Archive for August, 2007

by Tracy Piercy
When we talk about personal savings we are talking about asset accumulation. When we talk about asset accumulation, we are interested in getting a good return on our money — particularly a good after tax return so we can grow the pot bigger and faster. Why? So we have more money to spend on our lifestyle. Most people would agree that if there was a guaranteed investment that was virtually risk free and produced a good healthy return on our money (say 5 — 10 — 15 or better yet, 20% after tax) that we would be pretty happy. We could see that the healthy return would give us a big enough asset that we would have lots of money for things we like to enjoy. We might even be more excited about making the initial investment knowing the rewards are guaranteed.

At 10% guaranteed, even a modest $100 per month would accumulate to $10,000 in just over six years. If there was no risk and six years was too long, we would simply chose a higher return. What is the point of all this? Anyone knows that if you get a better return on your money it will grow faster and give you more money to spend. And any financial advisor or good calculator will tell you how long to save for, how much, what rate of return is best to meet your goals, etc. If the return is guaranteed and there is no risk, we can get excited about investing for our future and about all the things we can do with the money we earn. Saving and investing are activities we normally feel good about doing even if we might occasionally be intimidated by the number of options and risks associated with making specific investment choices.

The point is, on the flip side of investing is debt. The big ball and chain many people carry around with them: the dreaded bills, the high interest charges, and the monthly payments that eat into precious cash flow that could otherwise be used for our current lifestyle or for savings and investing.

If the goal of investing is to accumulate say $10,000 by saving a little each month and getting a high return on our money; the goal of credit is to give us the $10,000 before we have actually made the monthly investments. The purpose of the monthly debt payments is to now pay for the investment. In exchange for the advance on the investment, the financial institution earns interest.

So what’s the guaranteed investment? Quite simply, if you have any outstanding debt, you have already received the accumulated value of your investing — now you just have to make the monthly investments that you would have made if you were saving to accumulate money and earning the return you are now being charged on your debt. If you have debt, you have already cashed in on the investment so rather than begrudging the debt payments and cursing the monthly obligations and interest charges, next time consider your payment as your investment. I guarantee it will make you feel a lot better when you look at your debt as an investment already earned. So, if you are looking for a guaranteed investment with a high return, make payments to your outstanding debt. It’s guaranteed — you have already received the value of the investment!!!

Money expert Tracy Piercy is a Certified Financial Planner, author, and founder of the personal MoneyMinding Makeover System. To learn more about this step by step system and to get the Free 12 Simple Steps program visit www.moneyminding.com.This article can be reprinted freely online, as long as the entire article and this resource box are included.

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by J Randy Durig
Asset Allocation Balancing the Risks and Returns to better target your Investment goals.

The goal of asset allocation is to create a diversified portfolio with an acceptable level of risk and the expected return given that level of risk. A portfolio or asset allocation that maximizes return for the level of risk is called an efficient portfolio

Studies have found that, over the long run, how your investments are allocated is more important than individual investments, in determining overall performance for diversified portfolios.

The independent investment firm of Ibbotson Associates ranks the importance of the three major determinants of portfolio performance as follows:

Asset allocation 91.5%
Security selection 6.7%
Market timing 1.7%

A sound portfolio will allow investment decision to be evaluated not in isolation but in context of the portfolio as a whole with risk and returns reasonably suited to their goals.

Asset Allocation versus Diversification

Asset allocation takes this principle one step further by diversifying your portfolio not just among different investments, but among different investment classes: stocks, fixed income alternatives such as bonds, cash equivalents, and real estate and other tangible assets. Asset allocation does not eliminate risk, but it can reduce your exposure to extreme highs and lows in performance. Effective asset allocation can also help preserve capital, increase liquidity and decrease portfolio volatility.

Modern portfolio theory uses complex mathematics to evaluate different combinations of categories to determine the best return for a given risk and time horizon. The risk can be quantified into a statistically accurate prediction of performance. Of course, there are no guarantees, but the investor can see the statistically predicted range of performance of the portfolio in dollars.

Asset Allocation with Fiduciary Duty

A fiduciary duty is the highest standard, legally and ethically the law allows, this extra step ensures that the client always come first. Durig Capital has achieved an Accredited Investment Fiduciary we’re certified to conform to the Global Fiduciary Standard of Excellence in our investment practices. The Global Fiduciary Standard of Excellence is designed to ensure investment process is focused on all the components of a comprehensive investment process, demonstrated fiduciary standards of care, and commitment to excellence.

Our investment selection methodology is rigorous and tested to meet the needs and risk tolerances of individual clients.

Once investments are selected for your portfolio, they are monitored on an ongoing basis to ensure that they continue to meet our monitoring criteria.

Underlying all of our investment strategies are quantitative models designed to help us evaluate the relative risk and historical characteristics of each investment alternative. By assigning two scores to each mutual fund each and every quarter, this research helps enable us to identify what level of decisions that are important, we can rank the alternatives from most attractive to least attractive.

We create an asset allocation model designed specifically to help meet your individual needs. This model, when compared to your existing allocation, can help identify potential shortcomings while providing an understanding of how they can be turned into strengths.

When an investment fails our criteria, it may be placed on a watch list, or it may be removed immediately depending on the situation.

Once we have created and implemented a specific model, the most important task is listening to you.

Asset Allocation Means Service

Asset allocation enables us to work together more efficiently as a team while offering an established procedure to follow when organizing and planning investments. In addition, it is specifically designed to provide you with a greater understanding of your portfolio. Ideally, this increased level of knowledge will lead to greater comfort with the investing process. These recommendations can be useful as a basis for comparison when developing individual asset allocation models.

Asset Allocation is Designed to

Help understand the risk and rewards, which may assist in prioritizing investment management.

Potentially help increase long-term investment performance by identifying appropriate procedures for:

* Targeting selected assets to be included or remove from the overall portfolio.

* Diversifying the portfolio across multiple asset classes and peer groups
* Reduce risk and or volatility to the overall portfolio.
* Selecting appropriate targeted Investment Managers
* Terminating Investment Managers that no longer are appropriate
* Help uncover investment and/or procedural risks not previously identified, which may assist in prioritizing investment management projects. .
* Assist in establishing benchmarks to measure the progress of the portfolio.

Durig Capital LLC16850 SW Upper Boones Ferry Road,Suite F.Portland Oregon 97224 Toll free 1-877-359-5319www.durig.com

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by EvanE
Forex charting is vital to guarantee that you have the latest numbers to make informed evaluations. Charts give the stockholders with readings from the stock market progresses, financier’ odds in stocks pick up, since the readings show them the changes in the high/low. The shareholders use these results to know when the best time is to bet/ask, trade/sell.

You have an assortment of Forex charts, which may contain the Web and Java charts. Web charts provide the investors with conditions. Often, they receive particulars from a variety of stock markets which are streaming from different banks around the globe. These banks have a large institutional bank, which is situated in New Cork, London banks, Irish banks, Hong Kong and other banks tied to the headquarters in Stock or Forex marketing.

Charts will provide the stakeholders with important means. These technology arranged-software systems give exact readings. Some of the programs will read out rate of changes, stochastic, (random probabilities), Bollinger Bands, Common Deviations, and so on. Some of the readings, such as Bollinger’s, are an indicator. This indicator allows the investors to weigh unpredictability and prices on a timeline.

Indicators make up bands that rotate, from averages in the stock exchange to the center of Forex Charts. The bands at the crown of the charts move away, the stands (SMA) to sum up, while the low bands will subtract these stock differences. Clearly, stockholders must know how to read instabilities in the stock, as well as learn how to read pricing. These will help stakeholders at the buy/sell, trade, ask/bid, stages.

Change rates permit the shareholders to track all percentages. Sometimes the oscillator moves back and forward, unsettled. This means that at the time the market reaches “subzero”, added changes may happen. At this time, a Forex, stock financier can read the results to see positive/negative results. Each result will display high/lows in the stock market, and will show divergences within Forex. When the lines cross over the subzero mark, signals are sent that point tell the investors when to bid.

If you are just starting out to this stock market, then be sure that you become informed before opening an account. The benefit that Forex stocks provide the stock market exchange is that when the markets are low you still have a chance at making money. This is because you are betting on currencies within countries and these currencies may change at any moment. They consist of currency pairs, which may include EUR/USD, or JYP/USD, USD/JYP, and so on. You need to have an understanding of these currencies to know when to bid/ask, trade/sell in Forex stock exchange.

When you do, Forex is a great way to earn real money!

Evan Evans loves forex and can be found at his website PowerofForex.com

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by Caroline Poynton
In 1999, the government introduced Individual Savings Accounts (ISAs) for an initial period of ten years. So successful have these tax-efficient saving schemes proven - over 17 million people have invested in an ISA (double the number of people who ever invested in a Tessa or PEP) - that the government has now confirmed that ISAs will be made available indefinitely. It has also agreed several reforms to the ISA scheme that may impact your saving decisions in the 2008/9 financial year.

If you have invested in an ISA before today, or you have thought about it, you may have been a little confused by the options available to you. For example, you could opt for either one or two Mini ISAs, or one Maxi ISA. The Mini ISA enabled investors to put up to £3,000 into a cash ISA and up to £4,000 into a stocks and shares ISA (investors could choose to split these between two providers or just keep both with the one provider).You could also just choose one Mini ISA, either a cash OR stocks and shares ISA. Alternatively, a Maxi ISA would allow you to invest the full £7,000, with it all going into shares. Confused? Not surprising.

No investor could have both a Mini and a Maxi ISA, however, meaning that investment limits were capped at £7,000, no matter what option investors chose. The government has recently confirmed, however, that from 2008 onwards, not only will the ISA scheme continue indefinitely, but the model will also be simplified. The key changes are as follows:

* From 6th April 2008, the ISA limit will rise to £7,200, from the current £7,000. Up to £3,600 of this can be saved as cash and the balance, or all of the £7,200, can go into a stocks and shares ISA. The oft-confusing distinction between Mini and Maxi ISAs will be abolished, with accounts being re-designated as “cash accounts” and “stocks and shares accounts”.
* Personal Equity Plans (PEPs) will cease to exist from 6th April 2008. If you hold a PEP already, you will be able to transfer the PEP into an existing or new stocks and shares ISA.
* To encourage investment in shares, you will also be able to transfer your existing cash ISAs into a stocks and shares ISA and it will not count against the year’s ISA savings allowance.
* Money held in child trust fund (CTF) accounts will be able to roll over into an ISA once the child reaches 18.

These changes should make it easier for you to understand and make the most of your options, while giving you plenty more time to benefit from the ISA model for years to come. The rise to £7,200 has been welcomed by many commentators, although the possible cash ISA increase to £3,600 has in fact resulted in a fall in the amount that can be invested in stocks and shares ISAs from £4,000 to £3,600. However, observers hope that the government will further increase the ISA limit in future as the current 3% rise represents a fairly insignificant increase for nine successful years of ISA investment.

Why ISAs?
The ISA is quite simply a saving scheme that gives you significant tax savings. Any money accrued within an ISA is free of either income tax or capital gains tax - which means that you can accrue far more interest than on other tax-payable savings schemes. The cash ISA is a simple cash savings account, which works much like any other bank or building society scheme, except for also being tax free. Cash ISAs are useful for saving money to gain interest, avoid tax and have easy access to your savings at relatively short notice. The stocks and shares ISAs, however, are more suited for those who want to make a more long-term investment in the stock market. But do remember that past performance is not a guide to future returns and the value of investments and the income from them can go down as well as up.

Although April 2008 may still seem a long way away, it is never too early to look at your savings portfolio and start making some decisions about your short and long-term future. After all, in years to come, you may look at your carefully saved pot of cash and thank yourself for thinking ahead.

Caroline Poynton is a financial journalist and writes for Beat That Quote on all loans, mortgages and personal finance topics.

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by Daren Slaughter
Even though planning your estate isn’t an enjoyable job it’s necessary so that you can efficiently and successfully transfer all of your assets to those you leave behind. With a bit of careful planning, your heirs can avoid having to pay estate taxes and federal taxes on your assets. As well, a well planned estate avoids confusion for your loved ones.

Still, with all the advantages of estate planning, many people make a great many mistakes in the process. The most common mistake when it comes to estate planning is not getting around to doing it at all. Make sure that you take the time to plan at least the financial portion of your estate so that you leave your loved ones behind with some amount of security. The following seven mistakes often put families into great difficulty after a loved one’s passing.

1. Don’t fall into the trap of thinking that estate planning is just for the rich. This is completely false as planning your estate is essential for anyone who has any amount of assets to leave behind. Many people don’t realize that their estate is as large as it really is, especially when they fail to take into account the assets from their home.

2. Remember to update your will and to review it at least once every two years. Factors that can change information about your beneficiaries include deaths, divorce, birth, and adoption. As your family structure changes so does the change in your assets and who you want to leave them to.

3. Don’t assume that taxes paid on your assets are set in stone. Talk to your financial planner about ways that your beneficiaries can avoid paying taxes on your assets. There are several strategies for tax planning so that you can minimize taxes or avoid them altogether.

4. All of your financial papers should be in order so that it’s easy for someone to find them. Make sure that one of your loved ones has information on where to find the papers necessary for planning after your death.

5. Don’t leave everything to your partner. When you leave all of your assets to your spouse you are in reality sacrificing their portion of the benefit. You’ll get an estate tax credit but will forfeit part of this if your spouse is your only beneficiary.

6. Ensure that your children are well planned for. Many people take a lot of time deciding what to do with their assets and forget that they need to appoint guardianship for their children. There are many details to take into consideration when it comes to guardianship.

7. If you don’t have a financial advisor, get one. Financial Planners and Advisors are trained intimately in these matters and can provide asset protection well above whatever fees they may charge. If you need help selecting the right financial advisor, get the Financial Advisor Report.

The above mistakes are common when people are planning their estate. Take the time to plan for your death even though you think that you have years before it becomes an issue. The key to successful estate planning is being prepared.

Darren Slaughter’s book “Financial Advisor Report, How To Select a Financial Advisor Quickly & Easily-What You Need To Know”, can be found at http://www.financialadvisorreport.com . In it, Mr. Slaughter arms people with the information they need to ask the right questions to seek out the right investment advisor for their financial needs.

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by Mejo
The most important thing is that you realize that you have to do something to secure your future. Property offshore real estate investing refers to a huge variety of investment strategies, which capitalized on investor’s home country. Investing offshore just means investing in a place other than where you live. The key to building a portfolio of offshore properties is double: education, and emotional intelligence. Its little wonders that so many people today are turning to offshore property as their primary investment to funding their pension, retirement or to draw an income from it.

Investing property in offshore companies could be very money-spinning with many of the offshore investment openings being things like hotels in visitor locations and malls in high density population centers. The most excellent feature is it offers a very high return on investment if played properly. Following are the advantage and disadvantage of offshore real estate investing.

Advantage of property offshore real estate investing

• Tax reduction: Many of offshore investment countries today offer tax reduction to foreign investor. According to U.S Internal Revenue Service (IRS) The citizen of U.S are now taxed on their global income. As result U.S people could as well go for the offshore property real estate investing.

• Confidentiality: Many offshore property jurisdictions provide you with additional benefit of having the legislation secret. This confidentiality does not mean something to hide; it is just some high profile investors might like to leak out on the shares where they are investing their property. Hence this is another added benefit of investing in offshore property real estate.

Disadvantage of offshore real estate investing

• Tax laws are now tightening: One cannot afford to avoid the tax agencies like IRS. It becomes extremely difficult to invest in offshore property real estate investing due to tax problem.

• High Cost: Offshore is actually not cheap to be set up. Investing in offshore property real estate investing steeps you in many type of fees like legal fees, corporate fees, finance charge etc. hence one require to think about all the aspect before he invest in offshore real estate.

Mejo is a Copywriter of Kelowna Real Estate. He had written various articles in different topics on Kelowna Real Estate. For more information visit: www.bigwhitepropertyforsale.com. Contact him at bigwhitepropertyforsale@gmail.com

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by Smith Chen
By investing in properties “pre-foreclosure,” you get ahead of the crowd and possibly get a great price. The downside? You may have to walk a fine line between helping an owner and taking advantage of him.

Pre-foreclosure is simply that time between when the home owner gets the notice that he is in default on the mortgage loan, and when he finally loses the home. This may be where the most money is made on “foreclosures”. By going straight to the owner before the home is lost, you are a step ahead of investors who wait for foreclosure sale or wait until the bank owns the property.

Are you taking advantage of an owner when you make a profit off of his financial troubles? Maybe. You might also be helping him make the best out of a bad situation. You really can do the latter and still make a good profit. Let’s look at some examples of how.

Example of Pre-Foreclosure Deals

There are essentially two ways to help an owner who is in default on his mortgage loan. The first is to find a way to help him stay in his home. The second is to help him salvage his credit and get something out of the home he is losing.

Most owners who are seriously in default will simply lose the home. They will also wreck their credit, and lose most or all of their equity - unless an investor steps in to help. This is why you can feel good about making a profit from a home owner in distress.

Suppose you put an ad in the paper, something to the effect of “Losing your home? Let’s talk.” You get a call from a woman who is several months behind in her mortgage payments, and is about to lose her home. With back payments, her loan balance or payoff amount is about $95,000. The home is probably worth $130,000.

You ask her about her financial situation, to determine if she has the income to eventually get caught up and make the payments on time. You ask her if she mainly wants to stay in the home or if she just doesn’t want a foreclosure on her credit report. She says that she is ready to move. She could try to sell the home to pay off the loan and have a bit of cash left over, but there isn’t time. She doesn’t want the bad credit, but she also doesn’t want to lose all of her $35,000 in equity.

You agree with her assessment of the situation. You explain that if she did try to list the property with a broker, she would have a sales commission and other costs, which together could be $10,000. She also would likely have to sell it for $120,000 to get it sold fast. In this best case scenario, she might get to keep $15,000 of her equity. But it is risky, because if it doesn’t sell and close in a few weeks she loses everything.

You tell her that you can buy the home for $107,000 and pay all the closing costs. This will leave her with $12,000 and no foreclosure on her credit report, so she may be able to borrow again for a home when she is ready. She says no. You explain that after the costs of buying and selling the home, you will make $10,000, and though you understand she is losing some equity, you just don’t do deals for less than $10,000 profit. You wish her the best.

Soon she calls back and accepts your offer rather than lose her home and equity and credit rating. You have to have a line of credit ready or cash in the bank for deals like this, because time is of the essence. You also have to treat people well. In the example above, you might even offer another $500 cash if the house is left clean and ready to sell.

Look at the numbers, paying particular attention to the expenses you’ll have in buying and selling a property. You can see that there has to be a fair amount of equity in a property to be able to help the owner and help yourself. Verify exactly what the payoff amount on the loan is before you sign any contract. Owners are often underestimating.

Other Pre-Foreclosure Examples

A friend of mine liked to help people stay in their homes when the were in default on their loan. He felt this was easier and more profitable. There are several ways to do this. One obvious way, if there is a lot of equity in a property, is to put a second mortgage on it in exchange for making up the back payments. Sometimes a family has trouble that really is temporary, and once caught up on their mortgage payments, they will be able to pay them on time again, along with a payment to you.

Suppose the home is worth $185,000, and they owe $115,000 on it. They need $4,000 to catch up back payments and no longer be in default. A loan fee of $1,000 and interest at 5% higher than current mortgage rates might make for a decent return on your investment. A second mortgage on a property with so much equity makes it a safe investment.

Another way to help owners stay in their homes is to buy the home and rent it back to them. They get to avoid having a foreclosure on their credit report, maybe get a little cash, and they don’t have to move. You should of course, have positive cash flow and a good profit if you should need to evict them and sell the home.

You could also make it a lease-option deal. In this way, if the previous owner gets into a better financial situation, he can buy his home back. Of course the purchase price will be high enough to give you a good profit.

If you have a lot of cash to invest, you can buy the home and sell it back to the owner on payments. Of course you will have to sell it for at least $10,000 more than you bought it for, and you will have to have charge high interest. If this is likely to cause some bad feelings for the person who will be living in your investment, you may want to consider another way.

You could provide the cash for him to refinance and so keep the home. Since you may have to foreclose on the loan, so you want to do this only when there is a lot of equity. Charge high interest and high loans fees (perhaps rolled into the loan), and make it a balloon loan, with the balance due in three or five years. Explain that you do this for the profit, but it at least gives the owner a chance to keep his home, and he can refinance at better rates when he is doing better financially.

A Little Pre-Foreclosure Trick

Here is a a little trick used by an investor I met in Arizona. A holder of second mortgage in default has the right to foreclose and take the property. But in Arizona at that time (and possibly in other states - but ask an attorney), the law also said that if the holder of a second mortgage foreclosed on a property, he had the right to assume the first mortgage loan - without qualifying, and regardless of whether it was normally an assumable loan.

This investor “helped” people facing foreclosure, using this little known law. For example, suppose there is house that would make a nice little rental property. The owners owe $60,000, and it might be worth $80,000, but they are about to lose it. The payments and interest rate on the loan are lower than what is currently available.

This investor would convince the owners that rather than them losing everything, he would give them the $2,500 necessary to make up the back payments, and also $10,000 cash to walk away. Actually he loaned them the total of $12,500, and put a second mortgage on the property. But they were instructed to never pay on the loan. He made the terms outrageous enough that they weren’t inclined to anyhow.

In this way after they missed their first payment, he could start the foreclosure process. Once he had foreclosed, under the law he could assume that first mortgage with its excellent terms. Now he had a nice rental that would cash flow, and with some built-in equity from the start. The previous owners got their cash, and perhaps a big black mark on their credit report from the foreclosure.

Pre-foreclosure investing can get very creative. These few examples are just a sampling of ways it has been done.

Smith Chen is an author and internet marketing consultant.
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by Greg Silberman
Gold Stock prices have been turned back again from major resistance. The 3rd time in a year! What does it mean? Are we entering another gut wrenching correction or will we reverse higher?

Can I be forgiven for asking if Gold shares will ever break out?

Chart 1- Gold Stock prices bouncing off major support for the 3rd time in a year

So what’s really happening here?

2 theories:

1 — Gold has been a relative underperformer versus the stock market for the last 6 months. Now that momentum is waning in the stock market, Gold Stocks are slowing down alongside.

2 — Gold shares are schizophrenic and don’t believe that Gold is going a lot higher and prefer to act like regular penny stock listings.

I vote for the later.

The establishment banks have been trying for months to sweep the sub prime problem under the carpet. It just won’t go away. Fears of credit problems continue to spread. A friend at a big American bank tells me there are no bids out there for CDOs or CLOs. The latter being the instrument of choice for Private Equity capital raisings!

Credit spreads are widening and no matter the spin, this credit problem will continue to grow and chip away at market confidence.

And that’s when Gold will shine. Gold stocks are by nature counter-cyclical and Gold bullion is the ultimate safe haven. When confidence turns to fear, the HUI will take out 370 and move much higher.

But for now the level of confidence is still high. Investors prefer to move to the safety of Bonds or Foreign Currencies. In time they will realize that these financial instruments will also suffer from credit problems. The whole globe is fuelled by debt and that debt is beginning to implode along with the level of confidence.

Sit tight because this is a great buying opportunity to load up at this level of Gold Stock price.

More commentary and stock picks follow for subscribers…

—

For a FREE trial to my newsletter on gold stocks and oil stocks please visit me at:http://blog.goldandoilstocks.com/

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by Dr. Mary E. Waters
Did you know that there is no shortage of money? The problem is that you may not believe that you are worthy of having a lot of money. Anything you believe you can have, you will receive it. If someone is going to get rich, then why not YOU?

Many women are on the list of the rich and famous today. There is no secret on how to get money. You either inherit money or acquire it through some type of business. Some people reasons for getting lots of money are different from others. Some will apply money to their daily needs and wants to live a better life. Others may save their fortune and leave it to their children. Some use money to devote to a charitable cause to make the world a better place to live.

If you want to create wealth, you must do something different. First, pay off all those credit cards and get out of debt. Second, you should make saving and investing your money a high priority in your life. To keep most of your money, you must make wise investments. You may start this process by seeking the advice from financial experts.

When you use money to fulfill your purpose by starting a business to help others fulfill theirs, then you are doing good. When you are doing good with money, you can expect to draw more money to you. Once you start drawing money to you, then the sky is the limit. This means that you can get lots of money or as much as you want or need to fulfill your purpose. It is like standing under a water fall, “If you stand under a water fall, you are bound to get wet.“ The same is true with money, if you follow the principles of making and investing money, over a period of time, you are bound to get rich.

Are you interested in starting a business?

To the new and experienced entrepreneurs, getting help with your small business is very crucial to your success. Getting the right help will cause you to avoid costly mistakes, and it can also help you to save a lot of time, money, and energy. You will need to get the right help to form the legal structure of the business, financial, management, procurement/certification, marketing, pricing products, preparing a business plan, and more. If you are a business owner who is wondering if you can take your business to new heights, contact Dr. Waters at tina@mail.org or tina.waters@waienterprises.com.

Dr. Mary E. Waters runs a website where you can take business courses online 24/7. tina@mail.org, http://www.waienterprises.com http://www.drmewaters.com

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by
Determining what your return on investment is has become a major part of any investment review, and it should be. No matter what you are investing in, whether it is a savings account or real estate, stocks or new business ventures, knowing the return on investment will better help you make important investment decisions. There are many ways that people calculate the return on their investment, but the annual percentage yield return on investment calculation is the one that is used the most.

The first step in the calculation is to figure out exactly what costs you have into the investment. Are there any upfront costs, maintenance fees, taxes or other fees, and how much time you have invested. Make sure that you list all costs, even hidden costs, because these are costs needed to retain the value of your investment.

Next you have to calculate or estimate any returns on the investment. How much money will you receive from the investment, and when will you receive it? List all revenue you will receive from the investment, whether it is monthly rent for a real estate investment or dividends for a stock investment.

Now you have to establish a cost and return timeline. List in chronological order any costs and returns that you have from the investment. Use positive numbers for returns and negative numbers for costs on the investment. Now the complex formula is applied which looks like this: APY=final return/initial investment^365/days of investment-1. This basically means that you take the final dollar return amount and divide it by the initial investment. This number is raised to 365 which has been divided by the number of days it took you to complete the investment. This number is reduced by one and then divided by one hundred to get the annual percentage yield. This is your return on investment in a percentage form.

Knowing how to calculate the return on an investment is an important skill for any investor who wishes to be successful. This is a calculation used by investors to compare various investment methods and choose which methods are right for them. The return on investment will let an investor compare investments to examine which investment pays more overall, and has a better return. This allows investors to choose investment methods that have a higher return, which means a higher profit. This formula is one that every investor should know and use.

Copyright © 2007 Joel Teo. All rights reserved.

Joel Teo writes on various financial topics including Las Vegas Real Estate . Learn about Las Vegas Real Estate Investment at http://www.RealEstateInvestment101.info

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