Investment Articles

Buying Artwork is often considered to be the exclusive privilege of the rich and there is plenty of evidence to prove this with record sales making headlines the world over. Van Gogh’s sunflowers famously selling for $39.7million back in 1987 is just one example. With the current economic crisis casting a long shadow of financial insecurity for the foreseeable future, more people are looking for tangible alternatives in which to invest their hard-earned money. Buying art is one such alternative, but can it really be a safe investment? Is there a science to making it profitable or is it all just an indulgent matter of the heart? Here are four simple points to consider when buying art, whether for £50 or £50,000.

Chose a discipline

Art doesn’t have to be just fine art: i.e. paint on a canvas. No one can doubt the craftsmanship and art that is required to cut a diamond or carve a fine dining chair from a piece of wood so why not consider buying furniture (such as Chippendale) or sculpture, or more personal items such as antique glass, silver and jewellery? These items may have a broader range of price too enabling investors to start small and grow their collection over time. One collector bought for his daughter, on the occasion of her birthday each year, an antique silver spoon. In time, she learnt to love the subject too and began to compliment the gifts with her own purchases and built up an impressive, and highly valuable, collection.

Research your subject matter

Knowing your subject matter is vital and there is a wealth of information available ranging from the local library for the more academic research to the internet for information on recent sales. An auction house will produce a catalogue for each sale and these are useful points of reference as they will record each piece’s provenance (history). A quirky history, such as a famous owner in the past, will add value to a piece, regardless of what it is.

Study the market

Knowing the current market for your particular discipline is as important as knowing the provenance of a piece itself. The internet, again, is key and regular attendance at auction sales will help you to gauge who shares your interest in a particular style or genre as well as give you a guide to what pieces are selling for. Don’t forget that an auction price is not necessarily indicative of a piece’s value: demand may have pushed the price up.

Seek expert advice

Auction Houses are where most people think to buy art and antiques but antique dealers are just as knowledgeable and are part of a useful network. If the piece you coveted sold to someone else at an auction, why not go to a dealer and ask them to source something similar: by the same artist or craftsman, or simply in the same style. A reputable dealer will be a member of a professional trade association, such as BADA (British Antique Dealers’ Association) who will offer an independent arbitration service if you are not completely happy with your purchase.

Like any investment, the value of a piece of art or an antique can go down as well as up. But with careful research coupled with the advice of a professional, there is no reason why anyone should not be able to buy something with a potential return. If you are able to buy multiple pieces, think about how they can complement each other and if you would sell them on as a group rather than individual pieces. Think too on what links the pieces of a collection: are they all examples of one particular style, or differing styles executed by the same artist or craftsman. When you have carefully considered, weighed up and evaluated all this information, you may decide to go with the other piece of advice many art market professionals expound: go with your heart: if you can afford it and you love it, you should buy it, as you can never put a value on the enjoyment you will have from it. So why not do both? Use your heart and your mind: you will get something that you will treasure and it may even turn out to be a treasure.

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.

Jack and Mike were at a party in 2011 and the chatter was about investing money and where to invest it. Jack whined about interest rates, and Mike agreed that investing money in the bank was a lost cause. Assuming they both preferred relatively safe investments, a stranger overhearing this suggested they invest in safe mutual funds.

Investing money in mutual funds was on Mike’s list of where not to invest because he had lost a bundle in stock funds during the financial crisis. Jack wasn’t too fond of funds either, since his safe mutual funds (money market funds) were paying MUCH less than 1% in interest. Both felt clueless and uncomfortable as the stranger rattled on about a type of fund. According to mister know-it-all, you could invest in a relatively low risk fund, earn higher returns than at the bank… and just relax.

As they walked away from their new acquaintance Mike suggested that Jack ask his brother Jim (who knew about this stuff) what the devil the guy was talking about. Jim, as usual, had an answer. Can you invest in one single relatively safe fund in 2011 and have exposure to stocks, bonds and safe investments all in one package with relatively low risk at relatively low cost? Can investing money in 2011 and into the future be that simple? Yes it can, in a NO-LOAD balanced fund called a Retirement Income Fund.

Here’s how investing money in these balanced funds works. Let’s say you invest $10,000 in a retirement income fund with a major no-load fund company like Vanguard or Fidelity, the two largest fund companies in America. It should cost you nothing for sales charges when you invest and about $100 a year (or less) for management and other fund expenses. This money will automatically be deducted from the value of the fund shares you own. No-load means no sales charges when you invest or cash in shares.

Now, where is your money actually invested in these relatively safe mutual funds? About 20% will be invested in a variety of stock funds managed by the fund company. This provides you with some growth potential plus dividend income. The rest of your money will be split about evenly between bond funds and safer short-term funds managed by the company, both of which earn interest. The dividend and interest income earned are normally automatically reinvested for you – to buy more shares in the retirement income fund that you own shares in.

Investing money always involves risk and the value of your shares will fluctuate. The good news is that when you invest in a retirement income fund risk is relatively low, and you will own a small part of a large well diversified portfolio. No one knows what the future will bring in 2011, 2012 and beyond. Broad diversification in relatively safe mutual funds makes good sense for most people.

If you feel clueless and are safety conscious like Jack and Mike, consider investing money in a retirement income fund. Let the professional money managers do the managing while you relax in 2011 and beyond. You won’t get ahead with all of your money in the bank, so start investing with relatively safe mutual funds.

Author James Leitz teaches investment basics, stocks, bonds, mutual funds and how to invest in his investing guide for beginners called INVEST INFORMED. Put Jim’s 40 years of investing experience to work for you and get up to speed at http://www.investinformed.com. Learn how to invest.

Are you a conservative investor? Almost everyone is to some degree but if you are always concerned about not losing, about retaining your hard-earned cash, then you probably fit the mold for a true conservative investor. The good news is that there are sound strategies for conservative investors that can still grow your money, maybe not like a bamboo tree but surely like a solid oak tree.

And there is nothing wrong with saying you are conservative investor, that you want to leave the risky stock investing to others. When retirement comes, or a rainy day, conservative investors are confident they have money to meet their future needs.

There are degrees of conservative investing and it is important to recognize where you stand. These degrees include:

1. Totally concerned and committed to just about not risking a penny of your cash but desiring to at least keep even with inflation.
2. Committed to minimal risk of your money but desiring to see it grow a little more than inflation.
3. Conservative in most cases but willing to use a small portion of your cash to grow faster than inflation but not to the extent of taking wild risks.

If you fall in the #1 category, safe investments can be found:

• Bonds, bond ETFs or bond mutual funds
• Some stocks (companies) with a 10 year or longer history of paying strong dividends, ETFs or mutual funds based on dividend paying stocks
• US treasuries, ETFs or mutual funds based on treasuries

If you fit the profile for the #2 category you should invest similarly to those in the #1 category but put more of your funds into dividend paying stocks, funds or ETFs. This will enable your portfolio to grow a bit more than inflation as dividend payouts from strong companies are usually greater than inflation and there is also a good likelihood the price of the stock or ETF or fund is also appreciating.

For those of you in the #3 category of basically conservative investors, the majority of your portfolio should be invested as if you were in category #1. But like those in category #2 you should hold investments in dividend paying stocks, funds or ETFs to help grow your portfolio and beat inflation, but in your case this portion of your portfolio should be a strong minority.

You should also invest a smaller minority of your cash into strong, stable companies whose growth may be slow but sure. This can be achieved by either investing directly in stocks or ETFs or mutual funds based primarily on large companies (called large caps).

Another option for those in category #3 is to take that small minority of funds and invest in ETFs or mutual fund sectors which represent those portions of the economy that are growing.

In all situations, for all conservative investors it is still important that you keep on top of the market to some degree. Do you have to watch it daily? No, but taking a glance every week or for sure every three or four weeks is a good idea.

Just because your investments are conservative doesn’t mean that once you buy them you should hold on forever. Situations change and you may need to make adjustments. For example, you may want to switch from long-term bonds to short or mid-term bonds. Or maybe one of your dividend paying stocks is paying 3.5% but there is another paying 4.7%.

You can place your investments yourself; work with an investment advisor firm, or a financial planner. If you want to do it yourself, I would suggest using a software program based on technical analysis, not necessarily just charts, which gives you recommendations that can be set to fit these three categories and your particular objectives. By spending a few moments and updating such a software program every week or few weeks you will keep up with your choices and be able to make changes that protect your money while allowing it to grow at the pace you desire.

Author Raymond Dominick is the designer of Dynamic Investor Pro investment software for stocks, ETFs and mutual funds. He has been investing in the markets since his teenage years. An experienced business manager and journalist, he has been a registered investment advisor representative, also a professional photographer who loves escaping to the wonders of Glacier National Park in Montana.

View his software at: http://www.dynamicinvestorpro.com

A well-planned investment always gives excellent returns over the years. Investing should be done for at least a period of five years and having a clear long-term plan is needed. A lot of people expect quick returns on their money and end up investing in risky investment options instead of the safe investments.

Safe Investment Options

Bank Saving Schemes

Bank saving schemes is one of the most popular amongst all the safe investment options. With bank saving schemes, the chances the money spent being misused are reduced compared to other forms of investment. Most importantly, it gives an attractive interest which is a requirement of liquid money for use when needed.

Gold

Gold would be the best investment as well as a safe investment. The prices of gold are based on the market situations. Buying gold at a lower price would give bigger profits at maximum levels when the demand for gold in the market is at its peak. Buying gold in electronic form is better than purchasing gold in the physical form. It is necessary to seek help and advice from gold traders and dealers to know more about its prices and make profitable investments.

Bonds

Bonds are one of the safe investments to consider because of its stable returns year after year. Bonds issued by public companies, as well as private companies, provide decent returns, regardless of the situation of the economy and markets. Ideally, one should prefer reputable government run companies for bond investments. Bonds are the loans advanced to corporations by the investors. Therefore, bonds would be safer form of investment compared to other forms of ventures.

Residential Real Estate

Residential real estate is also a sound venture because of the attractive prices of houses and properties. With the economy showing steady growth recently, buyers are starting to purchase homes. This can start an upward trending in the real estate prices. Investment in residential lots is also predicted to yield superior returns on investment in a later time to come. Benefits from residential real estate investment are expected to be in five to seven years.

Mutual Funds

Mutual funds are one of the save investments considering the variety of options investors get here. Large cap diversified mutual funds offers safety and steady growth of the investments. Several mutual funds give as high as twenty-two percent return on investments. Prior to investing, it is best to conduct a thorough research, so that one can choose the correct mutual funds companies.

For most of the first-time investors, the safe investment options would be the appropriate choice. As one starts to gain profits, investing in risky investment options would follow depending on one’s comfort and choice.

Investing in the markets can help you make more money and secure your future.. You can invest in stocks, ETFs or mutual funds. You can invest cautiously or go for big results, or anywhere in-between.

What it takes to be an investor is the same desire it took to learn how to drive a car, figure out the features of a smartphone, or know how much you can spend on groceries this week. In other words you don’t need a college degree, a fancy suit or designer gown. You simply need “desire”. If you have the desire, the need, the want to make your life better, safer, easier, more fun then you should be investing in the markets because you have the abilities.

Working a job or a career you may get by or perhaps you’re doing pretty good. But getting by or doing pretty good will not take care of you in retirement, buy that special gift or protect you from job loss or major medical challenges. This is where investing comes in.

Saving money in a savings account, even a CD will barely keep you even with inflation and in most cases you lose money in the long run because the value of your savings won’t buy as much in the future as it does when you first put it into the bank. Savings accounts are good ways to build up cash for investing, but don’t expect to make money this way. And they are no safer than putting your hard earned dollars in safe investments if that is what you want or what concerns you.

Your biggest challenges are:

• Don’t get scared off – friends may want to tell you it can’t be done; you’ll fail; you will hear of how someone who knows someone who knows someone lost their shirt; or read a book with scary warnings.

• You can’t take friends advice – not on what to buy or sell, or even how to invest – unless they have a proven, successful track record on paper that you can verify.

• Deciding where to invest.

• Putting together the money to get started.

• Deciding how much time you have – be realistic about how much time you are willing to spend managing your investments. Don’t be afraid to say, I don’t want to do it every day; maybe an hour a week; maybe a few hours a month.

• Picking the software program – there are hundreds of programs on the market. Take your time to check them out and find one that works best for you; but set yourself a timeline so you don’t miss investment opportunities.

As long as you have the desire and recognize that investing isn’t going to make you a millionaire overnight you can:

• Safeguard and grow your money
• Become wealthy
• Buy those expensive gifts

This will happen when you decide to put the pedal to the metal and get going. You are in the driver’s seat and only you can control the circumstances and your financial future. No matter what anyone else says!

Author Raymond Dominick is the designer of Dynamic Investor Pro investment software for stocks, ETFs and mutual funds. He has been investing in the markets since his teenage years. An experienced business manager and journalist, he has been a registered investment advisor representative, also a professional photographer who loves escaping to the wonders of Glacier National Park in Montana.

View his software at: http://www.dynamicinvestorpro.com

INVESTMENT STRATEGY

A sound investment strategy may not mean what you think it means. Forget about all the hype you hear from day traders, Forex traders, and all the other noise out there. In fact a sound strategy is actually quite boring. Let me explain.

In order to have a sound strategy you MUST know what you want to accomplish, and what your time frame is. Think if it as a road map. You must know where you are going and when you have arrived. The best strategy is the one that will get you there with the least risks. We manage these risks with a proper asset mix.

By asset mix we mean stocks, large cap, mid cap, small cap, value, growth, domestic, international, global. This can be quite confusing for the novice, but I will explain all this in future writing. We also mean bonds, bonds range in rating from triple A, the safest to Junk, the riskiest. A combination of these can have a place in most any portfolio. Cash is another part of the asset mix. Cash ranges from savings accounts, to CDs, to money markets. Real estate is also an asset that can be combined into the asset mix. My sixteen years of experience in the investment industry shows no advantage in risk reduction or performance increases, so I neither advocate, no include real estate in any of my portfolios.

Time horizons are generally divided into three segments: long, medium, & short. Long horizons are generally 20-25 years or longer. Medium time frames generally range from 5-20 years. Short time frames are usually shorter than five years. Notice I use the term generally to define time frames. This is because based on where you are in life, your goals, and a term I am about to introduce risk tolerance, can have a little bit of effect on how your time frame is measures. Also a good investment strategy is part art, part science.

Risk tolerance is just what it says. What is your tolerance for risk? And another question that doesn’t get asked often enough what is risk? To define risk tolerance we must first define the different types of risks and how they can affect our investment. There are more types of risk than what I am going to cover in this article; it’s more technical than is necessary for our purposes.

The risk that we are all familiar with is loss of principal. In other words, we lose the money we’ve already invested. Most of us are familiar with this after the recent market crash. The second type of risk I want to cover is return risk. Will our strategy offer enough return to meet our goals. The third risk I want to cover is volatility risk. This is the one that gets us in trouble. This is what makes us buy high and sell low. This is where most people make their mistakes.

We use an asset allocation model along with our investment policy to manage our risks and get the greatest return for the least amount of risk. Think of it as a pie chart that tells what types of investments we need and how much of each we need. As long as our goals don’t change, we only need to buy and sell to keep our portfolio balanced.

The investment policy tells us how often we will rebalance the portfolio. It tells us when we will re-evaluate or portfolio to see if our investments still meet our original objectives. It tells us when to buy, sell, and take any cash out of your portfolio.

This article is just an outline, if you will, of a proper investment strategy. As I build this site we will examine the essential elements, time frame, goals, and risk tolerance to learn how you build a successful portfolio that will meet you investment needs. Feel free to read our other article and visit the other pages on this site to learn how to manage your investment strategy.

Matt Mullis
http://einvestmentstrategy.com

You can learn where to invest and how to invest your money and start investing money successfully as a beginner in 2011, 2012 with just a little guidance. Here we keep it as simple as it gets, to get you up and running in the right direction. With just a little effort up front you should be ready to start investing in a few weeks.

The key to successful investing and keeping risk under control is diversification. That’s rule #1 for investing beginners. You’ll want to invest money in the money market in order to have a safe investment that pays interest. Bonds are the investment of choice to earn higher interest with moderate risk, while stocks are where to invest for higher returns with more risk. Put together an investment portfolio with all three represented and you’ve got a portfolio that is both diversified and balanced. This is how successful investors keep risk at acceptable levels while earning higher returns over the long term.

The good news in investing for beginners is that in 2011, 2012 and beyond you won’t need to pick your own stocks, bonds or money market securities. Some of the biggest and best mutual fund companies will do all of the management for you at a total cost of about 1% a year for management and other expenses, with no sales charges. They offer balanced funds called TARGET funds and these come in several versions from low risk to high. When you invest money in a target fund your money is spread across all of the areas mentioned above.

The answer to where to invest: open a mutual fund account with a major no-load (no sales charges) fund family like Vanguard, Fidelity or T Rowe Price. You can find them on the internet. How to invest your money requires a two part answer. First, work directly with the fund company to avoid extra fees, charges and expenses. Second, spend some time on their websites getting familiar with their BALANCED or target funds. Now, let’s talk about how to identify these funds and how to determine which is right for you.

From safest to riskiest, you should be able to find a list of target funds that looks something like this: retirement income fund, target 2000, 2010, 2015, 2020 and up to 2040 or maybe 2050. These numbers refer to the year you retired, or the approximate year you target as your future retirement date. For example, if you invest money in the safest fund (retirement income) most of your money will be invested in safer investments like money market and bond funds. The reason for this is that when you are retired, or are close to it, relative safety becomes more important.

If you are younger and are willing to accept considerable risk for higher profit potential, investing money in a 2040 target fund (or higher) could be appropriate. Here the lion’s share of your money will be invested in stock funds. When you are deciding which target fund to select, think about your risk tolerance as well as your age and retirement date. If you want a good balance between stocks and bonds with average risk go with a 2020 fund. Or, you might want to invest money in both a 2010 and a 2030 target fund. Then, pay attention to how each performs over time, and how comfortable you feel with each. If you are not comfortable with a fund, move your money to one that better suits your comfort level for risk.

When you invest money in a target fund the fund company automatically adjusts risk downward over time to account for the fact that you are getting older, and likely want less risk when retired. For example, a 2020 fund will eventually resemble a retirement income fund in 10 to 20 years. You simply pick your fund(s), invest money, and watch your quarterly statements. The fund company automatically deducts your cost of investing from the fund to cover management costs and expenses. Investing money in target funds makes investing for beginners as simple as possible for 2011, 2012 and beyond.

You can keep costs to a minimum with a little time and effort and save thousands of dollars over the years. Or you can pay someone else to pick your funds for you and pay for the service. Either way, make sure that the investment matches your risk profile BEFORE you invest money. The simplest form of investing for beginners in 2011 and beyond: balanced funds called target retirement funds.

Author James Leitz teaches investment basics, stocks, bonds, mutual funds and how to invest in his investing guide for beginners called INVEST INFORMED. Put Jim’s 40 years of investing experience to work for you and get up to speed at http://www.investinformed.com. Learn how to invest.

A great time to start investing is during your college years, especially if you are working in conjunction with attending college. You might think this is impossible but I am here to inform you it is not. The more soon you start investing into your future, the more secure you will be when you settle down to start a family of your own. Learning how to make money from college with investing is something that all college students should do.

Before jumping into this task, you first need to delve into your long and short term goals. You need to determine what you need in the immediate future financially as well as “down the road”. Performing a necessary assessment of your financial goals is imperative because it will serve as a financial road map.

Determining your long and short term goals

Your goals short or long term will determine how much you invest. If you are merely beginning your retirement savings, you can invest more conservatively. If you want fast-money, you will want to invest with less conservatism. If you are saving up or investing for special events that are coming up in your life, you will want to comprehend how your investments will work for you and how fast this will occur.

What level of money are you comfortable parting with for savings?

If you are not comfortable taking the excess money you have left over from financial aid to invest, then it is simple, do not do it. Allot a portion of your aid that you feel most comfortable with. It is normal to be a little worried or scared when it comes to handing your money over for stocks, bonds or other commodities but you need to understand that there is always some type of risk involved, even with what some call “safe investments”.

Are you feeling frisky?

If you are feeling adventurous, you might find mutual bonds and savings funds less exciting than the stock exchange. If you want to delve into stocks, the best advice is not to stick your hands only in one cookie jar. You want to place your hands in different cookie jars.

What are safe investments?

Safe investments are things such as government bonds. These bonds promote our country while maturing. These types of bonds do not reap fast benefits; in fact, it takes many years for them to mature fully at face value. There are options available when purchasing government bonds therefore, ensure you know precisely how long it will take the bond to mature before you purchase it.

The world of investing is not pre-set. There is no one size fits all. Investors are individuals with different financial needs. Make sure that you seek the advice of a professional if you are a beginner to the world of investing. Attending college is a wonderful time in anyone’s life and the fact that you are planning for your future will ensure that you are secure and financially stable for your future. Learning how to make money from college with investing is not a hard feat, anyone can perform this task with careful planning and dedication.

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How do you make safe investment income? You will know one great way after you read this article. Any good source of investment income must have -

* Low risk to your capital.

* Large and predictable payments of earnings.

America’s county and municipal governments are eager to offer you that – and I don’t mean bonds.

* Return of your investment guaranteed by the government.

* Unusually high yields guaranteed by the government.

The investment is tax lien certificates. Here’s how they work -

Tax Lien Certificates – What They Are

County and municipal governments depend on property tax revenue. Property owners sometimes fail to pay their taxes. If they don’t pay after many warnings, the government sells tax lien certificates -

* You pay the tax owed. The government gets its money right away.

* The property owner gets an extra 12-24 months to pay up.

* You get high yield investment income guaranteed by the government.

Tax Lien Certificates – How They Work

Each state sets its own interest rate and terms. 12% – 18% per year is common.

* Check the interest and terms for your area. Do a web search on “tax lien certificates [name of your county and state].”

* Certificates sell at auction. They go to whoever will take the lowest – still high – interest.

If the property owner pays early, you get a guaranteed minimum profit.

* 5% is common. Check your local rate.

* Your do better with early payment. 5% in a month beats 18% in a year.

* Property owners avoid penalties by paying early. They often do.

You get paid by the government. Not the property owner.

* No worries about collection.

If the property owner pays his tax in a year, you get your investment plus interest. If the property owner pays his tax in two years, you get your investment plus double interest.

* Simple interest with no compounding.

Owners that don’t pay property tax often don’t pay their mortgage either.

* Banks will foreclose on the mortgage and auction off the property.

* You get paid that juicy minimum interest – guaranteed by the government.

* You get paid before any other creditor.

* It works the same way if the property owner sells the property himself.

If the taxes go unpaid for the full 12-24 months, the county auctions off the property.

* Again, you get paid.

If no one buys the property at auction – rare – you become the owner.

* In this case, the property is your return. Not cash.

* Wait! You don’t want the property. But you can avoid this by doing some homework. (Sorry – there is a bit of work involved.)

Keep risk low and investment income high.

Only buy tax liens on property you have seen.

* Make sure the property exists.

* Make sure you can get there by road – no land in forests or swamps.

* Make sure the property is worth much more than what you pay for the tax lien certificate.

* Property near water or developed land is good.

* Go with undeveloped property – land. Buildings can get tricky.

Go with property owned by individuals – not development companies, banks, or trusts.

* Corporations and trusts can make legal trouble.

You get paid when the property owner pays.

* You won’t know when in advance.

* Worst case would be an auction after 12-24 months.

You can’t sell tax lien certificates easily. In a few counties, if you’re not paid in a year, you have to pay property tax for the second year. Check the rules for your county. To get started -

* Check your county’s website or visit your county courthouse.

* Check your local paper. The county must advertise tax lien certificate sales in advance.

* Ads are in “Legal Notices.”

* Visit the property. See that it’s OK and worth good money.

* Attend the tax lien certificate sale.

* Don’t get caught up in competitive bidding. Know what you’ll take for interest before you arrive.

Tax lien certificates are true safe money. They’re among the safest, highest paying sources of investment income today.

Now that you know about investment income, take action with Safe Money Products. Subscribe now to get 4 Free Reports and bi-monthly Action Alerts. Don’t delay! Find out about Safe Money Products at http://safemoneyproducts.com/subscribe/

Dr. Bob Rubin, Editor