a business.

Shareholders "own" a part of the assets of the company and part of the stream of cash those assets generate. As the company acquires more assets and the stream of cash it generates gets larger, the value of the business increases. This increase in the value of the business is what drives up the value of the stock in that business.

Because they own a part of the business, shareholders get a vote to elect the board of directors. The board is a group of individuals who oversee major decisions the company makes. They tend to wield a lot of power in corporate America. Boards decide whether a company will invest in itself, buy other companies, pay a dividend, or repurchase stock. Top company management will give some advice, but the board makes the final decision. The board even has the power to hire and fire those managers.

As with most things in life, the potential reward from owning stock in a growing business has some possible pitfalls. Shareholders also get a full share of the risk inherent in operating the business. If things go bad, their shares of stock may decrease in value. They could even end up being worthless if the company goes bankrupt.

Different classes of stock
Occasionally, companies find it necessary to concentrate the voting power of a company into a specific class of stock, in which a certain set of people own the majority of shares. For instance, if a family business needs to raise money by selling equity, sometimes they will create a second class of stock that they control and has, say, 10 votes per share of stock, while they sell another class of stock that only has one vote per share to others.

Does this sound like a bad deal? Many investors believe it is, and they routinely avoid companies with multiple classes of voting stock. This kind of structure is most common in media companies and has been around only since 1987.

When there is more than one class of stock, they are often designated as Class A or Class B shares.

Next steps
We hope this hasn't been the most painful thing you've had to read this week. You're now conversant enough in stock-market matters to impress those who are very easily impressed. Although knowing the terms and general workings of the stock market is just the first step in your investing career, it's useful to know that each share of stock represents a proportional share of a business, and that the potential rewards are great, but that stocks are also riskier than putting money in the bank.

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How Do I Invest?

1/7/2012

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_How Do I Invest?

By Motley Fool Staff

Once you've figured out why you should invest, the next step is learning how. We'll break that question into two parts. First, we'll talk about how you can structure your financial life to make it possible to invest. Then, we'll delve into the mechanics of investing, such as opening a brokerage or mutual fund account.

What is investing?
Any time you invest, you're devoting your own time, resources, or effort to achieve a greater goal. You can invest your weekends in a good cause, invest your intelligence in your job, or invest your time in a relationship. Just as you undertake each of these expecting good results, you invest your money in a stock, bond, or mutual fund because you think its value will appreciate over time.

Investing money involves putting that money into some form of "security" -- a fancy word for anything that is "secured" by other assets. Stocks, bonds, mutual funds, and certificates of deposit are all types of securities.

As with anything else, there are many different approaches to investing -- some of which you've probably seen on late-night TV. A well-dressed, wildly positive (though somewhat whiny) young man sits in front of lazily waving palm fronds, shaking his head about how incredibly easy it is to amass vast wealth -- in no time at all! Well, hey! That sounds fine! But if it were so easy, wouldn't everyone who saw the same pitch be rich? And how come you always have to send in money to learn those wealth-building secrets?

We suggest you take the $25 you'd spend on the hardcover EZ Secrets to Untold Billions book and the $500 you would shell out for the EZ Seminar, and invest it yourself -- after you've learned the basics here.

First, douse your debt
After learning why investing is a smart thing to do, you're probably itching to take the next step. You want to drop everything and start investing right now. But hold on! Would you start running a marathon without first stretching? Would you pour syrup on the plate before the pancakes are done? Having dazzled you with the power of compounded returns, we want to make sure that same principle's not working against you. Before you start investing, you've got to get rid of your high-interest debt.

The very same principle of compounding that helps your investments grow can quickly transform a dollar of debt into a few hundred dollars. Does it make sense to try to save money even as your debts are multiplying like bunnies? No way. Although some kinds of debt may be low-interest or tax-advantageous (such as your mortgage), you'll want to free yourself from the high-interest stuff before you begin to invest.

Every dollar you can put toward investing will work for you. And every dollar of yours kept out of the pockets of financial professionals or full-service brokers is also creating value for you. (We'll get back to this point later.)

Pay yourself first
To become a successful investor, make investing a part of your daily life. That's not as great a stretch as it may sound. After all, you make decisions that affect your finances every day, whether you're ordering a $7 glass of wine with dinner or getting a home equity loan to pay down credit card debt.

We're not suggesting that you obsess over every penny you throw into a wishing well. (Please don't embarrass your mother by diving in after it.) If you pay yourself first, you won't have to.

You already pay the companies behind your credit card, gas, water, electric, cable, and phone bills every month, right? Why not add yourself to the list? Heck, put yourself right at the top. Set aside a chunk of money to save or invest when you first get your paycheck, and you can happily forget about it for the rest of the month.

The Motley Fool recommends that you save as much as possible; 10% of your annual income (total, not take-home) is a good goal. Depending on your obligations, you may be able to save more or less. The more you save, the more wealth you create -- but anything is better than nothing. Even a few dollars saved now will be worth more than lots of dollars saved later.

With online banking and brokerage services, it's easier than ever to set up automatic monthly transfers between your checking account and a savings account or investing vehicle of your choice. You'll be surprised how easy it is to live on a little less money each month -- in fact, you probably won't even notice the difference.

Don't hesitate to be flexible about your savings. If you find yourself truly pinched for pennies once all the bills are paid, perhaps you're paying yourself too much. Perhaps you're not yet in a position to start paying yourself at all. That's perfectly OK -- but as soon as you can feasibly start saving, jump right in! The earlier you start, the better.

Active and passive strategies
The two main methods of investing in stocks are called active and passive management, and the difference between them has nothing to do with how much time you spend on the couch (or the exercise bike). Active investors (or their brokers or fund managers) pick their own stocks, bonds, and other investments. Passive investors let their holdings follow an index created by some third party.

When most people talk about stock investing, they mean active investing. It may sound like the superior strategy, but active investing isn't always all it's cracked up to be. Over the long haul, most actively managed stock mutual funds have underperformed the S&P 500 Index, the most popular and prominent benchmark for index funds.

In that light, you can understand why some people want an alternative to "active" management. Many people who just want a return roughly equal to that of a major stock index prefer passive investing. Beyond the S&P 500, you can find passive investments in many indexes, including the Russell 2000 for small-cap stocks, the Wilshire 5000 for the broad market as a whole, and various international indexes as well.

Investing versus speculating
Right about now, you may be thinking about that brother-in-law who "made a killing" in options. Or maybe you're reminiscing about the Nevada vacation when your one lucky quarter magically drew out 700 more with the pull of a slot-machine lever. Why put your money in slow-and-steady investment vehicles that merely promise double-digit returns, when you could have near-instant riches? With compounding, you have to wait patiently for years for your riches to accumulate. What if you want it all now?

Granted, there's nothing exhilarating about predictability. Matching the performance of the S&P 500 won't make you the life of the party. But neither will the far more common tales about how you lost your savings on some speculative gamble -- nor a recounting of your subsequent adventures in bankruptcy court.

You don't need a card dealer, dour strangers, or Wayne Newton background muzak to gamble. Plenty of stock market gamblers do an admirable job of losing their money on seemingly legitimate pursuits. At The Motley Fool, we believe investors "gamble" every time they commit money to something they don't understand.

Suppose you overhear your best friend's dentist's nanny talking about a company called Huge Fruit at a cocktail party. "This thing is gonna go through the roof in the next few months," she says in a stage whisper. If you call your broker the first thing the next morning to place an order for 100 shares, you've just gambled.

Do you know what Huge Fruit does? Are you familiar with its competition (Heavy Melon)? What were its earnings last quarter? There are a lot of questions you should ask about a "hot" company before you throw your hard-earned cash at it. A little knowledge could help keep you from losing a lot of money.

Remember, every dollar that you speculate with and lose is a dollar that's not working to create long-term wealth for you. Speculation promises to give you everything you want right now, but rarely delivers. In contrast, patience all but guarantees those goals down the road.

Planning and setting goals
Investing is like a long car trip: A lot of planning goes into it. Before you start, you've got to ask yourself:

    Where are you going? (What are your financial goals?)
    How long is the trip? (What is your investing "time horizon"?)
    What should you pack? (What type of investments will you make?)
    How much gas will you need? (How much money will you need to reach your goals? How much can you devote to a regular investing plan?)
    Will you need to stop along the way? (Do you have short-term financial needs?)
    How long do you plan on staying? (Will you need to live off the investment in later years?)

Running out of gas, stopping frequently to visit restrooms, and driving without sleep (this is the last of the travel analogy, we promise) can ruin your trip. So can saving too little money, investing erratically, or doing nothing at all.

Don't let yourself get away with fuzzy answers, either. Investing demands hard numbers -- get used to them. You'll need to pin down exactly how much it'll cost to send a child to college, or how much you'll need to live on in retirement. It can be liberating to see exactly what you need to reach your destination, and that precision helps you stay accountable to yourself along the way.

Don't worry -- you don't have to do all the math yourself.  Online interactive calculators can help you figure your future money needs. The more specific you can be, the more likely you are to set and achieve reasonable goals.

How stock trading works
You've whipped your finances into shape. You've set concrete financial goals. Now you're ready to learn how to start making your investments. If you use a mutual fund, the process is pretty easy: Contact the fund company and ask to open an account. But with stocks, things get a little trickier.

Stocks trade on exchanges. In the U.S., the major exchanges are the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX), and the Nasdaq Stock Market. While there are differences in the way the various exchanges handle trades, buying and selling shares on any of them involves a similar process.

Exchanges bring together buyers and sellers. The price that buyers are willing to pay for shares is called the "bid," while the price sellers are willing to accept to sell their shares is the "ask" price. The difference between these two prices is called the "spread." Usually, the spread goes into the pockets of the exchange professionals who handle trades.

The amount of spread will vary, depending on the volume of shares traded. For heavily traded stocks, competition will make spreads quite small. Thinly traded stocks may carry a large spread, in order to compensate exchange professionals for the risk they take.

Investors can set their own bid or ask prices, too, by placing orders to sell or buy only at a specific price. (These are called "limit" orders.) Exchange professionals keep a close eye on these "open" orders, executing them when conditions are met, and using them to gauge demand for the stock.

Brokerage accounts are the most common way to buy stocks. You can either use one of the many way-too-expensive full-service (or full-price) brokers, or execute your trades through a discount broker. Learn more about how to pick one in our Broker Center, where you can compare brokers and open an account.

The perils of margin
When you use a brokerage account, you can have a cash account or a margin account. The former lets you trade only with money you actually have. The latter -- and right about now, you should be hearing alarm bells and warning sirens -- lets you purchase stocks with borrowed money. Margin accounts can increase your returns -- but they'll also increase your risk.

Brokers, who have a vested interest in enticing customers to use margin, like to say that such accounts increase your "buying power." But in reality, buying on margin only enhances your "borrowing power." You'll have to pay all that margin money back at some point -- forget that at your peril.

Brokers make a good part of their money by collecting interest on margin loans. And since margin gives investors more (borrowed) money with which to buy stocks, it generates greater commission fees for those same brokers. The broker has total control over the collateral for the loan, including the ability to step in and force you to sell stock if it thinks you're in danger of defaulting on its loan. For brokers, margin is a cash cow; for investors, it's a double-edged sword.

Dividend reinvestment plans (DRPs) and direct investment plans (DIPs)
Not yet ready to open a brokerage account? These plans offer another, steadier way to buy stock. Lovingly known by many investors as Drips, they allow shareholders to purchase stock directly from a company, with only minimal costs or commissions. Not every company offers such plans, but they're great for people who can only invest small amounts of money at regular intervals.

Summing up
All right, Fool -- you've got a rough idea of what you want to do with your finances, how much money you'll need, and how much time you have to reach that goal. And you now know how to start investing your money in the market. For your next step, it's time to start thinking about exactly what you should invest in, and the kind of returns you can reasonably expect.

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Why Should I Invest?

1/7/2012

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_Why Should I Invest?

By Motley Fool Staff    

Welcome to Investing Basics! If you've found your way here, chances are you've either got some money socked away or you're planning to do so. But first things first. Why is investing a smart idea?

Simply put, you want to invest in order to create wealth. It's relatively painless, and the rewards are plentiful. By investing in the stock market, you'll have a lot more money for things like retirement, education, recreation -- or you could pass on your riches to the next generation so that you become your family's Most Cherished Ancestor. Whether you're starting from scratch or have a few thousand dollars saved, Investing Basics will help get you going on the road to financial (and Foolish!) well-being.

Know your goals
What are you saving for? Retirement? College for the kids? A new speaker system complete with woofers and tweeters? An exotic animal menagerie complete with Chihuahuas (woofers) and canaries (tweeters)? A retirement villa in the sun-baked hills of Tuscany?

Say you take $2,000 of your savings and put it into the stock market. If your money returned 10% a year (the S&P 500's historical average), two grand would be worth $34,898.80 after 30 years. That might not get you the perfect retirement home, but it'll at least give you a down payment.

Maybe you don't have $2,000 burning a hole in your bank account, but perhaps you can afford to invest your lunch money. Brown-bag your lunch and sock away just $4 a day, 250 days a year. It's not a lot, but if you're in your early 20s, you've got the investor's best ally on your side -- time. If you invest $1,000 once a year in an investment that averages a 10% annual return -- the average annual stock market return since 1926 -- it'll grow to more than $1 million after 46 years, which is right around the time you'll be ready to retire.

Of course, as you get older and more financially stable, you should be able to put away more to invest. Upping the ante to just $166 a month -- which is probably less than lunch money plus what you pay for cable TV -- would put you at the million-dollar mark in just 39 years.

The power of compounding
The table below shows you how a single investment of $100 will grow at various rates of return. Five percent is about what you might get from a certificate of deposit (CD) or with a government bond over time, 10% is about the historical average stock market return, and 15% is what you might get if you decide to learn how to pick your own stocks and take advantage of some of our lessons in advanced investing techniques.

Why is the difference between a few percentage points of return so massive after long periods of time? You are witnessing the miracle of compounding. When your investment gains (returns) begin to earn money, and then those returns start to earn money, your investment can mushroom very quickly. Extend the time period or raise the rate of return, and your results increase exponentially. For instance, if you start young, say at 15 years of age, note how quickly a single $100 investment grows, especially in the later years.

(Click on Link for table)

Looking at it another way, let's compare two teenagers and their lifetime savings habits. Bianca baby-sits a lot and spends most of her spare time reading. She saves $1,000 a year starting when she's 15 and invests it in the stock market for 10 years earning 12% per year on average. After 10 years, she comes out of her shell, stops adding money to her nest egg, and spends every penny she earns club hopping and on trips to Cancun. But she keeps her nest egg in the market.

Compare her account to that of her friend Patrice, who squandered her early paychecks on youthful indiscretions. At age 40 Patrice gets a wake-up call when her parents retire on nothing but Social Security. She starts vigorously socking away $10,000 every year for the next 25 years. Guess who has more at age 65? That's right, Bianca. (You figured it was a setup, didn't you?) Her 10 years of saving $1,000 per year (just $10,000 total -- the same amount Patrice put away in just one year) netted her $1.8 million by age 65. Patrice, on the other hand, scrimped for 25 years to invest a quarter million dollars out of her own pocket and ended up with just under $1.5 million. Neither will be going to the poorhouse, but you see our point: Bianca's baby-sitting money grew for 50 years, twice as long as Patrice's, and Bianca barely missed it.

(It's almost not fair to mention this, but if Bianca put her money in a Roth IRA, that whole $1.8 million would be tax-free. On the other hand, Patrice couldn't put her full $10,000 in a Roth, so Patrice will pay capital gains tax on a good deal of her gains.)

The power of compounding is the single most important reason for you to start investing right now. Every day you are invested is a day that your money is working for you, helping to ensure a financially secure and stable future.

Common pitfalls to avoid
Before you race off through the rest of Investing Basics, there are some cautionary points to consider before you proceed. These are common mistakes many people make when considering what to do about investing.

    Doing nothing. There is no guarantee that the market will go up the first day, month, or even year that you invest in it. But there is one guarantee: Doing nothing at all will not provide for a comfortable retirement.
    Starting late. Postponing your investing career is second only to not investing at all on the list of investment sins. You already know that the earlier you start the better off you are. (Take another look at the compound return example we gave above.) If you're already past those formative twenties (you don't look a day over 32 to us), we'll reword this first pitfall to read: "Not starting now."
    Investing before paying down credit card debt. If you have money in your savings account and you have revolving debt on your credit card, pay it off. Many credit cards have an annual interest rate of 15% or more. Let's say you have $5,000 to invest, but you also have $5,000 debt on your credit cards with an average annual interest rate of 18%. It doesn't take an astrophysicist to figure out that you're going to have to get an 18% return after you pay taxes just to break even on that $5,000. Pay the debt off first, then think about investing.
    Investing for the short term. Only invest money for the short term that you're actually going to need in the short term. Invest money in the stock market that you won't need for at least three years, and preferably five years or longer. If you'll need your cash next year for a down payment on a house or for the family Caribbean cruise, use one of the shorter term and safer havens for your cash, such as money market funds or CDs.
    Turning down free money. You'd never turn down a dollar if it was offered with no strings attached. That's what you're doing if your company offers a 401(k) or similar retirement savings plan with an employer match and you're not participating. Take advantage of all tax-advantaged, employer-matched savings programs.
    Playing it safe. If you're young, most of your investing dollars should be in the stock market. You have enough time to weather any dips in the market and to reap the rewards of long-term gains. Although you may want to transition into bonds later in life as you depend on your investments for income, stocks should make up a large portion of the portfolio of every investor.
    Playing it scary. Not every investment is for everyone. Even if you're a daredevil, you shouldn't pour all of your money into something that could end up going down the drain.
    Viewing collectibles or lottery tickets as investments. If old comic books, Barbie dolls, and abandoned exercise equipment could be used to fund retirements, do you think the stock market would exist? Probably not. Don't make the mistake of thinking your jewelry, those Beanie Babies, or the lottery will provide for you in your latter years.
    Trading in and out of the market. We believe the best approach to investing is the long-term one. Pick your investments well and you'll reap greater rewards over the long term than you had ever dreamed possible. Trade in and out of the market and you'll be saddled with fees that chip away at your returns, and you'll potentially miss out on gains that long-term investors enjoy with much less effort.

Congratulations! You've made it through the first part of Investing Basics. (Bet you didn't even break a sweat.) You've witnessed the power of compounding and you understand how some common pitfalls can ruin even the healthiest investing plan. Now, let's turn to the various ways you can start investing.

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Here Are 15 Frontier Markets Offering Huge Returns For Adventurous Investors

1/2/2012

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_Thanks Brenda

Here Are 15 Frontier Markets Offering Huge Returns For Adventurous Investors

Mamta Badkar | Jan. 1, 2012, 9:25 AM

Lewis & Clark & Sacagawea

Investing in emerging markets, such as the BRIC economies, have been all the rave as investors seek growth while developed markets slow.

But even the emerging markets have become less attractive.  China faces a decelerating economy, India lacks the flexibility to stimulate its economy, Russia will have potentially destabilizing presidential elections this year, and Brazil is wrestling with inflation.

Before an economy is categorized as an "emerging market," it is usually considered a "frontier market."  Frontier markets are often characterized by underdeveloped infrastructures, weak legal systems, and illiquid capital markets.  As such, they are considered much riskier than than most investment classes. However, they often offer extraordinary growth opportunities that eclipse those offered by the more developed EMs.

In a recent report, Citi's Andrew Howell identifies 15 "Frontier" markets that will provide big returns for investors for decades.  Some, like Argentina and Venezuela, are well known.  But, others, like Ghana and Kazakhstan, often go overlooked.

Argentina
Argentina

Image: barcablaugranes.com
Long-term GDP growth rate: 4.1%

GDP per capita: $10,675

GDP: $435.2 billion

Population: 40.8 million

Adult literacy rate: 98%

What's doing well: Argentina's infrastructure is better than other frontier markets and it has a strong agricultural sector. Domestic consumption has been strong spurring economic growth.

Risks: Inflation is a huge risk and with capital flight on the rise, the Argentinian peso is likely to lose value. Policy-related concerns have affected stock market performance.

Source: Citigroup
Bangladesh
Bangladesh

Image: AP
Long-term GDP growth rate: 7.5%

GDP per capita: $764

GDP: $115.0 billion

Population: 150.5 million

Adult literacy rate: 56%

What's doing well: Bangladesh is poised to do well in large part because its low starting point leaves it with a lot of room to grow. It also has a young, rapidly growing, cheap labor force. Bangladesh's stock market is larger and more liquid than other frontier markets.

Risks: Limited employment opportunities are pushing more Bangaldeshi's abroad in search of work, and the country's infrastructure needs to be developed. The lack of regulation and supervision poses a risk to its financial sector.

Source: Citigroup
Egypt
Egypt

Image: KHALED DESOUKI / AFP / Getty Images
Long-term GDP growth rate: 6.3%

GDP per capita: $2,810

GDP: $231.9 billion

Population: 82.5 million

Adult literacy rate: 66%

What's doing well: Egypt's rapidly growing population is better educated than the population of many neighboring countries. Energy, trade, transportation and tourism are all doing well in large part because of its key geographical location.

Risks: In the wake of the Arab spring economic and political risks remain high, and many foreign investors have pulled their investments from the country. Youth unemployment is also an issue its new government will have to contend with.

Source: Citigroup
Ghana
Ghana

Image: Flickr Creative Commons
Long-term GDP growth rate: N/A

GDP per capita: $1,546

GDP: $38.6 billion

Population: 25.0 million

Adult literacy rate: 67%

What's doing well: Ghana's offshore Jubilee field has made the country the newest oil producer in the world. It is already rich in commodities like gold, cocoa, diamonds and manganese. And unlike many of its neighbors has a functioning democracy.

Risks: Ghana needs to avoid the resource curse / paradox of plenty in which countries rich in natural resources have weaker growth than economies with fewer natural resources. Moreover elections in Ghana have been followed by fiscal crises.

Source: Citigroup
Iraq
Iraq
Long-term GDP growth rate: 7.6%

GDP per capita: $3,325

GDP: $108.6 billion

Population: 32.7 million

Adult literacy rate: 78%

What's doing well: Iraq's oil production is set to rise more than any other country in the next decade.

Risks: The Kurdish Regional Government (KRG) and the federal government continue to disagree on oil laws. Security continues to be a major risk, the presence of U.S. troops increases the risk of domestic turmoil while its withdrawal could see a surge in violence which local security forces are unprepared for.

Source: Citigroup
Kazakhstan
Kazakhstan

Image: Ken and Nyetta via Flickr
Long-term GDP growth rate: 4.5%

GDP per capita: $11,115

GDP: $180.1 billion

Population: 16.2 million

Adult literacy rate: 100%

What's doing well: Kazakhstan's rich in natural resources like oil and minerals like gold, copper, zinc and uranium

Risks: Political succession is an issue with elections in mid-January 2012. The domestic banking sector is still trying to recover from bad debts.

Source: Citigroup
Kenya
Kenya

Image: AP
Long-term GDP growth rate: N/A

GDP per capita: $868

GDP: $36.1 billion

Population: 41.6 million

Adult literacy rate: 87%

What's doing well: Offshore natural gas deposits have been discovered close to the Ethiopian border and telecommunications industry is growing rapidly. It also functions as a business and manufacturing hub in East Africa.

Risks: Ethnic tensions persist and unrest in Somalia has seen military intervention by Kenyan troops. At 15%, inflation is high driven by rising food prices because of a drought in the horn of Africa.

Source: Citigroup
Mongolia
Mongolia
Long-term GDP growth rate: 6.9%

GDP per capita: $3,127

GDP: $8.8 billion

Population: 2.8 million

Adult literacy rate: 97%

What's doing well: Mongolia is rich in natural resources, specially copper and coking coal which are crucial for neighboring China. It has a young, growing population and a high domestic savings rate compared with other frontier markets.

Risks: Mongolia, like other resource rich nations, needs to avoid the resource curse.

Source: Citigroup
Nigeria
Nigeria

Image: Reuters
Long-term GDP growth rate: 8.4%

GDP per capita: $1,521

GDP: $247.1 billion

Population: 162.5 million

Adult literacy rate: 61%

What's doing well: Nigeria's banking sector is doing well, reporting strong earnings and inflation seems to have peaked.

Risks: Religious tensions are on the rise with a few attacks by militant Islamist group Boko Haram in the north-east this year. Poor infrastructure is also dragging overall growth.

Source: Citigroup
Pakistan
Pakistan
Long-term GDP growth rate: 4.9%

GDP per capita: $1,155

GDP: $204.1 billion

Population: 176.7 million

Adult literacy rate: 56%

What's doing well: Pakistan has a large, young and growing population and it is well diversified among its sectors.

Risks: Pakistan's population however needs adequate education to prevent it from weighing on the economy. Political and security risks remain high, with governance showing no signs of improvement.

Source: Citigroup
Romania
Romania

Nadia Comeneci

Image: Wikimedia Commons
Long-term GDP growth rate: 3.5%

GDP per capita: $8,645

GDP: $185.3 billion

Population: 21.4 million

Adult literacy rate: 98%

What's doing well: Exports have recovered.

Risks: The Romanian banking sector is 75% owned by European banks, and it faces contagion risks from Europe. The country's GDP growth has also been under risk from austerity.

Source: Citigroup
Sri Lanka
Sri Lanka

Image: AP
Long-term GDP growth rate: 6.6%

GDP per capita: $2,795

GDP: $58.8 billion

Population: 21.0 million

Adult literacy rate: 91%

What's doing well: Foreign investments to Sri Lanka have surged since the end of conflict between the terrorist group LTTE and the Sri Lankan government. Exports have picked up especially in textile manufacturing, and agricultural products.

Risks: The government's Asset Acquisition Act which allows the state to acquire assets once owned by the government but sold at a discount poses a risk to foreign investment.

Source: Citigroup
Ukraine
Ukraine
Long-term GDP growth rate: 3.7%

GDP per capita: $3,604

GDP: $162.9 billion

Population: 45.2 million

Adult literacy rate: 100%

What's doing well: Ukraine's agricultural sector is one of the best in Europe. It also has a well educated workforce that can help drive manufacturing.

Risks: Corruption poses a risk to businesses and eurozone issues have hurt its banking sector. Currency devaluation is also an immediate risk. Ukraine is also too dependent on Russia for energy.

Source: Citigroup
Venezuela
Venezuela
Long-term GDP growth rate: 4.3%

GDP per capita: $10,525

GDP: $309.8 billion

Population: 29.4 million

Adult literacy rate: 95%

What's doing well: Venezuela has one of the largest oil reserves in the world, and is a major oil exporter.

Risks: Half of government revenues depend on oil exports so the economy is always at risk from oil prices. President Hugo Chavez's decision to nationalize oil, cement, steel sectors and supermarkets led to a drop in foreign investment.

Source: Citigroup
Vietnam
Vietnam

Image: nurpax via Flickr
Long-term GDP growth rate: 7.4%

GDP per capita: $1,370

GDP: $121.6 billion

Population: 88.8 million

Adult literacy rate: 93%

What's doing well: Vietnam has competitive advantages in labor-intensive manufacturing. Its agricultural exports have also done well.

Risks: In an effort to drive GDP growth Vietnam has ended up with a 22.4% inflation rate. Moreover Vietnam has a weak banking sector

Source: Citigroup
The world can be an uncertain place...
The world can be an uncertain place...

North Korean leaders

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Tools and Calculators for Investors

11/19/2011

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_Tools and Calculators for Investors

Here are several tools and calculators to help you with your investment decisions:
   

Library of Congress Report:

Behavioral Patterns of U.S. Investors

Mutual Fund Cost Calculators
Scam Meter
Tax-Free vs. Taxable Yield Comparison Calculator
College Savings Calculator
Loan Calculator
Savings Calculator
Mutual Fund Breakpoint Search Tool        
Social Security Retirement Planner
Risk Meter Ballpark Estimate
Retirement Calculator
529 College Savings Plan Expense Calculator
Investor Quiz: Test Your Money Smarts 

http://sec.gov/investor/tools.shtml
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Office of Investor Education and Advocacy

11/19/2011

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_Office of Investor Education and Advocacy

The SEC’s Office of Investor Education and Advocacy provides a variety of services and tools to address the problems and questions you may face as an investor. We cannot tell you what investments to make, but we can help you to invest wisely and avoid fraud.

Please visit our website dedicated to retail investors, Investor.gov.

http://sec.gov/investor.shtml



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13 Steps to Investing Foolishly

11/15/2011

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_13 Steps to Investing Foolishly

The prospect of changing your life with a full 13 steps could sound a bit daunting. But don't hit the "back" button just yet. We've prepared this executive summary just for you Fools on the go.

Step 1: Change Your Life With One Calculation
Step 2: Trade Wisdom for Foolishness
Step 3: Treat Every Dollar as an Investment
Step 4: Open and Fund Your Accounts
Step 5: Avoid the Biggest Mistake Investors Make
Step 6: Discover Great Businesses
Step 7: Buy Your First Stock
Step 8: Cover Your Assets
Step 9: Invest Like the Masters
Step 10: Don't Sell Too Soon
Step 11: Retire in Style
Step 12: Pay It Forward
Step 13: Make friends and influence Fools

http://www.fool.com/how-to-invest/thirteen-steps/index.aspx
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The IQD team Tax Rules For International Investing - Foreign Currencies

11/8/2011

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Tax Rules For International Investing - Foreign Currencies

U.S. Taxation of Currency Gains or Losses  
By Vernon K. Jacobs, CPA  
& J. Richard Duke, J.D., LLM
 
Tax Rules For International Investing - Foreign Currencies

http://www.rpifs.com/offshoretax/otcurrency.htm

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The IQD Team FTC: Facts for Consumers: Investment Risks Scams Fraud

11/8/2011

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FTC: Facts for Consumers: Investment Risks Scams Fraud

Picture this:
 
In search of investments for working capital, an oil company sends consumers surveys of property that suggest the land is oil-rich. The company’s sales force tells interested consumers that top oil experts project the fields will yield thousands of barrels of oil a day — and a tidy return to investors within a year.
 
A film production company tells potential investors it is raising capital to produce a high-quality, low-budget family film with actors who are willing to sacrifice their usual high salaries for the sake of art. Claiming that the independent film market, cable television and video stores have increased the demand for movies, investors are "guaranteed" to make their money back. According to the prospectus, investor money will be spent on production, distribution and the screenplay.
 
Brokers of gemstones, rare coins or precious metals tell investors that the market price of these hard assets is skyrocketing. According to the brokers, the assets will increase in value — not only because experts have graded them rare, but also because of the demand.
 
Brokers of an FCC-licensed partnership tell consumers they’re raising capital to acquire a communications business that can be enhanced with new technology and turned into a competitive high-tech enterprise to be sold or developed for huge profits.
 
Investment brokers are claiming to sell ownership interests in a company that will offer Internet access to the public. The brokers maintain that investors will realize substantial gains from the fees the company will charge its users.
 
What’s wrong with these pictures? In a word — plenty.
 
The oil surveys are fake. The land owned by the company has not been drilled for oil, and in a legitimate deal, much more capital is required to determine if oil could be produced from the land at all.
 
The principals of the film-flam scam are the "producers" and "screenwriters." They take most of the money raised and then use a small amount to produce a low-quality film that is unlikely to turn a profit, let alone be released commercially.
Gemstone, rare coin or precious metal scam promoters often charge very high mark-ups and, as a result, consumers who try to resell their assets almost always lose most of their money.
 
The communication technology promised may be unavailable, unworkable or too costly. The partnership brokers take most of the money for themselves after they acquire low-tech businesses for consumers that would require millions of dollars more to have even a slim chance at turning a profit.
 
The fraudulent promoters generally structure the deals to siphon off at least 85 percent of investor money, never intending to turn over a functioning business with Internet expertise, equipment or staff. Investors are left with little capital, expertise or business with which to compete on the Internet.
 
It’s easy to make a new venture sound like a sure-fire money-maker, especially if the press is writing about successful legitimate companies in similar industries. Fraud promoters create the illusion of authenticity and success by incorporating, renting office space and issuing partnership units or stock certificates. But while they claim to offer investments in exciting sounding businesses or sell lucrative assets, they deliver cheap imitations of what they promise. As for consumers, they remain unaware that they’ve bought something of little or no value until their money is gone and profits have not materialized.
 
Pre-Investment Questions
 
Fraud is always a possibility, even with secured, regulated investments. Before investing, ask tough questions, both of yourself and those who are soliciting your investments. If the answer to any of these questions is "no" — or if the answers are vague or complicated — more than likely the investment being pitched is a fraud.
 
Is the company I’m investing in registered to sell securities? 
Be cautious if the company selling you stock, assets, or partnership units has not registered its securities. Companies that register their securities file prospectuses and annual reports with securities regulators. If a promoter tells you that your investment is "structured" to exempt the securities of the company from registration, you may be dealing with an outfit that’s purposely avoiding contact with regulators.
 
Is it "too late" if I don’t invest my money now? 
Using sales scripts, scam artists create the impression that only a few shares of stock or partnership units are left. They try to convince you that you’ll miss out on a big opportunity if you don’t send them thousands of dollars by overnight courier or wire transfer. Once you give your money to a scam artist, it may be too late to get it back.
 
Does the investment have a track record? 
Claiming that their "opportunity" is similar to those of "hot" entrepreneurs, scam artists often use news stories about the success of legitimate companies as bait. Unfortunately, success stories of other companies in the field are irrelevant for your purposes. Get the track record of the company you’re considering investing in and the background of the people promoting it.
 
Where is my money going? 
Legitimate companies account for investors’ money at all times. Ask for written proof of how much of your money is going to the actual purchase or development of the opportunity and how much is going to commissions, promoters’ profits and marketing costs. If most of your financial investment is slated to cover expenses and costs, much less will be available to earn a return. Telemarketing is particularly expensive; if you are investing in a telemarketed investment, how much are your brokers getting paid to talk to you?
 
Do I have an independent, knowledgeable, trustworthy person who can advise me? 
Get an independent appraisal of the specific asset, business or venture you’re considering. An appraisal offered by the party selling the investment opportunity can be fake. Talk to the previous owners of an asset or a business you’re acquiring for its value history. Discuss all investment ideas or plans with an accountant or an advisor you know and trust.
 
Do I know who I’m dealing with? 
Can you find published information about the company in which you’re investing, proof that the company has registered the securities it is selling with a government agency (if required), or someone you trust who has heard of the company? Have you checked with your state securities agency to see if the promoter or sales person is licensed to sell securities in your state, if required? If not, be cautious. You’re giving your money to strangers.
 
Checking law enforcement agencies and Better Business Bureaus in the community where promoters are located is prudent, but not fool-proof. It may be too soon for the company’s victims to realize they’ve been defrauded or to have lodged complaints with the authorities. In addition, fraudulent promoters can lie about their name or their business history, or even pay people to be "references."
 
Can I tell a genuine company from a fictional one? 
Don’t let appearances fool you. For a few dollars, anyone can incorporate an entity. Personal computers and desktop publishing software help scam artists produce slick promotional materials. Phone service providers can put toll-free telephone numbers in homes.
 
Did my sales representative tell me the risk of losing my money was high? 
Sales representatives should tell you the risk of particular investments. Be particularly suspicious of sales pitches that play down risk or portray written risk disclosures as routine formalities required by the government. Believe the risk disclosures that say you could lose your whole investment. When your money is gone, fraudulent investment promoters often use "risk disclosures" against you.
 
Can I be certain a promoter is not lying to me? 
Scam artists lie. Their success depends on having an airtight answer for everything. They inflate the costs and value of worthless investments. They promise you profits years down the road so you won’t find out that your investment is a scam until long after they’ve disappeared with your money.
 
Do I know when something is too good to be true? 
Investing is risky business. Anyone who tells you an investment is likely to turn a profit quickly should have a basis for the claim. Demand written proof of profit projections from independent sources. Be especially wary when someone tells you profits will be big enough to offset the risk of investing. Every potentially high profit investment is high risk.
 
For More Information
 
Several government agencies and business organizations register, regulate, investigate or monitor companies and individuals who offer investment opportunities. If you have questions about a company or an individual, or you wish to make a complaint, contact one or more of these offices, as appropriate. When you seek information, understand that the absence of complaints filed with governmental and private agencies does not mean that a company or an investment is necessarily sound.
 
Federal Trade Commission
North American Securities Administrators Association (NASAA)
Chief United States Postal Inspector
Commodity Futures Trading Commission
Securities and Exchange Commission
Better Business Bureau
National Association of Securities Dealers
National Futures Association
National Fraud Information Center
Your State Attorney General's Office
Your State Securities Commission, Securities Department, or Department of Corporations
The FTC works to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. Watch a video, How to File a Complaint, at ftc.gov/video to learn more. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
 
http://www.ftc.gov/bcp/edu/pubs/consumer/invest/inv03.shtm
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