Archive for May, 2007
by rateempire
There are many options for making use of your home equity value when thinking of building your property portfolio. These include loans such as home equity loans, refinancing your mortgage and many others. By far the most tested and used options are the two that we have highlighted. You have to carefully investigate these options and evaluate their benefits to you. Choose the option that is less stressful on your pocket and that offers you the best and easiest repayment terms when all factors are considered.
Home equity loans are loans that leave you with two loans to pay rather than one loan overall. They give you a separate loan on the home equity that you have available. They do not reduce the interest rates on your present mortgage nor do they reduce your mortgage payments. This means that you should be very careful that you can handle the additional burden. You also do not increase the length of your mortgage and are therefore obligated to repay the mortgage in the same time period as previous.
The option is yours to decide whether you can handle the burden of the two loans and the time frame. It is however not always the case that this is possible. It is often an easier option to free the equity in your home by refinancing your present mortgage and even possibly reducing the monthly repayments at the same time by giving you more time to pay. This may be the best option if you know that your budget will be tight.
The refinancing of the present mortgage that you have can even reap other benefits to you such as lower interest rates and of course the fact that you are able to get the cash for your start up into real estate investment and building out your property portfolio. With the right investment you will be able to handle the repayment of your mortgage in no time and you will be braced to succeed in the real estate race to riches.
It is important that you carefully assess your financial situation and determine whether you are financially able to repay the mortgage as it is your home that is being put at risk. Your decisions as to how to free up the equity in your home and refinance should be based on a clear understanding of the type of refinancing that will best accomplish your task without stretching you beyond your resources. You will be able to maintain your current lifestyle while progressing with your investment portfolio.
There are other refinancing options available on the market today that will accomplish the same goal but may or may not suit your requirements better. There is a means of freeing home equity known as cash out refinancing. This should also be considered in collaboration with home equity refinancing. Read on how to go about refinancing for your real estate investment, its benefits and the factors to consider when venturing into this type of transaction.
Martin Lukac represents RateTake.com Home Equity and Debt Consolidation Loan mortgage marketplace. RateTake.com matches consumers with mutiple lenders offering low mortgage rate quotes. For more information please visit Home equity loans versus refinancing
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by Sam Vaknin
The role of foreign direct investment (FDI) in promoting growth and sustainable development has never been substantiated. There isn’t even an agreed definition of the beast. In most developing countries, other capital flows - such as remittances - are larger and more predictable than FDI and ODA (Official Development Assistance).
Several studies indicate that domestic investment projects have more beneficial trickle-down effects on local economies. Be that as it may, close to two-thirds of FDI is among rich countries and in the form of mergers and acquisitions (M&A). All said and done, FDI constitutes a mere 2% of global GDP.
FDI does not automatically translate to net foreign exchange inflows. To start with, many multinational and transnational “investors” borrow money locally at favorable interest rates and thus finance their projects. This constitutes unfair competition with local firms and crowds the domestic private sector out of the credit markets, displacing its investments in the process.
Many transnational corporations are net consumers of savings, draining the local pool and leaving other entrepreneurs high and dry. Foreign banks tend to collude in this reallocation of financial wherewithal by exclusively catering to the needs of the less risky segments of the business scene (read: foreign investors).
Additionally, the more profitable the project, the smaller the net inflow of foreign funds. In some developing countries, profits repatriated by multinationals exceed total FDI. This untoward outcome is exacerbated by principal and interest repayments where investments are financed with debt and by the outflow of royalties, dividends, and fees. This is not to mention the sucking sound produced by quasi-legal and outright illegal practices such as transfer pricing and other mutations of creative accounting.
Moreover, most developing countries are no longer in need of foreign exchange. “Third and fourth world” countries control three quarters of the global pool of foreign exchange reserves. The “poor” (the South) now lend to the rich (the North) and are in the enviable position of net creditors. The West drains the bulk of the savings of the South and East, mostly in order to finance the insatiable consumption of its denizens and to prop up a variety of indigenous asset bubbles.
Still, as any first year student of orthodox economics would tell you, FDI is not about foreign exchange. FDI encourages the transfer of management skills, intellectual property, and technology. It creates jobs and improves the quality of goods and services produced in the economy. Above all, it gives a boost to the export sector.
All more or less true. Yet, the proponents of FDI get their causes and effects in a tangle. FDI does not foster growth and stability. It follows both. Foreign investors are attracted to success stories, they are drawn to countries already growing, politically stable, and with a sizable purchasing power.
Foreign investors of all stripes jump ship with the first sign of contagion, unrest, and declining fortunes. In this respect, FDI and portfolio investment are equally unreliable. Studies have demonstrated how multinationals hurry to repatriate earnings and repay inter-firm loans with the early harbingers of trouble. FDI is, therefore, partly pro-cyclical.
What about employment? Is FDI the panacea it is made out to be?
Far from it. Foreign-owned projects are capital-intensive and labor-efficient. They invest
FDI buttresses the government’s budgetary bottom line but developing countries invariably being governed by kleptocracies, most of the money tends to vanish in deep pockets, greased palms, and Swiss or Cypriot bank accounts. Such “contributions” to the hitherto impoverished economy tend to inflate asset bubbles (mainly in real estate) and prolong unsustainable and pernicious consumption booms followed by painful busts.
Sam Vaknin ( http://samvak.tripod.com ) is the author of Malignant Self Love - Narcissism Revisited and After the Rain - How the West Lost the East.He served as a columnist for Central Europe Review, Global Politician, PopMatters, eBookWeb , and Bellaonline, and as a United Press International (UPI) Senior Business Correspondent. He was the editor of mental health and Central East Europe categories in The Open Directory and Suite101.Visit Sam’s Web site at http://samvak.tripod.com
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by Graham Dyer
Surely inflation is our greater enemy, isn’t it? Rising prices are bad for the economy. Falling prices are a good thing, aren’t they?
Inflation and deflation are due more to mindset than anything else. Let me explain.
Whether you realize it or not, you are infected with inflation mentality, which goes back to at least the 1970s. I can illustrate that for you:
Let’s say your favorite loaf of bread at your local store costs $3 today. If you go back to that same store in ten years time and are able to buy a loaf of bread identical to today’s, how much will you pay? Will it still cost $3 or will you pay more or less than $3?
Did you answer more? Why? Because you are conditioned to assuming that prices will keep rising. You would not have answered that way in 1937 and you probably would not answer that way today in Japan, where prices have been falling for many years.
What’s wrong with that? It’s true that inflation erodes the purchasing power of money, but as long as your income keeps up, rising prices are not the end of the world, are they?
There is a consequence of inflation that is far more sinister than the erosion of purchasing power and you are not even aware of it. Inflation sucks you into debt. Let me illustrate that for you as well:
Your car is three years old and you want to replace it, but you would rather wait another year. The new model costs $25,000, but you expect it could be $30,000 in a year’s time. Will you wait another year and save up a further $5,000 cash, or will you go into debt and buy it now? You will almost certainly borrow and buy the new auto now, won’t you? Why? Because you expect the price to rise. You go into more debt because of inflation. And you are infected with inflation mentality, which is the cause of the crazy, unsustainable debt bubble today. When you borrow that money from the bank, it is injected into the economy, increasing the money supply and fuelling yet more growth in consumer spending and thus the economy (and probably prices).
Now let’s reverse that situation. Let’s say you believe the price of that new auto you want will be
But you will not be the only person thinking this way. Everybody will be putting off buying a new car. To such an extent that auto makers, who have failed to increase sales, even by slashing prices, have to scale back production and lay off employees. And if auto workers lose their jobs, will they be able to spend as much on shoes and clothes and restaurants and gadgets? No. But stores need cash flow to pay their rent and wages, so “50% off” sales appear everywhere. But even they do not work, and retail stores also have to shed staff. And the more prices fall the more the consumer expects them to fall, so the more they put off buying everything that is not absolutely urgent. And so the economy begins to contract and unemployment rises, all because of deflation mentality.
The lifeblood of an economy is consumer borrowing and spending, which is fuelled by the ready availability of money. When the mindset changes from inflation mentality to deflation mentality, people not only stop spending. They stop borrowing. In fact, reckless abandon changes to conservatism, and they even try and speed up the repayment of loans they already have. This disappears money from the economy back to the banks from whence it came, and so reduces money supply.
And thus the economy spirals down into a deflationary recession or even worse. Every depression in history has been accompanied by deflation, not inflation.
In the 1930s, was there any shortage of goods? Not at all. Stores were fully stocked. Was there any shortage of manpower? Hardly. Unemployment reached 25%. So what caused the depression? What was in short supply? Only one thing. Money. And the only way money comes into existence is by way of a loan from a bank. When people are reducing their indebtedness rather than increasing it, money supply shrinks and the economy contracts. Interest rates can be reduced to zero (as in Japan in recent years), but if people lose the courage and the capacity to take on more debt, they will not borrow. This is called “pushing money on a string.”
In my book “How to Profit from the Coming Great Depression” one entire chapter is devoted to this subject of deflation. You will learn why the coming downturn is inevitable and what you can do to escape the most serious consequences.
The forecasting record of the Graham Dyer Newsletter (since July 1983) puts it at the top of the world pack, including the 1987 stock crash, the Japanese debacle of the 1990s, and the real estate boom this decade, to name just three. His latest book is entitled: How to Profit from the Coming Great Depression. If you want to know the pitfalls of investing
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by Foxx
In my area of work you get many questions just like this one: “Which is a good stock to buy?” And sometimes, depending on the person, I answer back with another question: “You pot a penny?” People always stare at me with a look on their face that says: “Is this guy a joke?” or “Is this guy for real?” Well no, I’m not a joke, and yes I’m for real.
I gotta tell ya, it’s how I started out; penny stocks. They’re one of the best stocks to buy because of the little cost they represent and the big chances you have to get money out of the deal. With normal stocks you’re going to have to invest
But why?
Well, how many people have lost all their money in the stock market
One hundred dollars is ten thousand pennies! Even though a stock penny hardly ever really costs just one penny, I think you can see my point. But coming across a good penny stock to buy isn’t that easy. You have to do your research; you’re homework. Once you do have a penny stock spotted, then all I can say to you is great job, good luck, and keep it up! Because on your path to success you’ll see many riches many could just dream of.
William Foxx has dedicated a great part of his life into understanding how the stock market works and which are the best stocks to invest in. He believes that almost anyone with enough determination can make a lot of money by choosing the right penny stock picks.
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by Graham Dyer
Record oil prices are “bad” for the Share Market
It probably started back in mid-2004 when the price of crude oil reached $50 a barrel for the first time in history. It might have even been earlier. But you will recall it, I am sure. It went on for months, even years. You might still hear it. Night after night, as we watched the evening news on television and then the business report we were told: “Stocks tumbled again today, as crude oil reached yet another record high” or “The oil price rose to yet another new high today, forcing the Dow to retreat again” or something similar.
Whichever way the anchor said it, it meant the same thing — rising oil prices are bad for the stock market
Sounds familiar? Sounds right? Ever question that? Perhaps you should have, because it is totally wrong. Huh?
In October 2002 crude oil was around $25 a barrel. Three years later the price of black gold had almost trebled to $70 a barrel in August 2005, just before Hurricane Katrina hit. How much did the share market fall in that three year period? The Dow Jones Index and the S&P 500 rose about 50% in that time! The NASDAQ almost doubled, albeit from a low base.
So much for the notion that rising oil prices are “bad” for the stock market! It’s a nonsense. How come we were so misled? How come we didn’t even notice? Maybe you would be horrified if you knew how many other investment “myths” you believe, because of what you have been told by “those who should know,” that are actually wrong. In fact, back to front, like this one.
How come economists (who provide the information for the media) get it so wrong? And if they can’t even get it right after the event, then what chance have they of forecasting the future?
The answer is next to none at all. They miss the point altogether. They put the cart before the horse. They believe that “events” govern mood. That is, some economic “event” (like the rising oil price or a change in interest rates or inflation or GDP) causes people to “react” and thus go and buy or sell shares accordingly. Or it may be reaction to a geopolitical “event” in the “news,” such as a fresh outbreak of hostilities in the Middle East or a terrorist attack. All they can do when forecasting is to use their econometric models to extrapolate current and past data into the future, without making any allowance for change in sentiment.
Conventional wisdom is back to front. Mood governs events, not the other way around. When humans gather together in a group (crowd, herd, etc.), that collective takes on a personality separate from the individuals who make it up. And the behavior of that “herd” has a distinct pattern to it. It morphs between optimism and pessimism in waves that are as regular and reliable as the tides and moon phases. This is what we can learn from the new science of socionomics and a study of the Wave Principle.
Once you grasp this new insight, you realize that the change in mood comes first. The change in economic fundamentals and even geopolitics comes later, as a consequence of the change in sentiment. The great news is that we can know in advance when the change is due!
The forecasting record of the Graham Dyer Newsletter (since July 1983) puts it at the top of the world pack, including the 1987 stock crash, the Japanese debacle of the 1990s, and the real estate boom this decade, to name just three. His latest book is entitled: How to Profit from the Coming Great Depression. If you want to know the pitfalls of investing
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by Graham Dyer
Get ready for a shock if you don’t already know.
Every day countless millions of transactions are facilitated with money. Why do we need money? How does it get into “circulation?” Who puts it there? Who creates money? And on what basis? Is it the government? If not, why not? Who is it? And how do they know how much to “print?” What if they add too much or too little to the economy?
Three chapters of my book How to Profit from the Coming Great Depression are devoted to these questions. Most people are shocked when they first learn about our “fractional reserve” money system, which has sewn within it the seeds of its own destruction.
First of all, we need money because the barter system is too unwieldy. If you are a building contractor and I am a potato farmer, and I want you to build me a house, how am I going to pay you? How many potatoes can you and your family eat before they go rotten?
Clearly we need something that represents both houses and potatoes. But note that that does not make money a resource in itself. It is merely a vehicle for transferring the value of resources from one person to another. There are natural resources, both under the ground and above it, and there are human resources — labor and intellect. Put these together and man can produce. But although money may be used to value and transfer these resources, money is not a resource itself. Those who control money really want the resources that money represents.
Centuries ago things like gold and silver were used as money, before we had notes and coins like today. Remember the old western movies where highwaymen would hold up the stage coach and people would have to hand over all their valuables? Why, on earth, would people carry their gold and silver with them? Because they had nowhere else to put it.
This created an opening for the goldsmiths, who were the forerunners to our modern day bankers. They built large, secure vaults and allowed people to deposit their precious metals in these safes. In return they gave people “receipts” confirming the amount of gold held on their behalf. In time people began trading with the receipts rather than the gold. Today these receipts are called banknotes.
But that’s not all the goldsmiths did. They even paid interest to those who had deposited gold in their vaults (e.g. 3%), but then lent the gold out to others (in the form of more receipts) at say 6%. That’s how they covered their costs.
In time the goldsmiths noticed that nobody ever came back to collect their gold, and not all being honest, began to lend out more in new “receipts” than was represented by the gold in their vaults. In time there was ten times as much “money” in circulation as there was gold in the vaults.
That’s exactly how our money system operates today. For every dollar you deposit in a bank, the bank lends out about ten dollars. Money is created by banks — out of thin air! All money comes into existence by way of a bank loan. Less than 5% of it is ever converted to notes and coins. Most of it is never anything but a balance on a computer at the bank.
A hundred questions come to your mind. Right? They are all answered in my book.
Why do I say the system has sewn within it the seeds of its own destruction? It has a use-by date. That is why we have an economic depression at least once each century. It is not a question of if the system implodes. Only when it implodes.
Let’s say you borrow $100,000 from the bank (which takes security over your real estate worth $150,000). But you have to pay back $110,000 with interest added.
Where does that other $10,000 come from? You will have to get it from someone else. Where will they get it? What’s the only way money comes into existence? They will have to borrow it from a bank.
Can you see how in our debt money system it is not possible for everyone to pay their debts? Some have to go bankrupt. And as money is sucked out of the system in interest by the banks, money supply is reduced. The only way it can be replaced is with more borrowed money. So debt must rise exponentially. Can you see now why we have a debt bubble and why there is no solution to it other than a massive purging, with all of the horrific deflationary economic consequences, not to mention social dislocation that will come with it?
How can you protect yourself from these consequences?
The forecasting record of the Graham Dyer Newsletter (since July 1983) puts it at the top of the world pack, including the 1987 stock crash, the Japanese debacle of the 1990s, and the real estate boom this decade, to name just three. His latest book is entitled: How to Profit from the Coming Great Depression. If you want to know the pitfalls of investing
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by Foxx
I’m going to be sincere with you and tell you straightforward… there’s no such thing as a list of penny stocks waiting for you to discover it and become rich overnight! Well… at least not a free list of penny stocks.
But enough with the bad news, I’m not here to try to bring you down. I’ve been around for some time to know the power of penny stocks — been doing business with them for more than 20 years… And yes, life is good!
Day trading penny stocks is a tough business to be in, but once you master it your on the way to a life full of riches and commodities you could have only dream of.
But why is it that good of a business?
Well there’s a reason as to why they’re called penny stocks. Your investment is so low, that with the slightest increase in the stock value you’re already making tons and tons of money. I could say that penny stocks are some of the best stocks to buy. Don’t get me wrong though, if you have the means to buy the best stock pick around, then do so… I mean, the security of buying a Volkswagen stock compared to a penny stock is significant, even if the results show up in a longer time frame.
Anyways… getting back to the topic, even if you find free lists of penny stocks, I bet it isn’t that good of a list. There are pages on the internet that, for a fee, can let you in on their penny stock listing and let you use it. However — and this is where you need to pay most attention — if you are prepared to use a list of penny stocks you should research the background of the companies inside the list. Looking it up in Google or Wikipedia is the easiest way to get a hold on some info about the company and what they are doing. If you feel the company is going to be successful, then by all means you should buy a good share of stock from them.
I did my research back in the 90’s and boy, did it work out for me. Make it work for you as well.
William Foxx has dedicated a great part of his life into understanding how the stock market
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by stapin
Want to make money trading stocks online? If you follow these five simple tips, you’ll be way ahead of the pack.
1) Listen to the charts
You may have found a great stock, and it could have the best fundamentals in the world, but here’s the truth– that’s not enough! Even if a stock has a million fundamental reasons to go up, it’s not going anywhere unless people are buying it. People don’t always act rationally, so you can’t assume that a stock will behave as it should. That’s where technical analysis (chart reading) comes in. By learning to read charts, you can spot stocks that are poised to move up, or conversely, stocks hopelessly headed down. Reading stock charts will allow you to find stocks which actually will move up, not just stocks you think should move up.
2) Use stop losses
No one is ever right 100% of the time. That’s just the nature of the game. Even the best stock pickers sometimes pick lemons, but that’s not necessarily a problem. Picking losers, which is inevitable, is only a problem if you let them kill your account. You absolutely must set stop loss orders every time you make a trade, otherwise you may wake up and find your entire account decimated. Remember, to make money trading stocks online, you don’t always have to pick winners– your winners just have to be bigger than your losers. You accomplish this by always cutting your losers early, and then letting your winners run.
3) Don’t step in front of a speeding train
One of the biggest myths about making money by trading stocks online is that you have to buy low and sell high. That’s a very dangerous way of thinking. Why? Because people, searching for stocks to buy low, eagerly buy stocks which are spiraling downward. They hope, often falsely, that soon after they buy the stock, it will turn around, go higher, and then they can sell for a profit. But ask any experienced trader and he’ll tell you that stocks which drop precipitously tend to keep dropping. Don’t step in front of a speeding train. Instead, find stocks which are healthily moving up and will keep moving up. Think of it not as “buy low and sell high,” but “buy high and sell higher.”
4) Ignore the people on TV
There is no shortage of media personalities who love to recommend stocks. Follow their advice and you’ll become rich, right? Wrong. If you could make millions by following the guy on TV, everyone would be rich. You’ve got to do your own homework. You see, it’s not necessarily that the people in the media don’t know what they’re talking about. They often do. It’s that by the time that information reaches you, it’s too late! Think about it…there are professionals who spend all day looking for the next great stock to buy. Do you really think that by the time a stock pick reaches the general public on TV, the smart money hasn’t already bought it? Of course it has, and by the time the little guy buys himself, he’s left holding the bag. If you want to make money trading online, you’ve got to think independently. Otherwise, you’ll be behind the curve.
5) Don’t overpay on commissions
Let’s say you start trading stocks online with one thousand dollars. Now let’s say you’re paying ten dollars per trade. And finally, let’s assume you make thirty trades per month. If you do the math, you’ll see that you’re doomed regardless of how good your stock picks are! People often get so excited about trading stocks online, they forget about all the money wasted on commissions. If you want to be successful over the long term, you have to find a broker with low enough commissions for your trading style. With some brokers charging as low as one penny per share, there’s no reason to waste all of your money in fees. In this way, researching online brokers is just as important as researching stocks.
Keep in mind these five tips and you’ve already set yourself up for success in trading stocks online. Good luck!
Article written by Ethan Lux
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by John Bishop
How we view money has a profound impact on every facets of our life. It determines where we live, the type of job we have, how we look at the world, and, unfortunately, how we feel about ourselves. Money has the power to do great things, but it can also destroy the mightiest empires.
Each of us has to determine what our relationship with money will be.
You have to learn how to earn it, save it, spend it and invest
10 Rules About Money
1. Control your spending or it will control you.
2. Work smart for your money.
3. With savings and investments, have your money work as hard as you do.
4. Minimize or eliminate high-interest debt (i.e., credit cards, rent to own, payday loans, buy now/pay later loans, etc.).
5. Surround yourself with people who know how to use money wisely.
6. To earn more—learn more, do more and think more.
7. Put at least 5% from every paycheck into a savings account.
8. Don’t let money determine your self-image.
9. If your company has automatic deposit for your paycheck, use it.
10. Remember: It’s not how much you make. It’s how much you keep.
With these rules you will be able to live the type of life you want—whatever that means to you.
Suggestions for Implementation:
1. Find a mentor who can teach you about the fundamentals of money.
2. Have an open family discussion about money.
3. Look on the Internet about starting an investment club.
4. Think of your last major purchase. Did you really need the item? Or did you simply want it?
Please visit www.TeachingMoments.com for more life skills
ideas to help children succeed.
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by Raynor
Watch those late night infomercials and you will be ready to invest
If you do your homework, you can do pretty well in real estate investing
The first issue to consider with real estate investing is perhaps the most important. Simply put, do you have time to do this? A lot of time will be spent in doing homework to find the perfect investment. Once you own it, you will become a landlord. When the toilet blows up in the middle of the night, guess who the tenant is going to call? Yep. You! Don’t discount the time involved before making the plunge into rental properties.
At this point, many people are probably asking about property managers. This is a valid question. Property managers are great because they deal with all of the tenant needs. That being said, they also expect to be paid. Your investment may be such that you can afford the expense, then again it may not. Make sure you know and don’t just assume you can pass the tenant dealings off to someone else.
The next question to consider is just as important as the time requirement. Simply put, do you have any interest in real estate? Importantly, the question is not whether you have interest in making money in real estate. Of course, you do! However, do you have the passion for figuring out and researching deals? If you just try to wing it, you will get killed in the real estate market. If you have zero interest in real estate, you might want to consider another investment area.
Finally, real estate investing is all about getting the best deal. This means the game can be won or lost during the buy or sell transaction. No real estate transaction goes off without at least a few problems popping up. This means stress. Sometimes it means lots of it. If you are uncomfortable with stress, this is not the investment area for you. Try to be honest with yourself.
Many people get into real estate investing because of the prospect of making serious money. There is nothing wrong with that so long as you understand the practical issues you will need to deal with.
View or sell homes for sale by owner at FSBOAmerica.org.
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