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When I was growing up, I enjoyed playing Monopoly and particularly enjoyed handling the bank. At one point in my career, I worked for a bank. But until recently, I never thought in terms of being the bank. That all changed when I discovered Person-to-person (P2P) Lending on an eBay-like website where people (”borrowers”) post a request for an unsecured loan of up to $25,000 at a maximum interest rate they’re willing to pay. Then other people, like me (”lenders”), place bids in a reverse Dutch auction, for the amount and rate they’re willing to lend, usually for a piece of the loan (at least $50).

On one site, borrowers provide their annual income so a debt to income ratio can be determined and displayed. A credit check is run and a borrower’s credit grade is also determined and displayed. The site has over 1,200 loans listed currently. They range from $5,000 at 4.75% interest for home remodeling (1 bid) to $3,000 at 29% interest to consolidate credit card debt (12 bids).

Lenders create a link to their bank account, transfer funds to the auction site, and begin placing bids. When a fully-funded listing ends, a single loan is created from bids with the lowest rates. The site automates much of the operation for the lender including withdrawing monthly payments from the borrower’s bank account and distributing them proportionately to the lenders’ accounts.

Not every loan request will get fully funded, but those that do Read more…

Bank Certificates of Deposit (CD’s) have traditionally been among the lowest risk investment tools possible. They are safe because they are insured against loss of principal by the Federal Deposit Insurance Corporation (FDIC) up to an initial deposit of $100,000 per institution. Compared to the rest of the realm of investment tools, they also usually offer the lowest rates of return. Not only is rate of return low, but the interest earned by a CD is taxable annually as regular income. A CD owner receives an IRS Form 1099 which reports the interest earned. This amount is then included on line 8a of the Federal Form 1040.

In addition to considering low returns, subject to taxes, investors must also consider the inflationary environment.

Inflation always decreases the overall return on investment. Interest earned is further eroded by the effect of taxes. Depending upon your personal tax situation, it is highly likely you are actually losing money by having too much invested in CD’s.

In many cases, investors have a tendency to want to keep most of their money liquid. Most think they will need it on short notice. Banking studies have shown that the average life of a 90-day CD is actually 5.4 years. Though the CD matures every 90 days, the certificate is continually renewed, unless other instructions are given. These studies demonstrate that the need for liquidity is much less than most holders perceive. Certificates of Deposit were intended to be short term instruments providing Read more…

Now we come to the first crucial topic in our discussion. A lot of people want to know how they can start investing while they are still having problems paying back their debt every month. ” I do not even have an extra one cent to spare after paying back my mortgage, credit cards, insurance etc, so how possibly for me to have money to start my first investment!”

Therefore, I think the first problem a lot of people are facing right now is they are actually work hard for the bank and not themselves. They have a lot of downpayment to make every month and eventually they become slaves to their loans. Don’t you think it is funny for you pay the bank first when you get your salary every month instead of paying yourself first. You are the one who works hard to get the money but the funny part is you are paying the bank first when you are being paid every month.Some may argue that, they have no choice because they have to pay their loans or else they would have to pay extra next month due to late payment. If you can’t spare 10% every month for any investment, there must be something wrong with your money management every month. There are two possibilities, either you are living on liabilities ( you use credits to buy almost everything and you are now paying back your bad debts every month) or you are just spending too much ( the only way you can spare 10% is to cut down your expenditure).

If you are case number one, it is a bit difficult but I think the first step to do from today is to cancel your extra credit cards. A lot of people ask me, actually what is the appropriate number of credit card a person needs, I said it is “ZERO”, get me right, not “ONE”, not “TWO”, it is “ZERO”, you shouldn’t live on liabilities. I would talk to you about what liabilities you may take in next lesson.Credit card is the monster that seduces you to spend extra money, some time even more than Read more…

Performing technical analysis is a vital component of investing wisely in various securities and can be done to any type of security, including: stocks, mutual funds, bonds, etc. When you do a technical analysis on a specific security, you are looking for price fluctuations, trends and price patterns. Your final goal is to determine how you stand as an investor, i.e., should you buy or sell?

So, how do you do a technical analysis? Well, there are a few different methods; Some people do their technical analysis by studying charts of a security?s past activity, other people use technical indicators as part of their technical analysis process. The best way to do a technical analysis is to employ several different methods – pitting one against the other in a system of checks and balances.

Assumptions made during Technical Analysis

The methods for technical analysis make certain assumptions. The first assumption is that all securities have the tendency to form patterns in their fluctuations, which is fine, and is often the case, but the market is volatile and often unstable. The other assumption made is that the past is a good indicator of the present, and yet when dealing with the market, coming to this conclusion during technical analysis does not always lead you to profitable conclusions.

Why do it?

So then, how does one handle the concept of the ?technical analysis?? Why do it if it isn?t completely accurate? Well, even though it isn?t 100%, you still stand a pretty good chance of coming to the correct conclusions, depending on the methods you used and how thorough you were while analyzing.

Technical analysis, then, offers you a way to make informed choices when it comes to making new investments Read more…

The fact that you are reading this material is a good first step, showing that you are ready to get serious about your investments. But this is just the first step. Taking responsibility for your financial well being is not something that can happen over night, but it certainly can happen. It will require time, effort, patience and the willingness to learn, as well as the understanding that you may make some mistakes. However, by doing your research first, you can limit the severity of your mistakes and help to maximize your earnings from investments.

Initially, it is important to take a good look at your current financial situation. You will need to sit down with your significant other and your family in order to create a budget that will allow you the money needed to make your investments. This can be a rather startling process, particularly when it comes to assessing your debt. However, understanding where you currently stand financially is the first step to knowing what you will need to do in order to maximize your potential earnings. You should take note of your earnings, your expenses, your liabilities and your assets.

In fact, your second step will be to set realistic investment goals. The goals you set will be completely individual, but they will need to be based in some part on the basic reality of your age, earnings, assets, liabilities or other aspects of your situation. If you are already in your fifties and have not ever invested before, it may not be possible for you to retire a millionaire. But that doesn?t mean that you shouldn?t take the steps necessary to earn as much as possible between now and retirement. Alternatively, if you are just starting out in the work force, you and your spouse need to understand how powerful time, and the compounding interest that time provides, can be in maximizing your investments. So although the process of investing can seem overwhelming, it is important not to put your decisions off any longer ? you will just be wasting valuable time. It is absolutely true when it comes to your investments that time is money!

Once you have budgeted Read more…

Why Now is an Ideal Time to Invest in Land

Are you wary of relying on the stock market for your retirement? Or perhaps you?ve tried to increase your net worth with rental properties but are tired of dealing with tenants.

Let?s face it. Ultimately, the ideal investment opportunity is one with low risks, high profits and little leg work.

If you agree, read on to find out why investing in land is one of the most sound investment strategies available today. You?ll learn why it is a viable opportunity for most investors, both large and small.

Simply put, unlike developed property, such as an apartment building or strip mall, land offers a safer and higher return. When compared to other financial instruments, the profits are even more impressive. For example, during the past few years, stocks and bonds have had average returns of 4 to 8 percent. In contrast, land investments have realized cash on cash returns greater than 200 percent.

Advantages of Leveraging…

Another advantage of investing in land is the fact that it requires less money upfront than other types of properties. For individuals who qualify, only a 5 percent down payment is needed instead of the traditional 10 percent. The bank will provide the remaining 95 percent. This means double your leverage for a greater return on investment.

Investors are attracted to real estate because of leveraging. You can purchase an expensive property using 0 to 20 percent of your own money while financing the rest. Consider these examples, which assume that a property was held for one year. Let?s say you put down 20 percent and then the property increased in value by 20 percent. You will make a 100 percent return. (For simplicity reasons, closing costs, taxes, etc. weren?t calculated in this figure).
Now, what if you put down half of that amount?say 10 percent?and the property appreciated at the same rate of 20 percent? In this scenario you would make a 200 percent return.

As you can see, the less money you put down, the greater your return. Finally, consider this scenario. Suppose you put down just 5 percent and the property increased in value by 20 percent. You would make a 400 percent return!

The Appeal of Pre-Construction Property…

Real estate investors looking for ?ground floor? land investment prospects are finding that pre-construction planned developments are the perfect opportunity. One reason is because many developers will cover your mortgage payments for up to two years. So ultimately you pay nothing, buy at pre-development prices, make no payments while experiencing appreciation and then realize significant profits when Read more…

The occurrence of HYIPs is somewhat new, but have gained popularity at a rapid rate. They have become one of the biggest opportunities to make a lot of money fast, but also one of the internet’s biggest scams in recent years. They have made a lot of people rich, but have also made a lot of people lose their money. Should you get in on this phenomenon? This article is a reference to aid you in the decision.

What is a HYIP?

HYIP stands for High Yield Investment Program. HYIPs are investment programs normally offered on the internet. They typically accept investments of $100 or less while promising high returns. Interest rates of up to 100% a month is not uncommon. In general the interest rates are ranging anywhere between 5 ? 250% a month. Most only accept payments through e-currency programs such as e-gold because this allows them to accept numerous donations from anywhere in the world.

Where does the money come from?

There are hundreds of different investment strategies used by HYIPs. Some invest in stocks, others in property. There are even HYIPs investing in other HYIPs. Scam HYIPs are Ponzi schemes, in which new investors provide the money to pay a profit to existing investors, which they could then withdraw leaving nothing to pay the new investor. This approach allows the scam to continue as long as new investors are found and/or old investors leave their money in the scheme.

Is it legal?

Some might consider investing in a HYIP gambling. Gambling online is of questionable legal status in the U.S. and other countries, however, the odds Read more…

Futures. Day trading. International markets. Online brokerages. The barrage of investment opportunities on the internet can drive off as many investors as it should attract. There is simply too much noise; that’s why even small regional banks have asset management services available in their storefronts. Today’s potential investor is most likely looking for help in vetting the amount of information being thrown at him, rather than seeking more.

Probably the best approach to presenting information to a potential investor is to take the personal approach. Who is doing what? What are the speculative opportunities, where are the steady, cautious, safer options? How much cushion should an investor have in order to indulge in some of the riskier opportunities, such as futures and IPOs?

A good layman’s resource for concise articles that provide accessible and topical information is Businessweek online. The magazine has an enormous and accessible website that will take you to articles on overvalued housing markets; on the pace of mortgage resets; on the weakness of the housing market; and condo hotels as a hot U.S. market niche.

Access to that sort of basic material will make a potential investor more comfortable with other sections of an investor’s website. Too much scattered specific material too quickly can be a frustrating experience, even for the seasoned investor. A glance at the homepage for http://www.investorguide.com/ provides a market snapshot complete with miniature graphs; a list of hot stocks; a stock of the day; five clickable headlines for investment stories of the day; and three columns of commentary. As an introductory page, that would be overkill for anyone but the most focused of investors.

The SEC provides an informative and credible discussion of online trading, its tricks and travails at http://www.sec.gov/investor/pubs/onlinetips.htm. Including this sort of background material on an investor website would provide a degree of credibility not found on the more commercial, high pressure sites. The FTC has a bright green page that features investment promises that should ring alarm bells at http://www.ftc.gov/bcp/conline/edcams/onl-invest/index.html. A link to this page with an appropriate quote about “bewares” for the buyer would be another credible and unusual touch with which to frame Read more…

A lot of people only think of stock market when they are asked about investment. Many of them would tell you that the last place they want to invest their money is in stock market. They still remember the major market crash in US during 1920an. They would tell you that the stock market is too unpredictable and eventually you would ‘burn your fingers’ if you try to play with fire. Many Asians are still having nightmares when think about the market in 1997-1998 when there was money crisis in Asia. However, you must remember a few facts here,

a) although most people think that the safest way to invest money is through bank deposit,I must tell you that it is the worst investment vehicle in term of return.

b) although you always hear people saying that the higher the return, the riskier the investment. It is not always true!

c) it would save half your energy if you have written plan about investment and consistent in your investing.

d) stock market is not the only vehicle for you to achieve your financial goals, there are other ways as well such as property investment, mutual funds, money market , gold ……..etc

You would feel unsecured if you try to put your hard earned money in something that you do not know. Therefore, for you to start your first investment, learn as much information as possible so that you know your risk tolerance and understand your financial needs.
As I mentioned above, although fixed deposit gives you certain return, this return will be eaten away by your inflation. Although a lot of people hate stock market, history shows that the average return in US stock market is around 10% (before transaction costs and all other expenses) and UK is around 10-12% per year .The lesson to be learned here is you need to know how to diversify your investment in order to earn the maximum return.

I always tell my friends that there are 3 types of investors in the world, one group of investors whom I call Read more…

HYIPs are programs which pool together the funds of their members
to take advantage of investment opportunities, like stock trading
and foreign exchange (FOREX) trading among others. These HYIPs
attract funds from members (known as “deposits” or “principal”) by
promising high rates of interest payments, which explain why they
are termed “High Yield Investment Programs”. Naturally, the higher
the promised interest rate, the higher the risk borne by the members.
This is due to the fact that HYIPs pay off their members from the
returns on their own investments. Therefore, it is possible for the
payouts to exceed the HYIP?s own returns, especially when the rate
of interest payment is high. If such a situation persists, the
closure of the program would be inevitable and members will stand
to lose their principals.

Scams

A scam is a fraudulent business scheme and this is rampant among
HYIPs. Some HYIP owners abuse the trust of their members by
misrepresenting to them about their investment strategy, when they
have NONE. Consequently, they will eventually run out of money to
pay their members and most of them just disappear into cyberspace,
along with members? hard earned money. Therefore, we hope to
educate readers by offering our humble advices on minimizing the
possibility of being cheated.

Ponzi Schemes

This is named after Charles Ponzi, an Italian who migrated to
the United States and became one of the greatest swindlers in
American history. His aliases include Charles Ponei, Charles P.
Bianchi, and Carlo. By paying off initial investors with money
obtained from the later investors, Charles Ponzi managed to
swindle $15 million from 40,000 investors from 1919 to 1920.
This is how the term ?Ponzi Scheme? was coined. You should be
aware of the fact that some HYIPs are actually pure Ponzi Schemes.

My Advice

1. Never join any HYIP that pays more than 3% interest daily as
it is next to impossible to afford such a high payout on a regular basis.

2. Always do a Due Diligence check on the program.

3. Listen to what fellow investors have to say about the program
in the various hyip forums. Check if it has been paying its members.

4. Diversify your funds by making deposits in several reliable
programs. This reduces the risk of loss you are bearing. Even if
one program shuts down, you still have other programs as back-ups
for you to recoup your losses from.

5. Determine the coherency Read more…