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Property Investment: 7 Key Foundations To Guide New Investors To The Top

Real estate is undoubtedly one of the more attractive forms of investment. Not only is it one that offers potentially huge profits, but it also provides a flexible approach to investing too. As appealing as it might sound, though, anyone looking to enter this competitive arena must do so with their eyes wide open. Otherwise, you could be setting yourself up for a nasty outcome.

Succeeding in the property market isn’t just about buying one and hoping it will increase in value. There are many contributing factors that must be understood, especially by a first-time investor. Embrace these seven tips, though, and you’ll no longer need luck on your side.

#1. There Are No 100% Guarantees

The main selling point of the real estate market is that it offers great stability. The demand for properties ensures that prices will generally continue to rise over the years. However, this should not be an excuse to act in an irresponsible manner. Despite the solid foundations, many investors still lose out in this field.

As a new investor, there’s a good chance that you will encounter a process of trial and error. Still, this guide to protecting your capital should minimize the risks involved. Aside from the direct financial benefits, it provides reassurances that can enable you to achieve far greater things.

#2. You Must Walk Before You Run

Maximizing your financial status is the chief incentive for getting involved in this type of investment. As such, there is a huge temptation to jump straight into the deep end in a bid to gain the biggest return. However, the allures of international investments and other risky moves should be resisted.

Even if you decide to play a backseat role in your future investments, you’ll no doubt want to keep a close eye on things here. Sticking to domestic investments will make it easier to maintain control. Moreover, it removes the stress of adding currency exchange rates and other external matters to the challenge.

#3. New Investors Are Blessed With Great Opportunities

Real estate has been a wonderful investment playground for many years. Then again, the modern investor is now blessed with arguably even greater opportunities than at any other time in this century. And it all boils down to the affordable housing schemes that have been rolled out across various territories in a bid to repair economic growth.

The hopes of buying homes without wasting vast sums on various fees are better than ever. This guide to buying newly launched property project homes will offer great insight. If it reduces the risk and the initial outlay, your hopes of immediate and long-term profits become greater than ever. Frankly, that’s all that any investor could ever ask for.

#4. It’s Not You Versus The World

It might be your capital that is at risk, but that doesn’t mean you have to face this daunting arena alone. Paying for external support may sometimes feel like an added expense. In reality, the professional touch can often make all the difference. After all, the last thing you want to do is make an inexperienced error that comes back to haunt you for years. Sadly, it could take years to repair that damage.

Help is available regardless of which route you take. However, you should aim to embrace expert surveyors and other professionals when buying a fixer-upper. Underestimating the severity of structural damage and other repair costs could see you run out of capital too soon. If the property isn’t properly restored, your chances of selling it on quickly at a profit will remain slim. Finally, if you have a friend or relative with experience in the field, ask for support.

#5. Buying To Sell Isn’t The Only Option  

Making yourself aware of the different avenues is crucial for all investment types. But it’s particularly pertinent in the real estate market. There’s more than one way to skin a cat, and the method that brings you the best return on investment should be your priority. Otherwise, you might as well leave your savings in a bank account.

In today’s climate, that could mean embracing a buy to let scheme. This option can require less capital, and offers long-term revenue. Being a landlord isn’t always easy, though, especially if you encounter a bad tenant. Nonetheless, this is certainly an option that most new investors should consider as a potential solution.

#6. Location Is Everything

As already mentioned, you want to operate (at least early on) on the domestic scene. However, geographic elements shouldn’t end with the country. In truth, it’s equally vital that any purchased property is situated in a winning neighborhood too. After all, it might be an investment for you, but it will become a home to the tenant or future buyer.

There are many factors to consider when searching for a location. From transport links to crime rates, every aspect will influence the attraction of the property to families. This guide to researching the local vicinity before committing to a purchase should set you on the right pathway. Find the right property in the right location, and your career in real estate investment should get off to a flyer.

#7. Calculation Is Essential 

This is a huge step for any investor, new or not, which is why it deserves your full attention. Planning is vital, and you need to know exactly where you stand. Understanding tax relief and other factors is one thing. However, you should also think about the potential rewards offered by a property. For a buy-to-let, you want to consider the 1% rule. When buying to sell, you need to know exactly how much you can realistically earn too. And that includes factoring in marketing and other fees.

Investing in real estate isn’t a hobby. It’s a secondary career, and it’s only worth your time if it will provide financial rewards. While you can’t predict the future, you can make forecasts about how hard your capital will work. Without preparation, you’re asking to fail.

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What To Know About Investing in Bonds

Bonds make up the largest securities market in the world, and this is an area that provides extensive opportunities and options. There are some definitive advantages to investing in bonds. Some of the benefits of bonds include the fact that they have less volatility than stocks in most cases, but if you’re looking for significant returns, you’re better off going with a riskier investment strategy, because bonds tend to underperform most stocks over the long-term.

Bonds are often favored by older investors and people who are nearing retirement because they allow them to preserve capital and earn regular income, but for younger investors, they might go another route to earn more capital.

Along with these factors, the following are some important things to know about investing in bonds.

What Is a Bond?

A bond is a loan made by the holder to the issuer. Usually, bonds are issued by governmental organizations, corporations, and municipalities to get capital when they need it. If you’re an investor buying a government-issued bond, you’re essentially providing a loan to the government, and the same goes for buying a corporate bond.

You earn money because as with any loan, the borrower is paying interest as they repay the loan. The principal has to be repaid by a certain time, which is known as its maturity date.

The Role of Interest Rates

Interest rates play a significant role in the bond market. Recently there has been a lot of attention placed on the Federal Reserve, in particular, because of their likelihood to raise interest rates in the coming year, possibly several times.

Investors should realize that this can impact their bonds. The price of bonds tend to go up when interest rates fall, and the prices go down with rates go up. There’s an inverse relationship, so a portfolio made up of primarily bonds could be impacted by rising interest rates.

Municipal Bonds

One of the most popular types of bonds to invest in are municipal bonds. Municipal bonds are issued by state and local governments, and these loans are usually obtained by these governmental bodies to finance construction projects and deliver services.

One of the primary benefits of municipal bonds is that they have higher interest rates than U.S. treasuries, and they also have a pretty low level of risk associated with them.

Another advantage of municipal bonds are the tax benefits they carry. These bonds are exempt from federal income tax, and if you’re a resident of the issuing state, also state and local taxes.

Despite the many advantages of municipal bonds, there is a risk that comes with the potential for local governments to default on their loans if they see a decline in tax revenue.

Credit Quality

Another factor that can impact the price of bonds is the credit quality it carries. Credit ratings are assigned to the borrower of the bond, and they range from AAA to C. If there is a higher likelihood that an issuer is going to default, they’ll receive a lower rating.

Investing in bonds can be part of a larger portfolio strategy to balance risk, although it’s not necessarily the best option for younger investors who want to grow their wealth, and is more advisable for older investors who are getting close to retirement or who are in retirement.

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Stay Safe With Any Investment You Make

Investing is something that everyone should start considering at a certain stage in their life. It’s not enough to just be a saver. You need to think about how to quickly increase your finances. At the same time however, you need to make sure that you’re safe when investing. You never want to be in a position where you could lose more money than you can afford. That’s why we’re here to offer some great tips that you’ll want to consider when investing your cash. Read more

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Personal Finance: Save Today to Invest in Your Future

Young people just getting started out often fail to recognize the huge earning potential they have by saving today in order to invest in their futures. There are so many things you can do to cut down on what you are spending so that you have extra money to invest with the intent of growing that money into a tidy nest egg. Looking for some innovative ways to save today to invest in your future? Here are a few ideas.

Do You Really Need that New Car?

Actually, a new car is just an example of all the things we buy when they aren’t really needed. Yes, it would be nice to have the latest sports car on the lot and it sure would be cool to own the latest upgrade to that gaming system. However, do you really need it? One of the easiest ways to spend more money than you have to spend is in getting the next, best thing on the market.

Try asking yourself if what you have is serving you well. Is there any advantage to buying a newer model? Obviously if your tranny just dropped out of your vehicle you probably need a new one, but just to keep up with trends is another matter altogether. Think before you buy.

Comparison Shop for Deals Wherever Possible

Another bad habit many people get into is in failing to do comparison shopping to find better deals or better rates. One of the most neglected comparison shopping techniques is to go online to shop for better utility rates. Many people still aren’t aware of the fact that government deregulated utilities a long, long time ago which means that you may not be locked into the rates you are currently paying. Texas is one state that offers cheaper energy because there are a number of suppliers that have agreements in your area of the state. You can get info online in regards to the suppliers available in your area and the rates and services each offers with their current promotions.

What to Do with the Money You’ve Saved

At the end of each year, after you’ve filed your tax return, take any money left to invest according to the amount you have available. If it’s a significant number, you can buy stocks and/or bonds, but if you only have a small amount, you might be better off buying something called a penny stock. It all depends on the amount you have available and the amount of risk you are willing to carry, but in any event, do invest in your future now.

One final piece of advice about investing in your future is probably called for here. Just as you are advised to take it easy on spending, it is also wise to take it easy on investing. Start slowly with small amounts and do your research. Never rely on the word of a broker, no matter how reputable, unless you fully understand what you are investing in. This has proven to be a huge mistake for a great number of investors in the past and a mistake you can learn from. Invest just as frugally as you spend until you know what you are doing. In the end, the loss is yours just as the gain would be, so take it one step at a time.

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Millennials Are Starting to Invest Their Money & Technology Is Helping

Between new regulations and advancements in technology, millennials are starting to invest their money, especially as they make progress paying off their student loans. It will take some time for this generation to build confidence in investing, however, and it’s easy to see why — they’ve lived through the worst financial crisis in recent history, and this group has more debt than boomers and Gen Xers combined, according to a TechCrunch report. Despite the debt and notions that “stock are for old people,” millennials are giving it a try. Today, technology seems to be the key to winning young people over.

Where Are Young People Investing?

Data from TD Ameritrade shows that 38 percent of the company’s new accounts belong to millennials. But where are these young people investing their assets? Millennials are typically investing in individual stocks. In a survey of 1,600 people, the five most popular stocks to invest in included Facebook, Tesla Motors, Amazon, Netflix and Apple. Managing director at TD Ameritrade, Nicole Sherrod, told The Motley Fool that millennials prefer to invest with familiar companies and brands that they have seen during everyday life.

Since millennials grew up with the Internet and a surplus of technology, it’s no surprise to see that a large number of young people are investing in tech-driven companies. This style of investing is far different from traditional methods. The aforementioned companies are not low-risk. Traditional investors seek out stable companies with growing dividends and predictable earnings.

Why Crowdfunding?

Millennials have been the early adopters of such crowdfunding platforms as Kickstarter and GoFundMe. Young people can choose to support tech startups, small businesses or e-commerce companies with ease, investing in others, putting their money where their passion is, whatever that passion may be. Not only is it easy to navigate these platforms, crowdfunding does not require a large chunk of change to get started.

It’s no coincidence that crowdfunding’s rise coincides with that of mobile technology, either. Look at the cell phones available from T-Mobile, for example — with a variety of options available for a range of credit scores, it’s easy for millennials to stay on top of their investments. Crowdfunding, compared to traditional investment practices, makes investing money both easy and attainable.

Where Do They Get Stock Tips?

Most young people don’t have access to a network of stock analysts or a big financial team. New types of investing tools are taking over, and these tools are available to everyone online. Millennials use social media in their day-to-day lives. But social platforms aren’t just great for sharing photos or asking friends advice on a good place to eat. Young people are flocking to social networking sites for financial advice. While in some cases this may be good, receiving advice from friends, or non-experts online, can backfire. A social investing platform like Betterment can help anyone make smart investment decisions. The investment tool offers advice from an experienced team of experts, information and even automated investing services, taking the headaches out of traditional investing.

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How Can Lower Income Employees Invest in the Stock Market?

No matter how much or how little money you make, it is never too early to start saving for your future. The sooner you get started with your investment plan, the larger your nest egg can grow. While putting money aside is particularly hard for those earning substandard wages, minimum wage workers have a number of investment vehicles at their disposal.

Invest in Your 401k Plan: If you work for an employer who offers a 401k program, participating in that plan can give you exposure to the stock market. Even if you invest only 1 or 2 percent of your income, that is better than nothing. Investing even a small amount can instill the discipline it will take to build a nest egg going forward and allow you to put more money aside as you begin to earn more. If your employer matches part of your 401k contributions, strive to raise your contribution percentage until you are earning the full company match. Read more