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What Is An Investment Definition?

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Now that you’re getting older!You’re hearing your friends and parents talk about investments, and you may be unclear about what an investment is. Surprised at even how many adults lack understanding of what an investment truly is.

To understand investments we must also learn about assets, like investments, assets are similar and sometimes seem to be the same thing but they are in fact different.

Assets are things that have value and have the ability to make lose or retain their value this represents things like money a car furniture and art.

Investments also have value and the ability to make lose or retain their value unlike assets however they produce additional monetary worth.  Think of a company that makes a product and sells it to you and me the product is the added value created by the company.

Now let’s test your knowledge;

Is an ounce of a gold asset or an investment? If you said asset you are correct!

Lots of people misunderstand this concept but here is why if you take an ounce of gold and put it in a safe for 30 years later take it out it’s still just announced a gold, it didn’t produce anything even though it might be worth more than when you first put it in the safe.

Let’s try another one,

Is a house that you live in an asset or an investment? If you said asset you are correct.

If however, you decide to rent the property out to another family and charge them rent it then becomes a rental property or a real estate investment.

Remember that assets like investments can have their value change over time but only when the asset creates additional monetary worth outside of the hard asset does it become an investment.

One more is a Treasury bond an asset or an investment? If you guessed investment you are correct.

Treasury bonds are a form of debt owed to you by the government. The bond itself has value and it can fluctuate. But because it pays you money in the form of interest every year it’s considered an investment.

Both assets and investments are worth owning but understanding what they are will become important as you get older learning to identify the difference can take practice but it’s worth learning early on.

The Most Common Investing Mistakes People Make

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About investing, let’s talk about a few of the most common investing mistakes that people make when it comes to the stock market and how to overcome them.

The first mistake that people make when investing and this is the biggest mistake of all if they just don’t understand the company they’re investing in

Charlie Munger and Warren Buffett and Manish provide guys fear great managers of money who managed to get enormous returns and do it the way, all have an area of the market that they get really good at they call it their circle of competence and those guys stay well within that circle because they know they need to understand the business that they’re buying.

Most people when they invest don’t even treat it like a business they just treat it like a piece of paper and they just hope that the price is right so you can’t begin to invest properly without first understanding the business.

The second mistake people make is they don’t have a plan on how to invest

They just basically go out and start putting money into things they don’t understand. They don’t know how much money they’re going to need to retire and they don’t know how much time it’s going to take them to get there for any given set of returns that they expect to make, so they’re just basically flying completely blind.

They don’t know how to figure out that kind of retirement requirements that you’re going to have depended on how much money you’re starting with how much money you can put in every year and the rate of return that you can reasonably expect to get.

The third investing mistake that people tend to make is they just don’t have enough time they haven’t given them self enough time.

Really really easy to get to a good retirement if you start early enough but we never do right we always have a million other things we’re going to use that money for, it seems like we never make enough money when we’re starting to have kids and by the time the kids start to go to college we still don’t have enough money so it’s like we never catch up with it.

You got to follow this advice to put away a little bit of money for yourself all the time pay you first and get going on it right away. Now the good news is even if you’re starting extremely late you’re 55 you’re 60 or 65 and you don’t have enough of a nest egg to retire comfortably on the good news is that doing rule 1 style and dusting and being aggressive with it can still get you where you want to go I started with a thousand dollars and I got to 1.45 million dollars in just five years so it’s never too late.

The fourth investing mistake people make is buying stocks based on tips from experts, what?

When you buy stocks based on tip from other people you’re going to a company that now most inevitably you don’t understand almost inevitably you don’t know what it’s worth and almost inevitably you end up with a bad rate of return and this is just a bad habit people have of being lazy or from just not having a clue on how you deva glia a company in the first place now.

This isn’t to say that getting a little tip from an expert is a bad idea all by itself because if you know how to analyze a company noticing that Warren Buffett is buying it might be a really cool thing you get in there figure out why he’s buying it maybe you can buy right along with him which could be a really good thing but never just take somebody at their word.

Fits investing mistake people make is vine stocks that appear really cheap but they aren’t really cheap actually now this is a really common mistake especially when the market drops a lot. You’ll see people saying that this stock is on sale because it used to be at 100 and now it’s at 50 what they don’t realize is that when it was at 100 he was massively overpriced, Chipotle Mexican grill is a great example of that right now.

So those are the most common investing Mistakes. If above is helpful and you thought it might be valuable then share this who might benefit from.

5 Reasons Why Most Don’t Become Wealthy

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With the new year upon us, I know that many of your resolutions involve saving money and building wealth. But before you begin creating your plan of action to achieve your financial goals it’s important to make sure that you aren’t unknowingly holding yourself back from your own financial independence. There are five common mistakes that prevent the majority of Americans from becoming wealthy

Let’s talk about them one by one. First at the top of the list it is that it never occurs to them to become wealthy the average person has grown up in a family where he’s never met or known anyone who was wealthy, he goes to school, socializes with people who are not wealthy, birds of a feather flock together, he works with people who are not wealthy, he has a reference group or a social circle outside of work who are not wealthy and he has no role models who are wealthy. Now if this has happened to you throughout your formative years up to the age of 20 or so you can actually grow up and become a fully mature adult in our society and it may never occur to you that is just as possible for you to become wealthy as for anyone else.

So the first reason why people don’t become wealthy it’s because it never occurs to them that it is possible for them and of course if it never occurs to them then they never take any of the steps necessary to make it a reality.

The second reason that people don’t become wealthy is that they never decide to the primary cause for underachievement and failure is that the great majority of people don’t decide to be successful even if a person reads a book or attends a lecturer or associate with people who are financially successful nothing changes until he makes a decision to do something different even if it occurs to a person that he could become wealthy if he just did certain things in a certain way if he doesn’t decide to take the first step he ends up stain as he is,  if you continue to do what you’ve always done you’ll continue to get what you’ve always got.

The third reason that people don’t become wealthy, this procrastination, people always have a good reason not to begin doing what they know they need to do to achieve financial independence it’s always the wrong month, the wrong season, or the wrong year there always seems to be a reason to procrastinate, as a result they keep putting it off month by month year by year until it’s too late . Even if it’s occurred to a person that they can become wealthy and they have made a decision to change procrastination will push all their plans into the indefinite future and nothing will ever happen.

The fourth reason that people retire poor is what economists call the inability to delay gratification. The great majority of people have an irresistible temptation to spend every single penny they make and whatever else they can borrow or buy on credit. If you can delay gratification and discipline yourself to refrain from spending everything you make you cannot become wealthy.

W. Clement Stone once said: “If you cannot save money than the seeds of greatness are not in you”. If you cannot practice budgeting as a lifelong habit it will be impossible for you to achieve financial independence.

The fifth reason that people retire poor is perhaps as important if not more important than all the others, it’s a lack of time perspective.

Time perspective is defined as the amount of time that you take into consideration when planning your day-to-day activities and when making important decisions in your life. The young couple of it begins putting fifty dollars a month aside in a scholarship fund so that their newborn child can go to the college or university of his choice is a couple with long time perspective. They’re willing to sacrifice in the short term to assure better results and outcomes in the long term.

People with long time perspective almost invariably move up economically in the course of their lifetimes.

Well, that’s it for the five reasons why most people don’t become wealthy. I hope you found this helpful if you did please visit Brian at www.briantracy.com

10 Real Estate Hacks Everyone Should Know

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Buyers, sellers, real estate investor, coach, and mentor so certainly for real estate investors as well but anyone who either owns a home or intends on owning a home needs to know these 10 real estate hacks are 10 of the greatest lessons learned from all of those years of experience.

1.Hire the best

Hire the best that could mean higher the best real estate listing agent you can you sell the house and you have a retail a home that’s in beautiful condition. It means if you’ve got a house that needs a lot of work and you need to get rid of it in a moment’s notice hire the best real estate investor to pay cash for that property it means if you’re getting a loan hire the best mortgage broker and these things are all available.

Thanks to the internet you can research who is the best real estate agent in your area you can do that in a place called real trends. It gives the list of who sold the most by volume by a total dollar amount mortgage brokers. They have the list of who it does the most volume you can work with the best and that’s what’s so great about real estate.

2. Get three bids

If you need to replace your roof, call three roofers, if you need to do something to your AC that’s more significant than just a check-up get three bids from three different AC companies.

If you’re looking to get a mortgage get bids from three mortgage brokers all they don’t want you to do that they’re going to tell you lies about how it’s going to hurt your credit if it gets pulled more than once your credit score on your credit report when you try to get a loan well it turns out that you can get as many pools as you want in a two week period and it doesn’t hurt your credit at all.

Get three bids because when you do you’re going to get three different answers it’s amazing plus when they know you have other people involved what they’re going to do is bring their a-game so if you get three bids whether it be on a mortgage on an AC on a roof that also means real estate agents. Talk to the top three so I’m saying hire the best but get the top three and then get bids from all three some people are lazy that would make the phone calls they don’t want to do it do it needs to be done.

This is a hack of hacks you will save money you’ll get the best out of people and it always works.

3. Selling the property list on MLS

We’ve got people these days that want to try to use things like Zillow or Red Fin and they want to do it the freeway part on craigslist. Look, if you do that you’ll never get complete exposure to the entire marketplace pay the six percent commissions you’ll still get more than if you listed let’s say for sale by owner and you sold it for sale by owner you’ll still get less money because you won’t get complete exposure to the marketplace so listed on the MLS.

4. When selling, your price can never be too low

Mean that your list price can never be too low because the lower you listed the more likely you’re going to originate what’s called a multiple offer situation and the people will bid the property right back up to what the market value is.

When selling the house is to list it too high you do that you won’t get any showings and you won’t get any offers then it’ll grow stale on the market it’ll just sit there and people will start to think there must be something wrong with this house no one else has bought it all of a sudden it becomes the unwanted listing don’t go there if you’re selling your house list it low

5. When selling, your first offer is your best offer

The first offer equals the best offer. Right here has lost people so much money over the years so they put the property on the market. let’s say you took my advice and you listed it nice and low and the first offer that comes in you look at and go, wow I got an offer that much let me just wait around for the next couple of months and see what else comes in. NO don’t do that, first offer from the first person that came in they are the probably most qualified most interested party for all. That’s your buyer almost always.

So your first offer is usually your best offer that is the key it will save you a ton of money

6. Buyers are liars and sellers are too

This means that if you’re looking to sell a house and a buyer tells you something you gotta verify it.

Verify when a buyer says they got the cash they got the credit they got this they got that you got to verify it all and vice versa check it out make sure your crystal clear on what’s going on verify because buyers are liars and sellers are too.

That means is typically people are buying and selling only a few homes in their lifetime it’s not some repeat transaction like they own an ice cream store there are people to be coming in and out daily they’re not trying to build customer relations they’re like dealing with one house in their life they’re going to lie to you. We’re talking about the individual seller and the individual buyer because those two parties don’t do all that many transactions so they don’t have to worry about their reputation.So what you need to do is verify verify verify it.

7. Buy right or not at all

it’s a great discussion on what most people don’t talk about owning real estate owning your own home.
So you’ve got a buy right or not at all a lot of times, it’s safer just to rent unless you going to stay in there for five years or you’re getting a good deal on it where there’s a lot of instant equity, I have made a career, I’ve made a fortune out of buying homes from people that didn’t buy right they didn’t have a good contingency plan.

Here as a hack number seven, buy right or not at all. Don’t make an emotional decision the intelligent here because it’s not always that easy the house once you’ve gotten into it. You get that big fat mortgage payment and you’re trying to sell and you’re trying to hire the best but you don’t have enough in equity they’ll pay the Commission’s and now you’re stuck now you’re stressed out be careful here it can be a major trap and realtor’s across America don’t really care if you’re in that trap because they’ve already made their commission when you bought or sold.

8.Buy less than you can afford

Buy less than you can afford because you’ve got new expenses coming at you otherwise it’s going to be a miserable experience that’s a huge hack by less than you can afford.
Options, keep looking until you find something that fits for what you need and it fits for your finances otherwise just keep renting because you are going to get hit with a lot of expenses you didn’t see coming once you’re the owner.

9 If you can’t qualify for a loan get creative

To buy houses creatively you can do this too it’s not completely complicated and so if you have a dream of being a homeowner but you can’t qualify for a loan that should not stop, you get creative.

10 Always maintain walk away power

Walk away power what does that mean that means that if you are buying a house be willing to not buy it if the inspection comes back and there’s a problem, if the appraisal comes back lower than what you have it under contract for and the seller won’t drop the price be willing to walk away, if you are selling a property be willing to say no to a deal if it’s just completely the wrong deal you’ve got to have walk away power.

 

 

 

 

 

 

Credit goes to Phil Pustejovsky

What Are Growth Mutual Funds

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What Are Growth Mutual Funds: Growth vs Dividend Option

With so many mutual funds available in the market selecting a mutual fund for your investments can become quite a task until you know certain differences. one such difference is between growth and dividend options available into neutral funds let us check the difference in detail first let us see what makes these two products different in growth option you are not

One such difference is between growth and dividend options available into neutral funds. Let us check the difference in detail first let us see what makes these two products different:

In growth option, you are not paid out any profits made by our underlying investments in mutual funds the profits your are reinvested.

In dividend option, a part of the profits made by the underlying investments is paid out to the investors.

Growth and dividend mutual funds of a given funhouse perform at path but what separates these two is what is done with the profits and this ultimately impacts the NAV.

Profit reinvestment in the case of a growth option increases the nav resulting into capital appreciation in case of dividend option when the mutual fund house makes some profit the NAV first rises then a part of the profit is paid out to the investors, the NAV then reduces by the amount paid out to the investors per unit. Now after this profit distribution that is dividend distribution the new investments into the mutual fund are accepted at the ex-nav rate reinvestments of profits in case of a growth option has a compounding effect on your initial

Now after this profit distribution that is dividend distribution the new investments into the mutual fund are accepted at the ex-nav rate reinvestments of profits in case of a growth option has a compounding effect. Since your initial investment, as well as the returns, start earning more returns in case of dividend option since a part of the profit is paid out to the investors compounding effect is not at its full potential.

As already discussed, the growth, as well as the dividend option of a given mutual fund house, is the performance part, the fund performance is the same what differentiates them is what they do with the profits. So how are the gains realized in both these options in case of growth option you can realize the games only on selling the units in case of dividend option there are two ways through which you can realize your games first is

So how are the gains realized in both these options in case of growth option you can realize the games only on selling the units in case of dividend option there are two ways through which you can realize your games; first is through the dividends that you receive and the second is on selling the units as the NAV would increase in case the entire profits are not paid out to you through dividends

So to whom these two options best suit? People looking for capital appreciation over the longer period and not looking for periodic income should go for growth option and people looking for periodic income like retirees etc should go for dividend option.

Let’s look at the taxation now.

The taxation of growth, as well as dividend options of a mutual fund, is same if your mutual fund is an equity mutual fund and if you hold on to your investments for less than a year your gains are taxed at fifteen percent. If you hold on to your investments for more than a year your gains are not taxed if your mutual fund is a dead mutual fund and if you hold on to your investments for less than three years the gains are taxed according to your tax lamp if you

If you hold on to your investments for more than a year your gains are not taxed, if your mutual fund is a dead mutual fund and if you hold on to your investments for less than three years the gains are taxed according to your tax lamp.if you

If you hold on to your investments for more than three years your gains are taxed at twenty percent but after indexation.additional things to note about dividend

Additional things to note about dividend optional that the dividends are tax-free in the hands of the investors the mutual fund has to pay a dividend distribution packs in case of a debt fund which is 28.84% of the actual amount paid to the investors. In case of equity

In a case of equity mutual funds, there is no dividend distribution tax. Also note that the dividends are paid out only when the mutual fund makes some profit, so the factor that ultimately influences your decision when you want to choose between a growth and a dividend option of a mutual fund is your need. if you are looking for periodic income as well as a moderate capital appreciation of your investments you should go for dividend option

If you are looking for periodic income as well as a moderate capital appreciation of your investments you should go for dividend option.

And in case you’re not looking for periodic income from investments but looking for capital appreciation alone you should go for growth option hope the difference between growth and division option of mutual funds is clear enough

Hope the difference between growth and division option of mutual funds is clear enough

 

Rural Pennsylvania Homeowners Face New Home Security Risks

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A largely rural state covered in rolling hills and mountains, Pennsylvania also throws in the surprise every now and again of a major city.

Whether bustling Philadelphia, political Harrisburg or ever growing Pittsburgh, there are many communities across the states of all shapes and sizes.  From the communities of the Pennsylvania Dutch caught in time to the very latest and greatest in modern conveniences and technologies, the great state of Pennsylvania seems to have it all.

Along with all the positives, Pennsylvania also struggles with something that most states are having to grapple with, property crime.  The numbers are up to a way you look at them when it comes to residential burglary and breaking and entry, and homeowners are scared stiff that intruders might disrupt their peace and quiet at any moment.

No matter where a person lives in Pennsylvania there are important measures to take to ensure great home security, but residential homeowners should take special precautions.

There are a number of reasons why a residential home is easier to break into than an urban or even suburban home, not the least of which is a lack of preparedness.

The average criminal knows that a home in the country is less likely to be protected by features such as a home security system.  In fact, a large number of residential burglaries are suffered by Mennonite and Amish communities in the state every year for the very fact that criminals know they do not have electricity to run alarms or telephones, and therefore the chances of being interrupted by the authorities are slim to none.  Rural homes provide some similar conveniences.

The cover of not just a few trees or bushes, but entire fields and tracts of forest can be between neighbors, giving burglars lots of uninterrupted time to figure out a way inside during the day.  Should there be anyone inside, or even observing the crime, the chances of help reaching the residence before the criminal is finished are also slim to none.  The average burglar tries to spend less than 15 minutes inside the residence, and it is a longer drive than that, even at top speed, to the nearest police officer.

As if all that weren’t enough, the average criminal also knows that home security practices like always locking doors and windows that are standard in the city are likely not observed in what are perceived to be safe, tranquil, rural communities, homesteads, and towns.

Luckily for rural Pennsylvanian homeowners, it’s not all bad news.  There are ways to stay safe at home that require just a tiny bit of extra effort.  To begin with, locking doors and windows both at night and while you are away can make it an extra challenge for burglars, meaning they are more likely to simply move on.

Some rural homeowners also find that with people in and out of the house and on and off the property all day, a property alarm can be very helpful.  Such an alarm can be used simply to advise the owner that someone has arrived, and can alert them to keep watch at suspicious hours.  Above all, secure the property with lots of lighting and motion detector lighting to deter criminals and keep your rural property safe.

When all else fails, a home alarm system works wonders to keep thieves away from any rural residence.

Second Homes – The Economic Impact on Rural Communities

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There is a concern in some quarters that second homes have a negative impact on the economy of rural communities. In some parts of the UK, local strength of feeling about this has occasionally erupted into arson, for example, with a number of second homes being burned down in Wales.

The main issues that create controversy are twofold. Firstly, there is the argument that second home owners drive up prices in rural areas, pushing them out of the reach of local people and exacerbating the problem that there is not enough affordable housing for low-income local families. This is clearly an area that needs a balanced approach and well thought out strategy to help solve this very real issue.

The second common concern is that second houses are unoccupied for a large part of the year and this deprives local businesses of potential custom, sometimes badly affecting their viability.

Another aspect of this is that local schools can become short of children, sometimes forcing local schools to close. Indeed, on some areas very popular with second home owners, the area can feel like a ghost town out of season, without the community vitality and vibrant local economy that characterizes some other rural areas.

The problems seem to be focused on highly localized rural and coastal areas, the kind of attractive areas that are popular for second homes. For example, in North Cornwall, one in three properties is thought to be a second home or holiday home,

In general, the more remote rural areas have the greatest concentrations of second homes as a proportion of all the housing stock, intensifying the problem of creating a sustainable and robust local community with a thriving local economy.

Although second and holiday homes contribute to an uplift in property prices in rural areas, it is important not to view their economic impact in isolation from other factors contributing to changes within rural communities and especially pressures on local housing markets from other groups such as commuters, retirees, or people wanting a lifestyle change.

One way that second home owners can help avoid any negative economic impacts on the local community is to maximize the extent to which the second home does not stand empty.

By renting a second home out as a holiday home for part of the year, when it is not in use by the owner’s family, it ensures that money is brought into the local economy as the family renting the holiday home will inevitably spend money in the local shops, restaurants and at local attractions. This is clearly a positive impact on the local economy and far better for the local community than having a second home stand empty.

Yet many owners of second homes resist renting out their home to holidaymakers.
There are a wide variety of reasons for this. It is often not as simple as whether or not the owner of a second home would like to make a profitable return on their property.

Some second homeowners simply do not want strangers in their home and this is a strongly felt emotion they are not likely to overcome.

Others do not want to get involved in what they see as complex property management issues, involving a lot of work and practical difficulty. For these owners, the answer is often to hire a holiday homes services specialist that can take away the hassle and arrange everything on their behalf, making the whole process of renting out a holiday home very straightforward.

If a holiday homes services specialist is engaged, they can arrange all aspects of property management, cleaning services and key holder services as well as sometimes a holiday concierge service. This means that the second homeowner can benefit from a stream of income from the property, all the gain without the pain.

In addition, the impact on the local economy is positive as the holiday home rentals bring money into the local shops, restaurants, and attractions as well as necessitating the employment of local trade peoples, such as plumbers, electricians, painters, and carpenters.
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The impacts, both positive and negative, of second homes and holiday homes touch on a diverse range of factors that affect the sustainability of rural communities.

One thing is clear – renting out a second home as a holiday home has a more positive impact on the local economy than leaving it standing empty for long periods.