Investment Articles

Good investments are always out there, but investment opportunities are not always easy to find. What’s important is that you find a good investment that fits your particular needs. This can be tricky business because it’s all a matter of trade offs, and most people don’t know investment basics.

A good investment for your friends might not be a good investment for you. For example, you don’t want to place bets on a penny stock in an account earmarked for future college expenses. Penny stocks are not investment opportunities; they are speculation.

Believe it or not, many people follow the lead of a friend when making investment decisions. They want to invest money where Ralph did because, according to Ralph, he made a lot of money in investment opportunities he found. As a financial planner I ran across this time and time again from new clients that were referred to me by existing clients of mine.

Here are the investment basics. You can’t have it all in any one investment. If you want growth (higher returns), you trade off safety. If you want high income or safety, you trade away high growth prospects. If you want the tax breaks offered by a retirement plan, you give up high liquidity (quick and easy access to your money without penalties).

So, when looking for good investments, make sure the investment fits your needs. If your kid starts college in two years, a bear market in stocks could change his or her plans if you had the college fund invested in stocks. If you are saving for a down payment on a house, the same holds true.

Rank your financial needs before you invest in anything. Always consider these five investment basics: liquidity, safety, growth, income, and tax advantages. No investment ranks high in all five categories.

A good investment for you depends on the investment basics that best describe your financial needs and financial position in life. For example, an IRA or 401k plan is great if you want to invest and earmark money for retirement. But you don’t want all of your money tied up in stock funds in a retirement plan. What happens if you need cash fast for an emergency?

Don’t call Ralph’s financial planner and tell him you want what Ralph has. Instead, view every investment in terms of the investment basics. His investment opportunities might not be good investments for you.

A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.

Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com

The term non-correlated asset classes covers a whole range of potential investments, including venture capital, real estate, private equity, and commodities, but also alternative investment strategies.

But in today’s economy of crashing public equity markets, defaulting hedge funds, and non-existent real estate plays, one company believes investing in film slates, including theatrical distribution, offers a high yield alternative investment that can be leveraged with tax benefits and multiple sources of revenues including theatrical, DVD, video on demand, cable, and the foreign markets.

As a non correlated asset class, films and film finance has outperformed every non correlated asset class in the world if you look at the more than $6 billion dollars poured into motion picture finance deals in the last 3 years, the IRR across the spectrum for both studios and independents are resilient to global economic declines in other industries.

When defense contractor Honeywell, New York Hedge Fund Elliot Associates, and Dune Capital invested more than a combined total of more than a billion dollars towards several different film funds, many pension funds, private banks, hedge fund managers, private equity groups, and high net worth investors and family offices started to follow suit enter the movie business.

Investors from Wall Street to Silicon Valley to the Middle East to Russia have been parking their money into Hollywood.

Anil Ambani, Larry Ellison Of Oracle, Paul Allen Of Microsoft, Steven Rales, Fred Smith of Federal Express, Norman Waitt, the Co-Founder of Gateway Computers, Jeff Skoll Of Ebay, Marc Turtletaub of The Money Store, Roger Marino Of EMC Corp, Sidney Kimmel Of Jones Apparel Group, Minnesota Twins owner Bill Pohlad; Real Estate Developers Tom Rosenberg and Bob Yari, and, financiers Sheikh Waleed Al Ibrahim, Michel Litvak, and Philip Anschutz are all behind the finance of a lot of films that range from box office hits to Academy Award winners.

Institutional investors and hedge funds investing in films include Elliot Associate, Stark, Columbus Nova, Bain, Honeywell, and others.

Non-correlated investment strategies can be used by investors to neutralize, or counterbalance, the risk that one, or more, of the investments in a traditional portfolio of stocks and bonds falls in value. In order to do this, investors typically place between 5% and 20% of their total investment portfolio into alternative investments to protect the remainder of the portfolio from downside risk.

Among the spectrum of asset classes targeted by high net-worth individuals, institutional investors, pension funds or private banks, alternative investments are becoming popular offering more diversification to investors’ portfolios. The benefits of such diversification have been demonstrated by Harry Max Markowitz ( 1990, Nobel Prize in Economics ) in the Modern Portfolio Theory. He proved mathematically that an investor can reduce portfolios’ risks simply by holding instruments which are not perfectly correlated – a correlation coefficient not equal to one. By holding a diversified portfolio, investors should be able to reduce their exposure to individual asset risk.

If investors are attracted by alternative investments in their quest of alpha, it is because allocating to alternative investments offers advantages compared with traditional asset classes and diversification to a portfolio — though involving a certain level of risk.

As investors have become more concerned about their risk-adjusted returns, especially in bearish market environments, interest in alternative investment strategies gained momentum.

By investing in alternative investments, a portfolio manager or a given investor aims at obtaining performance from the relationships between securities. A non-correlated asset class behaves independently from other securities composing a portfolio. Such investment vehicles allow investors to hedge the risk that an asset falls in value and avoid any snowball effects. One of the main benefits of alternative investment strategies lies in the fact they minimize downside risk.

When educated about properly structuring leveraged film finance which may also include U.S. and international tax incentives to minimize the risk many private bankers, sovereign wealth funds, high net worth investors, family offices, and pension plans understand that they are not gambling on one film hoping to win a film festival. When a company is looking to finance 10, 20, 40,50, 75 films there is more than just upside on revenues from each one but a final exit strategy after 5-7 years that can bring 300-400% returns on capital invested.

Film, Entertainment, Media, And Hollywood in general seems to be thriving and immune from economic woes. If you look at the theatrical box office receipts and DVD growth of recent films, including ‘Slumdog Millionaire’ or “Twilight” which had zero movie stars, the ROI on these and numerous other films exceed the ROI and revenues of auto manufacturers, real estate, stocks, mutual funds, etc. Primarily because a well made film is not a local commodity that is just bough and sold once but a global one that has revenue potential from more than 50 countries and medias including theatrical, cable, tv, satellite, airline, DVD, and the huge explosion of Video on Demand.

While some private equity outfits may balk at the notion that Hollywood is safe this country was built based on blue chip industries and for the retail investors, Wall Street and Real Estate was the path to go. Well, when retail investors as well as institutional investors are transitioning from brick and mortar investments to the film business, the underlying factor is ‘why’?”

Some U.S. investors and C corporations are looking for either a strict 100% deduction of their investment under IRS Section 181 or simply being in a portfolio of non correlates investment opportunities. Overseas investors simply want a high yield non-correlated asset class that has long term appreciation such as our hybrid film slate and 100% control over U.S. theatrical distribution.

And for smaller retail investors, not including affluent families or ultra high net worth investors, the bridge between film finance, film production, distribution, and technology are converging so that investors see their investment bring an immediate return from the monetization of state tax credits as part of the equity stream,  an upside in a number of films vs. investing in a single picture, possible Section 181 benefits, as well as being involved with creating jobs and stimulating the economy since every film production creates 50-100 jobs.

Yuri Rutman is involved with structuring tax advantaged private equity alternative investments in film for affluent families, wealth managers, swiss private banking, wealth advisers, private client services, hedge funds, portfolio managers, pension funds, ultra high net worth investors, family offices, corporations, tax attorneys, CPA’s, private equity funds, tax planners.

He also consults to entrepreneurs needing business plans and private placement memorandums, as well as owning a Chicago search engine marketing and media agency specializing in SEO, web commercials, SEM, branding.

Well by now we know that we can invest our money, but where do we put it for best affect? Basically there are just three different types of investing. At the top of course we have stocks market trading, and followed closely by bonds and the old favourite cash. So how simple can it be? Well unfortunately from this point on it gets very complicated. Under each of the headings I have mentioned we have a myriad of sub topics.

Now if you have about thirty years and lots of hours in your day to study, you can study all there is to know about all there is to use in your investment career. Yeah right! we can all do that can’t we? Seriously though, when your just starting out and lots of readers of this site fall into this category, the stock market is a big scary world and your first thoughts are that you will never understand it and you will probably loose your money anyway. Well of course lots of people never understand it and, yes lots of people do loose money. How you approach the market is in direct relationship to the type of investor you are.

You might find this hard to believe but just like there are three types of investing, there are just three types of investors.There are; the conservative investor, that I think of as the blue investors. The moderate investor, lets call them green and the fellow you can’t hold back, or the aggressive investor that I like to call the red investors. To go along with these people we have the two levels of risk tolerance of high and low risk.

Now everyone who starts out earning a wage or any other type of income is a conservative investor, even if they haven’t though about investing. Most of our income at first goes into an interest bearing deposit account. Then when the idea of investing takes a hold of the investing part of our brain we progress to money market and mutual funds or treasury bills and sometimes Certificate of Deposit. All the above are very safe investments. It takes them a long time to grow and they are very low risk. So if you are young enough to get started now, put some of your money into these types of investments, but allow about 20 years to get a return. If you put a little into your investment each month it will surprise you how compound interest can take hold.

Now lets talk about the green investors. You find this investor putting his money into cash and bonds. Occasionally he may dabble into the stock market but stays a moderate investor. This investor is also found in the real estate market in low risk property.

Then we have the red investors, found mostly in the higher risk stock market and business ventures as well as higher risk real estate. For instance you will find them buying older apartments and investing their money into the renovations of the property. Of course they expect to be able to lease or rent the building for more money than the investment is currently worth. Or preferably sell the property at a profit. Like all investing there is always a risk association with any investment.

As you know I am forever preaching that you learn all you can about what you are thinking of doing. History is the greatest teacher, understanding is the disciple, and all the successful investors know this from experience, with learning you can circumnavigate some of the bad experiences.

MR (ed) is the editor of http://www.expandingwealth.com educating enthusiastic stock market traders for over 4 years.

“Buy low, sell high” is quite possibly the oldest of axioms in investing in the stock market. While on the surface it seems like a simple rule, the fact still is that some people make money on the stock market and others don’t. The issue is that there are certain intricacies in these four words that some people don’t understand. And so, the rich remain rich, and the poor remain poor.

What’s really going on?

Imagine this situation. Some problem happens which causes a particular commodity to drop in price per share. Think of the S&L crisis from a few years back. Because of the subprime loans, real estate prices inflated because the market got saturated with bidders. When inflation goes on for too long, the bubble is bound to burst. When it all came down, every news medium had horror stories of people losing their homes-people you would never expect. The prices in real estate plunged, everyone became afraid of banks and their stocks fell. There’s a saying that if Bill Gates catches a cold, the shares of Microsoft will fall. In other words, if a problem happens with a commodity, the prices of related commodities will drop.

Certain people, uneducated in the school of investing can only see the problems of the commodity and miss out entirely on the fact that its prices are at a low point. They miss the opportunity to “buy low, sell high” because the fear over the problems clouds their judgment. They can only see the problem and not the opportunity.

Other people know the game. When stock prices on a commodity are low, they buy, regardless of problems with the commodity. They may not even pay attention to whatever scandal led to the price drop. These opportunistic types are the ones that make money off the market.

Naturally, once the problem with the commodity goes away, the prices will rise again; maybe even shoot through the roof. Guess who’s at the advantage in this case? That’s right, the savvy investor who bought low now gets to sell high.

The other group reads in the newspaper about a certain commodity (real estate, stocks, gold, whatever you can think of) is on the rise. They probably also see in these headlines that people are getting rich beyond their wildest beliefs by “selling the farm” and buying everything they can get their hands on.

This is how it plays out.

When the prices are high, the less affluent players buy from the wealthier share holders. Eventually, the inflated bubble bursts, and the prices drop. The inexperienced buyers panic and sell-right back to the wealthy players, who will buy it just because the prices are low. They really don’t care to have the commodity; they just hold on to it until the less savvy come along when the esteem (and prices) rise again. And so, the dance goes on.

Raymond Aaron,
New York Times Top Ten Bestselling Author, “Double Your Income Doing What You Love”

Follow Raymond on Twitter and he will immediately follow you back: http://www.raymondaaron.com/TW

If you have made the decision to invest in silver, the next step is to learn all you can about your options. Silver coins are always in high demand with collectors and investors and typically net higher premiums than bars. Which would you rather have: a Kennedy half dollar minted in 1964 or one minted in 1965?

Would you rather have an’ early” dollar or a Morgan dollar? Silver investors know that silver dollars vary greatly in their worth, and they know what to look for. Before you begin investing, make sure you are aware of what to look for in your silver dollar coins and how to determine what they are worth. Here are some tips.

Be aware of the availability of the coin. Because the US Mint issues Silver Eagles and they are also issued by private mints, they are easy to find. They have a full ounce of silver and can be purchased relatively inexpensively. The ounce of silver is then worth whatever the spot price for silver is at the moment. By contrast, though, the rare 1840 silver dollars are worth hundreds of dollars because they are very difficult to find. Their worth is increased by the rarity of the coin.
Be aware of the silver content. Before, I asked what the difference was between a 1964 and a 1965 Kennedy half dollar. The answer is either a 90 percent silver content or a 40 percent silver content. The year of issue has a great deal to do with the amount of silver found in these dollar coins. Those minted before 1965 have much higher silver contents, making them more valuable for investors. Silver Eagles have a 99.9 percent silver content and contain a full ounce. These will be worth more than the 90 percent silver dollars, but both are a good investment.
Know how much silver is worth per ounce. If you have a coin, you can determine an approximate value by knowing how much silver can be netted from the coin. For instance, 10 pre-1965 silver coins equals one ounce of silver. You can determine the value of these coins by knowing how much silver is currently selling for.

Whether you purchase full one-ounce coins or silver half dollars with high silver contents, you can easily build security into your portfolio. Get started today with our Free Guide.

Dr Mark Mobius is one of the most renowned fund managers in the world. The Templeton Emerging Markets Fund that he manages has risen 11-fold since its launch in the late 1980s. This equates to a return of over 12% a year.

In a recent interview with The Times Online in London Dr Mobius offered some advice for investors. As investment advisors ourselves, we thought it worthwhile taking a closer look at his advice. His first piece of advice was to keep an eye on value. It is no surprise to us that this was his first point. He is famous for his value approach. He looks for companies trading below their book value, or at a very low multiple of earnings.

He also advises people don’t follow the herd. By this he is referring to the fact that markets often act irrationally. During good times they can become overly exuberant and during tough times they can fall well below fair value. It often pays to buy when others are selling, and sell when others are buying.

According to Mobius, investment is a long-term endeavour. “Rome was not built in a day and companies take time to grow to their full potential”. It can be difficult to sit through a volatile market, and there are times when, if a company strikes life-threatening problems, selling is the best option. But generally, a longer-term approach helps smooth the short-term market ructions and is the best way to approach share investing.

One of the most important pieces of investment advice was to drip feed money into the market. The idea of buying – and ’selling’ – in instalments is becoming much more talked about over recent years.

Nobody knows, including investment advisors, how markets will perform over the short term and it is incredibly important to drip feed into, and out of, markets. There is nothing worse that investing just prior to a sharp market decline. Investing in bites over a period of time is the best way to avoid mis-timing the market.

Mobius goes on to say that you should only invest in shares if you are comfortable with the risks involved. This is the most fundamental piece of advice of all. While shares do offer the highest potential returns, they also are a very volatile investment.

Although the average annual return from shares might be 9.5%, which is the average annual return they have delivered over the long term, it is a rare year when the return actually equals 9.5%.

It is more likely to range anywhere from plus 20% to minus 20%, with even more dramatic gains and losses possible from time to time. People not comfortable with this degree of volatility must include fixed income in their portfolio.

Just to prove that I’m not the only investment researcher who bats on about diversification, Mobius also counsels that a portfolio of stocks be diversified. There is no ‘perfect’ number of shares for a portfolio. Various studies have shown that having 15 stocks in a portfolio is enough to remove almost all stock specific risk from a portfolio. Many people prefer to hold many more shares than this in their portfolio. Ultimately, how many shares you include in your portfolio is a personal decision. But in general terms, when it comes to share investing, there is safety in numbers – more is better than less.

Mobius also recommends we don’t listen to our neighbours when it comes to making investment decisions, nor should we believe everything we read in newspapers. The overriding message here appears to be that there is nothing more valuable than doing your own research on your investments and being comfortable with each and every investment you hold.

Given he manages emerging markets funds, it is perhaps unsurprising that Dr Mobius also recommends people invest in emerging markets. He believes developing countries, with their young populations will continue to grow at a faster clip than developed economies.

Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand’s largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates. Services offered include: Sharebroking, International Investment Portfolio Strategy and Management, Retirement Planning and Superannuation, Investment Advisory, Custodial Services, Foreign Exchange, Asset Allocation, Cash Management, Portfolio Lending, Research and such other services as introduced from time to time by Craigs. http://www.craigsip.com/

If you are looking into investing it must be noted that emerging markets are attracting a lot of attention from investors at present. This enthusiasm is warranted on many counts, but investors delving into the developing world need to be aware of the risks that come with investing in these markets.

I recently met with the managers of the Eastpoint Global Emerging Markets Fund, an Australian fund that invests in emerging markets. They made a strong case for why these markets may do better than developed markets over coming years.

One of the main reasons developing countries have the potential to recover faster than developed countries is that consumers have much less debt in emerging countries than in developed countries.Mortgage debt across developed countries is around 55% of GDP, while in emerging markets it is closer to 15% of GDP. Households in countries like China save a much higher proportion of their income. This high savings ratio has meant the developing world has largely side-stepped the implosion of the debt bubble that has so impacted the developed world. The Anglo-Saxon countries, where the debt and housing bubble have been most pronounced, have been the hardest hit.

Governments are also better placed in the developing world. Governments in emerging markets also have much less debt than in developed countries. Debt held by governments across the twenty largest developed economies equates to 80% of GDP, while across emerging countries public debt is around 35% of GDP.

Perhaps the most significant issue that these markets have in their favour is demography. Countries in the developing world generally have a much younger population than do developed countries. It is clear that the ageing populations in countries like Japan and Germany is having a negative impact on their economic performance. At the other end of the scale, countries such as China and India have much younger populations, which should help propel economic growth over coming decades.

An unlikely, but nevertheless important, factor that may influence future economic performance is tax. Developing countries typically have lower tax rates than developed countries. Not only are taxes higher in developed countries, but many are facing the prospect of raising taxes to help pay for bank bailouts as well as burgeoning healthcare and pension costs.

All of these factors mean that emerging economies have the potential to generate a higher level of GDP growth than we may see across developed economies. The deleveraging of household balance sheets may mean that economic growth will be as low as 2.5% a year over coming years across developed economies. This is a far cry from the 3.7% seen over the past five years.Emerging economies are forecast to grow at double this rate. This faster growth should mean higher levels of growth for companies and therefore better performing share markets in emerging markets.

Emerging markets currently account for just 24% of the total value of world share markets. This is set to rise as their performance relative to the major developed economies improves. While the long-term outlook for these markets is compelling, there are risks in investing in these.

Emerging countries face massive political, legal, social and financial hurdles on their journey towards prosperity. Investors in emerging markets bear these risks.

Share markets in emerging markets are also more volatile than in developed countries. The Chinese market is a shining example of this. Over 2006 and 2007, the Chinese share market rose an incredible 370%. Then, over 2008, virtually all of this gain was wiped out when the market fell 70%. In the first five months of this year the Shanghai exchange has again risen strongly, gaining 90%. But yet again these gains have been short lived.

Over August it has fallen 22%.The key message is that investing in emerging markets has merit, but it requires a careful approach, a hard hat, and a very long-term perspective.

Craigs Investment Partners Limited (formerly ABN Amro Craigs.) is an NZX Firm that was established in 1984. It is one of New Zealand’s largest and most established investment advisory firms. Craigs Investment Partners is 100% owned by certain staff and close business associates. Services offered include: Sharebroking, Portfolio Strategy and Management, Retirement Planning and Superannuation, Investment Advisory, Custodial Services, Foreign Exchange, Asset Allocation, Cash Management, Portfolio Lending, Research and such other services as introduced from time to time by Craigs. http://www.craigsip.com/

Joe and Leslie are both real estate investors. Joe has over twenty years experience in “the business,” and boasts that he has done every type of deal known in real estate investment. He has massive experience when it comes to doing short sales, negotiating directly with banks and even with creating land trusts and other safeguards to help his buyers and himself avoid potential complications with estate transactions down the road. In short, Joe is an expert when it comes to estate investing.

Leslie, on the other hand, is a “newbie.” She’s attended a few seminars, and is very excited about getting involved in real estate. She researched, negotiated and purchased the home she lives in now without the help of a estate agent, and she got a great deal by using some creative financing that she learned from a mentor along the way. However, she can in no way be considered an “expert” in estate investing because her real-life experience is just plain lacking.

So how is it, then, that Leslie and hundreds of “newbies” like her are generating major wealth through estate investing while experts like Joe are struggling to make ends meet? The answer is simple: Leslie is not afraid to ask for help, while it just plain does not occur to Joe.

Being an “expert” is not a handicap, but it can contribute to stalling your real estate investing. In this changing economy, knowing it all is a big advantage, but it can also work against you if you already have a lot of properties that you are struggling to maintain or if you have a system in place that is no longer working. As a result, newer investors are dominating the estate investing arena when it comes to success because they are more flexible in many cases and more likely to take on a team or mentor who can help them navigate the sometimes confusing aspects of estate investing.

People like Leslie have the best of both worlds when they create this type of team because they have their own flexibility combined with years of know-how. It is a nearly unstoppable combination, and it is taking today’s real estate investing market by storm.

If you are interested in talking with Peter further about his private real estate coaching program please respond to this email with your full name and all your contact information.

Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US helping them achieve riches in real estate investing. For more information please visit http://www.CoachingByPeter.com.

Introduction to Investment

Manish Choudhary is 32, married and works for a MNC. Just like the rest of the lot, he has his dreams. His dreams are no different than you and me, he also dreams to live is a plush home owned by him. He dreams to build and decorate his home with his wife and children and family. He wants to give the beast possible education to his children’s. He wants to go on exotic holidays each year and wants to make sure that he has enough funds make his life secure post retirement.

One careful look at his bank balance and spending habits, and we get the clear picture that his dreams are going to stay as dreams and the chances of them turning to reality is in oblivion. His savings pattern is just not sufficient enough to pay for his dreams. Every one has got the right to dream and dream big. But our habits (bad) holds us from achieving those dreams. The only way to achieve our dream is to create wealth. Wealth creation is possible only through wise investment. Lets discuss and understand the thought process that goes into investment and the process to create ways of wise investment.

What shall be the objective of investment?
Investment is one sure-shot process that can make you rich and will enable you to achieve your financial goals of life. The first step before you start your investment activity is to budget your expenses. You shall know the pattern of your spending. The items that makes you most greedy and items on which you have control. How much a movies to costing you each month? what dent your dinning is creating on your pocket? how irrelevant it was when you decided to buy that mobile phone last month? By budgeting your expenses you are actually putting a upper limit to all your expenses so that at the end of the month you can track your spending habits. Objective is to plan your budget and follow your plan. Buy budgeting you not only plan your expenses but also plan your savings. Unless you have savings you have no investment. Once you create your realistic budget, start following the same. You will find that you have made a big value addition to you life. You are saving, and when you see your investment grow you will feel proud of your self. Do not think, just do it, it will feel good. Take it from me. The thought process driving your investment is wealth creation for happiness and well being of your family.

What is the process of investment?
Investment has no secret formulae. The rule of investment is have the right information, plan your savings and investment, and make investment on assets. The steps involved in the process of investment is as listed below:
Budget to Save
Save and make investment regularly
Investment shall be for long term
Control your debtsWhy at all we should do investment?
Ask your father and he will tell you the wisest thing he did when he started his career was to open a recurring deposit account in the bank at the start of his career. In those time investment were limited or else people were less informed about investment options and about necessity of investment. Now the days have changed, not only people has become more aware about investment but also the demon of inflation making us think more aggressively about wise investment.

Inflation is eating away your savings
Maintain a good standard of livingInflation eats away your money even when you are sitting and watching your favorite movie. If your have a monthly expenses as on today as Rs 15000 and annual inflation is 5%, 20 years later those same goods will cost you a whopping Rs 40,000. It means for the same set of items today you are spending Rs 15,000 and after 20 years you will have to spend Rs 40,000. Bank deposit gives you a meager return of 6-7% per annum. After considering the effect of inflation and tax you are left with returns which is practically negative. Means investment in bank deposit is making you loose money rather than making it grow. This is not a wise investment.

What is the key to wise investment?
Warren Buffet is an example of the most successful investment icon of this world. He has not build wealth over night. No one can build wealth over night. To build wealth you must remember those steps of investment, budget to save, save to invest, invest long term and control your debts. But this is for sure that all rich people did something very different than most of us. We will discuss few such wise investment to-do’s

Start the process of investment as early as possible.
Lets take example of two friends, Ritu and Manish. Ritu started saving and investment of Rs 750 per year from the time she was just 15 years of age. After 15 years (when she was 30) she stopped investment. She allowed her investment to grow without any additions and withdrawals.

On the other hand Manish started investment of Rs 5,000 per year when he was 30 years of age and continued his investment of Rs 5,000 till 60 years of age.

Assuming both earned a steady return on investment @ 15%, Ritu’s portfolio was a massive Rs 27.7 Lakhs by the time she reached 60 years of age. Manish accumulated wealth when he aged 60 was Rs 25 lakhs. The key to wise investment is give more time to your money to make more money.

Get the benefit of compounding of money

Once there was a king and a farmer. Both of them were good friends since childhood. One day they were playing chess and the farmer played a good game and defeated the king. King was very impressed with the farmers game and he asked the farmer to choose his reward. The farmer was very clever. He asked the king to give him 1 grain of rice for the fist square of the chess board. 2 grains of rice for the second, 4 grains of rice for the third, 8 grains of the rice for the fourth and so on till the 64 squares are complete. The quantity of grain that was required to fill was 18,446,744,073,709,551615.

Suppose you have Rs 1 today. Every year your money doubles, then at the end of 64 years, your investment of Rs 1 today will become Rs 18,446,744,073,709,551615.

This is the power of early investment compounding of money. Lets take a more practical example. Assuming your father gave you Rs 1,000 on your 10th birthday. As you was to young to handle that money he decided to make a fixed deposit of those Rs 1,000 for next 50 years. Fixed deposit gave a steady return on investment @ 8% per annum.
Your investment of just Rs 1,000 today will become Rs 47,000 in 50 years
Your investment of just Rs 5,000 today will become Rs 2,35,000 in 50 years
Your investment of just Rs 20,000 today will become Rs 9,38,000 in 50 years

http://www.getmoneyrich.com/investment.htm

I recently had the honor of interviewing the world-famous Robert Kiyosaki and this is what I learned …

The popular perception is that being an entrepreneur and investing in general is risky business in which you’re likely to lose your shirt – and your nest egg. Well, it’s time to debunk that myth!

See What Others Cannot See

First, think like an investor, not an accountant or an attorney. That simply means seeing the true value of something rather than just considering the original price. If you can see what someone else can’t — like how existing zoning will limit or expand what can be done with acreage – you can identify low or no risk investments.

Also, you must have an entrepreneurial spirit and a love for that lifestyle. Investing isn’t for those with a “saver’s” mentality as making money and attaining wealth are about mind control — how you view an opportunity and what you are willing to spend in order to step up the value are key.

So says Robert Kiyosaki, author of The New York Times best seller Rich Dad, Poor Dad. He explains that the more you invest with control, the more profits go up and risk goes down. In large part, this is a matter of ownership and power over outcome, something you can’t get by participating in a mutual fund or buying stocks and bonds.

Six Critical Controls

According to Kiyosaki there are six critical controls to help you manage your financial statement for an investment; they are:

• income

• expenses

• assets

• liabilities

• financial training or management

• insurance

Financial Training

Although listed as number five, the most important of these is financial training as without it you can’t control the other five elements. Unfortunately, this is not something we learn at school but, luckily, in today’s global and web-based world there are many options for gaining the learning you need to become an expert at investing with control.

Controlling Income

With respect to the other critical areas Kiyosaki identified, controlling income is about making sure there is some and that you have a say on how much that will be. Think about owning rental properties where you can set the monthly fees versus opening a savings account where the bank controls how much interest you’ll receive.

Controlling Expenses

With expenses, the old adage is definitely true; you often have to spend money to make money. The point is to do it as necessary and wisely, whether it’s upgrading rental property by painting the apartments or increasing the advertising budget to see more of a product you make.

Controlling Assets

To do this, you need to be able to shift the gears in your head so that you’re seeing all the possibilities for making money and measuring them against expenses. Kiyosaki again uses real estate as an example: consider a piece of land that could be used for varied purposes, some at no additional cost.

However, if you think a bit out of the box you could build a mobile home park which, although it necessitates building an infrastructure, the costs associated with obtaining zoning changes and different capital gains taxes, has an ultimate value to the entrepreneur that is exponentially magnified.

If you don’t do these things you negatively affect your assets; remember even small changes can lead to large rewards. The learning here is that asset control can impact the speed at which your investment gains value. It’s as simple as deferring maintenance on that apartment building to keep expenses low or making the repairs now and being able to up the rental fees.

Controlling Liabilities

With respect to liabilities, pay cash where you can, refinance at a lower interest rate or sell equity instead of borrowing to pay off debt.

Controlling Insurance

Carry insurance and consider bypassing any investment where you can’t.

Raymond Aaron,
New York Times Top Ten Bestselling Author, “Double Your Income Doing What You Love”

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