Let's start stock investment!

Stock is a long-term investment. As a stock holder person of a company, we can get a return in investment of the company's profit sharing based on number of shares we hold. We also potentially get profits from re-selling our stocks. We often call it ‘capital gain'.

Nevertheless, investing in stocks is not a risk-free investment. Investor who want to trade stocks, need to understand and know his investment goals, including measuring the risk of a company they buy the shares.

Before entering into the stock market, the important thing is, decide first your motivation to buy a stock. Are you plan to get short-term profits by selling and buying stocks a.k.a stock trading? Or, do you want to be a long-term investor? Long-term investors are not only targeting the advantage of rising stock prices. They also wanted to get a dividend or part of the company's profits.

Otherwise, for a stock trader, dividend is just an added value because the main goal is short-term capital gains.

However, in the context of financial planning, stock is a long-term investment tool. Therefore, the process of stock selection should be based on fundamental analysis of the company's performance. That means, you have to understand how to read financial statements and know the ins and outs of the company's business that you want to buy shares.

This is different from the trader. The technical analysis is made based on the share price fluctuates more dominate their investment decisions.

You should also pay attention to the liquidity factor. That is, how easy the shares to be traded. Typically, the more the stocks are traded, the easier it is to be traded.

There are two options for those who are just starting out stock investment. An investor can transact their own with the online service or use the services of a broker from trading securities. However, before doing an online transaction, investors should gather sufficient information about the world of stocks.

At this early stage, there is no harm for investors to use the services of securities to obtain assistance and related research of leading stock issuers. This is to make easier to investor for selecting stock to buy. In addition, the analysts will suggest to you to learn a trading plan. By having the trading plan, the investment can be measured, both risk and potential returns.

[image taken from: sendaiben.org]

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What is Inflation? How it affects our financial?

Government or other state financial authority often heard announcing the inflation rate of a certain period. For example, in the USA the inflation rate from Jan-Jul 2013 is average 1.6% (www.usinflationcalculator.com)..

Well, now the basic question is.. What is inflation? How it affects our personal finances? Is important to know the inflation rate? What should we do to deal with? What is inflation rate?

Based on common understanding of economic, inflation is a process of rising prices in general and continuously, caused by various factors. For example: increased consumption, excessive market liquidity, un-smooth distribution of goods. Also, it could be said that inflation is the decreasing process of currency value continuously. Simply put a can of coke. Ten years ago maybe only needs 10 or 15 cents for a can. Now maybe it needs around 70cents or even $1. The price continues to rise while the purchase value of money ($1) becomes lower and lower.

The rising price of goods, while our salary still fixed, the amount of money needed to buy the same product will be bigger. Thus, probably the amount of money that can be set aside for saving or investment for each month will be reduced.

Is important to know the inflation rate? YES, it is very important!

Knowing the inflation rate makes us become more aware of what is going on and what to do. For example, our country inflation rate is average 5% this year. Is the money we save or invest growing? I am afraid not! What should we do to deal with inflation?

After knowing the meaning of inflation, inflation rate, and its relationship with to our financial life, some important things to do are:

1.  Check our fund placement allocation.

2.  Diversity is important. Do not keep all money in just one financial product. (See Asset Allocation).

3.  Saving our money in saving product will only grow 1-2% per year. While in deposit probably could grow around 3-4% annually. In the meantime, inflation rate is average 5%.

4.  Find another financial product that can grow your money compete with inflation rate.

5. Change our dreams become goals. Clearly state your expected amount to reach, what is your financial goal, when to achieve it. This is because the price of our ‘dream’ will continue to change each year in line with inflation.

6.  Pursue your dream by raise money on the right product, so that dream can turn into reality.



[image taken from: seekingalpha.com]

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Make your Retirement Fund Work for you

It is estimated that a typical individual will need approximately $40,000 per year in retirement to live a modest lifestyle, and couples may need about $55,000 per year. In your retirement years you will not be earning the income you need to live comfortably, so saving for retirement is very important. The compulsory requirement to make regular contributions into a superannuation fund is designed to help you save the amount of money needed to retire comfortably. Because of how important the superannuation fund is for your retirement plans, it is important to make an effort to maximize the account’s benefit. Consider the following points carefully.

Maximize Your Contributions
First, you should maximize your contributions in your superannuation fund. Currently most Australians are required to contribute at least 9 per cent of their annual income into this account, but you may contribute more. There are two key benefits associated with investing more money into your superannuation fund. First, your account balance will grow more quickly as you invest more money into the account. While the principal amount of your investments will grow, the effects of compounded interest and dividend reinvestment will further enhance growth. In addition, the contributions and earnings on your account are tax advantaged, so you may pay less in taxes by contributing more. However, keep in mind that there is a maximum limit to the amount that you can contribute without experiencing a financial penalty.

Understand the Rules
You should also take time to learn the superannuation rules in place. For example, you may not have realized that a spouse can make a contribution on behalf of a non-working spouse. In this way, the couple can fully take advantage of the tax benefits associated with the superannuation fund. Another example involves the government co-contribution rule for lower income workers. If you earn less than $46,920 per year, you may qualify to receive up to $500 per year in matching contributions from the government. This may be a relatively small amount of money, but it can add up to a considerable amount of money over time.

Invest Wisely
A superannuation fund provides you with the opportunity to invest your money at your discretion. You can choose to invest in high yield but risky investments, low risk but low yield investments or moderately rated investments. Generally, financial advisors recommend that younger Australians invest their superannuation funds more aggressively and in higher yield investments. As you age, however, you should consider diversifying your assets and gradually moving more of your investments into lower risk funds. It is important to take time to educate yourself about investing fundamentals as well as the different investment options available to you. Because you are the person who ultimately is responsible for the growth of your fund’s value, you want to ensure that you are investing your funds wisely.

If you are like most Australians, you are one of millions who participate in a superannuation fund with minimum regular contributions.

Australian readers interested in self managed super funds should have a look at UBank as they seem to offer the best rates (at time of writing).




Guest post from Cody Rowley

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Gold Investment or Property Investment? Which one is better?

What are the advantages and disadvantages of investing in property and gold investments? Which one is better?

Indeed, each type of investment has its advantages and disadvantages. In property investment and gold investment, both are an investment that we can see the physical form. That is why many people prefer to invest in property and gold than investing in mutual funds or stocks, for example. This is one of the major advantages of both types of investment (property and gold).

In terms of liquidity, gold investment tends to be more liquid because it can be sold in smaller denominations in accordance with its gram weight and our need. Meanwhile, if all the assets we have are in the form of property and money that we need is not too large, we still have to sell the property as a whole.

Choosing the appropriate property requires special skill and luck as a major factor in property investment is location, location, location, location and location, and not everyone is lucky to find a suitable property. However, if you can choose the right property, it is not impossible to have additional income if the property is leased.

About which one is better, this will depend on the goal of financial plan you want to achieve. For example, we put our money in gold investment as one component of our emergency fund or education fund. Or we invest in property for the purpose of generating passive income. After determining your financial goal, and then we decide the product. Hope it helps.


[image source: guardian.co.uk]

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Being a Smart Property Investor

Property is still regarded as one of the best investment choice. This statement has been proven since the property still has favorable returns in the midst of economic ups and downs. Therefore, many people wanted to invest in property.

Unfortunately, many investors are still using their emotion in choosing and determining a property as an investment. Consequently, the results are sometimes not optimal and not a few others suffered losses. This trap of property investment is often experienced by many people.

Before you want to be an investor, the important thing is collect all the references and all the wishes of the consumer. There are five elements that must be considered by prospective investors in selecting and determining a property as an investment:

1. Investor should be smart to determine when the right time to buy property is. The most important principle is to buy at low prices and sell at high prices.

2. Investor should choose a prime location. Downtown location is an area that has the prospect of a guaranteed value increase continuously. Other prospective strategic location is near the business center area where economic growth.

3. Be creative in determining the sources of financing, whether through cash or credit/mortgage. Adjust with your financial capability as an investor.

4. Try to look at the property which has investment prospects for the future. This will affect the speed of return on capitalization of the type of investment. Usually condo occupies the top position of return on investment.

5. Always consider the developer's track record. It determines the quality of property's building in the future. In addition, the developer determines the completion time of a property that must be consistent to the contract.



[image taken from: goodtimes.com.au]

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8 Common Mistakes in Property Investing

In the previous article, we have been talking about how to start a property investment. Also, in the next article, discussed how to do successful investing in property, and how to buy a house for your investment purpose.

Well, before you really start to put your money in property investing, it is worth to read this article and think before you start.

Here are 8 Common Mistakes in Property Investing:

1. There are no clear goals and plans.
This is the most important of whatever we do. If we do not have any clear goals, the results will be not clear as well. It is good to have a clear goal in an investment. It is necessary and good to write down your clear goal, so it is easy to remember. For example, I want to have one unit of apartment to be rented out in 2013 and give me a passive income around USD1000/month.

2. Not seek for advice from property expert or a successful property investor.
This is usually neglected. But, if we do not get feedback or input from expert people who are already have much experience, most likely we will make mistakes which should be avoided.

3. Buying a home as an investment that did not generate positive cash flow.
Indeed, often, the first time we buy a house usually does not for investment, but if we want to buy a first home to invest as well, then you should pay attention to how the actual cash flows. Or, if the cash flow is not your investment goal, then the capital gain is the thing to be noticed.

4. Buying your own property and not see the potential buyer in the future.
Often we are only concerned with good design, interior, but the location, for example, this property is very difficult for people to reach. Of course this will be a problem if you are going to sell it or rent out to prospective customer.

5. Buy a cheap property ,but in the wrong location.
When you buy a property, do not get stuck on price only if the location of the property is not so good. This will make it difficult to sell, even though the price below the market price.

6. Buying a dream house and then making an excess renovation.
Usually for the first-time buying, people are tend to re-design his home based on his expectation. But what happened next? The time will come when you feel difficult to pay the mortgage and it seems quite a burden. Especially if it's the fact that his house is not in a good location and at a good price to buy, it is clear that would be very difficult to be an investment.

7. Buying a home beyond the financial capabilities.
We have to consider our financial capability. We have to consider the costs such as sales tax, insurance, monthly installments, operating costs, and also some renovation needed at an early time.

8. You still pay the mortgage until you retire.
You were thinking about buying a small house with small start-up costs. But it turns out that the mortgage was taken for very long time until you retire, you still have to pay the mortgage. Unless it is for rented house and provide a positive cash flow, so that mortgage payment is not a problem.

Well, try to look at and consider the above things before we took the decision to invest in property, so that we could avoid the common errors. And create a better personal financial planning.

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Successful investing in property

Property can serve us as a place of living. At the same time, it is also one of investment product.

Property can be utilized as an investment because in the future there is a possibility of price will go up. Property prices will rise in future due to amount of available land becomes more scarce.

On the one hand, as other investment products, property also contains risk that price does not rise or even fall. If that land is limited, then there is a possibility of price drops? Imagine if when you buy a property, whether land or buildings, it turns out there is content of nuclear radiation in the area. Surely people will think twice to buy property in the area, and makes the demand and property prices to fall.

Between price, location and purchasing power

Three important points to consider when buying property is location, location, and location. You must have often heard about this. And, in fact, that's what it is. Location is the important key in the selection of properties.

In considering the location, there is a good idea to do a small survey first. Try to visit these properties area during weekdays, during holidays, or even during the rainy season. Some property developers say that property they offer only a few minutes from downtown. Why don't you try to do a survey to prove that statement?

Make productive assets

Investing in property, tend to require a high enough money, either in the form of land or houses. This makes the property not easy to be accessed as an investment. To invest in property, you can take advantage of mortgage facilities.

Investing in property by utilizing a mortgage will be better if the property becomes a productive asset. The meaning of productive asset is it could give you a regular source of passive income every month higher than mortgage installments. For example, if you rent a property, the rental income per month can be used to cover mortgage.

So, in the end your property can be utilized as a vehicle for investing. But, because the price is expensive and limited, it will require your attention so that you are not wrong when buying it. You can use your property as a producer of passive income, and no need to wait the price increase in the future.

Lastly, if you want to buy it with a mortgage facility, make sure that the mortgage can be accommodated by your financial health.

Successful investing in property!

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How to make safe investment?

Rise and fall in your investment value throughout 2011 surely provoke anxiety for many investors who had just started to put money into the capital markets as well as precious metals. Thus, one question that inevitably arise is "what is the most secure investment for me?"

Talking about risk, I am convinced, surely there is always a risk contained in every investment product. For all investment options, you will definitely be dealing with three types of risk: loss of capital, the difficulty of converting to cash, and the loss of purchasing power due to inflation. Among all three of these risks, I am sure most of the young investors or newbie investors will definitely put the risk of capital loss as the greatest risk.

To me, a safe investment must be adjusted to our financial goals. The term 'high risk, high return' should be changed to 'highest possible return with calculated risk'. We must look for an investment product that can produce the highest potential yield for all our financial goals.

First, for financial goal under a year period. Holiday fund for the preparation of Christmas 2012 is an example of short-time financial goal. For this, you cannot tolerate the risk of capital loss due to the arrival needs is certainly in the short term. Therefore, the choice of your investment is savings, deposits, and money market mutual funds.

Second, for the purpose of emergency funds. Emergency funds are only used for unexpected purposes, such as hospital costs, the cost of replacing damaged refrigerator, put into this category. The risk is that we cannot withdraw the investment cash immediately. It would be very scary. Bank saving account is the best place to store the emergency funds. The next option is a money market mutual funds because it can be withdrawn at any time without penalty. But for bank deposits, if you withdraw before its due date, it means you will pay a penalty.

Third, for the financial goal of above one year. College education fund for seven years old children, your pension fund, or funds to purchase a second home, are including into this category. You cannot still use savings or deposits for this purpose.

If your savings just give you 2% a year, while the inflation rate reached 6% a year, then you actually lose 4% of the money. So, although your initial money may be secured, you are losing the purchasing power more than half.

Looking for a balanced combination of financial planning for your financial goals is an art in making an investment portfolio that is "safe" for you. Whatever your life situation, I recommend that you save money on products that the risk of capital loss and liquidity risk is low, a minimum number of 3-month expenditures.

The more risky your job, due to unfavorable business situation or choice of working as a freelancer, then you should enlarge the amount of funds placed in this product.

Along with investing experience, you will understand the performance of various investment assets and risks that may occur. Most importantly, you still feel safe and comfortable in investing to achieve a prosperous life.

Live a beautiful life!

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Investing in 2012

Talking about investment, this word has been heard often enough. A lot of people or friends who do not really understand what investment is and desperate to start investing without knowing the contents of their investments. Be careful. You may experience losses instead of profits.

Investment is a concept that is commonly done in the financial world in order to develop the value of money. Development is represented in the form of return or interest.

A good investment product is a product that suits your needs and your character. Not all of investment products are suitable and necessary need all at once. You have to understand of how the product will deliver the maximum benefit and what risks that may arise.

Banks Deposit Account.

Deposit account is commonly used by people who have a certain risk-tend is more conservative or safe (with fixed interest and protect the initial) as compared with other investment products. The period is very diverse, typically 3, 6, or 12 months. If you try to withdraw before its due date, you will be penalized.

Although this type of investment is less able to compensate for the inflation rate, the deposit is still required and can be utilized in the process of financial planning. This product is suitable for storing the funds that will be required within one year.

Gold - Precious Metals

There are gold bullion and jewelry. The difference is, when buying gold jewelry; you buy a gram of gold plus the difficulty of manufacture. When you are willing to sell it back, the ‘difficulty value’ is not counted. Thus, for investment purpose, certified gold bullion is much better.

Property

Property investment has been recognized for long. Currently, the attraction of property is not only land, but also houses, townhouses, apartments, villas, and other residential properties. The most crucial thing when investing in property is the location.

Stock

When deciding to begin to invest in stocks, you must commit to have it in the long term, 5 years-10 years. If you only intend to purchase in the short term and make a profit on the price difference, then you are not investors, but a trader or broker.

Stock investment is more suitable for those in young age, young investor. Why? It is because the stock is an investment product for the long term. Stocks often need more time to develop.

This investment has the principle of high risk, high return. Perform an analysis of companies with the potential to continue to grow in the future.

Mutual Funds

There are four conventional mutual fund products: money market funds, fixed income funds, mixed funds, and stock or equity funds.

Mutual funds help the investors, especially beginners, who have limited funds, time, and knowledge to investing directly into stock. Noteworthy is the suitability of types of mutual funds with a risk profile and your financial planning goals.

Have a successful investing in 2012! Have fun with your money!

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5 common mistakes of young investor

When we are learning something, it would be easier if we are still young. The existence of small errors in learning is a natural thing. But, if the error is related to money, then the consequences will be massive.

Beginner investors are usually easier to make mistakes, but also easy to bounce back and take lessons from past mistakes. However, you can be much more successful if you learn from other people's mistakes while avoiding the mistakes occur to yourself.

The following are common mistakes that typical young investor. Hopefully these errors can give knowledge to you so you can avoid it:

1. Putting off plans to invest.

Procrastination is not a good thing, especially in terms of investing because the market situation is rapidly changing. A very appropriate time to start investing is very difficult to determine. After much research, usually ideas and time to start investing like it just showed up.

You should be more ready to act before the market situation turned around, so you do not need to depend on market situation. Usually, due to lack of experience, newbie investors are sometimes not confident with his decision in investing.

2. Speculate rather than invest.

A young man had plenty of opportunities to invest in his life. An early age usually affects the risk he could take. Thus, young investors are more likely to take high-risk investments, but with high returns as well. Why?

It is because when young investors lost a lot of money, he still had plenty of time to start investing again from scratch. So do not spend time just to speculate, but immediately invest.

Speculation is usually done by young investors because of the lack of information or do not understand correctly about investment options. This is dangerous because there are many senior investors can take advantage from these young investors.

Instead of having to speculate or gamble, young investors should do lots of research, or looking for high-risk enterprise, but with the potential income is also high for the long-term. Take advantage of your young age to take risks because the result will be worth it.

3. Too much spending money.

Investing in large quantities can be a double-edged sword. As mentioned earlier, if a young investor suffers losses, he had plenty of time to get up and start investing again. However, similar to speculate, too much spending money without enough information can destroying the portfolio.

4. Less asking.

If the stock market is falling, young investors are usually optimistic about situation. They believe that it will soon improve in the near future. What happens next is usually the opposite. One important factor in making decisions in this kind of situation is to ask 'why'. Do not just stay silent. Young investors should be able to maintain and responsible for a good portfolio.

Do not be ashamed to seek input from senior investors because they know more about what happens in the market. Do not take bad decisions in the uncertain market situation.

5. Not invest the money.

As mentioned earlier, investors have an advantage to see a high yield in the middle of the high risk of long-term basis. Younger people will have more opportunities to bypassed risk while still young.

A young person is usually having less experience in money management. They think that the money should be spent right away, without looking at the long-term. Spending money without thinking about retirement saving or deposits can hurt you.

Conclusion:
Young investors should take advantage of his youth age to seek for experiences as many as he take the risk. Early learning of investment can help you in designing a solid portfolio. Indeed, there are many risks to face. But, at least, risks and mistakes can help young investors to gather such a valuable experience.

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Mutual Funds or Unit Linked?

In personal financial planning, a man's income should be allocated on three main points, namely consumption, savings, and investment plus protection.

Consumption allocation is used to finance the consumption needs of food, clothing, and house. Saving has its function just-in-case, and investment is to cultivate owned assets. And lastly, everyone is usually fortifying the risk with insurance.

The problem is, investment and insurance products continue to grow, in line with the wishes of the users of the product. Including the product mixed of various types of investments and insurance. For example, various types of mutual funds; insurance plus savings; insurance plus investment, and the combination of unit-linked products can be assumed that such interbreeding.

Mutual fund is basically a wide range of financial investment products, such as stocks, bonds, money market securities, etc. There are equities, fixed income mutual funds, mixed funds, as well as money market funds.

While unit-linked identified as life insurance product that is combined with investment. Thus, when it is the time to pay the insurance premium, some portion of the premium is invested into various securities, known as units. Management of investment funds is done separately by fund managers.

The difference is in mutual funds, all customers' funds have been invested in the product since its inception. In other words, the funds placed at once when buying mutual funds.

In unit-linked product, insurance premiums that have been paid in stages are invested. In short, the mutual funds, investments are made at the same time, the unit-linked investments are made in stages.

Investment objectives will answer which one is better because it fits with the needs. If the customer already has a standalone protection, investing directly in mutual funds can be an alternative if there is still fund available. If you want to have protection plus investment together, and don't have much enough fund available, unit linked can be an option.

But the selection of the two options above should be appropriate to your needs and abilities. Basically, the management of mutual funds and unit linked, in the aspects of the investment, is managed by fund managers. So the success of investments in both of these products relies on the expertise of fund managers in selecting investment products.

So consider carefully beforehand the institution issuing of mutual fund products as well as unit-linked. After that, examine carefully the type of investment product to be purchased. In order we will not to regret in the future.

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3 Most Feared Investment Risk

"Do I dare to take the risk in investing?" This question may often occur when you are considering for investment. You have the money USD 5,000 and you are confusing whether to put it in a bank or elsewhere. If you put in the bank, you might feel safe. But sometimes, investing in other places is often quite large and very tempting, so this sometimes scares you.

Investment risk is definitely there. Three (3) investment risk that people most feared when they invest:

1. The fall in value of investment

The most feared risk when investing generally is "Will my money be lost?" If you invest, how much you are willing to take responsibility of a value decrease if you lose? Is it 10 percent? 30 percent? 50 percent? Or 100 percent? Regardless of the loss you are willing to bear, remember, it is part of investing. Do not ever expect you will continue to profit. Loss, it must be experienced occasionally.

2. The difficulty selling the investment product

The second most feared risk when investing is whether the investment product he bought is easier to resell. Some people may be happy to invest in gold because gold is considered easy to resell.

Another example of an investment product that is not always easy to resell is the art goods collection. These collections are generally not always easy to resell because the market is very specific. So, before you decide to invest, know first how easy the investment products can be sold back. Do not invest, but you cannot sell it because difficult to sell.

3. The Investment yield/result provided is not amounting the increase prices of goods

Imagine if you invest in time deposits that provide 10% of interest a year, whereas in the year the price of goods actually increased by 15 percent? This often happens, not because of too high price increases for goods and services, but because the selected product itself is not necessarily appropriate. Some of you may want an investment product that is safe and conservative. However, the consequence is that the investment results obtained might not be able to match the rising prices of goods and services. If it continues experienced from year to year, then you will get bankrupt.

What should you do to deal with this risk? Do not close yourself to the information. Learn about other investment products that you may not know, and then try to go into it with considering all the consequences. Over time, you can surely overcome the high rising prices of goods and services by investing in products that are potentially able to provide higher yields than the price increases.

Happy investing

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Gold Investing Tips

Talking about investment, did you know that gold investment has a good prospective future? Because it is true that gold is a very attractive investment and secure. Liquidity is very good. Whenever you need the money urgently, you can just sell it easily.

The price of gold is determined by demand and supply condition. The world's gold supply is limited so low and many investors are switching their investment portfolio from stock investments and start to gold investment. So there is a high demand for the gold. When it is the low supply and high demand, the price of gold will rise. When gold prices rise, gold investment value will rise.

Why gold investing is become a better investment, compare with other investment?

- The value of gold is not affected by the economic crisis
- The value of gold is not affected by inflation
- The value of gold is not affected by government decisions
- Are beyond the influence of the banking system
- The higher inflation, the higher the price rise in gold prices
- Very easy to sell and liquidated into cash
- Accepted by all people around the world
- Gold prices always go up from year to year, the average is 10% - 15% per year
- Gold is money, while money is not GOLD.

How to invest in Gold ?

In fact, there are many ways to invest in gold, such as gold mutual funds, gold-mining company stocks, ETF (Exchange Traded Fund) gold, gold futures, gold bars and jewelry. Gold bars and jewelry (necklaces or bracelets) are commonly used and generally known for investment due to its fairly easy to do.

Now the question is when is the best time to buy gold?

Perhaps this question is often asked by those interested in gold investment. Before answering that question, it's good to start again with a more substantive question: what is your purpose of gold investing? Is it for future saving? Is it to pay your retirement? And how much time do we have to achieve that goal?

After finding answers to the above questions, we are able to answer the rhetorical question: when is the best time to invest in gold?

Gold is a medium to long term investment category. It is suitable to support a new financial plan that we will do in a period of 1-2 years upwards. It is because gold investment will show its strong prospective at least after one year time span.

Thus we should not be too concerned with daily price fluctuations of gold, if we have understood that the gold we buy new we will use in due course; 1-2 years, maybe even 3-5 years to come.

So, when is the best time to gold investing?

Base on above explanation, then we should be able to find an answer that the best time to invest in gold is when we already have a clear financial plan for our gold investment and at that time we already have the money (no matter how small) allocated indeed to gold investment.

If the plan is clear, the money is available, and then we may buy the gold. No matter the price of gold at that day. No need to worry about the price fall because we are not planning to sell the gold the next day, but 1-2 years later. And at that time, we can be sure the gold price is higher than the price when you buy.

Happy investing :)

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The Pension Plans

When hiring a pension plan must be clear within the investment and the amount to be invested. We must also set a goal of profitability and above all, the risk that you will take.

A pension plans is a saving product which you can comfortably save to available capital at the time of retirement. It consists of making regular contributions of money that the fund manager will invest.

The fee may be monthly, quarterly, semiannual or annual basis. Although it depends on the contract plan, you can usually reduce, increase, or even temporarily stop. It is important to note that fund managers charge fees that can reach 2%. If the target return is 3% or 5%, then we are not interested in that plan. Find another who charges less. Normally, the fees apply to deposit, maintenance and cancellation.

The pension plans is an excellent product for long-term investment thinking about retirement. Surely this must be one of the first steps of our personal financial planning to start building our own portfolio, regardless of age.

In addition, investing in a pension plan has interesting tax advantages and provides the discipline to save. There are products on the market that incorporate mixtures of equities, bonds and other assets, thus facilitating a single product, the construction of this portfolio.

The fundamental problems of a pension plans are high commissions and expenses. That directly affects profitability. That is why they end up being the decision variable to select the best pension plans.

Pension plans are very popular products and juicy. Hence, banks and asset managers have launched a bidding war and gifts. Do not be fooled and do not pay attention to these gifts. Check out more commissions, guaranteed returns, if any, and the rest of the above.

With several options available to start your pension plan, the best-suggested way would be working for a company having good pension scheme. This option is quite advantageous since your employer will also contribute. A good pension plan at an early age will require minimal efforts. However, the expected result out of it is something astounding during retirement. You cannot touch a penny out of your pension savings until the reach of your retirement age. This will stop your temptation of using the money due to your leisure spending habits.

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Asset Allocation and Risk Management Plan

Despite the saving and investing wisely, your growth strategy may not be sophisticated enough to cope with market cycles. Then, how to protect and grow your investments?

The answer lies in a broad diversification: a variation of certain revenue streams as opposed to speculative profits. Diversified also offers asset protection to deal with emotional reactions that can damage your objective assessment, including the luxury of ongoing ‘bubble’ market.

Most people do not take into account the investment risks. This is really happening, especially to investors who put money in stocks, money market, or commodity markets. Most of them have a tendency of short-term investments. More often tend to focus on the potential increase or profits, rather than the risk of loss. Although these investors can profit quickly, many samples showed a greater risk of loss occurs than if the money is placed for the long term.

Short-term investment portfolio performed worse than the long-term horizon. Generally occurs because investors are failing to understand the risks, including the need for investment diversification. This process is hereinafter known as asset allocation.

Smart investors did not even try twice within one investment instrument in a long time. In fact, what they do is always try to diversify and spread more money into various instrument. This is a very helpful way to minimize losses if market conditions deteriorate.

Asset allocation is the process of how you diversify. This is a good experimental method that has shown more fortitude than just hold shares, bonds or other investment vehicles. An asset allocation strategy makes us move one step forward.

Outside the capital markets, bonds and other securities, it is worth considered to put funds in less liquid assets such as property and other forms of insurance. If you ask what the right portfolio, this means a combination of stocks and bonds, but that does not mean there are no other possible investments.

Needs of each person is definitely not the same. Thus, the strategy for the placement of assets is not only from textbooks. More than that, this is a personal decision to be made after consultation with partners, family members and trusted financial consultant. The decision must also consider some factors such as age, income, living expenses, and risk tolerance.

For example, if you're age of 30, will be retired at the still long time, might want to invest aggressively as a strategy, such as putting 80% -100% money for stocks in the inside/local and outside/foreign market. This may be the potential to reap big profits.

However, if you want five more years of retirement, then it should have a more conservative investment instruments. This means you must put your funds on certain income instruments like bonds.

Happy investing!

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Property Investing; How to start ?

While there are opportunities to use the loan to finance your property investment, does not mean you become complacent. Investment in property still requires the use of money and time commitment. So do your research and establish a plan before investing in property is very important. Since the very first step and most importantly once you decide to do property investing was to learn everything about the property as much as you can.

1. Continue to learn

There are many sources of information that can gather to learn about investing in real estate for example from books, courses, seminars, as well as internet and others. To learn more about property investing, you can also take a part-time work as a property broker. The advantage, besides you can practice what you learned from the various sources of that information, you can also get a commission on sales of property you are selling. Not to mention the opportunity to build a network that will certainly be very useful to help your property business later. Doing research in advance will make you aware of the risks or problems that may arise regarding the ownership of property such as problem with tenants, building maintenance costs, etc.

2. Work with a Realtor or property broker.

Once you equip yourself with sufficient information about the property business, then find a Realtor or a property broker who is willing to help you understand more about the property business. Look for sales agent who is experienced at least two years, they usually have more business experience of property.

3. Research on interest rates, rising property prices, rents.

If you want to use financing from the bank, compare the interest rates of credit to one another and look for the most competitive. Then also on the assumption of rising property prices so that you can determine roughly how much the selling price someday. Do not forget if you want to earn income from the rental fee. Before determining the rent price, look for information about the reasonable rent prices for the area that are tailored to the condition of the building.

Your Action Plan.
Once you have determined to do property investing, then the next you just set the goal of your property investment in specific and measurable. Once you set a goal then you can determine what type of property suitable for achieving that goal, whether residential, commercial buildings, apartment, etc. Calculate how much money needed for investment, property market conditions, then the amount of rent you can expect, nor how many property you can buy.

By doing research as recommended above, then you can estimate how much money should you provide and investment returns can be expected to continue to grow. You can even estimate how long you should hold the property before selling it. By making financial goals will give you some sort of guidelines to start your new business, take actions necessary to anticipate risks, then make your investment of your personal financial planning.

Happy investing!

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Property Investment - How to buy a house ?

Property investment is still a top choice of most people because people assume that it is one of the best ways to grow his money of the personal financial planning. In general, property investment is considered safer than other types of investments. It is because of people are controlling or managing their own investments, so we can control almost everything. But it was not the only advantage to invest in property because the most interesting fact of a property investment is allows you to use other people's money to start investing.

Most other investment products is heavily influenced by outside factors. For example, prices in the stock market can go up and down rapidly even significant because of the issues or gossip about politics, government policy, national security, economic conditions, or as bond prices fall when inflation and interest rates rise. Compared to property, although also affected by external factors, but changes are not too fast, for example, house prices certainly cannot be changed just in one day, but it takes years.

Advantages of Property Investment

When investing in property, you have the chance to get a great return of investment. If you see Donald Trump, an American property businessman, or other property businessman, they are rich from the property business. Banks also have the property, if we consider high rise headquarters building is magnificent, not to mention dozens of branches.

There are many ways to invest in property. You can start by buying a house, shop, build a rented house, other commercial buildings or vacant land. Of all these options, buying and selling a rental home is better for those newly begin to invest in property, then a little saving from the lease to be re-invested. If you notice a lot of people interested in making a rented house because by being landlord lets you have a treasure that you can control yourself, then sell it later. The good news is you do not need much to start your investment in property.

It is important to understand why the property is often the primary choice of people to develop their wealth; the reason is not because the property is not at risk. Like any other investment, property investment also has constraints such as the tenants are late of paying the rent cost, moved without telling, damaged buildings, whatever difficulties may occur. Essentially if you are willing to bother with the affairs of this sort, then the investment in property is for you.

Using 'Other People's Money'

One of the most interesting parts of the investment in property is that the system created in such a way that allows you to use other people's money to finance your investment. This is one of the most important concepts that make the property can make you richer than other investments.

In other types of investments, the large amount of investment is determined by how much you are willing and able to pay with cash. So to buy another investment, you pay in cash assuming using your own money. We just take the example of investment in capital markets. To buy stocks then you have to pay in cash the entire of the transaction, unless you do the actual margin trading that is very risky. Likewise, investments in bonds, mutual funds, deposits and savings in banks, moreover gold investment, it requires cash payment in full.

Investing in property is not the case, you could pay for the down payment of 10% to 30% of the price in order to have the property first. Then, the rest can be financed from the loan to the bank. Even the developer itself was willing to provide mortgage relief payments for the payment of advances for purchase of goods.

The opportunity to use other people's money in the form of financing is referred to as leverage, or ability to multiply anything. For example, the first day, you managed to get a mortgage with a down payment of USD 30 thousand, and then at the same day directly your cash assets increased to USD 100 thousand. The more money invested the more likely someone else's money or financing that you can get, for example with the money of USD 30 thousand, then you can only buy shares up to USD 30 thousand. But with the same amount of money if invested in property, then you can buy a house worth USD 100 thousand. Where you pay a down payment home USD 30 thousand, then the bank will finance the remaining USD 70 thousand, now you become the owner of a building for USD 100 thousand. That amount is more than three times or 300% double? Fabulous!

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Gold Investment - Five Things to Know

Precious gold investments can be a very interesting experience if you are just starting to put this investment on your personal financial planning. As we may know, recently the gold price is on the top form.

Moreover, gold prices continue to soar, despite the U.S. dollar strengthened. The price of gold has shown prowess back since the debt crisis in Europe worsened. The rise in gold prices in line with oil price slump that occurred due to investor fears of debt in the United States and Europe. That triggered a global sell-off in stocks and pushed gold prices to the top position.

However, there are some pitfalls you must avoid before buying gold and silver. Below I tried to make a list of five most important things you should know before investing your money in precious metal products.

1. Beware of an antique gold coin investment - antique gold coin is a rare coin from a high-value precious metals. If you want to focus on gold investment, then you should avoid buying this antique coin, which essentially require very expensive.

2. You should always buy the gold in coin or bar form - that is, the product you buy is in the form of coins or bars are manufactured from pure gold or silver as well as mass-produced. These products are only made for investment purposes, allowing you to obtain high investment value when buying gold or silver.

3. Compare prices from several different dealers - this may sound obvious, but many are too fanatical to buy gold in the first place they found it. Doing this is tantamount to swallow the price was probably too expensive for you; especially if it turns out other dealers can offer lower prices for gold of the same type. Do not underestimate of this situation because it often occurs.

4. Diversify your silver or gold investments - Investing in gold is no different from other stock and bond investments. You want to make sure that you buy a variety of gold and silver coins from different countries or governments, perhaps even from different companies.

5. Purchase various denominations of gold coins - there are 1/10 ounce, ¼ ounce, ½ ounce and 1 ounce coins are usually available. You do not want to buy all one ounce gold coins due to a crawl if the price is high, you may not want to sell all of ounces of gold at once.

When we know what to do and when to do, we already obtained for 90% of the battle when investing. More important to note that you should invest in gold during the state of the economy are declining.

May this post is helpful for our financial planning to invest in gold. Happy investing!

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Savings and Investments ; risks if not done

There are four major risks of not saving adequately for your needs and future goals on your personal financial planning:

1. The probability of Social Security benefits that do not provide adequate money for long-term, or a lifestyle after retirement.
2. That exceed your expectations of life savings
3. The possibility of an unexpected major event in the economic life
4. The impact of inflation on your savings

Social Security

When thinking about retirement, many people think that Social Security payments will be based on your financial security. It is also true that this government program will continue to be part of the annual income of most retirees. But the reality is that Social Security will be a lot less money than many imagine.

Three factors are determined of how you receive Social Security:
• The number of years you worked and paid taxes
• The total amount of annual income (which will be adjusted for inflation)
• The age you have when you start receiving benefits (the minimum age for receiving Social Security benefits is usually 67 years for those born after 1960).

A typical worker earning $ 50,000 and retire with 65 years would receive $ 16,000 annual Social Security, that is, less than a third of his previous earnings. If you want to narrow the income gap between Social Security and what was used to winning, you should consider other sources.

You (or your spouse) might be lucky and receive a fixed pension from his/her previous work, which is a substantial difference. But, as ever more normal, employers that offer such pensions, seek to contribute to a tax-deferred account rather than promising a fixed amount. Then it's up the option of investing your money wisely and save on any tax-deferred plan (such as 401 (k)) or invest on your own for retirement.

Life expectancy

Most Americans began his professional life around 21 years and hope to retire at 65. Although there is obviously no guarantee of your own life expectancy when planning your finances, it is interesting that many Americans live to 85 or 90 years. This means that you must save and invest enough money for yourself for another 20 or 25 years after retirement.

Unexpected major events or economic life

Are you financially prepared to withstand an unexpected event in life, such as loss of spouse, loss of a job, a long-term illness or loss of home due to a natural disaster? Would it have saved money to continue paying the monthly bills and you lose some or all of your income, or if you have accumulated huge unexpected costs? What if the economy or the markets change and retirement or pension plan maintained or your home loses value?

No savings or investments, an unexpected change in life can force you to quickly take tough decisions such as whether or not:
• to personal loans
• acquire significant debt and high potential for credit card interest
• acquire a second job and return to work or look for different types of jobs or income
• delay in important personal goals
• important assets such as selling the house which will not be able to afford your payments

Unfortunately it is often a significant event, a family member who is uninsured or has very low insurance and have a medical emergency, loss of a job or spouse, a workplace injury or car accident, can begin a rapid spiral into a debt that can have long term consequences, including bankruptcy. Have at least enough money saved to meet 6 months of expenses in the event of an emergency will give greater financial ability and flexibility to try to address the immediate financial challenges of this sudden change in life. It will also help reduce or avoid getting a debt to handle the crisis, which will reduce the financial impact on you or your family in a very difficult time.

The fact that markets and the economy always grows, as we have witnessed the most recent recessions in 2001 and in 2008-09, is a further reminder of the value of savings and investments plan from an early age.

Inflation

In this case, inflation can substantially reduce your savings. Do not despair, because inflation is inevitable, you can plan to prevent and compensate as it grows. When it comes to an investment plan or long-term savings, a good rule is to add a further money annually to cover the cost of inflation.

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Investment Strategy - Basic rules of investing

Investing your money can be a great way to ensure your financial success in the future. With the correct choice of investments, you can be sure you have emergency money for the education of your children, and to have it available for the time to leave work.

There is an important phrase in everything, just said "right". If you make the wrong investment, you can end up worse than it started Bankruptcy.

Many people who invest wisely and make good decisions with their money follow the same basic patterns of investment. It may be cynical type of person who chooses to believe in the basic rules that may not be as easy as they seem, in an area that is complex. However, these rules have survived the test of time.

First of all, make sure the money you choose to invest is in effect for the purpose. As in any game, there is nothing to gain and much to lose when it comes to investing. There are many consultants as Robert Kiyosaki, Say "Do not invest what you are not willing to lose." Never put money that you cannot afford to lose in case of recession or market problems.

A rule that people seem to refuse to apply in any area of their lives, including the investment world is not lean on your own understanding. Often, this happened in people who refuse to trust the help of a financial advisor for their money, believing that with a little understanding of the market they can invest in itself. This kind of thinking is totally wrong and misguided.

First, most people are not able to decipher the complicated graphs, pie charts, statistics and full of information where the investment world is related. To understand what the numbers mean, you need basic training. That may come after you have experience in the market, and thereafter be able to make good decisions on your own.

Think long term. Unless you're investing millions of dollars initially, it will take time of your investment mature and begin to earn substantial profits. The best investments are those that are approve of the time, so it is best to place your funds in long-term investment, at least for a few years.

The two investment strategies

There are two reverse trends:

Diversification
Diversification is a way to protect the common scourges of the world of investments. A good portfolio will include cash and cash equivalents (GICs, fixed annuities), growth investments (stocks), growth and income investments such as mutual funds. Diversification does not ensure that you have all your eggs in one basket. Keep in mind that diversification does not just mean investing in several areas, but also ensure that any area contains a proportionate share of funds.

Specialization
I think the best way to explain it is to take an excerpt from the book "The Cash Flow Quadrant" where the author Robert Kiyosaki mentions the following: People who seek security are widely used the word" diversification " Why? This is not an investment strategy to win. Successful or wealthy investors do not diversify. Focus their efforts.

Another investment expert mentioned in the same book, Warren Buffet says that the portfolio concentration or focus on a few investments, instead of diversification, is a better strategy.

Now, whether you diversify or specialize with your investment. That depends on the type of person you are. You are someone who likes to learn no matter how difficult the issue and hate back, thus specialization is for you. If you want to be more passive and leave it safe then diversification is the option you are looking for.

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