Investment Articles

Have you ever asked yourself how the rich became wealthy? The next time you ask those who are rich how they became wealthy, they will probably tell you that they became wealthy from buying and selling real estate or by trading in stocks. These are only some of the ways to become wealthy. There are several other ways to get rich by investing. You can invest in real estate, buy bonds, mutual funds etc.

People who invest in real estate will normally buy property, fix it up, and then sell it for a profit. A lot of people have built a tremendous amount of wealth this way. If they do not sell the property, they may place someone in the building and collect rent on a regular basis. This method is called “buy and hold strategy”. There are many other ways real estate investors can make money investing.

Other types of investors are people who buy and sell stocks. They usually will buy stocks at a relatively low price, and then hold on to the stocks until the price of the stock rises significantly in value. When the stock prices start to drop, the stocks will then be sold at a significant profit. Investors who buy many stocks like these from several companies can quickly develop a massive portfolio.

Many investors spread their money over a range of investments. This is called diversification. To put it another way, you do not want to put all your eggs in one basket. Many will put some of their money into higher risk investments with a hope of getting higher returns. It also makes sense to invest in “safer” investments. The returns on “safer” investments will not be as high as the returns on higher risk investments of course.

Other ways to invest include bonds, saving accounts, mutual funds, and CDs. Mutual funds are professionally managed by investment companies. Investors buy units in the fund, and the investment company uses the money to buy stocks, bonds, commodities, futures, etc.

If you are going to be a successful investor, you have to follow certain procedures. The first thing you need to do is understand the investment vehicle and learn how it works. If you don’t understand how to invest, you could end up making a lot of mistakes which can turn out to be expensive.

Investing can be confusing to anyone who does not understand it and how it works. This is why you need to learn as much as you can about investing. Learning and understanding investing will enable you to invest properly and wisely. By educating yourself, you will remove a lot of risk and be able to make informed and wise decisions concerning your investments. This in turn will enable you to build wealth for you and for your family. It is important to realize however that investing is not a get-rich-quick scheme. If you must take control of your personal finances, it will require work and you will have to learn. The rewards though will far out-weigh the amount of work involved. Start taking control of your personal finances today.

Get more free information at http://www.smartinvestorsguide.com

Get more free information at http://www.smartinvestorsguide.com

Do you think a person earning $20,000 per year can become a millionaire? Absolutely! Anyone can do anything they set their mind to it and if they develop a realistic plan and stick to it. Let’s take a look how.

John is a hard working man earning $20,000 per year in his job. He has learned to reduce the money he is spending on taxes, life and health insurance, health care, food, and cars. He has also learned the importance of planning for retirement and purchasing his own home. He is 35 years old, and has set a goal of having $1,000,000 when he retires at 65. What must he do?

First, by reducing many of his living costs, John has worked into his budget a 10% savings plan. This means he will be able to invest $2000 per year into a tax sheltered Retirement Account (which by the way, further reduces his taxes). He might even use a self-directed account, therefore even further controlling the investment vehicle. John knows he MUST earn a minimum of 15% a year on his investments. So, he may select tax liens in Florida (18% a year), stock investing (Dogs of the Dow-17% since 1973), or real estate investments, with rates of return (cash on cash) of 15%.

There are several ways to get 15% or greater on investments, as well as cash flow strategies. Bottom line he is going to get at least 15%! His investments gains an average of just 15% per year over the course of 30 years. How much do you think this has earned him?

$2,000/year x 15% return on investment (compounded) x 30 years = $739,066.

Well, John has not quite reached his goal yet. But remember, he is also investing in a new home. He knows that real estate will appreciate on average at 5% per year (national average). John finds a nice home that suits his taste at 10% below fair market value using the rules of this course for $80,000. The house is actually worth $88,000.

Starting value of $88,000 x 5% annual appreciation x 30 years = $393,161.

So, at age 65, John has $393,161 in equity + $739,066 in his mutual fund, which equals $1,132,227. You see, John has surpassed his goal.

A simple plan can work. The key is being disciplined and saving for your future. Your objective is to make available for savings, 10% of your income. If you cannot achieve this simply by reducing your expenses, you must increase your income.

SUPER CHARGE THE PLAN

Now if we want to supercharge this plan, we have to increase the amount of starting money, or more importantly, get a better rate of return.

For example, if we start with a small amount of money, granted “small” may differ for everyone, so I did a table with various amounts. Added 30 years, at some aggressive rates of return, and you have some unbelievable future wealth. Even Trillions!

30 Years of Investing at different ROI

Amount – 15 percent – 25 percent – 50 percent

$1,000 – $66,212 – $807,794 – $191,751,059

$5,000 – $331,059 – $4,038,968 – $958,755,296

$10,000 – $662,118 – $8,077,936 – $1,917,519,592

$25,000` – $1,655,294 – $20,194,839 – $4,793,776,480

Now the reality, is that we are not going to hit a TRILLION dollars, but it does illustrate the point. Strong rates of return over time, give you outstanding results over time.

My magic number is 15%! In fact one of my favorite trading systems is credit spreads. A high probability system, with outstanding returns. Often, you can earn 5-10 percent per month. No guarantees, investing has risk, but highly probable. You should check it out.

Hi. My name is Jim Francis. I would like to create a financial miracle in your life. I have had the good fortune to spend time with 50 plus millionaires and 2 billionaires. Each of these MENTORS, gave 2 wonderful gifts. Number 1: Philosophy. Number 2: Strategy. Each are equally important. After studying with them for over 2 decades, I created the Millionaire Matrix. A vehicle for financial freedom. Specific strategies, in business, real estate, investing and wealth protection that can make a major difference in your life.

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To be really basic there are pretty much just a few different types of mainstream investments. They are stocks or shares, property, bonds and cash. Now if you haven’t done any investing before I may have just terrified you. Just try to remember that most things in life sound complicated or confusing when you first start learning about them.

OK, so when we look a bit deeper into it, there are quite a few sub-categories for each kind of investment. And each area of investing comes with its own challenges, positives, negatives and quite a steep learning curve as well.

The good news is, that when you are a new investor you will probably start out slowly and so you’ll learn about each type of investment as you’re ready to “play” with them.

The next question to ask yourself is “What type of investor am I?” Most people will fit into one of these categories and either be a conservative, middle of the range or an aggressive investor. And you may find that once you have some experience in investing, your style of investing may change also. Particular types of investments also usually fit into one of two categories – high risk or low risk.

The share market can be very intimidating for those new to investing and I recommend getting some other investing experience before tackling this type of investing.

Many people start their investment journey as conservative investors and will most often invest in cash-type investments. What I mean by this is that they invest their money in very conservative financial vehicles, such as interest bearing accounts at a bank, mutual funds, retirement funds, Government-backed bonds, and Certificates of Deposit. These are very safe investments that grow over a long period of time. These are also low risk investments in a way, but often don’t even keep up with inflation. It also means you are relying on other people to invest your money wisely and that you have absolutely no control over it.

Modest investors are still fairly conservative and will often invest a good part of their portfolio in cash investment products, while at the same time some may try their hand in the stock market, others may purchase property and most moderate risk investors will be looking at low to moderate risk investments.

The more aggressive investors generally do a lot of their investing in the stock market, which can be quite a volatile market. If you plan to get into share trading I strongly suggest doing at least one course that has been recommended to you by someone you trust and then to paper-trade (practice trading – real trades, but without actually buying them) for at least six months. Aggressive investors will look at business ventures along with higher risk property deals and are often will to put the larger part of their portfolio in higher risk opportunities.

So let’s say you’re an aggressive investor and you find an older apartment building. You would plan to invest even more money renovating the property, which can be risky if you have not calculated all the outcomes correctly. You would invest this way because you anticipate being able to increase the rental fees for each apartment or perhaps you were looking to flip the property for a net profit. This can be very lucrative and it can also cause bankruptcy. Usually it comes down to how well you do your homework and how much experience you have.

Property in any given area tends to go through cycles, so again you need to be educated before you jump into any “deals of a lifetime”, especially if everyone is jumping in at the same time. Usually by that time all the real deals have been snapped up by the savvy investors and you are looking at the peak of the cycle, just before it starts to decline. I will go into cycle details in much more depth in future posts. Oh, and it’s not just property that has cycles – just something that you should be aware of.

If you’re seriously considering investing you first need to decide what risk level you are comfortable with and how much money you have to start out with. Seriously, there are very few people who get rich working for someone else, so you’re on the right track, because you’re going to look after your own money way better than anyone else in the long run. Just remember – especially when you’re starting out – that any money you plan to invest, you must be comfortable with the idea of losing it. You mustn’t invest with money you can’t afford to lose.

Julie started investing from an early age, owning her own 7 days a week business at 18 years old, and has continued throughout her life to educate herself on multiple investment strategies. Her main focus has been residential property investing. She has owned multiple rental properties, renovated 11 homes, performed sub-divisions, bought off the plan, been successful with property options and now lives on over 110 acres in rural South Australia. While she leans toward property investments, she has also educated herself with many other investment vehicles and encourages others to do the same. Looking into a variety of investments can help you decide what investing strategies are a good fit for you.

Since the beginning of the year, a lot of investors have been asking themselves what are the best investments for 2011? It is such a delicate question, as 2010 was a very volatile year. A lot of investors who starting to pour their money into areas they thought would be strong, got hurt.

Before asking yourself what the Best Investments for 2011, you must sit down with yourself and work out what goals and desires you have. You must also do a bit or research to ensure you put the odds in your favour. Not doing do can have dire consequences.

If you cannot spend time to do some research, it is better to hire or outsource someone to do this for you. This will cost you some money, but it will save you time, and will only increase the chances of seeing handsome profits down the track.

So what are the best investments for 2011?

1) Invest in Gold & Silver

No matter what you think, gold and silver have been very popular investments. Although whenever the economy suffers, these commodities do extremely well. They always have. Normally they are extremely volatile in price, and it is not advisable to buy futures or paper contracts. However you can watch the spot price of these commodities online and buy physical gold and silver bullion. They have real value and you do not have to deal with leverage like you do on the futures exchange. A lot of investors have realised this is one of the best investments for 2011 and that is why we have seen prices skyrocket.

2) Invest in Mutual Funds

These are some of the best investments for 2011. With many people now scared about the stock market and trying to make money themselves. Mutual funds that have a good track record in the past are a good option. The best part about these companies is that you get to diversify your money in many investment vehicles. That way you are not putting all your eggs in one basket. It is a low risk, high reward way to invest, without doing the hard work yourself.

3) Invest in commercial and residential real estate

With the recent real estate collapse, it is no surprise that real estate investments will be one of the best investments for 2011. If you are a good negotiator you can get even better deals. This does require a little time and patience but the rewards are very good. With prices so low, and the market recovering it is now very easy to spot a bargain. Look to do a bit of research on evolving towns or those towns under massive development, close to schools and shopping centres. These are the are guaranteed to do well in the years to come, and are likely to be the best investments for 2011 and 2012.

Want a looking glass into the future? World Recognised for their past trend forecasts and accurate stock market calls, Forecast For Tomorrow provides regular updates to help you make BIG profits in any economic climate. Find out what are the best investments for 2011. Visit http://www.forecastfortomorrow.com

What most people think about when they hear the term high yield investments is a low-rated bond, known to most as a junk bond. Junk bonds are from companies that have to pay higher when they borrow money. Just like the average consumer that has financial troubles and pays a higher rate on a credit card, the same is true for companies with a bad credit report. When they issue a bond, the company is really applying for a loan with anyone that wants to purchase their bonds. The people that purchase low-rated, high yield bonds are risking their money in the hope of a better return. If the company is in dire financial straights, no matter how high the interest rate, the bonds simply won’t sell well.

The junk bond market can be quite lucrative if you’re educated in the ways of bonds. For instance, most people simply see bonds as a means of making interest. Stock market investors, in particular, find bonds quite boring especially if they love the thrill of the market fluctuations. These investors simply don’t know much about bonds, in particular, junk bonds. Many online investing sites often neglect information on bonds and focus strictly on equity products.

After September 11, 2001, the market crashed. Several industries felt harsh financial effects from the attack on 9/11 and one of them was the airline industry. United Airlines, already feeling financial pain, now had loss of revenue adding to the pinch when the government stopped flights. They were in a precarious position, similar to many other airlines. However, Frontier airline was a cash cow as well as some others.

Bonds go up and down in price depending on their financial rating, length of time to maturity and interest rate. At the time following 9/11/2001, not only did the stocks for major airlines drop, so did the bonds. In some cases, the bonds discounted as much as 50 percent for airlines. This means that if you bought a 50 percent discounted bond with an interest rate of 5 percent, you would receive a 10 percent return at every annual interest interval. If the price of the bond went up, you could also receive a capital gain by selling it. This made investing in high yield bonds from fiscally sound airlines an attractive investment.

As time passed, United did file chapter 11 and US Airways also does, but many of the lower priced bonds for airlines returned to the price adjusted for length of time and interest rate. People that knew the financials of the different airlines fared well, while people that risked their money on United or US Airways lost money. The key is looking at the financials of the company before you buy the bond. High yield returns are risky and even if they’re bonds, you can lose all your money or most of your money.

During good economic times, the price of high yield bonds increase. Bonds that provide a higher interest rate simply are more popular. Even if the company has a lower rating, during times of economic prosperity, most people feel the companies won’t fail.

During times when the economy drops in the cellar, it raises concern over credit ratings of companies. The high yield bonds discount deeply and are often a bargain for the seasoned investor. The person occasionally doing online investing, however, should not use these types of investments. There is a high risk to high yield investments. Just like any other investment vehicle, the higher the yield, the more risk you face.

Alex Roca is the creator, founder and editor of http://smart-personal-finance.com – a popular website that provides free education on personal finance. For more information on money management, investing, budgeting, saving, and retirement visit http://smart-personal-finance.com

Since the introduction of Tax Free Saving Account (TSFA) in 2009, it has become one of the most popular ways to invest for Canadians. Every year, Canadians are allowed to invest up to $5000 into their TSFA. Any capital gain and any form of income such dividend, trust distribution, interest are all tax free. By compounding the returns without taxation, it is a great way for Canadians to build wealth.

Naturally the question of “what to invest in tax free saving account” becomes a very popular topic. There are many articles and researches out there to explore that topic. This article, however, attempt to address what NOT to invest or hold inside a TSFA account.

The truth is the Tax Free Savings Account isn’t always tax free. It really depends on the holdings inside the account. The name “tax free” can be misleading. I found about this the hard way. A few months ago, I bought preferred shares in a major US bank with good dividends inside my TSFA account. I noticed the dividend I received was less than what I expected. After checking with my broker, I realized a 15% of the dividend was withhold from my account. Needless to say I was not a happy camper.

Recently, with the strengthen of the Canadian dollar vs the US dollar, many Canadians like myself are interested in buying and holding US dividend paying company stocks inside their TSFA. While it’s a good way to diversify one’s stock portfolio, there is tax implication on collecting US dividend income inside the TSFA.

15% withholding tax on US dividends

Under US and Canadian tax treaty, a 15% withholding tax on dividends is automatically deducted on Canadian TSFA accounts by the brokerage firm. Although Canadian investor can file a US tax return later on to claim some of the tax back, it is still not fully tax free, not to mention the opportunity cost to have those dividend reinvested in other investments.

RRSP and TSFA are taxed differently

On the other hand, there is no withholding tax on dividend income inside Canadian RRSP (Registered Retirement Savings Plan). Even though TSFA and RRSP are both registered accounts, there are major difference in terms of tax treatment when holding US stocks and bonds. This is because under the tax treaty between US and Canada, only retirement accounts are exempt from the withholding tax. TSFA is not treated as a primary retirement investment vehicle.

Besides US withholding tax implications, there could be more tax consequences for holding other foreign stocks.

In summary, Canadian investors need to be careful on what to invest inside the TSFA. If one wants to keep TSFA truly tax free, it is best to keep things simple by not holding any foreign securities.

For more tips and guides for Canadian investors, visit http://www.CashflowForLife.ca

When investors research current annuities today, what they are likely to find is that there are a large number of optional features that are now available as additional features on the annuity product. These options, often referred to as riders, allow annuity holders to access some additional benefits that are not offered within the main annuity product.

These riders are typically offered on fixed and variable annuity products. Due to the fact that these investment vehicles now hold billions of dollars in retirement assets, the importance of asset preservation has become extremely important. And, this has subsequently led to the development of different types of both living and death benefit protection for annuity holders.

In fact, all of the riders that are offered on fixed and variable annuity rates contracts will fall into either one of two categories. First, living benefit riders will typically offer a guarantee for some amount of payout while the annuitant is still living. Some of the living benefit riders will guarantee the annuity holder’s principal. Others will offer guarantees on a specific rate of hypothetical growth – provided that certain specific conditions are met.

One example of a living benefit rider is the Guaranteed Minimum Withdrawal Benefit, or GMWB. This benefit offers the compare annuity rates holder the guarantee of a return of principal through withdrawals of a certain fixed percentage of their principal during a fixed time period – until the amount of the annuity holder’s original investment has been withdrawn.

Another such example includes the Guaranteed Minimum Income Benefit, or GMIB. In this case, when the annuity holder first purchases the annuity rates, the issuing insurance company will guarantee income through a fixed annual compounding rate. Following a period of vesting, if the annuity contract is annuitized by the investor, the guaranteed income base will be used to calculate the amount of minimum monthly payments. This occurs regardless of market performance.

Death benefit riders, on the other hand, protect against declines in annuity contract values due to market conditions for the annuity holder’s beneficiaries. In addition, some death benefit riders may only guarantee the initial amount of the annuity holder’s principal, while others may provide the investor’s beneficiaries with a death benefit that is equal to the highest recorded value of the annuity contract or with fixed annuities an attractive guaranteed rate of return.

Current annuities offer a wide variety of features that were not offered several years ago. Therefore, it is important for investors to truly understand how these riders work, as well as the additional costs that are involved with adding these benefits to the annuity contract.

Even in light of their additional cost, however, oftentimes these riders can be very beneficial to compare annuity rates investor.

Investing is such a complicated field that there are literally tens of thousands of books written on the subject. Investing can be quite difficult, depending on the strategy, though it and can also be simple and straightforward if done properly. One of the best pieces of investment advice ever given is to diversify your portfolio into several different investment vehicles. This can help you spread out the risk and achieve a steady return on your investment capital. This is the goal of most investors. This type of investing can be categorized broadly as value investing and with a diversified investment strategy that holds a goal of long term positive returns.

Value Investing
On the whole, value investing is generally defined as investing that focuses on buying investments that have good value. This is a fundamentally safe and secure type of investment strategy. The goal is for steady appreciation and consistent yields on capital invested. Value investing is a fundamental and lies at the base of a solid financial investment plan. Buying investments because they are a good value is a mark of a solid investment plan. If you buy companies because they are good value, then chances are you will be in a position to enjoy capital appreciation in the years to come.

Stock Market Investing
Stock market investing is one of the fundamentals of value investing. By diversifying investments into the stock market it is possible to spread out investment funds into a wide variety of different companies and their stocks. It is certainly very difficult to choose specific stocks that are going to go up in value immensely in the years to come. The Walmart-like stocks are few and far between and taking them at their outset is almost impossible. This certainly does not mean that you should not try. Buying fundamentally sound stock market investments can be a goal and ticket to a fruitful financial future ahead.

Penny Stock Investments
Penny stocks are those that bear their own name. These stocks are often valued very lowly and the costs are often quite low-often times ranging from a few pennies per share up to a couple dollars per share at the most. Some investors believe that there is great potential return in penny stock investments because you can buy for such a low cost a large amount of shares and if there is any appreciation in value this year value will likewise increase. An increase in the share value will yield an increase in the investment return as well.

Bonds Investing
Bonds are another core element of a diversified investment strategy. Bonds typically have slow and steady growth patterns and consistent yields year after year. This makes them the ideal investment for slow and steady capital appreciation. There are several different types of bonds available ranging from government-backed bonds to higher risk corporate bonds. Bonds remain one of the best ways of diversifying a portfolio with safe and secure investment returns. Talk with an investment adviser about the different kinds of bond ratings and how the different types of bonds will play an important part in your overall investment portfolio.

Mutual Funds Investing
Mutual funds are yet another way of diversifying investment risk and return. Some mutual funds specialize in high risk/high yield type investments, while others mirror segments of the stock market (as in Spider Funds, which buy the exact companies that appear on certain stock indices). Mutual funds are run by a board of directors and a management team in most cases. These individuals have the responsibility of making the investment choices for the entire fund.

Mutual funds are traditionally one of the most popular investments options and routes to take. Mutual funds are easier to become involved with than almost any other investment. They are often times the starting place for investors who are looking to have the potential for return while also curving the risks in spreading out the potential downside. One of the challenges with mutual funds, however, is the fact that there are so many and they can be difficult to choose between them. Out of thousands of different mutual funds, finding one that meets your investment requirements can be tricky. It also should be noted that just because a mutual fund has done well in the past that does not mean that it will continue to do well in the future. Very few mutual funds maintain a steady track record over time.

Commodities Investing
Commodities are another option for a diversified investment portfolio. Commodities represent certain items like corn, oil, gold, silver, and other such natural items classified as commodities. Commodities can often be used as a ‘hedge’ investment and have a safe and secure track record. Investing in commodities should be done with the help of an experienced investment adviser only or with much experience under your belt. They are not typical investments and should not be viewed as ones that are as easy to invest in as bonds or mutual funds. Typically, commodities investments can be used as a counter-trend type of investment, or in other words, as a protection against loss when other types of investments seem to be falling. Commodities will typically hold their value contrary to the stock market as a whole.

All of these different types of investment options should be discussed with a qualified investment adviser or broker. To venture into these investments on your own can be dangerous. It should be mentioned that with any investment there is the potential for loss. Anytime you have the potential for substantial gain, likewise you have the potential for substantial loss. Some of these investments are more secure than others. You should discuss your options and your long-term strategy with your investment adviser to determine the best plan moving forward. You’ll want to create a diversified plan that creates a steady return while minimizing risks.

For more great tips and expert advice on investing for a bright and secure future, please visit us at http://www.elementaryinvesting.com

For anybody who is motivated to get your investments started, you can get yourself started immediately without having a lot of know-how about trading stocks. Start by being a conservative investor which has a low risk tolerance. This will likely provide you with a technique to making your hard earned cash increase while you learn more about investing.

Get started with an interest bearing savings account. It’s possible you’ll already have one. If you don’t, you ought to. A savings account can be opened up with the exact same financial institution that you do your checking from – or at every other financial institution. A savings account should pay 2 – 4% on the funds that you’ve got within the account.

It’s not a lot of money – if you do not have a million dollars in that account – but it’s a start, in fact it is money making money.

Next, put money into money market funds. This may often be done through your bank. These funds have higher interest payouts than standard savings accounts, but they work much the same way. These are short-term investments, which means your funds won’t be tied up for a long period of time – but again, it is money making money.

Certificates of Deposit are also good investments without having risk. The interest rates on CD’s are normally greater than those of savings accounts or Money Market Funds.

You can select the duration of your investment, and interest is paid regularly until the CD reaches maturation. CD’s can be purchased at your bank, and your bank will guarantee them against loss. When the CD gets to maturity, you receive your original investment, as well as the interest that the CD has earned.

In case you are in the beginning stages, one or most of these three kinds of investments is the best place to begin. Again, this tends to allow your money get started on making money for you while you find out more about investing in other areas.

It’s easy to be seduced by the big profits that can result from considerably more high risk varieties of investing such as day trading. Bare in mind that risk is normally proportional to return. A beginning investor which has a small amount of capital should not contemplate day trading.

Begin small with conservative investment vehicles and continue to learn and study. Try different things and think about paper trading to acquire expertise and get your feet wet.

Investment advisors should be approached very carefully. Regrettably the typical advice to get recommendations is not completely foolproof as many of the recent investment scams have shown. Always temper the decision with sound judgment and the old adage that if it looks too good to be true.

When you are ready to learn about day trading software, or just want to explore daytrading software options there is information at http://www.daytrading.nu

There’s plenty of information available on the internet about investing in hard money loans, so it’s generally safe to assume that most investors have heard of this popular strategy. It goes by a lot of different names, including: Trust Deed Investing, Being the Bank, Private Lending, Secured Lending and many others. Unfortunately, a lot of the details and even some of the basic philosophies that make this investing strategy so powerful in today’s marketplace tend to get lost behind the message that these investments generally feature high yields (8 – 15% depending on the circumstances). Nobody’s going to complain about the possibility of earning these types of returns, but is that really why investing in hard money loans is a good decision? After all, junk bonds and penny stocks promote the potential for high yields too, but smart investors aren’t scrambling to scoop those up. So, it must be something else that makes investing in hard money loans attractive. Let’s examine a few of the reasons why investors are loving this popular investment vehicle:

Wise investors always have a Plan B

1. Security
The security that hard money loan investments offer is by far their most important feature. Security means that your investment is backed by, supported by, linked to or kept safe by a piece of valuable collateral. It’s often helpful to think of investing in a secured loan as “having a Plan B.” When you make a loan to a borrower, your investment is really a bet that your borrower is going to make monthly payments and then eventually return your principal. You’re investing in a contract – an agreement to receive a specified return for the right to use your money for a period of time. The real estate that the loan is secured by is your Plan B. Should your borrower not abide by the contract that you’ve invested in, you have another means of recovering your investment. Namely, you have the right to liquidate their asset(s) to pay yourself back. There are very few investments available of any kind that offer this type of investment structure. The ability to protect yourself is by far the most important aspect of any hard money loan investment.

2. Control
When you buy a share of stock you don’t get control of a company. You bought the right to stand back and watch someone else make or lose you money. When you buy a corporate bond you buy the right to collect cash flows based on terms that someone else has set. When you invest in hard money loans you call the shots and make the rules. If borrowers don’t want to play by your rules then you don’t have to lend them any money – plain and simple. You have the opportunity to assess the situation, create loan terms that mitigate your risk, and obligate your borrower to meet certain requirements that you dictate. If they don’t, you generally have the right to seek recourse.

3. Income
Investing in hard money loans produces regular income. In a time when cash flow is tight and many investors are looking for a regular paycheck to supplement other lost income, secured lending provides an excellent solution. If hard money loans are structured properly, they can provide a safe, consistent, monthly income to their investors for years.

4. Attainability
For most investors, shelling out large chunks of cash to buy foreclosure properties or to invest in real estate just isn’t a good fit. It requires larger amounts of cash and carries considerably more risk and responsibility. Investing in hard money loans is an attainable solution for almost everyone that has a little bit of cash to invest. There is a multitude of borrowers in the marketplace looking for capital and absolutely no shortage of demand for loans.

These are really just some of the reasons why investing in hard money loans is beneficial for investors today, but they’re also some of the most important. Safety, security and consistent income are all rolled into this single investment vehicle, and investors have definitely taken notice.

Chris Gleason is the Managing Director of MMG Capital, a nationwide hard money lender and provider of Secured Investment Opportunities. MMG Capital and its partners have over 50 years of combined real estate, finance, and lending experience and handle all of their transactions with utmost integrity and complete transparency. More information about MMG Capital Investments can be found on our website: http://www.mmginvestors.com. Investors can request a free copy of our Guide to Trust Deed Investing, as well as an Investor Kit that includes information on our company and what we do for our clients.
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