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In addition to being one of the world?s wealthiest men, Warren Buffet is also known for his common sense investment advice. Instead of chasing hot stocks and market trends, the straight-shooting septuagenarian preaches simple and logical investment strategies that even the least financially inclined investors can follow. While there are as many stock-picking strategies as there are stocks to pick, Buffet?s long-run returns serve as compelling testimony to the effectiveness of his methods.

While numerous books have been written about Buffet?s investment advice, the primary focus of his philosophy is to look for companies with strong intrinsic value. Rather than relying solely on balance sheets or assumptions of value, he encourages investors to reflect on the nature of the company and its future. Who are their competitors? Is it a business with a high degree of customer loyalty? What are the barriers to entry? Are there any major logistical flaws in the company?s business plan? By following Buffet?s advice, an individual would have fared well through the technology bubble of the 1990s. The acceptable downside to this investment strategy is that the investor would also have missed out on many profitable opportunities that existed before tech stocks began to plummet.

In keeping with his common sense investment advice, Buffet emphasizes that an investor should invest in companies that he or she understands. He reasons that investing in the latest technology-oriented hot stock may lead an investor away from the use of common sense valuation techniques, causing the investor to make decisions based on hype rather than logic. Along those lines, he has been quoted advising individuals to invest in the companies where they spend their own money. Since doing business with a company is one of the best ways to see how it operates, it stands to reason that it would offer insight about the company?s value as an investment. Instead of selecting companies that ?everyone? is talking about, he argues that you should buy shares of the companies that everyone you know is doing business with, especially if price and market interest levels don?t seem to reflect the quality you know is there.

While Buffet offers excellent non-technical investment advice, he also offers tips for those who know their way around a balance sheet. Instead of looking for companies that pay large dividends on a regular basis, he advises investors to Read more…

You need to know about your variable annuity contract before you exchange it. When you own a variable annuity contract a broker may put a temptation to offer you an opportunity to exchange your contract for another one. Should you consider this? Maybe, but it may not be in your best interest.

The problem with exchanging one contract for another is the broker or agent can spin a story to make it sound very attractive. What you need to keep in mind is the grass is not always green on the other side of the fence. Your contract may offer the same or better benefits that can be added after the purchase of the variable annuity.

That’s right; many companies offer the opportunity to purchase the newer benefits to existing variable annuity policy holders. Many times the agent does not realize this or just wants to earn a commission. When that is the case that part is left out of the sales pitch. The availability of new features that are not offered by your current annuity company, or in the rare case that the insurer has financial troubles, are really the only reasons to switch variable annuity contracts.

You should never, ever exchange a variable annuity for another if you are still subject to a deferred sales charge, or penalty. Many brokers tell you that you can make up the surrender charge with a new ?bonus” variable annuity. The fact is you will never make up that penalty you may take. All you have done is surrender one contract for another one that has longer surrender charges and/or higher fees.

The only acceptable reason to take a penalty is if the current insurance carrier is in extremely poor financial condition. Other than for that reason, it maybe just a reason for the agent to generate another commission.

If you are considering exchanging one variable annuity for another make sure you are doing it for the right reasons. If it is for the opportunity to get a better benefit, make sure your current company does not already offer that Read more…

There are 2 kinds of investments:

a) investments for the rich and

b) investments for everybody else.

If you want to make like the rich, you got to have you’re own business. Without a business you can’t afford the investments that rich people do.

The only reason for you to start a business is to accumulate lots and lots of values.

I want to underline the difference between an employee who makes investments and a business that makes investments.

The majority of the investments are too expensive if you want to do them as an employee. But they become accessible if you make them through you’re business.

The only thing that investors have to do is to learn how to make money work hard for them.

WHY THE IDEA OF INVESTMENTS SCARES US?

First of all, the term “investment” is a different notion for different people. The things that people call investments are not necessary investments.

They talk about totally different things, but they think they talk about the same thing.

Different people invest in different things.

a) A solid preparation, and job that offers financial security and other benefits, is what some people call investments.

b) Some people make extern investments.

Here is a list of some types of objects for investments?

a) Stocks, bonds, mutual funds, real estate, insurance, merchandise, savings, collectibles, precious metals, etc.

b) All this can be divided in different subgroups.

Stocks?

1) Usual stocks

2) Special stocks

3) Secure stocks

4) Stocks that sells at low price

5) Stocks that sells at high price

6) Read more…

Recently a friend in the insurance industry was telling me about an insurance product that had decreasing premiums rather than the increasing ones we have become so familiar with in the term insurance arena. This lead to a discussion about investing and how we are always looking at making money on the upside.

Yet, you can actually make more money faster in a down market. That’s not to say that we should all run out and start changing our investments, it’s just that we have become so accustomed to looking at things from the same box, that we miss opportunities that are right before our eyes.

What if you could see things from a different perspective: the one that fits your goals, your life priorities, your current situation, your values, and the way you want to live? Do you get frustrated when hearing the same old messages of make more money, save more money, cut back, get a better return. This vertical thinking does not allow for creative, individual solutions to very personal financial situations.

A 12 step e-course might seem like a lot of work, or a long to wait to get an answer ? but, hey, we didn?t get to where we are today overnight ? the quick fix is the 360 degree view of the current reality combined with some day to day very Read more…

Fundamentals are associated with the economic health of a company, measured in terms of revenues, earnings, assets, liabilities, Return on Equity (ROE), Return on Assets (ROA), Return on Investments (ROI), growth prospects and cash flows, etc. The fundamentals tell you about a company. You can say a company is having robust fundamentals if it is growing at a nice pace, generating a profit, has limited debts and abundant cash.

The analysis of a company?s fundamentals involves getting deep into its financials, rather than day-to-day movement in its share price. Equity researchers normally do fundamental analysis in order to calculate the intrinsic value of a company?s stock. If a company?s stock is trading above the intrinsic value or fair value, then the stock is overvalued. If a company?s stock is trading below the intrinsic value, then the stock is undervalued. However, if you watch the stock markets very closely, the share price of most companies never matches the fair value. Often, day traders and investors who would prefer short term investment options invest in those stocks, regardless of the companies? long term growth prospects. However, long term investors generally prefer to invest in companies with robust fundamentals and ignore near-term share price movements.

The following are various components that constitute a company?s fundamentals:

Revenues: Revenues (sales) are the total amount of money received by a company through the sales of its goods and services during a specific period of time. Revenues are one of the most important barometers of the growth of a company as it indicates whether there is demand for their products and services.

Cash flows: Cash flows are calculated by deducting a company?s cash payments from cash receipts over a particular period of time. Cash flows indicate the liquidity position of a company. However, one must pay particular attention to the operating cash flows, since the health of the business can be most clearly seen there.

Net income: Net income, which is also called the ?bottom line?, is calculated by subtracting from revenue, all of the company?s costs, such as operating costs, interest expenses, depreciation, taxes Read more…

When most people think of low-risk investments, they think of stocks and bonds that simply sit in their portfolio and show no real yield or loss after several years of doing a whole lot of nothing.

Of course, this is almost never the case? even low-risk stocks and bonds have their market fluctuations and see their share of ups and downs. While the ups aren’t as extreme as some other investments, the downs tend to be rather mild as well.

With a little bit of smart investing, it’s not uncommon to be able to turn a nice profit from investments that have a lower risk.

Defining Low-Risk Investments

Low-risk investments are those investments that are not likely to suddenly drop in value, largely because the company that offers them is quite stable and generally maintains a certain price level on their shares. Because of the lower risk of sudden price drop, the value tends to increase rather slowly? though a slow increase is still an increase.

Determining Investment Risk

When determining investment risk, you should take a few moments to do some basic research on the investment and the company that offers it. Many online stock and investment sites offer research options that show you the performance of the investment over various time periods. Look at some of the longer periods, such as 1 year or 5 years, and see how consistently the stock has performed. If it appears to be fairly stable, especially with a slight increase, then the stock can be considered to be low-risk and you can proceed as you would with any low-risk stock.

?Safety Stocks?

?Safety stocks? are called this because they have been shown to be stable over a period of many years, and are considered to be some of the closest things to a sure bet as you can find with investment. These stocks tend to grow in value at a relatively slow pace, but also tend to avoid some of the drops in value and large fluctuations that other stocks periodically go through. This doesn’t mean that safety stocks won’t drop in value; this simply means that they generally recover quickly and then continue their gradual rise.

Diversifying with Low-Risk Investments

Low-risk investments are perfect for diversifying your portfolio, Read more…

Choosing a variable annuity can be very frustrating. There are so many to choose from and the benefits seem so complicated. You must do research on the product you want to buy, it could save you big time.

With variable annuities and living benefits becoming more and more popular, you need to take a careful look at the products. Getting the right product will be a win fall, but getting the wrong product can cost you in the future. If you only think you understand the product or feature, do not buy it. You must fully understand the product and features before you own it.

Withdrawals or market conditions can severely impact your variable annuities living benefits. If you take too much money out, then you may be subject to a lower guarantee on your living benefit base. Some living benefits can be impacted if you take withdrawals during a declining market, while others it is better to take withdrawals during an increasing market.

Simply reading the sales brochure will not give you the ins and outs of a variable annuity benefit. You must read the prospectus and understand what they are talking about. Your financial advisor can help with this, after all this is part of their job. Once you are comfortable then make the investment, but if you are unsure do not let yourself be pressured.

Choose the right benefit for your needs, if you are looking for immediate income you are not going to be interested in a fancy death benefit guarantee. If you Read more…

The range of options for investing your money can be bewildering to the new investor. Obviously, I cannot provide investment advice particular to your circumstances, but I will try to advise you of a few basic investment options that may be available to you if you are looking to invest a lump sum.

Investment Options:

High Interest Deposit Account

A bank account? Is that really an investment option?

Sure it is ? something that really needs underlining is that if you?re looking to invest on the stock market, you really need to be looking to make long-term commitments.

What a High Interest Deposit Account offers is a short-term investment option, for example, if you?re looking to put a lump sum away for just a couple of years.

You?ll find the interest is usually taxable ? but you can also benefit from much higher interest rates than normal savings account at the bank.

And, your money is also safe ? whatever the fluctuations of the stock markets, your interest rate should be guaranteed.

Tax Free Savings accounts

Another financial product a bank can usually offer, is a tax-free savings scheme.

Certainly that?s true here in the UK, where the ISA ? Investment Savings Account ? is widely available.

Take note, though ? there are a couple of important points to be aware of.

The first is that ISA?s come in at least two basic forms ? often referred to as Mini and Maxi ISA?s.

The Mini ISA is effectively a form of high interest savings ? you have a guaranteed savings rate, and again, it?s pretty high relative to current accounts. So a mini-ISA can make a good short-term investment.

The Maxi ISA is a direct investment in stocks and shares ? so you?ll need to be in this for the longer-term.

That?s partly because your interest will only grow with the stocks themselves. But less obviously, when you invest you?ll likely find yourself immediately hit by a management fee ? for example, 4% of your deposit. So your stocks will need to earn 4% value before you get back to where you started from.

The second point to be aware of with ISA?s and tax-free savings is limitations ? with an ISA you can only invest a limited amount of money in them each year. So this isn?t really something you can use for larger lump sums.

Stocks and Shares

Stocks and shares are the mainstay of market trading ? you buy into the equity of growing companies, on the grounds that as they continue to grow and perform well, their revenues increase, their company value increases, and therefore not only does the stock you hold grow in value ? but you can also earn dividends ? earnings paid directly to shareholders.

The problem with the equities markets, though, is one of risk. It is up to the individual investor to determine the level of risk that they feel comfortable with taking on board, and proceeding accordingly.

For example, investing a lump sum into a single company stock is extremely risky ? it?s all eggs in one basket. Lessen the risk by investing in multiple stocks and also try to cover different market sectors ? for example, financial services stocks, energy stocks, mining, airlines, retail, etc.

There are certain options to help make those decisions for you ? such as Mutual Funds and Exchange Traded Funds. These will simply take your cash and spread it around a diverse range of stocks for you.

Of course, you can take a hands on-approach yourself, and try to choose your own stocks.

However, the big problem here is that in doing so, Read more…

The IRS issued the February 14, 2006 Quality Assurance Bulletin (?QAB?) dealing with 401k plan exclusions of part-time, temporary, and seasonal (A.K.A. ?part-time?) employees. This QAB revolutionizes the way IRS document examiners will look at 401k plan eligibility clauses and warns that inadequately drafted provisions dealing with part-time employees may be disqualifying, regardless of any plan determination letter.

Why the Attack?

As 401(k) plans have matured, newly recruited employees are no longer willing to wait the traditional 1000 hour, one-year eligibility period to begin participating. Many employers are liberating their traditional 401k plans of a 1000 hr year wait by allowing immediate eligibility, at least for the deferral portion of the plan.

Other employers, while permitting immediate eligibility, wish to also avoid covering part-time employees because of:

(1) the negative effect on the ADP test as part-timers seldom contribute and will be counted as a zero.

(2) the administrative costs of adding and deleting new employees and

(3) the part-timers? zero balance will prescribe a top heavy contribution.

Employers are now looking to provide immediate deferral entry and simultaneously exclude part-timers as a classification.

The Problem:

Treas. Reg. ?1.410(a)-3 notes that a service condition requiring more than one thousand hour year of service is invalid. In other words what matters is that the plan as written, could have a service requirement in excess of the Code ?410(a) limits, which is enough to disqualify the plan. Therefore, as a class part-timers can not be excluded.

IRS additionally addressed this issue in the following:

? A 1994 Field Directive instructed IRS examiners to challenge plans which had these service requirements.

? the IRS modified Publication 794, which accompanies determination letters, added the following : ?A determination letter may not be relied on with respect to whether a plan?s exclusion classifications, if any, violate the minimum age or service requirements of section 410 by indirectly imposing an impermissible age or service requirement.?

? A 2002 Recurring Issue Focus (?RIF?) told IRS examiners that this would be an audit issue, not a determination letter matter.

IRS 401k Attack

Effective with the February 14, 2006 QAB the IRS examiners will again challenge 401k plans with the ?part-time? exclusions. Examiners will not be challenging an exclusion classification that is defined without reference to hours of Read more…

Did you know?

89,000 people from the UK and USA in January 2006
were looking for UK land investments to purchase via the internet using google and yahoo

Why Land is the strongest investment

There is a huge shortage of Land In The United Kingdom, which is fuelling house prices and rising homeless, so buying land which is undeveloped that can be purchased is a great investment opportunity and taking into account the supply and demand situation in relation to the UK property requirements it is easy to see why.

Land value is rising steeply, and to many who thought this type of investment was only open to developers and professional investors, this is just not the case anymore.

Top Investment Properties represent Leading Property Developers in the UK who offer land investment on their Prime Residential Developments which meet the overwhelming housing demand in England ? and, the planning process is handled by the Developer at no additional cost to you, with the buy back agreement in place before you spend one penny!

“One Simple investment can make over 400% return within 4 years”

Many Investors are buying because of the huge benefits of compounding on land that will give them massive profits in the near future using this proven method for wealth creation.

Land Investment Versus Property Investment
Land Investment benefits from no mortgage, tenants, voids, maintenance, utilities etc, etc, etc, as you would expect when purchasing a property for investment, this would mean no headaches and worries at all.

Also with a property investment the initial outlay is higher, and there is no guarantee you would sell at a high profit in the present climate within 4 years, yet alone over 400%.

Compounding
Land is a great low entry investment strategy with the benefits of compounding using this program, let me explain more.

There are now lots available from ?10,800 upwards and with the buy back option from the developer in the Read more…